Klein Speaks in New York

Posted on 10/31/1998 by Jonathan Klein | Printable Version | Comments (0)

Jonathan Klein, CEO, Getty Images, Inc.

Like most good or even average wedding speeches it is important to begin with an expression of gratitude to a number of people. No, do not worry you are at the right place at the right time - this is not an accompanying piece to the address on Alternative Wedding Photography, which follows at 10.15 this morning.

In order to complete the "thank you" part of the speech, I would like to thank Photo District News for inviting me to give this address. I was lured into doing this address by the fact that it was described as the "keynote address". I have since discovered that there is a "keynote address"every day and I am one of the many "keynote speakers". However, notwithstanding this affront to my own sense of importance (which has been somewhat reduced over the last few months for reasons that are obvious to many of you), I do indeed remain grateful for being given the opportunity to speak to such an important industry gathering.

A moment ago I suggested that I had completed the thank you part of the speech. However, it strikes me that I should also thank Photo District News and PhotoPlus for the subject matter of this address. Like most good politicians (if there is such a thing) as well as any Chief Executive Officer of a publicly traded company, one becomes adept at speaking on the subject which one chooses or, in other words, giving answers to a different question from that which is posed. As a result, I am able, under such a broad subject as "Content in the 21st Century", to speak about almost anything. Like someone else, I thought about speaking about a relationship which was both "inappropriate" and "wrong". However, I think there is very little to add to the small domestic matter that has been occupying everybody in the United States for some months "for the sake of clarity, the matter to which I am referring is NOT the new Tony Stone Images" photographers contract.

Whilst it is tempting to dive into the subject of this speech "Content in the 21st Century" and begin pontificating, blue-skying and expressing opinions about how the world will be for us all in the next century, I think it is more sensible to begin by looking at where content has been or, to be more precise and in the case of most people here, where visual content has been, in this century. There will be time to look to the future later.

The power of imagery to enlighten, convince, entertain, educate or decorate has never been in doubt. I hardly need tell this audience about the unrivalled power of visual content. One of the very first methods of communication was visual and as the century has progressed we have all become more visually aware.

There are a myriad sources of imagery but in the context of this discussion and with this audience let us focus on the photographer. In most instances, the original source of imagery is, of course, the photographer or image maker. Photography is not a job, it is an art. It demands creativity, dedication and innovation and, although I am sure it is one of the most artistically rewarding career paths, it is also fraught with risk, uncertainty and insecurity. As a freelance or independent professional photographer, you generate work in a fiercely competitive environment. There is constant pressure to shoot more imagery, better imagery, new trends, newideas and even whole new concepts. It is very demanding and difficult and for those of us who are not adept with a camera, it is something which fills us with admiration for the talent that is capable of producing such stunning shots.

However, for most photographers, whilst image making is an art, it must also be commercial. By commercial, I do not mean to intimate that it must be crass or not valued for the creativity inherent in the art. I mean that it must be relevant. It must be capable of being licensed to a third party - that third party could be one of the high priests of consumerism or might even be a high priest of culture at the other end of the spectrum; however, when all is said and done visual content is a business for us all. Yet, it is like no other business I know in that it generates REAL passion. But it is still a business. Many of you here understand this only too well.

You have customers, administration, accounting, tax etc. Keeping your customers while meeting all your creative demands is a very difficult task, especially as they so often clash in terms of time and effort.

There is, of course, one particular sector of the market, close to my own heart, that works a little differently and completely changes the dynamics of time, effort and financial return for photographers. Stock photography removes all of the customer service and a lot of the administrative pressures from you, the photographer. Most importantly, stock photography is a very solid source of income. Stock photography businesses know what their customers wanted in the past, they know what they want now and they have a very clear idea of what those customers will want in the future. They brief their contributing photographers accordingly so that there is the greatest opportunity for creating multiple selling images at minimum risk.

