January 2001 Selling Stock

Posted on 1/10/2001 by Jim Pickerell | Printable Version | Comments (0)



Volume 11, Number 3

©2001 Jim Pickerell - SELLING STOCK is written and

published by Jim

Pickerell six times a year. The annual subscription rate is $120.00 to have the printed

version mailed to you. The on-line version is $100.00 per year. Subscriptions may be

obtained by writing Jim Pickerell, 110 Frederick Avenue, Suite A, Rockville,

MD 20850, phone 301-251-0720, fax 301-309-0941, e-mail: jim@chd.com. All rights

are reserved and no information contained herein may be reporduced in any

manner whatsoever without written permission of the editor. Jim Pickerell is also

co-owner of Stock Connection, a stock agency. In addition, he is co-author

with Cheryl Pickerell of Negotiating Stock Photo Prices, a guide to pricing

stock photo usages.

Thought For The Month

In any moment of decision the best thing you can do is the right thing, the next best

is the wrong thing, and the worst thing you can do is nothing.

Theodore Roosevelt

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November 21, 2000 - For those applying technology to business, "speed and ease of use"

are the prime motivator. Everything else is secondary. Technologists insist that every

sales transaction must be fully automated and human interaction must be removed from

the selling process. At first glance this appears to reduce costs and provide greater

customer service, but in stock photography it may lead to a great disservice to the

models -- and by extension, photographers and everyone else in the selling and buying


One fact implicit in most photographer/model relationships is that in exchange for

being allowed to use the model's photograph the photographer agrees to make his or her

best efforts to see to it that the images are not used in a way that might be damaging

to the model.

There may be a release that offers the photographer some legal protection, but seldom

is that release so airtight that flagrant violations of the model's human rights are

not protected. The courts get to decide what is flagrant.

In the past, protection against such misuse has been provided by the dialogue that took

place between the seller and the prospective purchaser.

It seems a very small step from a sales person questioning the buyer about the

potential usage to fully automatic transactions. But, automatic transactions open a

very wide door to the potential for misuse. Photographers should be concerned about

both the legal and moral issues such a change raises.

Uses That Could Be Problems

Suppose you take a photograph of a loving father and daughter in the park -- warm,

family feeling. Dad signs a release. In everyone's minds, this is a "family" photo that

portrays a positive feeling and healthy family relationships. Then along comes a stock

buyer who attaches a totally bogus caption about incest or abusive families to the


Suppose you take a picture of a professional financial planner at work in her office.

This person signs a release allowing use of the picture as stock. She might be very

upset if the picture is used in a brochure of a competitive financial planning company

leaving the impression that she is their employee. Maybe this is a reason for always

using professional models who are not involved in any way in the occupation being

illustrated, but is everyone doing that?

What if a photo of a wholesome young woman is used in an HIV drug campaign, or in

connection with drug addiction, alcoholism, sexually transmitted diseases, or

illiteracy. Any use in connection with prescription drugs, tobacco, or liquor can

present problems if that was not the original intent for which the photo was produced.

Imagine a couple of 19 or 20 year old Baptist girls from Texas showing up in an ad for

a lesbian travel resort.

Use of a photo of a senior citizen could lead to embarrassment if it is used in

relation to incontinence products, or implies that the person's life has been changed

by taking certain vitamins. The copy attached to any photograph can dramatically change

the original intent the photographer had when producing the image.

Celebrity photographers have a different control problem. Many are given access to

their subjects on condition that the images will only be used in positive ways. Usually

there is a blanket prohibition on selling such images to the tabloids. Some may

consider this manipulation of the press, but the subjects have a right to exercise such

control if they are allowing access to their private lives.

What about non-people pictures? Car photographers get access to the newest models on

condition that they agree to certain rules. Most car companies will sign a property

release for a specific use not a blanket license. In other words, if Mobil Oil

(advertising their superior oils) or Union Bank (advertising their car loans) wanted to

use a shot of a Corvette for a national print ad campaign, Chevrolet would be happy to

sign a property release for each of those campaigns. And Chevrolet would not charge the

photographer or the client anything for their time. They like the publicity but they

have to make sure that images of their vehicles are used in a positive way.

The list could go on and on. It is impossible to develop a list of all uses where

"sensitive issues" may be involved. Uses need to be examined on a case by case basis.

Often it is the text connected with the image, not the image itself, that makes the use

objectionable. Thus, when the buyer says, "I want to use image XXX," it is important

for someone representing the seller to ask a few questions about how the image will be

used, and be prepared to say NO.

Without such an intermediary, sellers who make their images available through automatic

transactions must have in their possession model and/or property releases that allow

them to license rights for ANY USE WHATSOEVER to all available images.

