Skeptical photographers are struggling to understand whether
Corbis’ new Contributor
Gateway and the elimination of foreign office fees will actually benefit
them.
Many have focused on the royalty reduction from 40% to
37.5%. In order to participate in the Gateway, contributors must sign a new
contract with Corbis and agree to this lower royalty rate. However, the 35%
foreign sales office fee that is currently being deducted from sales made by
any office outside the contributor’s home territory will be eliminated.
The 37.5% will be calculated on gross sales made by the 11
Corbis wholly owned offices around the world. Corbis offices are grouped into 5
territories – U.S.A., U.K., France, Germany and Hong Kong. Under the current
system, a contributor had to choose a home territory, but the new agreement
makes the whole world one territory.
Notably, approximately 50% of Corbis sales come from sales
made in North America, 33% from wholly owned offices located outside North
America, and 17% from international distributors who will still deduct a
percentage of the sale before submitting the remainder to Corbis.
Thus, while contributors will lose some money on sales made
in their old home territories, they will earn a significantly larger share on
all sales made through offices outside those home territories. Photographers
can easily determine if they are likely to benefit from the new contract by
analyzing their sales reports for the past year and determining the percentage
of gross revenue that came from sales made through all of the four territories
that are not their home territory. If more than 18% of revenue comes from
territories other than home, a Corbis photographer will make more money at a
37.5% royalty on all wholly owned sales than they would earn receiving 40%
under their existing contracts.
Don Wieshlow, senior vice president of production at Corbis,
estimates that 95% of contributors will see a net increase on the real money
they will be receiving.
Exclusive, co-exclusive, non-exclusive
Another important change in the new contract is that Corbis
will no longer require that all submitted images be exclusive to Corbis. Under
the new contracts contributors will have the option of submitting images on a
co-exclusive or non-exclusive basis. Contributors can make these choices on an
image-by-image basis as they are submitted. The new “standard percentages” are
as follows:
Rights-managed
- 37.5%
if Corbis represents the images exclusively.
- 35%
for a co-exclusive giving the photographer the right to sell the images
through his own Web site.
- 30%
for a non-exclusive, allowing the photographer to sell the same image
through multiple other sites and agencies.
Royalty-free
- 20% if
Corbis represents the images exclusively.
- 15%
for a co-exclusive giving the photographer the right to sell the images
through his own Web site.
- 10%
for a non-exclusive, allowing the photographer to sell the same image
through multiple other sites and agencies. But, the photographer may not
make the images available through any microstock site.
Wieshlow noted that in addition to the higher percentages
exclusive contributors will receive there are other benefits like the
anti-piracy efforts the company makes for its exclusive content. But he also
pointed out that, “We are giving contributors more control over their assets
going forward and giving them ways to potentially earn more money by having
non-exclusive content represented on more sites. We feel that is a positive for
contributors and something that has not typically been available in the
traditional stock industry. We’re hoping that our guys will see advantages to
both and provide both and do it in a way that can maximize their earnings.”
A few particularly productive photographers with contracts
that provide them with a higher percentage royalty than 40% have expressed
concern about the huge drop to 37.5%. Wieshlow said, “40% is the standard rate.
But, if someone is currently earning 45%, or some other rate, instead of the
40% standard rate they will see an adjustment down, but it won’t necessarily go
all the way to 37.5%.” The new rates will be negotiable just as the higher
rates were negotiable in the past. “If someone has been earning 45% and he
decides that he wants a non-exclusive arrangement for future work his rate for
the non-exclusive will drop, but not to 30%.”
Some photographers are concerned that they may be forced to
accept the new contract before their existing contract expires. Wieshlow said,
“We are rolling this out to people when their contracts come up for renewal.
The vast majority of contracts are due to renew within a couple years, but if
someone has a longer contract we will honor those terms.
However, once contributors understand that one agreement
allows them to submit photography, motion, illustration, rights-managed,
royalty-free, commercial and editorial all through one submission tool we
anticipate that most people will approach us asking to go on the new contract
and the Contributor Gateway early. Those who join the Contributor Gateway will
also benefit from shoot lists and trend information available on the new portal
and get their images working quicker. Early feedback is that people want to get
on as soon as they can.”
“We will start the re-contracting in the next couple of
weeks. Even photographers who are not submitting much new work can benefit from
this new contract because they will get a higher percentage on all sales made
outside their home territory,” he continued.
Extra work
Some photographers are not happy that they will have to do
keywording on the Gateway.
Sven Kroencke, Director, Production Management, said “most contributors are
already providing keyword recommendations with their image files. We can
extract those keywords using our tools. They help a lot. Contributors
understand the concept they were trying to shoot if the images are commercial,
or if they are editorial the who, what and where and those kinds of details. By
using the Gateway’s keywording tool contributors get exposed to relevant terms
and other shortcuts and benefits so they can apply their keywords more
effectively. By doing that it allows the content to get through our system a
lot more quickly than it would if we have to manually keyword and the images
have to fight its way through that queue. This allows us to get the content
live to site much more quickly.
“The beauty of the new system is that it is connected to the
controlled vocabulary so the suggestions that will be made when the first
keyword is entered are so much more relevant. This is an intuitive thing and
gives us more and better keywords than if the guy were to sit in front of a
computer and think about potential keywords that fit. It does not have to take
more time. Over time it may actually save time because the contributor is able
to batch content and use the same keyword sets and model and property release for
many images. Beta testers in multiple countries have been pleased and thrilled
with how intuitive the tool is.”
Taking less
Don Wieshlow, SVP of Production at Corbis, points out that,
“we take a big hit when we eliminate foreign office fees. Corbis will be paying
out several million dollars more in royalties each year through these changes.
We reduce that hit somewhat by adjusting the rates down.”
I pointed out that it is hard for photographers to
understand why Corbis would be willing to take less and pay out to
photographers a larger share of revenue generated in these difficult economic
times. This is something that has not happened in the industry. Somehow, it
never seems to happen. Certainly, that is one of the reasons for the
skepticism. Agencies always seem to end up taking more.
Wieshlow said, “What we’re doing is really streamlining our
systems, our back end processes and our administration. By the time we are done
with this we have a vastly simpler system to work with and rather than concentrating
on administration and supporting the system we can concentrate on building new
features and tools and finding new monetization opportunities for our talent.
By having much cleaner, more efficient and simple tools, both internally and
externally, our intention is that we won’t have to spend as much money in the
future on administration.
“That will allow us to spend more dollars on marketing,
contributor support and
contributor acquisition. We think this system will clean up 20 years
worth of contracts and back end processes that were attached onto each other
and allow us to operate much more efficiently, effectively and quickly without
having to invest in the systems support technologist and administrators that we
have had to in the past.
“In some cases we are involving the contributors in more steps. We’re
making it attractive for contributors to become part of this new effective
system. We want to attract the best talent and the best content in the world.
By doing that we will put ourselves in a position where we can steal more
market share. We’re bullish on the future of this industry. We feel there is
always a need for high quality content and there will always be customers out
there that are willing to pay for high quality content. That market is
differentiated from the high volume, low cost market. We’re willing to continue
to invest in making Corbis a good place to sign on with and the best place to
put your best images. That’s why we’re willing to put some money back out to
the contributors as an investment in the future.”