In addition, contributing photographers to stock businesses also have an open gateway to creative expression. The largest stock photography businesses all have a presence in almost every single major design, advertising and publishing company on the planet. Many of these customers are, at any given time, looking for the next creative statement and they are eager to see and use imagery that pushes aside the accepted boundaries. As a result, contributing photographers to the best stock photography businesses can explore their talent and still be confident of being paid for their work, and, also gain the satisfaction of multiple uses of their imagery. Financially and creatively, a very good option.

The other very serious advantage, mentioned earlier, is that while no one photographer can establish and maintain a relationship with all of the advertising, design and publishing companies in the world, a leading stock photography business with a hefty marketing budget and with sales people across the globe can do so successfully. This is a fantastic advantage for each contributing photographer to that stock business.

The combination of dedicated and creative contributing photographers, and stock photography businesses that insist on the highest standards of product and service, has resulted in a very real difference in market share between stock photography and all other visual content competition. Indeed, together, we have raised the status of stock photography so that it can compete with the best commissioned work. But there is still some way to go.

In 1994 when I first had an exposure to the stock photography industry, my research revealed that due to the efforts of a relatively small number of stock photography businesses, including of course Tony Stone Images, and the excellent contributing photographers signed there, stock photography was no longer being regarded as the last choice for customers. One customer was very frank and told me that "in the last few years stock photography has raised itself from being the arse-hole of the industry". I asked where he thought it was now and I was somewhat taken aback with the reply "the armpit of the industry". That's progress!

It is unfortunate that this perception is still alive. There are many reasons for it but, in this talk, I would like to focus on one, in particular. Our industry - and when I use this phrase I am focussing at this point on the stock photography business - has found it very difficult to think of our product and our business from the perspective of the customer.  

On the one hand, the unflattering attitude referred to a moment ago, as well as the mindset of the industry that I have just described, is somewhat disappointing. At face value it suggests that our lifeblood - the pictures or our product - is not respected or valued by the very people who keep us housed, fed and clothed. And furthermore, due to the product centric nature of the visual content industry, there would appear to be little hope, again at face value, in understanding and responding to customer perceptions. We should not despair as we, as an industry, can and will change.

As a relative newcomer to the industry - otherwise known as somebody who has come from somewhere else and has never taken a photograph professionally – I remain struck by the lack of customer awareness. The best example of this is the simple fact that no-one in this room or at the meetings being held by PACA tomorrow has a clear idea of the size of the market in which we operate.
Yes, we have our guesses, we come up with estimates, we throw numbers around but at the end of the day, no-one knows anything firm about the sales of any company in the industry, except, my own.

So, in summary, where are we today and what do we know? We know that the power of imagery is not in doubt. We know that the appreciation of this power has been growing throughout the century and that it is now being extended to a far greater marketplace than ever before imagined. We know that, in an ideal world, photographers ought to be able to concentrate on their art and spend less time on administration, prospecting and customer service. We also know that stock photography, as it exists today, lacks the respect and credibility that it and the imagery it sells, deserves. We also know that the stock photography industry has not historically focused on the needs of customers and, frankly, needs to in order to SURVIVE! That is where we are now.

As promised at the beginning of this speech I am not sticking to the subject. However, now that I have put forward some thoughts on where we are today, (and, hopefully, my realistic and pro active views will be seen as comforting rather than controversial), it is time to crystal ball gaze.

Firstly, and most importantly, I am convinced that the demand for visual content of all kinds will continue to increase.

The reasons for this are quite straight-forward. We are all becoming increasingly more visually literate and technology is making and will continue to make access to visual stimuli simpler, quicker and, dare I say it, cheaper. Furthermore, technology is creating distribution channels which, quite simply, require more visual content. Let me explain.

As this century has progressed we have already become significantly more visually aware and literate than a few years ago. This is most evident from the generation which has been raised with keyboard and monitor. My children are able to understand what an icon on a computer screen means, almost instinctively, and that visual image (often courtesy of a certain shareholder of Corbis) conveys a world of meaning and possibilities.