While obtaining model releases has been standard practice among photographers for years

it is questionable whether most of these releases would allow the images to be used in

ways that would embarrass the model or damage his or her reputation. The most innocuous

photo can be used in ways that will upset the model. An iron clad release can still be

challenged in court. The plaintiff may not win ... but legal fees can be staggering.

Not only do photographers have to worry about legal ramifications to themselves, but I

believe they also have a moral obligation to try to protect the interests of their

models. This is particularly true when you are using amateur models who have little

understanding of the wide variety of uses that might be made of their image.

Automatic Selling

At the very least, it is important that legal language be attached to all photo

licenses, and be made prominent in the on-line selling process, that clearly obligates

the buyer in the event there is a misuse and says something like, "No model releases or

other releases exist for any Content unless the existence of such release is specified

in writing by the Rights Holder." Most who favor technology solutions don't want to do

this because they view it as not being a "customer friendly" act. They want to place

the liability on the photographer and the model.

(In fact it might be a "customer friendly" act because they would be helping to keep

the customer out of future messy legal problems.)

Nevertheless, many agents are looking to simplify their lives. They can accomplish this

by only handling images for which there are no restrictions. They want to be able to

sell anything they have for any purpose and not have to worry about it. They are also

opposed to obligating the buyer through the license and requiring the buyer to

indemnify the agency and photographer unless they have obtained a copy of the release

with specific permission for the intended use. The easier alternative is to require the

photographer to provide the protection and indemnify the agency and the buyer if the

model happens to complain.

The lawyers at Getty and Corbis (and maybe other agencies) have developed releases they

believe will fully protect them in the event of a misuse. No model in their right mind

would sign these releases if they fully understood the implications. What is hoped is

that the model will sign the release without a careful reading or understanding, or

that the photographer will be able to con the model into agreement. Is this the kind of

relationship photographers want to have with their models?

If photographers have trouble getting releases, it makes no difference to the agency

because they have nothing invested. They simply limit the images they will accept to

those that are accompanied by releases that will protect them and their customers.

Problems Are Rare

Problems with inappropriate uses are rare. They only occur in a small percentage of

uses, but a small percentage can cause big legal and ethical problems. The process of

checking uses is not an absolute guarantee that legal problems will not arise, but it

is much better than no checking at all. Photographers should always get the best

release possible and clearly explain to their agent any restrictions they want to place

on the image.

Are Fully Automatic Transactions Necessary?

The fundamental problem is the belief that in order to be e-commerce enabled you must

be able to offer fully automatic transactions - start to finish.

If this is necessary then the only alternatives are to remove your images from the

market or to do what you can to protect yourself from legal liability. However, there

is a big question as to whether this is really necessary.

Buyers of rights protected images want on-line search and delivery. They also seem to

like to talk to a human sales person rather than purchasing automatically. If that

wasn't the case Getty Images wouldn't need more than 665 telephone call center

personnel (more than one-quarter of their total employees) to handle sales


Some people argue that while most buyers may want to talk to a sales person now, in the

future they insist on being able to complete transactions without negotiations. I

don't think so. I can't prove it, but consider the following.

There is a lot of evidence that the reason buyers embraced RF was because it made

delivery, and searching easier, not because it was cheaper. Many traditional stock

agencies missed the boat in the early 90's because they weren't prepared to deliver

images digitally, and because the didn't market as aggressively, not because they

wouldn't sell at low prices. The recent failure of SuperStock's Express Pricing is a

notable example that a simple pricing structure is not enough to bring in customers.

Another indicator is that the recent price increases instituted by the RF producers

have not reduced their number of customers. Price is not the issue.

The number one thing buyers want is choice. When they figure out that a "no negotiation

rule" reduces the number and quality of models who are willing to let their images be

licensed as stock, they will look for other options rather than just buying the limited

choices available with automatic sales. In order to compete, sellers will need to

provide digital search and delivery, but they won't have to give up negotiations.

I believe buyers will be happy to spend a little time discussing their project, and

supplying information about the potential usage, rather than accept limited choice. In

such conversations buyers can also learn about other previous uses of the image.

Even if it turns out this is not the ideal situation for some buyers, can photographers

afford to take the financial risk, and the risk to their models reputations that are

required when they offer automatic pricing? The liability issues make our product

different from the vast majority of other products that will be sold effectively

through automatic pricing on-line.


Interestingly, technology can provide a route to greater protection for the sellers and

the models, but not via automatic sales. As we move more in the direction of on-line

search and the tracking of sales there are some neat and simple technological solutions

that provide for easier tracking of restrictions.

