Posted on 3/15/1999 by Jim Pickerell | Printable Version | Comments (0)



March 15, 1999

How important is E-commerce licensing of photos to a photographer's future

success? Many argue it is an absolute necessity.

Getty Images reports that in the 4th quarter of 1998 more than 15% of total sales

were E-commerce sales. E-commerce sales at PhotoDisc increased by 92% over 4th

quarter 1997 sales and represented 32% of total sales for PhotoDisc in the 4th

quarter of 1998.

Over 5% of Tony Stone Images' North American sales were generated online by the

end of December 1998, and of these, 25% were new customers. In January of 1999,

over 10% of total TSI's sales in North American were E-commerce.

E-commerce means several different things to different people, so before we go too

far we need to define terms. I will define E-commerce as: a term that describes a

process whereby a customer can initiate and complete a purchase, at any time,

using the internet, and without the assistance of a human operator or order taker.

The term is often used to include transactions that were initiated on the web, but

where a human order taker handles completion of the order. It is also often

considered E-commerce when the product, like a book or a computer, is delivered

through the mail, not online.

It is unclear what percentage of the Getty sales were made with on-line payment

and direct on-line delivery. We suspect, but could not confirm from TSI, that at

least an order taker was involved in a good precentage of the TSI sales and that

not all delivery was digital on-line. Thus, the E-commerce part of it was

primarily in finding the images on-line, not full E-commerce.

Fully Automatic?

An important question is whether in order to successfully engage in E-commerce, a

site must be 100% automatic, or whether it is possible to keep an order taker, and

maybe even a negotiator in the loop and still make digital sales.

There is no question that customers would prefer to buy all products at a fixed

price rather than explaining usage and negotiating the fee. This desire by the

customer must be weighed against the risks for the seller. A fully enabled

E-commerce site allows "anyone" to purchase the product at any time. This carries

with it some dangers that sellers and producers need to consider.

Ninety eight percent of your customers will use your images in a benign way that

will create no problems. But the uses made by the other 2% make could destroy

your businesses and your livelihood.

You've all read "Models Sue RF Providers," Story 181 .

Seller of bananas or cigars could care less how their products are used. Most

people will use them as the producers intended. But if a few use them in

inappropriate ways, (I'll let you think of some of the dirty or sadistic stories

you may have heard) the producer of the product is not responsible.

If someone uses one of your photos of a person in an inappropriate way, YOU MAY BE

RESPONSIBLE. At the very least you may have to defend in a court of law your

right to have allowed such a use. Appropriate, is defined by the person who has

been photographed, and to some extent by society at large, not necessarily by your


Agency Solutions

In an effort to make images available to ANYONE who wants to purchase rights,

stock agencies have developed three strategies which may be used as a single

strategy or in combination. The strategies are:

  • Get bullet proof model releases and accept only released images;

  • Put language on your site that obligates customers to request releases;

  • In the event the releases don't work, make photographers responsible.

Bullet Proof Releases. All photographers know that many of the models they work

with will not sign long "bullet proof" releases. Many pictures using real people,

as opposed to highly paid models, and which could be sold for a lot of wholesome,

benign uses simply should not be made available for uncontrolled sale.

Even professional models who agree to sign the more elaborate releases may

eventually argue that certain uses were unanticipated and unexplained at the time

the pictures were taken. If they can show that their reputations were damaged as

a result of a use that was made of the image, they may have a chance of getting a


To protect against this most agencies have been monitoring "sensitive issues" and

either getting additional releases for such uses, or refusing to license the image

for such a use.

Take away that monitoring capability with automatic sale to anyone, and you raise

some interesting liability issues. It may be necessary to monitor, and have some

control over usage of such images so that 2% of users can't get access them.

See the release prepared by Ari Kopelman of Direct Stock in

Story 207 .

Obligate The Customers. The Image Bank has put a strong notice on their Private

Network site which obligates their customers to obtain releases. Part of the

information is printed below. For the full text go to www.theimagebank.com and

click on "legalstuff."

Steps You Must Take Prior to Publication or Other Commercial Use of the Images

    Releases. The images supplied to you are unreleased unless The Image Bank

    expressly specifies to the contrary in writing. This means that no releases of

    any type, e.g., model or property, exist for any of the subjects depicted in the

    images unless The Image Bank so specifies in writing.

    Unreleased Images. Although there are many lawful uses for unreleased images,

    The Image Bank does not represent or warrant to you that you may use the images

    for your intended uses without first obtaining releases or retouching the image.

    You or your counsel must determine whether and what type of model, property,

    trademark or other releases are necessary for your intended uses. You are solely

    responsible for obtaining any required releases prior to your use of the images

    for any purpose whatsoever. As part of your agreement with The Image Bank, your

    right to use the images is conditioned upon your independent verification that all

    releases necessary for your intended uses have been obtained. The Image Bank does

    not have trademark releases available for any images.

    Sensitive Subjects. Even if The Image Bank has advised you that the model

    depicted in the images have signed releases, the use of the images in connection

    with certain sensitive subjects such as sex, birth control, drugs, and physical

    and mental ailments may require that additional permissions from the models be

    obtained. Such permissions may not be available in all circumstances and, when

    available, may take additional time to obtain.

    Verify Caption Information When Important To Your Selection Or Use Of The

    Images. To aid in the retrieval of images from its library, The Image Bank uses

    key words, titles and captions to generally describe the subjects depicted in the

    images. Although The Image Bank uses reasonable care to insure the accuracy of

    such information, The Image Bank does not guarantee its accuracy or completeness.

    Unless you have received written verification from The Image Bank of the accuracy

    and completeness of such information prior to your use of the images for

    publication or any other commercial use, you assume all liability arising from

    your reliance upon such information.