This is significant in that imagery is not something peripheral or incidental to people's day to day lives. It is central. We simply cannot function – in either a work environment or at play - without visual stimuli, messages and input all around us. From something as essential as putting on the windscreen wipers in a car (very essential in the two cities where I live - Seattle and London) and using a PC to recreational activities, the most popular of which remain visually based.

The importance of visual content in people's lives has been there for some time but over the last few years we have seen the start of what will be correctly viewed in the future as a rapid and significant increase. Put simply, technology is making people more visually literate, even though we may not realise it. The best way to explain this is to refer again to my children and also to how most of us now conduct our working lives.

Our children can and do recognise visual symbols, as I said a moment ago, almost instinctively. They can use a mouse and point it at an icon on a screen and know what they are going to get from that action - and this without real training and at a very early age, some time before they can read. They are tomorrow's customers of our products and services. We are already seeing evidence of this, today, in the way that the amount of copy in advertising has reduced over the years, with the image conveying more of the message. The internet - which I am sure you have guessed will figure somewhere in this address - without imagery is quite simply nothing more than a lot of words on a screen. Visual content is the life blood of the web and as our children grow up this trend will accelerate.

In the work place now most people in the western world have a PC. The entire work flow and work experience in many industries has changed completely as a result of this plastic box. How do we navigate around the box? Aside from the absurdity of having to click on "Start" to switch it off, we proceed in a logical way by clicking on, to put it bluntly, pictures or icons. As all industries move increasingly from paper to a desk top computer, we will all  become more visually literate.

A moment ago I made the point that technology is creating a requirement for more visual content. There are many examples of this phenomenon but the television world provides some striking statistics. As little as ten or fifteen years ago, television in the U.S. generated 64,000 hours of programming a year. Not much. In fact, very easy to fill. The advent of cable has already increased this number to two and a half million hours and with the coming of Web TV, this number will increase exponentially. One can only watch so many repeats and re-runs. So, in short, technology is creating the requirement for more content.

This is all very good news for us here today. Visual content in this century has only scraped the tip of the iceberg in terms of its potential for application and sales. In order to take full advantage of what this increased demand could bring, we need to make some changes to our thinking and approach whilst at the same time remaining true to our core values.

I believe that in order to get full value from the extraordinary photography that you all produce, it is incumbent on us in the next century for the visual content equation to have a much higher customer component. In other words, we need to make our products relevant and accessible and our service efficient and cost effective.

Let me stick to what comprises the bulk of Getty Images to illustrate this point - stock photography and stock film. The stock business that does not care deeply about customers and does not drive quality and creativity will not survive the next five years, let alone the next century. Every single photograph is special and must be perfect in terms of its execution and its content. Customers will only source imagery from the businesses that they know and respect and which enforce these values. These are the two sides of the same coin that is our business: there is no coin without the customers on one side and high quality imagery on the other.

The stock photography sector has undergone a period of rapid change in the last few years, the most fundamental of which is that the customer now expects more and more service values at the same cost to him or her as in the past or even at a lower price. The hassle inherent in sourcing and using imagery that characterised our industry through much of this century is simply not acceptable any longer. Whatever oneoes views of royalty free digital stock photography, that segment of our industry or to be more precise, PhotoDisc, showed customers that there was a third way to get the picture - assignment, licensed stock or royalty free stock. They – the customers - liked what PhotoDisc and others had to offer and what they liked most of all was NOT the price or the fact that it was royalty free. They liked the hassle free nature.

Customers have correctly grasped the idea that it is now possible to have all of the positive parts of the stock photography industry but in "hassle free" form. They have begun to demand the "hassle free" option and demand it NOW. There is no going back now!

As a result, it is true to say that, with the exception of electronic commerce, the idea of royalty-free imagery has done more to grow the industry overall than anything else had done for decades. I know that many of you have strong feelings about royalty-free but I do not believe that it is a moral issue. Royalty-free stock has educated people in digital delivery and image use. That those royalty-free customers may also wish to use licensed imagery is a fact. That customers for licensed imagery may wish to use royalty-free imagery in digital form is a fact. And here is another fact: neither of these scenarios reduce the market for either. Indeed, the opposite is true - the market for both is expanded. We know this to be a fact.

