January 2004 Selling Stock

Posted on 1/2/2004 by Jim Pickerell | Printable Version | Comments (0)

604

JANUARY 2004 SELLING STOCK




Volume 14, Number 3



©2004 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, 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, 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

The business model is changing. Photographers need to go with the flow to earn
more dough.


John Lund



INCREASED IMAGE USE?????




January 2, 2004 (Story 603) - Economists expect the U.S. economy to be
better in 2004 than 2003 and 2003 wasn't all
that bad. Does that mean that sales of stock images will increase? Jonathan Klein
expects Getty's growth in 2004 to be between 8% and 12%. Some of this will be due to
price increases, but he also says Getty will sell more images despite the declining
trend the company has experienced in the past five quarters. (See statistics in Story
590 .)


Lots of people are very bullish on 2004, but as an industry skeptic I'd like to offer
some things to consider before you run out and pile up debt betting on future growth.
I've been wrong before, and I hope I'm wrong this time, but I don't see the rosy
picture ahead of us that many do. Unfortunately, in most cases there is no solid
indisputable answer to some of the most critical questions, but that doesn't mean we
shouldn't consider the questions.


I've always taken the position that it is better to PLAN for the worst and be
pleasantly surprised when it doesn't materialize than to HOPE for the best and face
disaster. With that said, here are a few things to think about.


Things To Consider


One of the trends we see at Getty is a decline in the number of images being licensed
over the last year or more. (The trend is worse for RM than RF, but it is down for
both.) For part of this period the overall market was flat, but recently we've seen an
upward trend in sales for many industries but, as far as I can tell, not an upward
trend in the use of professional imagery. Getty's experience may not be representative
of the stock photo industry as a whole. My guess is that most other companies have been
seeing a bigger decline in usage than has been the case at Getty.


It is comforting that Getty has been able to offset declining volume with price
increases, but there is probably some limit as to how much prices can eventually be
increased. The long term health of the industry depends on finding some way to increase
volumes.


When it comes to price increases in the RF sector a case might be made that companies
may be close to the maximum they can raise prices without losing ground to the
"Subscription Model" RF offerings. So far it is very difficult to get any handle on how
many images Subscription buyers are actually using, or if these buyers would have
purchased regular RF if it were still at its old, lower price points.


But the key questions are: Will there be a turn-around, and growth, in the number of
images used? Or, are their reasons why we may not see the same type of growth in image
use that we have experienced in past economic recoveries?


Technology has been a boom to the stock photo industry in many ways, but it may also
have brough with it some unwanted side effects that may partially explain declining
user demand.


There are signs of some fundamental shifts in user demand that could mean the recovery
in the stock photo industry will not track with the recovery in advertising, or the
economy, as has been the case after previous downturns.


Image User Demand


  • According to Dr. Joe Webb, formerly of TrendWatch and now with
    www.WhatTheyThink.com, despite the improvement in the economy in general the printing
    industry in the U.S. is not seeing similar improvement. In October 2003 unadjusted
    shipments of printed materials were $700 million less than October 2002. Shipments for
    the year are down 2.7% compared with the previous year. There has been a steady trend
    downward since late 2000.


    Still photographers should keep in mind that their revenue is very tied to print uses.
    Anything that causes overall printing to decline will eventually affect the average
    still photographer's bottom line.


    Dr. Webb says surveys show that there is now a clear disconnect between the growth in
    Gross Domestic Product (GDP) and growth in the printing industry. Previously it was
    assumed that printing was tied to GDP and as GDP demand grew demand for printing would
    also grow.


    Why the disconnect? It used to be that there were two basic ways for consumers to get
    information about products and services -- printed materials and television. When there
    were only a few TV network outlet the cost of an advertising buy used to make it almost
    impossible for anything but big national brands to use TV for promotion.


    Now with the explosion of cable, and more special interest programming, more and more
    advertisers are finding it cost effective to spend a larger portion of their ad budgets
    on TV. That leaves less for them to spend on print.