    Satisfy Any Pre-Publication Review Requirements. It is your obligation to

    insure that you do not use any image in any manner that might be considered

    defamatory or tortious, whether directly or in context or juxtaposition with

    specific subject matter. Also, your company may impose certain pre-publication

    requirements in respect to your project.

While this language has not been tested in court it appears to cover most of the


Photographer Responsible. In the event that a release does not hold up the other

line of defense is to try to lay as much of the responsibility as possible on the

photographer. This will vary from agency to agency, but photographers need to

examine their contracts closely with this thought in mind. The Tony Stone Images

contract that was presented all their photographers in the summer of 1999 is

instructive in this regard.

    One section says: Regardless of the provisions in Subsection 5.1

    (Indemnification Obligation), Contributor will be liable only for one-half of the

    Costs Contributor would otherwise be liable for under the terms of Subsection 5.1

    if the claim giving rise to liability is made solely as a result of not having a

    valid and enforceable release for a Contributor Image, provided that the

    Contributor Image was (a) marked "No Release" in accordance with the Submission

    Requirements or other requirements in effect at the time of its submission or (b)

    was submitted with a release in accordance with the Submission Requirements or

    other requirements in effect at the time of its submission and a change in the law

    subsequently rendered the release inadequate to defend against the claim giving

    rise to liability.

One lawyer has given the following interpretation of this language. "Normally, if

one party discloses an exception to a rep or warranty, no breach results later on

with respect to the disclosed item. Here, the photographer is going to indemnify

TSI for a breach even though the photographer told them that there was no release.

If you give them a photo and you say, 'Hey, there is no release on this photo',

and they say, OK and they license it, and screw up by licensing it as a released

photo, and they get sued for their mistake, and even though you gave them the

proper notice that there was no release, TSI is going to charge you half of the

cost of the liability (even though it is their error in licensing it that way)."

When questioned at the time, Jonathan Klein said, "Section 5.2 does not address the

issue of TSI licensing an image in a way that violates the terms of a release that

complies with the TSI release guidelines and has been discolosed to TSI. If TSI

licenses an image in that way, that is not the photographer's responsibility --

TSI will bear any ramifications alone since the photographer did not breach any

representation or warranty. I hope that this clarifies the position in relation

to 5.2."

Courts usually interpret the language in the contract, not any side

representations that might have been made to the press. Thus, if you are faced

with signing such an agreement it is worth checking it out with your lawyer first.

Klein also said, "It is TSI's view that both parties should bear the

responsibility for providing an unreleased image to the marketplace. If a

photographer sends it in knowing it isn't released, they should bear the risk

equally with TSI. If a photographer doesn't want to be liable for unreleased

images, they should send in only released imagery. It is entirely up to the

photographer to decide whether to submit unreleased imagery; if he/she is not

comfortable with the sharing of the potential liability, the image should not be

submitted and thus the issue does not arise. It is worth stressing that this

continues current practice where both parties assess the risk of licensing

unreleased imagery. If either party concurs that the risk is too high then the

image is rejected."

Klein was unable to explain whether this clause would be operative on "No Release"

images that had been accepted into the file prior to the signing of this version

of the contract, but which were licensed for use after the contract was signed.

Many photographers will have images in the TSI files that are marked "No Release"

and these images are still being licensed. For more information on TSI's contract

see Story 169 .

It is also interesting to note that at least 80%, and probably closer to 90%, of

TSI's photographers signed this agreement without requesting any changes in this

language. In light of the fact that TSI has full on-line commerce for the images

on their site, many of these photographers have placed themselves at great risk.

Although we have no specific knowledge of the final terms of the negotiated

contracts, we assume that the "Group of 45", and many others who held out before

signing, negotiated changes in this clause of their contracts.

What Should Photographers Do?

Clearly it is possible to engage in E-commerce without accepting unnecessary

risks. The Image Bank solution enables customers to find images on-line and

receive digital delivery without putting the photographers or the agency at

unnecessary risk of misuse.

In such cases it is still important to get the best model release you can and

supply it to the agency. Many customers will not be able to use an image until a

release has been provided and sales will be lost if no release is available. On

the other hand, it is impossible to say whether a release is "adequate" until you

have some idea how the image will be used.

The web environment still offers tremendous advantages to the buyer, even if they

must clear usage with a human before they are allowed to publish the images.

  • The buyer can search on-line. They can download a watermarked images for the

    purpose of comping and decide if this image will really work for their project.

    They can send specific information about the use, as well as a comp, to the seller

    by e-mail.

  • Once the deal has been completed, they can pay online with a credit card, if they

    desire. They can receive immediate delivery of a large digital file.

The only things that can't be handled without human intervention is the actual

clearance of the use. Also, since the customer must talk to a sales person anyway

in order to explain the use, there may not be a big problem with negotiating the

price based on the usage.

Another service that traditional marketing offers the buyer is the right to be

billed for the use, rather than having to pay cash up front. This may be enough

of an incentive for many that they will be more than happy to deal with


Only time will tell whether the buyer will be willing to accept the minor

inconvenience of negotiation as long as all the other aspects of E-Commerce are

functioning. In most cases, in exchange for this inconvenience, the buyer will be

able to choose from a much broader cross section and variety of imagery.


Leslie Hughes

VP & Managing Director

Corbis Images

A very significant portion of our business is digital to the extent that

clients are searching, selecting, placing orders on line and getting digital

images from us. But a much smaller portion is concluding the sale on line. We

currently have chosen to continue what we call a "near line" process for

traditional licensing that includes a clearance process that involves a human

check re rights, usage and content chosen. This is partially due to the unusual

nature of some of our content like fine art and

celebrity images. In any case, a client can do everything including placing the

order and receiving images on line, but in many cases they will finalize rights

and pricing with the account exec.

Copyright © 1999 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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