Corbis has announced that it will adjust rights-managed photographers’ royalty rates downward “to harmonize its royalties with industry norms.” The change, which will not affect suppliers of royalty-free images or celebrity portraiture, will take about three years to complete: it will be instituted when rights-managed photographer contracts come up for renewal. The announcement was made to a small group of photographers and trade association leaders attending PhotoPlus Expo in New York over the weekend.
Corbis chief executive officer Gary Shenk started the discussion by presenting the company’s projections for industry revenues over the next few years. These figures showed a slight overall decline but a more significant drop in rights-managed and traditional royalty-free sales, due to a corresponding increase of microstock revenues. Shenk then argued that to grow revenue in the traditional market segments amid this expected decline, Corbis would need to increase marketing spending to take a greater market share of total industry revenues.
It is hard to define “industry norms,” given the wide variety of royalty rates among different companies. However, it seemed that Corbis was using Getty Images’ rates as reference. For some time, Corbis has paid photographers slightly higher rates than Getty.
Don Wieshlow, senior vice president, products, characterized the royalty reduction as “imperative for this company to continue to grow.” He also stressed the point that royalty rates are not revenue. By staying more focused on the core elements of its business—such as more effective keywording, faster ingestion of images, global expansion and more effective marketing—Corbis hopes to grow revenue to the point that overall payments to photographers increase, even at the lower royalty rates.
Shenk described Corbis is a “$300 million company.” GreenLight, previously the rights-clearance division of Corbis, is estimated to represent significantly more than $30 million of the company’s total revenue. The acquisition of Veer has also added significant revenue from fonts and other non-photographic products. Thus, the still-photography share of total revenue may be in the range of $250 million.
Shenk also told Selling Stock that Corbis was profitable in the last quarter, though not for the entire year. He asserted the company would be profitable in 2009.