In the past each seller had their own separate database of information. Large agencies

might have fifty or more sub-agencies selling the same image around the world. Not only

was it necessary to supply dupes of these images to every office, but the information

about each image also had to be duplicated and kept up to date, if every office was to

remain current on usage restrictions. Without centralized databases this was an

impossible task so everyone headed in the opposite direction of requiring absolute

control and absolute protection up front.

But, now centralized databases are possible. Getty and Corbis have a single database

for all information about sales. All licensees will access the same database.

Masterfile has all of their sub-agencies supplying updated sales information to their

master database on a daily basis.

If the usable image file is only available in one location and there is a single

database where sales information about the images is updated daily, it is easy to build

into that database the restrictions on any given image.

The simple rule is that if there are any restrictions attached to a particular image

number then that image can not be licensed automatically. In such a case the buyer

would have to call the appropriate office and negotiate the usage. The sales person for

the agency could input the image number and get a list of all restrictions placed on

the image.

The vast majority of people images in stock agency files today should be tagged as not

released for "Sensitive Issues". At that point some human on the sellers side would

have to ask some questions about the use and make a judgement about sensitivity. Based

on this information the sales person could then decide whether the image could be

licensed for the use requested, or not.

The default search would be to include all appropriate images and only after an image

had been selected would the customer learn whether or not the image could be licensed

automatically. Customers would also have the option to search only for those images

which had no restrictions on usage.

Some might suggest that customers should be given access to the "restricted use"

database so they could determine for themselves if the restrictions apply. I would not

be comfortable with this approach. I believe the buyers who want to use images in

sensitive situations are exactly the people who will say, "Why would anyone be upset at

the way I intend to use this image."

The big downside to this approach from the point of view of those favoring a technology

solution for everything is that sellers will continue to need knowledgeable and well

trained human negotiators manning the phones. These are the people they had hoped to

eventually eliminate and replace with hardware and software developers.

FPG's New Policy

Recently FPG announced a new policy on "Sensitive Issues" and the type of releases they

will require in the future. Effective immediately, they have decided that they will no

longer accept images unless they are backed by a release that meets their minimum

requirements for sensitive issue uses. Use of these new images will be allowed for any

purpose whatsoever without any additional clearances.

Their terms and conditions will continue to prohibit clients from using images in a

defamatory or pornographic manner, but they are amending their back office procedures

and revising their Online Licensing Agreement to eliminate the requirement that the

client obtain prior clearance for sensitive issue uses.

In a letter to photographers FPG said, "We have devoted a considerable amount of time

and resources to carefully examining this issue in order to arrive at a decision. The

primary reasons for retiring the policy are detailed below:

"The practice of going back to the photographer or the model for additional permission

calls into question the validity of the releases themselves. Having the photographer

sign off on a Sensitive Issue usage on behalf of a model may place that photographer in

a position of liability.

"Requiring the photographer to go back to the model for signature is cumbersome and

sometimes impossible when the release, if it meets our minimum requirements, is in

place to cover all uses, including sensitive issue uses.

"An additional special clearance step represents a considerable disadvantage in an

e-commerce environment where the client's experience must be as fast, easy and as

seamless as possible. As is true with any e-business; optimizing the client's on-line

experience is paramount."

They believe that since a release, in and of itself, represents the model or property

owner's specific consent, it is not judicious to ask them, or the photographer, to give

consent a second time.

Their lawyers believe that elimination of the sensitive issue policy not only

streamlines the licensing process, but it reinforces and protects the intent of the

release as proof of the specific agreement between the photographer and model or

property owners.

Photographers have pointed out that this policy is unworkable from their point of view

and some have indicated that as a result of photographer complaints FPG may be backing

away from this new position and returning to the old strategy of checking with the

photographers and getting a specific release for each sensitive issue use.

In my opinion, this is wishful thinking on the part of the photographers. FPG, TIB and

Stone will continue to push for releases that relieve them of all obligation, UNLESS

Getty Images changes its overall policy toward automatic sales. They may re-group, but

they will keep coming back with slightly different versions until they get enough

photographers and models to agree. They must have this protection if they are going to

make images available without any checking and that is their goal.

If photographers produce images and don't supply an "adequate" release, the images will

simply be rejected as not suitable for marketing. In my opinion, this is a signal that

not many of the existing people images will be selected for the FPG or Gettyone.com


Getty Images goal seems to be to remove all risk to the buyer, no matter how

irresponsible that buyer might be. Since they don't want to accept those risks

themselves the only alternative is to lay the legal liability on the photographers and

the models. This is a basic fundamental issue for them unless they dramatically change

their business model. They may back off from their current position for a while, but

they will keep coming back to it because their business model demands it.