Let me put into perspective what stock imagery has entailed for customers until now. They searched through mountains of catalogues, they may or may not have found the image they needed. If not, they called us or one of our competitors and asked a Picture Researcher to locate a picture that matched a description and this description was often conceptual as opposed to physical. The Picture Researcher chose a selection of imagery that he or she HOPED matched the client's criteria and then the selection was dispatched. Depending on the location of the client, the selection was delivered the same day, the next day or the day after.

The client then had to telephone in order to negotiate rights and price. (As an aside, to say that the analogue pricing structure is complicated is an understatement. It is actually quite awe-inspiring in its complexity.) Once the price had been agreed and the license granted, the client could then use the image provided the dupe is of sufficient quality. Of course, they would need to return both what they did not want and also the image that they chose. Then, of course, there is the printing and the necessary pre-purchasing of a digital scan from a repro house. And let us not forget the liability issues involved with lost or damaged images.

The way we, as an industry, have forced our customers to interact with us, in this way, is another example of the fact that we have not been customer centric. Yet, we have all provided the best service that we could given these extraordinary constraints.

You can see why the whole process - the length of time, the hassle, the cost - might mean that many licensing opportunities are lost and that customers might be tempted to license only ENOUGH imagery, as opposed to as many as they could have done.

In this decade we have seen the beginning of the end of all of this hassle for the customer. Thanks to digital technology, the entire image industry is becoming more customer centric. The image industry is now allowing customers to license, purchase and use more photographs and it is allowing whole new markets to join in. I think customers don’t quite believe it yet. The take-up of electronic delivery has been rapid but it does not touch on the explosion in image use that we will see one day soon, when the world realizes that it can access, select, pay for and use imagery EASILY.

In the next century we will see further blurring of boundaries between the different forms of visual content. The impact of this proliferation of imagery is that the customer will become more discerning and more exacting with regard to quality and service.

To illustrate my point, I remind you that with all books that are penned each year, only a small percentage make it past the publishers and still fewer are promoted in a bookshop. Of course, in the past, the unfair aspect of this arrangement was that the small number of well advertised books became bestsellers while the others languished. Funny then that someone would decide to create a web site where every single published book could be accessed. That this web site should be hugely successful is interesting. It is interesting because it has proven that people WANT to search at the biggest store with the biggest selection. As books cannot be delivered electronically, there can be no other fundamental reason for the extent of the success of amazon.com.

In the next century, people will shop for imagery at the web site with the largest collection of varied, high quality, creative imagery that has made it past the discerning editors! They will do so because they know they will find what they are looking for. But, with imagery there is the added advantage that they also get the immediate and hassle free factor of electronic commerce and delivery because, unlike books, images can be delivered online.

There are lessons to be learnt for us all from the success of amazon.com. It is very relevant to our industry. People want to have access to a broad selection. In fact, in all aspects of our lives and work where it is remotely possible to expect a broad selection, we DEMAND it. In addition to this, people trust a brand - especially brands that are built for the specific purpose of providing that which is required, quickly, cleanly and easily. Web commerce provides the framework to do exactly this. It requires very significant investment to put together the broadest selection of high quality imagery in the world and then it requires another massive financial commitment to scan, keyword, design and build full electronic commerce.

And it doesn't end there. Once the images are available online, it is important to let the customers know! Web marketing is one of the most challenging aspects of electronic commerce. It is still in its experimental stage as it is so new. What is definite, though, is that if you want all of your new customers across the globe to know that there are significant service benefits to be gained from using a web site, as well as the fact that there is an enormous selection of imagery available from that web site, you will have to spend a lot of money to do so. For clarification, when I say "a lot", I am talking millions of dollars each year. This is before we even approach the new small office/home office and consumer markets - each of whom will need a different approach.

