390 DILEMMA FOR GETTY PHOTOGRAPHERS
April 6, 2001
The new Getty Images photographer contract has arrived and it seems to me that Getty
and their photographers are operating at cross purposes. The following is my analysis
of the current situation.
What Does The Future Hold For Photographers At Getty?
It is becomming increasingly clear that as far as new images are concerned Getty is
focusing its energies on photographers who are willing to work for a small up front
fee and 10% of sales.
These 10% photographers have no production costs except the costs of their equipment
and get large numbers of images loaded online almost immediately after they are
produced. Freelancers who receive royalties of 30% to 50% of sales get very few new
images accepted into the online database. Even when new images are accepted, it
often takes months, to more than a year, from the time the 50%ers deliver images to
Getty before they are accepted, or rejected.
The 10%ers work under tight direction of Getty art directors. In fact, increasingly
the new creative force at Getty -- those who determine what will be shot, and design
the images -- is the editors and art directors, not the photographers.
Sales for Getty are not growing substantially. In the last four quarters they were:
Q2 2000, $123.6 million; Q3 2000, $127 million; Q4 2000, $129.4 million; Q1 2001,
????. Analysts estimate $131 million for the quarter just ended, but some also
believe that Getty will fail to reach this very modest increase.
This slow growth is happening despite heavy advertising and promotion campaigns and
Getty's overwhelming dominance in the industry. If sales aren't going to grow
substantially then the only way to increase profits is to cut costs. Their biggest
costs are the royalties they pay photographers which was just under 25% of gross
sales in 2000. They need to wholly own a greater percentage of the content they
license, increase the fees photographers pay by raising catalog charges and lower
royalties whenever possible.
From a business point of view such a strategy will work. Getty's goal is to get
better at predicting customer demand, and produce more images in-house to fulfill
that demand. They need to steadily reduce their dependence on high cost freelancers
and move toward a model of owning, or paying minimal royalties, for images rather
than toward the model of the photographers absorbing all costs and receiving a
significant percentage of sales.
Another way to cut costs is to put fewer new images online, thus reducing their
scanning and keywording costs. Getty has announced that they intend to add no more
than 15,000 new images pre-brand, per-year in the next three years.
They are willing to pay up-front production fees on shoots where it is virtually
assured that the company's share of sales down the road will far exceed costs. When
the subject matter, in their judgment, is in lesser demand they want the
photographer to assume the production risk. In such cases they will reluctantly
concede to pay a somewhat higher royalty.
Low Demand Subject Matter
Getty's goal seems to be to limit their offering to only high demand subjects and
leave specialist material and other low demand subjects to someone else. In
addition, to the degree possible, they would like to remove the low demand options
from the marketplace in hopes that buyers, faced with no other alternative, will be
forced to settle for one of Getty's remaining offerings that may not be quite on
subject, but is the closest the buyer is able to find.
It is clear that they are agressively moving to eliminate file research because they
have determined that these large files of "low demand" images are too costly to
maintain for the return they generate. This will eventually remove millions of
images from the market, and require a huge effort by photographers if they want to
get any of these images back to where they can be seen by customers. It appears that
their active online site will have 1 to 2 million images (3% of the 70 million
images they advertise they control). They will seldom, if ever, search through the
other images to fulfill specific customer needs.
One confusing factor is the way they handle "historical" images. They seem to be
willing to continue searching through analog files owned by Hulton Getty and
Archive, but they are returning huge quantities of unscanned images belonging to
contemporary photographers. In effect, this eliminates their access to much of the
historical record from the 1960's through 2000. It looks like that as long as
historical is defined as the 50's, 40's and before, they'll keep servicing that
file. On the other hand outside researchers report that they are no longer allowed
to search through the Hulton Getty and Archive files as was the case in the past.
Some photographers want to believe that this strategy is a management oversight.
They hope that if the problems and risks are clearly explained to Getty management
they will see the wisdom of returning to the older, more photographer friendly
It seems to me that Getty's strategy is very calculated and accomplishing its
intended goal. Consider what Getty, or any company whose sole, driving force is to
maximize profits should do.
- It would be in their best interest to pay out the smallest possible
percentage of gross sales and continually reduce that percentage.
- As much as possible, they would have 10%ers produce replacement images for
all high demand subjects and current best sellers. It is not necessary that these be
exact copies which could be copyright infringements. The images simply need to be
ones that could substitute for a 50%ers images, if the 50% images were no longer
- As replacements become available the 50% images will start disappearing
from the database.
- The company would use their sales statistics to determine the images in
highest demand. This data is only shared with a few photographers, mostly the
- Ideally, they would limit their use of freelance material to those
subjects that are very unique or where the image is particularly costly to produce.
- It is to their advantage to get rid of specialist material that is
- As they reduce the size of the general file it should also be noted that to
a great degree they are eliminating much of the unique and specialist material so in
any event they really need relatively little freelance material.
- It is to the agency's advantage to get first look at any images the 50%
- It is to their advantage to use the "editing process" to hold images they
have little intention of using off the market for as long as possible. In this way
the images can not compete with their 10% images. This can be achieved by under
staffing or various other inefficiencies that are hard for photographers to pin
- It is to their advantage to have a rigid definition of "similars" and to
put certain images into their system to keep "similars" out of the market.