    There are other indicators that the use of printed materials may be on the decline.


  • The Pew Internet & American Life Project discovered that Americans seem to look
    less to Magazines and Newspapers for information than to all other sources. (See Story
    600 .)
    The other information sources are not big users of still imagery, and
    when they do use still photos the payments for usage tends to be less than in the
    printed environment.


  • Dr. Joe Webb also points out that in the Internet age consumers get lots of
    product and pricing information on line, without printed materials. He says that while
    the economy is growing, print advertising is not and suggests that, "Perhaps they
    (print advertising uses) have been permanently discounted? In the past when economies
    had an upturn, we could always count on advertising going up shortly thereafter. We
    may not be able to this time."


  • More companies are finding more efficient ways to advertise on the Internet.
    Total online advertising in 2003 exceeded $6 billion. Online advertising at leading
    media sites jumped almost 40%.


    The big spenders in online advertising are no longer fly-by-night Internet companies,
    but hotels, airlines, car companies, insurance companies, retailers and companies in
    all the largest sectors of the economy. Consider any of the products that are sold
    through Amazon.com, and the explosion of EBay not just for consumer to sell items they
    no longer need or want, but as a retail outlet for many small businesses. More and more
    companies are finding ways to promote their products that don't involved print. They no
    longer need print as much as they used to.


    A recently released Patrick Marketing Group report finds that 48% of marketers plan to
    spend more on electronic advertising next year and 40% will spend more on online
    marketing. If they are spending more on electronic, and their budgets don't rise
    dramatically, there will be


    Less Spending On Print.


    Internet Use


    When advertisers use photos on the Internet to promote their products or services
    there are four reasons why they tend not to pay as much for such usages as they might
    have paid for comparable print usages.


      1 - If the photo is being delivered on the Internet the file size necessary is often
      much smaller than that needed online. This means the buyer can often get by with the
      cheapest RF resolution rather than paying more for a larger file size.


      2 - Many uses have print and Internet components. The tendency is to price the total
      usage based on the print component and do a small add-on for the Internet usage.
      However, as print components become smaller and Internet components become more
      dominant this will tend to reduce the overall amount that is being paid for
      photography.


      3 - There is a tendency among sellers to think that all Internet uses of images are
      the same. Sellers are struggling to find a way to determine the likely buyer impact
      that any particular Internet use might have and to develop a circulation based system
      of pricing similar to what the industry has had in the print environment.


      RF marketers would argue that circulation based systems of pricing are not important
      and that the price should be fixed regardless of the circulation. But, there is no
      denying that a huge percentage of the industry's revenue comes from prices based on
      usage (I estimate it at about 75%). If we eliminate usage pricing and price everything
      at the current fixed RF rates the Stock Photo Industry's annual revenue would drop to
      about half of its current level.


      There may be no good way to ever price Internet uses based on estimated eyeballs as is
      the case with circulation pricing. This may mean that the overall revenue from stock
      photography is destined to go down, down, down.


      4 - The hotel use example we discussed in "Hidden Internet Uses" (Story
      600 )
      clearly illustrates the problem. Through linking a single promotion or advertisement
      can get much more extensive exposure than is likely from any printed piece, and the
      degree of that future linking is impossible to determine at the time the image is
      licensed.


      In one example an exterior view of a hotel was placed on the hotel's web site. It was
      later discovered that this images was on 155 separate Internet portals in the U.S.,
      Canada and the UK that were marketing rooms for this hotel. In the print environment
      multiple insertion fees would be established for such uses, but this kind of pricing is
      certainly not common when discussing Internet uses.


      It is also likely that when the commitment was made to use the image the buyer
      probably had no idea as to the number of portals where it would eventually appear. The
      buyer is not buying space on these portals, but giving up a percentage of revenue on
      any sales made by the portals. The image seller is caught in an impossible bind, if he
      wants to price based on eyeballs.