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January 4, 2001 - There are widespread expectations among Getty photographers that

early in 2001 Getty will offer a new contract to TIB photographers. It is also

believed that the terms in this contact are likely to be extended to all Getty brands.

Thus the FPG, VCG and Stone photographers are equally interested in this hoped for new


Photographers want a single standard contract, with a single royalty rate, across all

brands. Getty recognizes what photographers want, and for months has been trying to

find a way to write such a single contract that would satisfy the majority of their

photographers. I'm not convinced they will be able to accomplish this task because

they are faced with a set of conflicting problems.

I believe the number one issue for Getty is that the total percentage of gross revenue

paid to photographers must not go up, and hopefully it can be reduced. In order to

make their business profitable at a level that will satisfy investors, Getty needs to

cut costs. Their biggest single cost of operation is the amount of gross revenue they

pay suppliers.

This basic principle is in direct conflict with the image

creators desire for a larger share of the total revenue collected from the sale.

TIB photographers look at Stone photographers and say, "Why should they get 40% of

gross sales and I only get 30%?" They look at FPG photographers in the U.S. and say,

"They get 50%, why can't I get 50% also." Getty now wants Stone photographers to allow

them to market some of their work under the TIB brand and pay them only 30%. Stone

photographers say, "Yes, I want more of my images marketed, but I am not willing to

give up that much of a percentage of sales to make it happen."

It appears that any royalty percentage that would appeal to a large number of suppliers

would dramatically raise Getty's cost of content. This is something they probably will

not accept.

Getty appears to have other problems.

  • They need new images, but a large percentage of their suppliers are sitting

    back and waiting to submit until they get a satisfactory new contract. If

    photographers are unhappy with the new contract terms some may allow the images they

    already have on file with TIB to remain in the files, but they are unlikely to submit

    new work.

    The question is how long Getty can operate without a steady flow of fresh images.

  • The lack of new agreements is making it difficult for Getty to publish some of

    their planned marketing materials. Getty has a strategy of putting out a series of

    subject oriented catalogs that they were calling "Special Collections" and were to be

    marketed through the TIB brand. Some of the subjects under consideration are: nature,

    wildlife, scenics, travel and sports. Some of the images they want for this series

    have been produced by Stone or VCG photographers, but Getty wants them to accept the

    lower TIB royalty percentage on these images. A number of photographers seem to be

    resisting which is playing havoc with the editing for these catalogs. Of course, long

    range this could affect the flow of Getty's marketing.

    Word on the street is that the "Special Collections" terminology is no longer being

    used internally as they look for new ways to get the photographers involved.

  • One alternative to getting contract photographers to work for a lower percentage

    is for Getty to produce the work in house. Getty has tried hiring young people right

    out of photo school to shoot new work under the careful supervision of experienced art

    directors. In such cases the photographer is paid a day rate, plus expenses and a

    minimal royalty. In at least one case they paid $800 a day plus a 10% royalty for 10


    The main reason for paying a minimal royalty is so they can tell their other contract

    photographers that they don't "wholly own" much of the work in their files.

    Indications are that this strategy hasn't produced the desired results. Work produced

    in this manner evidently isn't selling well enough to offset the up front costs Getty

    is paying, when compared with getting the freelance photographers to absorb all

    production costs. Sources indicate that Getty has come to the conclusion that in house

    production is not a realistic solution, and that they need to do more to encourage the

    experienced freelance photographers who work for royalties to continue to produce and

    supply new images.

  • Getty is trying to give their separate brands unique visual identities from the

    point of view of the buyer. They have defined Stone as having modern, innovative,

    cutting edge imagery and TIB as having more conservative, classical imagery.

    Photographers are having a difficult time figuring out what the third distinctive for

    the VCG/FPG brand might be -- (a brand that also includes Bavaria, Telegraph Colour

    Library). So far Getty Images has not identified a third "brand" distinctive. There

    does not seem to be a clear third brand definition. Will they roll VCG into TIB and

    basically have only two brands? Will they retain the FPG brand, which has a strong

    user following, and basically brand it in the same way as they brand TIB without a

    major distinction between the two?

    One problem with this strategy is that Stone, TIB and the various VCG brands have all

    been in head-to-head competition for years. All are currently perceived by the buyers

    as offering a full range of quality imagery from innovative cutting edge to

    conservative classical. Moreover, individual photographers associated with each of

    these brands, from time to time produce images that would fall into the category of one

    or the other "new" brands.