So, for successful web commerce in the visual content environment, you need a broad, high quality collection; significant technological expertise; a lot of investment and then more investment to drive traffic to the web site. You also need a profound understanding of your customers' needs. You need to be able to anticipate and provide for all their needs of the future. You need to be able to provide them with, as far as possible, everything they need in one place. This is because customers will only source imagery from the one site that has the greatest choice and the greatest service levels. The Internet is far too chaotic and disorganized, almost deliberately so, to attempt to "surf" many web sites to find an image. By eliminating this "surfing" factor, visual content will no longer be a cottage business or the armpit of an industry, it will be a huge, global commercial success.
My point is that those participants in our industry with strong brands and the marketing dollars to match; breadth of high quality, relevant and accessible content; and customer focussed obsessions will come to dominate in the next century. Photographers will remain critical but they should continue to stick to what they are good at.
The advent of the web is to be welcomed for another reason. By lowering, over the medium term, the cost of distribution, additional funds can be invested in creating the product and then in marketing it. In short, once the vast investment has been made to digitize and e-commerce enable our industry, there will be more money to invest in creativity and also in capturing the customer. A good example of the scale of the investment in analogue distribution is provided by Time Inc. Last year I understand that Time spent $900 million on paper, printing and distribution (trucks etc.) to offer their magazines to the public. With the advent of the web, that money is available for more added value or front end investment. The same applies to our industry as we move from an analogue business model to a digital one.
The larger companies with financial, marketing and service muscle are to be welcomed into this industry because they will supply the hugely growing market with high quality imagery; they will raise the reputation and value of the imagery; and they will respect the interests of the image makers.  The changes introduced as part of the process of professionalising our industry are not always easy or straight-forward but they need to be made.
Needless to say, in time, the market can and must extend to consumers. The small offices and home offices are already climbing on board but there is still a lot of growth to come in that market. As I alluded to earlier, I think that these individuals may not yet have fully grasped the idea that they are allowed to and CAN use photographs, that it is uncomplicated, fun and that each image brings a thousand benefits to their lives in terms of conviction and support for the message they are communicating.

Finally, the protection of intellectual property is one of the most important considerations for everyone involved in any artistic or creative enterprise. Yet, we have seen, in our own industry, a lack of respect for copyright ownership of imagery and the necessary licensing processes that have been in place. This lack of respect sometimes manifests itself as an additional print run for which an image license has NOT been updated, and it sometimes manifests itself in far more gross abuses. Some of this copyright abuse is deliberate and some, significantly, is not.
In moving from an analogue to a digital distribution system, many people are concerned about the protection of their imagery online. Our view is that whilst this concern is far from misguided, it is based on a fundamental misconception, namely that there is more risk to copyright or that there is likely to be more unauthorised usage in a digital environment.

We believe that there is no greater risk of copyright abuse on the web than there is with dupes and film. In fact, there could soon be less risk. Rapid developments in watermarking mean that, already, invisible watermarks electronically note and return details of all usage oe those that do not match with invoices are copyright abuses and they are easy to block for the future.

Furthermore, existing full commerce web sites are enjoying huge growth in sales month-on-month and have not experienced any difficulties with payment. All of this is in addition to the fact that most web sites will sensibly refrain from delivery of high resolution imagery until after payment. We will continue to have instances of infringement; these will be more frequent in countries with less inherent respect for intellectual property; the risk will remain but should be mitigated by advances in technology.

Thanks again for asking me to speak. I hope for all of the following: Most importantly, that I have not embarrassed my colleagues unduly, a number of whom are in the audience today. That some of you agree with some of what I have said. I gave up on pleasing all the people all of the time some time ago. That I will be invited to speak again at such an important gathering.

Thanks for listening.

If time permits, I would be delighted to take some questions.


The following eight questions were asked from the audience and either summarized by Jonathan Klein in his answer, or summarized by Jim Pickerell for this report. The wording of the questions may not be totally accurate. The responses are from the tape.

Question 1 - The thrust of the question is that technology brings the costs down and as a result the imagey can be sold more cheaply. The second part of the statement is that essentially the industries' costs have come down and therefore the industries' profits, by implication, are higher. Where does this leave the photographers?