      As this type of advertising becomes more widespread, and effective, it is likely to
      mean less revenue for the stock photo industry.



    How Usages Are Changing


    Even when we look at print advertising usages, there may be changes in the industry
    that will cause a reduction in the number of images licensed.


  • Some sellers have noticed that there may be a greater tendency to use high paid
    celebrities in advertising. Thus, while total advertising revenue may not be falling,
    on the creative side the fees for these personalities may be eating up a bigger share
    of the creative budget leaving less to spend on still images.


  • There may be more of a tendency to develop large campaigns using a variety of
    media targeted to reach certain segments of the population than was the case in the
    past. This could mean selecting fewer images and making more use of each one. That's
    not bad if there are additional fees for each use. But, there may also be a tendency
    to offer volume discounts when the same image is used in many different ways. This
    could mean lower revenue overall. If the buyers choose RF images for such campaigns
    then the discounting is built in.


  • In the process of getting information to consumers, marketers are finding that
    it is more effective to make more of the Internet and put less information in
    brochures, or printed pieces that are mailed to consumers. This may lead to a decline
    in the use of brochures for marketing.


  • Rising postage costs also tend to make print a less viable advertising medium.


    How Do Customers Get Their Images?


    Customers, almost exclusively, want to receive their images digitally. In many cases
    the only thing they are willing to look at is digital images. This is partly because
    they need a fast way to determine what is available. Digital gives then this option. In
    addition suppliers are finding that because they receive so few requests it is no
    longer cost effective to maintain and search analog files. This limits the choices for
    many buyers.


    Isn't that good news? Maybe. But in the last few years a huge percentage of the images
    that were formerly available to customers have been removed from the marketplace.
    Consider that Getty and Corbis alone acquired over 140 million images. Only a small
    fraction of these are now available through the web. The rest have either been returned
    to photographers or for various reasons are inaccessible.


    When it came to choosing the images to scan and put on the web these companies tried
    to pick the ones they believed would be in greatest demand. But, many images that were
    rejected are ones that some customers would like to buy, and these images are not now,
    nor are they likely to ever be, available on the major portals.


    One of the issues is will customers be satisfied with an available second choice
    rather than trying to find the image they really wanted? And what options are available
    to them if they are not satisfied with second choice?


    The fact that some art directors are "googling" to find images (See story
    598 , page
    10) is an indication that they are not accepting what is offered on the major portals.
    What they tend to find by googling is not images from stock agents or professionals in
    the business of selling stock images. The images that tend to come up in a google
    search are ones that have been posted for other purposes by people who are not
    necessarily focused on making money by licensing rights to their images.


    The Internet offers a way of finding resources for very specific subject matter that
    simply was not available a few years ago. As a resource it is also likely to get better
    and better. It will be very hard for archives that focus on offering general interest
    images that would be useful to a larger segment of the buying public to ever compete
    effectively with the specific knowledge and resources of the people with imagery in
    special niches.


    The main question will be whether this loss of customers will be significant, or not.


    The number of professional buyers who actually find something they can use in this way
    may be very small. And there will undoubtedly be a lot more hassle for the customer in
    obtaining imagery from these unsophisticated sellers. However, on the plus side for
    buyers is the fact that they will be dealing with people who really know their subject
    matter. If the buyer needs detailed caption information she is more likely to get what
    she needs from a google source than from a general interest stock archive. In addition
    the buyer will often be able to get the images for a lower fee from the
    non-professional sellers by saying, "Our standard honorarium is ___."


    I think this resource is likely to be of particular interest and use to book
    publishers and low budget special interest magazines. Only time will tell how much
    impact it will have, but professional image sellers should be careful not to discount
    this as unimportant.


  • Another thing that may happen is that more and more photo user may start
    creating images themselves rather than buying from a professional source. Digital
    cameras make it easier and easier for amateurs to produce professional quality images.
    Canon sold about 1 million SLR's with interchangeable lens in 2003 and estimates sales
    of 5 million in 2006.