    Now, Getty has to change the way they accept images for these brands, as well as the

    way they market the brands to the buyers. In the past, each of these brands showed the

    full range of work of their photographers. Under the new branding it will be necessary

    for photographers to cross from brand to brand in order to market everything they

    produce. Adding to the complexity for the photographers, each brand has different

    contracts and different royalty percentages.

    Getty needs to work out a simple system that will enable all their photographers to

    offer work to whichever brand is most appropriate to the images that have been

    produced. This argues for a single unified contract, and possibly unified editing, as

    well as one royalty rate.

  • One argument Getty may be able to use with Stone photographers is that fees per

    usage are going up. Therefore, they will make money at existing percentage rates.

    However, TIB photographers report there doesn't seem to be any rise in their average

    fee per usage. If anything, the fees per use, as well as the gross royalties received,

    seem to be dropping. Therefore, the above argument would be unlikely to hold much

    water with TIB shooters.

  • Can Getty offer a higher percentage, but take the money back in fees for various

    services provided? I think this is unlikely to work, particularly in the near future.

    Photographers are very sensitized to the amount they are losing as a result of fees

    being charged. While the total impact of such fees are often difficult to calculate

    until after the fact, photographers, especially those with previous experience with

    TIB, will be wary.

    Getty's recent effort to play catch up with Stone catalog fees has angered many

    photographers. Stone allowed catalog fees owed by photographers to accumulate for

    almost two years without taking deducting any portion of the amount owed, or even

    telling photographers how much they owed. The photographers could have accepted small

    deductions each month, but in the last four months of 2000 Stone deducted fees from the

    photographer's royalty checks in an effort to totally catch up on the debt. This left

    many photographers with small checks at the end of a difficult year, and a clear

    recognition that they must be concerned about fees as well as royalty percentages.

    In theory, catalog fees would be the perfect way for Getty to get more money out of the

    photographers. They can set the per-image cost at almost anything they want because

    there is no transparency to the numbers. On the other hand, lately they have pushed

    this per-image fee so high that it is hard to imagine that photographers would not

    rebel at even higher fees.


I believe Getty will repackage their contracts in an attempt to find a way to make them

more palatable, but I believe they will face a lot of resistance from many of the most

productive photographers until they offer a single royalty percentage across all

brands. To gain much acceptance that percentage would have to be at least 40% -- and

even that may not be enough.

But, as I have pointed out, I believe it will be very difficult for Getty to offer an

across the board 40%. Consequently, I expect them to go through several variations

trying to find something that a significant number of photographers will agree to

without having to raise the percentage.

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Alaska Stock To Drops Royalty to 40%

December 18, 2000 - Alaska Stock has asked their photographers to consider a change in

the royalty percentage from 50% to 40%. In exchange the agency will make ALL of the

photographers' images available on-line as well as not charge catalog and dupe fees in

the future. Jeff Schultz, owner of Alaska Stock, provided the following explanation of

their plans.

Schultz -- We represent a little over 100 photographers. I have personally corresponded

with 95% of our photographers on this change and all but two realize how important it

is and costly it is to have a very good web presence. Those 95% have voted yes to this

change. We have one photographer who wasn't willing to wait for us to make this change

and actually wanted to pay us to get his general file images up on the web. We have

another who feels that we should go to the 60/40 split AND continue to charge for

premium set/catalog fees.

JP -- What was the co-op fee charged for the last catalog?

Schultz -- Our catalog #4 which was mailed in June of 2000 cost a photographer $100 per

image if a photographer paid up front and $130 per image if they chose to take the fee

out of their sales. If they don't pay up-front, we take up to 25% out of a

photographers' portion of their monthly checks until all their catalog fees are paid.

JP -- What is the current dupe fee?

Schultz -- We call it a "premium set fee". Images in our premium set are exclusive to

Alaska Stock and are duped, keyworded, scanned, and slated for the next print catalog.

This fee is currently $28 per image.

JP -- On average after all the catalog and dupe charges are removed will the

photographers be getting smaller royalty checks, or checks the same size?

Schultz -- We expect more sales overall and therefore larger checks because of the

change to aggressively market MORE of their images and therefore a client is apt to

find the image instead of moving on somewhere else.

JP -- Is there any charge for scanning and keywording images that are put on-line or on


Schultz -- We have never charged photographers a fee for producing a CD, the web site

or for general file images being scanned and keyworded and put on-line.

JP -- Would the 40% apply on revenue received from sub-agents?

Schultz -- No, subagent sales remain at 50%.

JP -- How are sales from old catalogs handled?

Schultz -- If a sale is made because a client saw the image in a previous catalog the

split remains 50/50. Likewise, reuse of images that were originally sold at 50/50 are

still at the 50/50 split.