Klein: I think the first point to make is that at the moment we believe that the total number of people in the world who buy stock photography is at most 250,000 to 300,000 customers. Our entire customer universe today is absolutely tiny. The reason is because of the distribution, firstly, and secondly because of the fact that the price points are at such a level that one has to have a certain budget to even contemplate using imagery.

It is our assertion that what will happen going forward is that we will be able to license imagery in significantly higher volumes. If one looks at the broad range it is fair to say that the average price per image will go down if one starts at the consumer level and goes right out to ad campaigns and averages that across all sales. However, we have no reason to believe that the average price in certain segments will change at all. We don't see why the price per image should be any different to a major advertising agency using imagery.
It is very early days on our web site, but I can tell you that the average price per image on the Tony Stone web site in its first two weeks is higher on-line than analog - completely contrary to most people's assertions.
Secondly, I can tell you that PhotoDisc is continuing to increase the average invoice value year after year on its web site. So I hope that begins to put to rest the idea that digital equals cheap and customers won't pay for things that are delivered on-line.

As far as where the photographer fits in this equation, I go back to what I said in my presentation. I think photographers should stick to what they do best and that is creating awe inspiring imagery. At the end of the day we are after a very much larger market. We are after higher volumes and we think we will get them.

The argument as to who should take the profit and where the profit margin should be is not one I will address now. I am happy to do so, if there is insistence.

Question 2 - Are the days of 35mm film behind us?

Klein: The right people to ask that are people from Kodak who actually have a vested interested in that business. I don't frankly care from where I stand, but if you want my opinion on it I think that over a period of time it will reduce. We know from a number of our customers that digital cameras are still not of a quality which we demand. We are using them to a small extent at only two of our businesses and only for the newspaper market. We know that for the commercial markets at this point digital cameras are not producing something of sufficient quality. Film is still ruling for the time being, but we can not rule out continued advances in the developments of these cameras with the obvious implications for film.

I will say that there are some companies in this industry whose vested  interests in film are so great that they are retarding the development of digital cameras.

Question 3 - Should photographers or could photographers begin marketing their imagery directly as opposed to leaving the marketing for us. The other part of the question is that historically photographers have found it very difficult to get enough of their images infront of the customers.

Klein: I would agree with the second part of that. Photographers have had difficulty doing this and the agencies have been increasingly tight in their editing. We all know that the largest selling images are those that appear in the catalogs. One can only produce so many catalogs. So the fact that the web has come along is clearly hugely beneficial because every image is infront of the customer, in theory, as opposed to being in the files, or not even getting to the files. So I would agree. What the web does is enable imagery to be seen all over. Theoretically, any photographer can put images up there.
The simple answer to the first part of your question is that I have a wonderful book store on the corner of my road near my home in London. That bookstore has a web site. That business has no hope of competing in the web environment with Amazon.com. Customers never come to that site. They don't have the range. They don't have the selection. They have very high quality books of the type that people who live in my part of London like to read, but that site will get very few hits. What we have also found, and Amazon is only one of the examples, is because of the chaotic nature of the web the web is a natural place for aggregators. Essentially what we are talking about is aggregation.
The challenge in the past was to distribute your product to somebody. That was almost the highest cost component in any business. When you remove the high cost of distribution you can't just stop and say I am on the web. Big deal. Who knows and who cares. The only way you can get people to know and care is with significant marketing, and when they come there, keep them, by having the broadest selection possible. So I don't think it is a viable alternative for a photographer, or even groups of photographers to go direct to the customers.

I actually believe, perhaps more controversially, that the commissioning or assignment side of the photography business will also move to the web based agency model.

Question 4 - What is the future of the digital watermarking technologies?

Klein: We feel that it is just a matter of time until the market supports one of these companies. They will enable us to go beyond just protection and track all sorts of usage We will be able to analyze usages and market trends. Those of us who use the various technologies - Corbis and ourselves have used them quite extensively - feel these companies have made a lot of progress, but there is still a way to go.