    If image users are having trouble finding an image that works then it may be simpler
    to shoot the image themselves and let their graphic designer manipulate it in
    Photoshop. Many graphic designers may find that often it makes more sense for them to
    create the images they need themselves, rather than getting a professional photographer
    involved.


  • Anyone considering any type of print use today needs a digital file. They are
    not going to be anxious to work with someone who is supplying them with film, given the
    hassle they must go through to turn that film into a useful digital file.


    Summary


    So lets sum up. The threats to increased still image use are:


  • Demand for printed products is down and no longer tied to trends in the economy.


  • Consumers get more of the information they need from non-print products.


  • Consumers get more product and pricing information from the Internet.


  • Still photo demand is very dependent on the use on print products.


  • Expansion of cable encourages more TV advertising and less print.


  • Internet use is likely to increase.


  • The pay for use of still photos on the Internet is less than in printed products.


  • There is no good way to increase the fee-per-use for images on the Internet.


  • The growth in image use on the Internet is likely to be for video, not stills.


  • Print users are spending a greater share of their budgets on celebrities.


  • As print campaigns get more complex the actual price-per-use is likely to be
    discounted compared to single use pricing.


  • Many of the images some buyers want to use are no longer easily available.
    Consequently, buyers are looking for other ways to find the images they need.


  • By "googling" print users are finding images outside of the normal sales
    channels.


  • Rising postage costs encourages more use of the Internet for distributing
    information and less print.


    This isn't bad news for everyone. Some individuals and companies will prosper as they
    capture market share from the less efficient. But the total market for still images may
    get smaller. The number of photographers who can develop, and maintain, successful
    stock photo businesses is likely to decline.


    It seems clear that the long term the trend is toward greater Internet use for
    communication and less use of print. Young people should also keep in mind that as the
    Internet matures it is likely to make more use of video and less use of still images.
    How long it will take for such trends to develop is anyone's guess, but it seems clear
    that's where everything is headed.


    In 1926, George Eastman told his employees, "The world is moving, and a company that
    contents itself with present accomplishments soon falls behind." If Eastman thought the
    world was changing rapidly in 1926, consider the speed of those changes today.
    Individuals and companies in the photographic industry should heed his words.


    Have a Happy New Year!


    LEGAL NIGHTMARE


    December 22, 2003 (Story 602) - If you think that owning copyright to your images
    guarantees you the right to stipulate how those images will be used, and to receive
    compensation for each use; THINK AGAIN -- particularly if you are dealing with the U.S. legal
    system.

    Back to the Spring of 1997 National Geographic Society (NGS) first announced that they were
    going to publish a CD-ROM set that contained all the pictures and words that had appeared in
    its flagship magazine for the previous 108 years. Most photographers believed they should
    receive some additional compensation for this re-use of their imagery in an entirely new
    product. National Geographic initially claimed that they had a right to use all of the images
    without any additional compensation whatsoever. Then they made an offer to a few people of
    $20 per image for unlimited rights to use the images on CD-ROM products forever.

    When that offer was rejected by virtually everyone NGS reverted to their initial position
    that based on section 201(c) of the U.S. Copyright Act they had the right to use these images
    and they weren't going to pay anyone anything.

    The Battle Was Joined


    Some photographers thought at the time, "what's the big deal". Each image is one of almost
    150,000 that are on each CD set and who will want to buy CD's anyway. What can a single image
    be worth? Well, in the intervening years the initial CD-ROM project morphed into more that
    100 different products, all re-using images that were first published in National Geographic
    Magazine. These products have generated more than $70 million in total revenue. Someone's
    making money off these products, but it's not the content producers.

    The vast majority of photographers and photo agencies took the position that, "I can't fight
    someone as big as NGS," and let them do whatever they wanted. There were loud grumblings, but
    little else. However, a few photographers were prepared to join the legal battle.