- It is to their advantage to limit the variety of options available to the
customers so the customers will be forced to make more use of the images they have
decided to provide.
- It is to their advantage, to reduce competition by acquiring competitors
and closing down much their operations in the name of integration and efficiency.
- It is to their advantage to reduce the number of photographers they work
with as that reduces administrative overhead.
- It is to their advantage, if many photographers decide to stop producing
stock images as that reduces the supply in all subject areas and the options
customers have to buy something other than one of the company's wholly owned images.
- It is to their advantage to allow underpricing to the degree that it causes
competition to leave the market.
- It is to their advantage to have a contract so complex that any penalties
non-performance by the seller are very difficult to enforce.
There are at least two good precendents in the industry for the wholly owned
strategy -- Comstock and SuperStock. Photographers need to look at these models as
they assess where Getty is headed.
Both companies have always had a strategy of supporting a small group of
photographers who would produce all the available images in the high demand subject
areas. Comstock has two staff photographers -- Tom Grill and Michael Stuckey.
Together, with Comstock's in-house production team, these two produced approximately
85% of the total file. At one point Comstock was one of the more successful agencies
in the world.
Comstock accepted other photographers, but each one specialized in something other
than the high demand business and lifestyle subject areas. Business and lifestyle
are the two top selling subject areas in the industry. Any image produced by the
freelancers that might compete in any way with one already produced by Grill or
Stuckey, or with something they might want to produce in the future, were not
accepted into the file.
Many photographers joined Comstock because they heard about the high returns the
company was getting from high demand imagery.
Few ended up being satisfied because none of their high demand images were accepted
and the returns from their specialist images were insignificant.
With SuperStock freelance photographers have complained that staff photographers
occasionally copy ideas once they have seen the images freelancers have submitted.
The staff images make the catalog and the freelancer images get returned.
Certainly, from a business point of view this strategy worked for Comstock and
SuperStock, even though many photographers find it unsatisfactory. The main
disadvantage for the company seems to be that the company's file ends up with less
visual variety, no matter how talented the prime photographers are. There is no
getting around the fact that an agency with hundreds of different shooters will
offer a greater variety of approaches to a subject than a small production team is
likely to envision. In general, the basic themes that advertising customers need
change very little, but new approaches to these themes are in constant demand.
Getty may believe that they can overcome the problems Comstock and SuperStock
experienced by working with a larger design team, and a larger number of
photographers. In the end, I believe that limiting the number of shooters they work
with, and drastically limiting the variations in the file, will result in many art
buyers looking elsewhere for imagery. I believe that is what has happened at
Comstock and SuperStock.
What Are The Freelancer's Options?
The key issue for Getty photographers is to find an alternative way to show buyers
the images Getty refuses to make available. It is a lost cause for the 50%
photographers to try to convince Getty to put more of their images online. This does
not fit Getty's business strategy.
Photographers need to diversify and become less dependent on a single source for
their income. They need to enlist the aid of different sellers, and test a variety
of marketing strategies through a variety of outlets. The time has passed when a
photographer could tie his fortunes to a single agent and a single marketing
Photographers need to be free to create, and know that everything created will be
made available for purchase in a timely manner and in a way that buyers can easily
find it. Photographers must also have a clear understanding of buyer needs and
recognize that the only images that will earn revenue are those that meet the buyers
requirements for usage.
Photographers must kept clearly in mind that Getty's goal is to maximize profits,
not support photographer's careers. They are now referring to photographers as
"artists" instead of "content providers," but they have no interest in being an
agent, or in trying to maximize sales or income for any given photographer.
Photographers also need to be able to exercise some control over how quickly their
images are reviewed and uploaded once they are delivered to the agency, and how they
In any relationship photographers need to be very careful about signing long term
inflexible contracts. If the relationship with their representative is not working,
they need to be able to easily terminate it and move their images somewhere else.
Photographers retain agents to handle marketing for them, it is not the agent who
retains the photographer.
Be very careful about any definition of "similars." Locking any single image, or all
of its "similars," up with a single agency or a single marketing strategy puts the
photographer at great risk. The photographer is betting he will "win the lottery"
with a single high dollar sale, and possibly giving up countless low dollar sales in
Photographers need to get images that are no longer being shown to clients out of
the files and put them somewhere else so they can begin working again. Getty seems
to be making some progress in its effort to return images, and is moving at a much
better pace than The Image Bank did prior to its acquisition by Getty. Nevertheless,
the job is huge and it is likely to take many months, if not years, before it will
be complete. From the time Getty removed the images from circulation until the
photographer gets them placed somewhere else, Getty has an advantage because images
are no longer competiting with what Getty is showing.
Various service providers (agents?) may be able to aid photographers in various
steps of this process, but the relationships are likely to change from what they
have been in the past. Photographers need to retain more control.
Photographers needs to recognize that RF has changed the market forever. There will
never be the volume of RP sales in the future that occurred in the past.