Question 5 - What is the justification for reducing the photographer percentages? Will percentages continue to go down?

Klein: I feel quite frankly that the existing Tony Stone photographer's contracts - most of the photographers have now signed – is the right percentage. That's why we proposed it. That's why we stuck by it. We have no intention of further reducing it. That percentage is 40% for an on-line in-territory sale and 30% for an out-of-territory sales. Now one can debate what the right percentage is.
And I have often made the point, and I'll make it again now that the percentage the photographer gets is the highest of any industry I know, with one slight exception and that is Hollywood. If you take the percentage cost of a movie the star may get, sometimes, a higher percentage, but not even then. So I feel that the relationship between the talent and the business of marketing and distributing that talent is extremely favorable to the talent. If you are asking me from the Getty Images perspective, do we intend to change, the answer is no. The top selling writers in the world do not even get 15% of the royalties.

Question 6 - The production costs of producing a movie or publishing a book are not paid for by the "talent" and that is not the same as producing a stock photograph.
Klein: The only reason it (this question) makes me uncomfortable is the fact that when an industry has had a way of cutting the cake which our industry has had for a very long time, someone has to step forward and say, "Is this right, is this the way we go forward into the digital age?" And that somebody was us. When a person does that then the heat flies and we are taking the heat.

As I said in my address there are difficult decisions and some things are uncomfortable, but we believe it is entirely fair and appropriate, and the fact that more than 90% of the Tony Stone photographers have signed the contract shows that it is fair. And the fact that 100% of the photographers at PhotoDisc earn, at most, 20%, and they earn a very good living, both the Tony Stone photographers and the PhotoDisc photographers speaks for itself.
That doesn't mean we don't have different views. We have views. A number of other people have different views. The idea that you can change the relationship between the photographer and the business and that it is going to be seemless and nobody will get upset is frankly naive.
I also have to point out that a year ago when I came to PACA the level of abuse in relation to Getty's entry into royalty free was extraordinary. I'd like to thank Comstock for doing it a few weeks before. That was last year's issue. This year's issue is photographer contracts and the split. I don't minimize the strength of feeling on either side, but as an industry we have to move forward.

We grasped the royalty free network. Even the mighty Image Bank is now in royalty free and no one has raised a peep. I can't tell you what next year's issue will be, but there will be a nettle to grasp, and I suspect I'll be the one who has to do it.

Question 7 - How do photographers not with major agencies get distribution in the future?

Klein: Something has changed in the last couple of years and that is the advent of the web. I have felt that the small or niche agencies with good brands, high quality photography and service have a very viable future.  It all depends on the efficiency of that group of people.  One needs to team up with somebody who can give you that distribution. The fact that one's brand is strong is an illusion because the brand will be strong to a very small universe of people. We believe, and it is not something we have talked very strongly about, that in the next few years we will be hosting other agency's content on our site.
We will be representing other products and services on our site. We can offer from day one, large traffic. Yesterday we had 310,000 hits on our various web sites. Everyone hitting those sites is interested in visual content. Therefore, if you want to get your photographer's pictures to a broader market, I suggest that you begin to think about teaming up with someone who has the marketing muscle, technological expertise, and not necessarily some of the great photos that you have, to move that forward.

Question 8 - How fast is the demand for searching and delivering images on the web growing?

Klein: Massively. Absolutely massively. A year ago our company had no digital sales. At this point in time we have just announced that in the third quarter 34% of our sales were digital. That's a combination of CD-ROM's and on-line. The pure web commerce now accounts for more than 10% of our total sales which this year will be about $185 million. Already, more than 10% of our sales are digital and that was before we launched the Tony Stone web site. In September we generated $2.1 million in sales on the PhotoDisc web site. One would be frankly wrong to sit around and debate whether digital technology is coming or whether people will buy online. That's a waste of time. They are, and every day it is growing. We generate more sales on our PhotoDisc web site alone than most stock agencies in the United States have in total sales - with the exception of four or five agencies.
That gives you some idea of how big it is.

Copyright © 1998 Jonathan Klein. 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


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