    Greenberg vs. NGS

    The first was Jerry Greenberg. He had all his images that were contained in four major
    stories registered prior to the infringement. He had clear letters of agreement with NGS
    stating that what he had licensed NGS was one-time-rights to use these images and that the
    right to make any additional uses needed to be negotiated.

    At first his case was heard in the U.S. Federal District Court in Miami. The judge in that
    case granted NGS' motion for summary judgment and held that the "allegedly infringing work
    was a revision of a prior collective work and fell within the defendant's privilege under
    201(c)" of the copyright law. The judge based her decision on the Tasini vs. New York Times
    case that was tried in the Southern District of New York and favored the Times. That case was
    at that time being appealed to the 2ND Circuit Court of Appeals and later to the U.S. Supreme
    Court. The Supreme Court eventually ruled in a 7-2 decision in favor of Tasini.

    Greenberg appealed his case to the 11th Circuit Court of Appeals in Atlanta which eventually
    found in his favor and ordered U.S. District Judge Joan Lenard to enter a judgment on the
    copyright claim in favor of Greenberg and to provide injunctive relief.

    NGS, aided by a brief written by former Watergate prosecutor Kenneth Star, among others,
    appealed the case to the U.S. Supreme Court asking it to review the 11th Circuit opinion but
    the High Court without comments, refused to hear the case.

    This meant that a new jury trial had to be held in Miami to determine what "injunctive
    relief" (damages) should be. This trial was held in March of 2003 (it had been six years
    since all this started) and the jury found that the infringements had been "willful" and
    awarded Greenberg $100,000 per infringement for four infringement ($400,000). Willful usually
    adds legal fees to the damages.

    Has Greenberg seen any money yet? No. Because NGS has asked Judge Lenard to set aside the
    jury's determination and 9 months later she has yet to rule on that request. NGS has
    indicated that if they don't like her decision they will appeal the case back to the 11th
    Circuit.

    Meanwhile

    Fred Ward filed a case in U.S. District Court for the Southern District of New York. Another
    group of photographers including Douglas Faulkner, David Hiser and Louis Psihoyos also filed
    a separate case in the same court. These cases were assigned to Judge Louis Kaplan, well
    known for handling major publishing cases that appear in this jurisdiction.

    Over the years Ward had more than 850 images and 12 articles published in National
    Geographic Magazine. He also has excellent documentation substantiating that he licensed
    specific one-time-rights to the material and that he was to be compensated for additional
    uses. For more about his case see Story 475 .

    In reviewing the case Judge Kaplan found that the new features contained in the first
    Complete National Geographic set of CD-ROM's did not carry it over the line from being a
    revision into a new work. He focused on the fact that NGS made no changes in the content,
    format or appearance of the articles in the Magazine that were reproduced in the CD's and
    rejected the finding of the 11 Circuit Court of Appeals.

    On December 11, 2003, Judge Kaplan ruled that that NGS's section 201(c)(3) copyright
    privilege allowed it to create the CD-ROM set. He argued that because the Supreme Court
    ruling in New York Times v. Tasini was handed down several months after the 11th Circuit
    decision in the Greenberg case it cast doubt on the validity of the Greenberg decision.

    The implication of Judge Kaplan's decision are chilling. The court stated that so long as
    the publisher digitally reproduces the contents of the original print work in the same
    context in which they originally appeared, the publisher is free to add a number of
    multimedia elements and software tools that enhance the marketability and salability of the
    product.


    Thus, unless Judge Kaplan's decision is overturned, we may find that publishers will be
    allowed to display photographer's images in many new products without additional permission,
    or compensation, so long as the context in which they first appeared remains substantially
    the same. This could mean that an ad agency that wants to use an ad on the web or a
    corporation that wants to offer their annual report, or brochure as a PDF may be allowed to
    do so without having to pay creators for the additional use.