JP -- Can you explain why you felt this move was necessary?

Schultz -- We are adding more value to our photographers' images than we ever have

before by making them available on the web, as well as through our traditional


I don't know of anyone in the stock business that does not see the web as THE way the

majority of the stock photography business will be transacted in the future. I

absolutely agree 100%. We feel that not too long from now, images that are just filed

in a general file will simply just sit there. Of course there are also those clients

who indeed do call us and have us search for images and send transparencies. Therefore,

we now need to operate efficiently in both a digital and analog world.

Alaska Stock is faced with a much larger increased cost in doing business in order to

stay up with technology and client demands for immediate access to our images.

Many clients want to see images today. In order to make our photographer's images

readily available it must be digital. If it's scanned, our in-house sales people can

get the image to a client right away by e-mailing them a light box.

With all this said, we now not only need to do things as we have before: edit images,

enter into a database, label, file, market, send out images, re-file, invoice etc. We

now need to get all our images in a digital environment where they can be seen

instantly. This goes way beyond just scanning and keywording. It involves digital

storage, RAID systems, constant enhanced software upgrades for the web, web

maintenance, higher cost employees on the tech side, enhancing our product, etc. And we

must now do a better job of marketing our images in both digital and traditional ways.

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November 21, 2000 - Getty Images acquired all the outstanding shares of Cass & Cass

Limited (TIB-UK) on September 20, 2000 according to the 3rd Quarter 10Q filed with the

SEC. They paid $6.3 million in cash and 247,790 shares worth $10.4 million to Cass &

Cass Ltd. for a total of $17.1 million, including the costs of acquisition.

Companies House in the UK which provides detailed annual accounting figures of Limited

companies shows that the gross turnover (annual income) for Cass & Cass in 1999 was

6,741,654 pounds. If we assume an average annual exchange rate of 1.45 pounds to the

dollar this is equivalent to about $9,775,398 U.S.

An interesting number for photographers is the "Cost of Sales" which includes the

amount of the gross revenue paid to TIB (now Getty Images). The cost of sales was

3,054,394 pounds. This number certainly includes everything that was paid to TIB in the

U.S. and it may include some other costs such as depreciation. This number is only

slightly over 45% of the total revenue collected.

TIB-UK retains 40% of the gross fee collected for still photo sales and remits 60% to

TIB headquarters. They retain a lesser percentage of the footage sales. If all of the

3,054,394 pounds is fees paid to headquarters (TIB or Getty) then the total gross sales

that this number is calculated on would be no more than 5,090,656 pounds. It may be

significantly less depending of the proportion of these sales that are for footage.

Sources in the United Kingdom believe that only about 2.5 million pounds of the gross

revenue comes from licensing still images. If this is true, footage sales would be

slightly above 2 million pounds leaving another 2 million pounds unaccounted for.

During 1999 Cass & Cass operated a scanning bureau and earned income from their own

wholly owned imagery. In addition they may have been charging research fees, service

fees, delivery fees, etc. that were not shared with TIB or the image creators. These

factors may account for the additional 2 million in revenue.

Wholly owning such an operation greatly improves the gross sales on the Getty Images

balance sheet. If 2000 sales were flat Getty would have only recognized 3,054,394

pounds in revenue when TIB-UK was a separate company.Now, with no increase in sales

they get to recognize 6,741,654 pounds, a 120% growth in annual revenue from this

division of their operation.

In the 4th quarter of 2000 Getty's annual revenue from this acquisition should increase

by at least $1.3 million (1/4 of $5.25 million) if they have zero increase in sales.

Cass & Cass' Cost of Sales was 3,040,810 pounds in 1998. This would be about

$4,409,174 U.S. TIB (parent company) reported that their total sales in Europe in 1998

were $29,932,759. Thus, the UK market made up about 14.7% of their total European


Interestingly, the figures in the Companies House report for "Profit On Ordinary

Activities Before Taxation" was 1,171,055 pounds. Thus, the $17.1 million U.S. would

have been about 10 times gross annual profits which it is my understanding from talking

to people in the investment community is a reasonable multiple for the price being paid

for companies with profits and good growth prospects.

Mark Cass remained as VP/Marketing for the TIB Brand until the end of 2000. He will

continue to live in NYC, in a newly purchased apartment after selling his home in


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November 21, 2000 - One of the important services an agency provides for editorial

shooters is lining up assignments, or expense guarantees, from magazines on breaking

news events. Without such minimum guarantees it is difficult for many freelancers to

justify covering news events.