    The Battle Escalates Dramatically


    Not only have the current plaintiffs spent countless hours in bringing the cases this far,
    but they have also incurred huge expenses - and this may only be the beginning. Now the case
    must be taken to the 2nd Circuit Court of Appeals. In the Tasini decision the 2nd Circuit
    overturned the District Court decision and found in favor of Tasini. Whatever happens at the
    2nd Circuit the losing side is likely to appeal to the Supreme Court.

    This is no longer a series of lawsuits brought by photographers and writers against National
    Geographic for the CD sets. It's now a major conflict between creators of intellectual
    property and those who would exploit their works.

    The case hinges on what will become the legal definition of a "revision" as it pertains to
    copyright law on the digital frontier. This legal hairsplitting could have huge ramifications
    as to how clients will be able to use and distribute photographer's work, and whether
    photographers will be entitled to compensation for what they produce.

    The plaintiffs are asking organizations and individuals who care about protecting the
    copyright of artists, writers, photographers, musicians, painters, television and movie
    producers, to file amicus (friend of the court) briefs on their behalf. It is our
    understanding that ASMP and EP have already initiated work on such briefs.

    Whatever the eventual resolution it is likely to be many years and many tens of thousands of
    dollars in expenses in the future. Photographers contemplating an action for copyright
    infringement should contemplate what might be involved, and carefully consider whether their
    pockets are deep enough to see the action through to the end. It is unfortunate that the U.S.
    legal system isn't structured to better aid to the little guy, but that doesn't seem to be
    the case when it comes to defending copyright.


    GETTY RAISES ESTIMATE


    December 15, 2003 (Story 600) - At their Analysts Day on December 12th Getty Images
    announced that they expect revenue for the 4th Quarter of 2003 to be between $128 and $130
    million. This is up from their estimate at the end of October of $124 to $128 million. For Q1
    in 2004 they expect to report revenue in the range of $137 to $142 million and they expect
    their annual revenue for 2004 to range between $560 and $580 million. Thus they expect to see
    between 8% and 12% growth for 2004.


    VNU LAUNCHES STOCK PORTAL


    November 8, 2003 (Story 592) - Jose Azel has sold his Independent Photography Network
    (IPN) to VNU Corporation, parent company of PDNOnline. The new portal, that will be at
    www.IPNstock.com (still under development), will be headed by Jeffrey Roberts VP/Publisher of
    PDN. PDN views this as an extension of their mission to "serve the photo community" and
    intends to operate IPN as a service to photographers and stock agencies, and not to become an
    agency itself.

    VNU is a global information and media company and one of the largest providers of integrated
    business-to-business information in the United States and Europe with a gross annual revenue
    in the range of $4 billion. It is headquartered in The Netherlands, publishes 140 trade
    magazines and organizes 150 trade shows and business events annually. They are also the
    world's leading market research company and produce thousands of specific market data reports
    each year. ACNielsen Media Research is one of their brands.

    VNU's proprietary databases and industry-specific knowledge and expertise puts them in a
    good position to grow sales for those image suppliers represented on the IPNstock.com portal.
    VNU will market the site directly through regularly scheduled e-mail campaigns to photo
    buyers and creatives around the world, print ads in trade publications, special events and
    direct mail campaigns. In addition to PDN other VNU brands including PhotoServe and AdWeek
    will help IPNstock.com reach the creative audiences they server.

    VNU has 59 business-to-business titles in the U.S. in the fields of entertainment, media,
    marketing, fast-moving consumer goods, retail, merchandising, performance, travel and the
    design industries. Its publications include: AdWeek, MediaWeek, Billboard, The Hollywood
    Reporter, National Jeweler, Progressive Grocer and Successful Meetings. For more information
    about the company go to: www.VNUeMedia.com .

    Azel originally developed IPN for use by his editorial agency Aurora&Quanta. Once the
    software was developed he expanded the service by making it possible for photographers to use
    the interface to build their own custom sites and also have their images available on an
    expanded network. If customers enter the site through a photographer's portal they see only
    the photographer's images when they do a search. In the event the customer is searching for a
    subject the photographer doesn't have the customer is then given the option to roll over to
    the full IPN portal and see images on that subject from all IPN photographers.


    In the old version there was no direct entry to the IPN portal (it was necessary to enter
    through one of the photographer sites), but in VNU's version there will be direct entry via
    www.IPNstock.com .

    For photographers who want to be a part of the new PDN version of the site there is an
    initial $595 set-up charge and a monthly licensing fee for use of the software of $195. In
    addition IPN will take 20% of any image licensing fee. A two year contract is required. The
    monthly fee includes storage of up to 500 high resolution images per year. An additional
    1,000 images costs approximately $35 per month. For agencies there is the same initial set-up
    charge and the licensing fee to use the software is $495 per month and this fee covers adding
    5,000 images per year to the site.

    Currently IPN encourages photographers to post at least 40MB, and preferably 60MB files.
    They will accept smaller files when shot with digital cameras and of subject matter aimed at
    the editorial market. The software indicates the deliverable file size that is available for
    each image so the customer can make a decision while selecting images as to whether the file
    size available will be sufficient.

    Features

    There are a number of features that make this portal very attractive for both photographers
    and small stock agencies.


    The image supplier gets a fully functional site that includes automatic pricing and
    delivery. Suppliers have the option of using the IPN pricing, or providing their own schedule
    for online prices.

    Each supplier may post any images it wants on its own custom site. Image suppliers will be
    responsible to supply high resolution deliverable files and the necessary keyword and caption
    data. IPNstock may select some or the submitted images for inclusion on the larger IPNstock
    portal. IPN will directly promote this larger portal and, given the larger cross section of
    imagery available, it seems likely that many customers will choose to use the main portal
    rather than individual sites of photographers or agencies. Customer may also access the main
    IPN portal through the individual supplier portals.

    If a customer enters the database through an individual supplier's URL and performs a search
    the customer will initially see only the images of the individual supplier. However, if the
    search is for a subject that the supplier does not have, then the customer will receive an
    online message indicating that more images are available on the main database. By clicking
    the customer can then see all the images from all IPN members on this subject. This referral
    system is unmatched in the other online systems we've seen.

    In those cases where negotiations are necessary the supplier has the choice of letting
    IPNstock handle the negotiations or in dealing directly with the customer. If IPN does the
    negotiating they take an additional 10% of sale. If the image supplier handles negotiations
    they bill the customer directly and pay IPN its 20% share of the usage fee. Customer will
    have the option of searching for either advertising or editorial oriented photos, or to
    search all.

    In addition to being able to offer automatic online delivery for IPN customers, the supplier
    may deliver at no additional charge Hi-res files from the IPN database to customers who did
    not locate the image through IPNstock. For example, if a foreign stock agency is representing
    one of the IPN suppliers and showing low-res images on its site the IPN supplier may
    authorize that foreign agency to download high-res images, as needed, from the IPN site. This
    reduces the storage requirements for many foreign agencies and makes it easier to quickly set
    up representation arrangements with other agencies around the world.

    One time registration on any of the individual sites, or on the main IPNstock site, gives
    the customer access to any of the preview images on the site. If the customer searches
    various photographer or agency portals he doesn't have to re-register each time.

    It is also possible for individual photographers to make arrangements with agencies within
    the network to show and market their images.

    IPN allows members to see real-time reporting of site traffic and know who their customers
    are and what they are looking for. Suppliers have access to management information on
    subjects customers are requesting and the preview images they are selecting. This information
    can be useful as suppliers endeavor to fill holes in their offering and plan new shoots.

    Images can be uploaded to the IPN server from Netscape or Microsoft browsers or by FTP. This
    real-time ability to update the database means that timely images are fresh, and new images
    can reach clients faster.

    The business model appears to offer some very exciting opportunities for both photographers
    and stock agencies. IPN is currently signing up image suppliers and expects to go live with
    their site early in 2004. For more information contact lcurtis@ipnstock.com.


  • Copyright © 2004 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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