Many Sygma photographers claim that since Corbis took over, the frequency of such

guarantees has fallen dramatically. This affects the overall income of photographers.

There have also been reports that in the future when no magazine is prepared to

underwrite a speculative shoot, Corbis will not independently fund such shoots as Sygma

had in the past.

Charles Borst, Executive News Director of Corbis Sygma in New York says, "We will

indeed provide expenses for future shoots. We heavily subsidized a NYC based Sygma

freelancer's trip to Israel last month, and most recently subsidized Sygma/Newsweek

photographer David Kennerly's trip to Vietnam with President Clinton. If we didn't

subsidize travel, we might as well fold up our tents and just sell rapidly aging stock.

I have, and will continue to subsidize travel whenever there is a potential sale to be


He also pointed out that earlier this year Corbis funded a major shoot by Ilkka Vinonen

to examine the state of the world's water. Vimonen traveled to Africa, Asia, India and

Israel for this project.

Borst acknowledged that there has been a falloff in magazine assignments in the past

year, but says this has been industry wide, not just at Sygma. "This has not been a

huge news year. There was little interest in the political campaigns, there was no

interest in Clinton because he was not running, and there was no major story overseas.

In addition, the big news magazines seem to be moving away from covering hard news and

more toward what we call 'infotainment'," Borst said.

Logical as this all seems, photographers can't help but be concerned when one of the

few assignments that does develop is passed to a newspaper, and its staff

photographers, rather than to a Sygma freelancer.

When the election problems in Florida developed Corbis Sygma got a guarantee from TIME

to provide coverage. The only Corbis photographer in Florida at the time was under

contract to Newsweek on a totally different story, and could not shoot for TIME. To

lock in coverage for TIME Borst called the South Florida Sun-Sentinel in Fort

Lauderdale. In the past Sygma had picked up pictures from this paper on the Elian

Gonzales "rescue," various Cuban boatlifts and other South Florida and

Caribbean-interest stories. It is a common practice of stock agencies to pick up, and

market pictures from newspapers, worldwide, when an event is over and done with and

there is no possible way of having their own photographer provide coverage.

The Sun-Sentinel had eight photographers spread throughout South Florida covering

various aspects of the story. TIME magazine gave Corbis/Sygma a guarantee for first

look at the pictures these photographers produced. All this is accepted normal

procedure for an assignment agency and is certainly the way Sygma has operated prior to

the Corbis take over.

However, the next step is what has many Sygma photographers hopping mad. Borst wanted

coverage in Tallahassee, but the Sun-Sentinel had pulled their shooter back home after

the first two days. Sources in South Florida tell us this was because the Sun-Sentinel

has put a hold on all travel assignments for the rest of the year for budgetary


Instead of trying to find a Sygma freelancer who would be willing to fly to Florida to

cover this event, Borst offered to pay for the airfare if the Sun-Sentinel would send

one of their photographer's to Tallahassee. "I had to make a judgment call here, and

the Sun-Sentinel photographer was already familiar with the story and the players,

having covered it from the beginning. I didn't feel I had any better options available

at the time. In 99.9% of scenarios, I'm able to work things out to the benefit or our

Sygma photographers, and those who have known me for a while can attest to that. In

this case I had to make a judgement call on how to provide TIME with the best possible

photos on a developing news story. In the long run, a happy customer will keep coming

back, and 99.9% of the time I'll be able to turn that into an opportunity for our

shooters. This scenario was the exception, not the rule," Borst said.

As it turned out the Sun-Sentinel photographer stayed on the assignment for about two

weeks and is being replaced today (Nov. 21st) by Sygma photographer Shaul Schwarz from

New York. Schwarz was in Israel on assignment when the story broke.

The Sun-Sentinel gets expanded coverage for their newspaper, and 50% of any fees

collected by Corbis for the pictures generated. The Sun-Sentinel splits their

percentage with their staff photographers who are also on full salary for the

newspaper. The Sygma photographers get to sit home and wait for the phone to ring.

Some Sygma photographers wonder if anyone is thinking of them, or if the motivation is

entirely one of how Corbis can make the most money. Borst says, "The profit motive is

not necessarily bad. If we keep our customers happy in the long run that will result in

more income for our photographers."

Sygma wants their photographers to focus more toward conceptual and infotainment

subjects, and put less emphasis on breaking news because that is the direction their

customers are taking. They have beefed up their sales force. When a client calls for an

archive photo they try to push them toward an assignment. They believe these are the

things that will generate more assignments and revenue for Sygma photographers.

Story 362


SIZE =5>

One Stone photographer has calculated, based on the per image fee photographers are

being required to pay, that the costs for production and distribution of the "Work"

catalog which contains about 1100 images was $2,395,272 ($786,830 for the North

American edition and $1,608,442 for the Rest of the World edition).

We asked Getty Images about two months ago how many copies of "Work" they had

distributed and if these figures were accurate. They have been unwilling to comment.In

checking with a major producer of quality catalogs in Europe we have determined that

they have recently been able to produce and distribute 100,000 copies of a 428 page

catalog with about 2200 images (twice the number of images as in "Work") for the

following costs.

Printing, including shipping

and insurance   




About 70 dupes of each image

for at total of 160,000 dupesAbout 70 dupes of each image

for at total of 160,000 dupes  


In country mailing to customers varies

but averages $4.00 per book  






It they had distributed 200,000 copies the total cost would have been about $1,940,000.

These figures do not cover any internal labor costs for editing and design work. Also

keep in mind that "Work" has a page size that is about 40% of the traditional catalog

page size so Stone probably had much lower paper costs for printing.

Another thing to keep in mind is that because Stone is only putting about half as many

images in a catalog as the other agency the proportional cost per image will be twice

as high.

If Stone is paying for 50% of the catalog costs and the total fees charged

photographers was $2,395,272 then Stone probably distributed close to 500,000 "Work"

catalogs worldwide.

Story 362


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The name of the game on the internet is how many different ways you can tell customers

about your site. Get your banners on every conceivable site related to your business.

If you can get your competitor to promote your site, all the better.

Back in January Getty Images purchased a small Ontario Corporation called I/US

Corporation. They issued 49,565 shares of Getty's common stock which had an aggregate

value at the time of $2.3 million in exchange for all of the issued and outstanding

capital stock of I/US Corporation.

I/US, All Things Graphic, is a portal which is aimed primarily at desktop publishers.

However, advanced business users and graphic designers also use the site. There are

also aspects of the site that seem to be aimed at advanced amateurs and students. It is

unclear how the site itself is being marketed. It can be reached by going to

www.i-us.com.What is interesting to us is that although this site is owned by Getty, it

has three sponsors -- Adobe, CORBIS and EyeWire. Each sponsor pays advertising dollars

to get their "sponsor" position. Sponsors have a permanent button on the left hand side

of the home page. The Corbis button is the same size as the EyeWire notice. There is no

mention of Gettyone.com or PhotoDisc on the home page.

While it mentions Royalty Free under the Corbis button, if you click the button it

takes you to the Corbis site and immediately gives you the option of searching for

either Rights Protected or Royalty Free images. Corbis also has banner ads appearing on

the site.

I find this willingness of Getty Images to promote the Corbis name and venue very

interesting. Maybe next we will see Corbis being promoted on Gettyone.com -- if they

are willing to pay enough for the position.

It is also interesting when we consider that Getty doesn't want the photographers they

represent to offer to Corbis, images that Getty is unwilling to accept. Likewise,

Corbis doesn't want their photographers to make available to Getty for marketing images

Corbis won't accept.

Story 362


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In 2000 PhotoDisc has instituted some dramatic increases in prices for single image

sales on-line.


Nov 1999  

Feb 2000  

Sept 2000  

% Inc.  
















Disc prices are also up slightly over what they were a few years ago. Prices for their

major line are $329 per disc. They also offer their Signature Series and Designer Tools

at $279 and the Object Series and Backgrounds and $179.

While the Royalty Free business used to be based totally on selling discs in 2000 there

has been a dramatic shift to buying images on-line. Published information has indicated

that at least 60% of the dollar volume currently being generated by PhotoDisc is for

single image sales. The majority of those sales are for the 10MB file size.

It has generally been assumed that most customers who bought discs purchased them in

order to use a single image. Frequently they never use any of the other images on the

discs. Now when it is easy for customers to buy just the images they need, and to get

rapid delivery on-line rather than having to wait for a disc to be shipped by Federal

Express, the average price per unit sold is dropping -- $99.95 vs. $329. This may also

result in an increase in unit sales. (Those people who actually used two pictures off a

disc are now making two purchases instead of one.)

Other RF producers are reporting that in excess of 70% of current sales are for single

images rather than discs. It seems likely that disc sales are on the way out. In the

future all buyers will purchase the image they need, as they need it, be it RF or RP.

It also seems likely that prices for single image RF will continue to rise as a way of

making up for the loss of revenue from disc sales.

Story 363


SIZE =5>

The London staff of the Comstock office is notifying customers and the press that the

office will be permanently closed as of the end of the year. Comstock's entire European

operation will now be based in Luxemburg.

Copyright © 2001 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 301-461-7627, 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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