Major Agency Catalog Costs

Posted on 4/3/1998 by Jim Pickerell | Printable Version | Comments (0)

135

MAJOR AGENCY CATALOG COSTS


April 3, 1998

In an effort to understand what it is costing photographers to advertise and promote

their stock images I contacted a number of photographers with the three major

companies marketing stock photos worldwide. This information was later corrected and

confirmed by principals within each company. The agencies are:

    Tony Stone Images (Getty-Images)

    VCG/FPG and Telegraph Colour Library

    The Image Bank

I also discovered that in some cases policy modification are to be put into

operation this spring, and to the degree that they are defined at this time I have

reported them below. The questions I asked were as follows:

    1 - What are the costs per image for catalogs distributed in the U.S. and the rest

    of the world?

TSI - According to Stephen Mayes of Getty-Images, the TSI photographers pay 50%

of the entire costs of design, production, printing and distribution. These figures

are calculated after printing and distribution is complete and a detailed breakdown of

the costs is given to each participating photographer.

To give some examples of specific products, I have the following figures for two TSI

catalogs. The cost per image for the Interpretations catalog released in May 1997 was:

"5">

  Single Worldwide Edition   

 $815.96   

For the Flagship 8 catalog released in January 1996 the costs per image were:

"5">

  North America   

 $280.20   

  Rest Of The World   

 $300.63   

  Both Editions   

 $580.83   

Reproduction size is not a factor for TSI when calculating the value of a catalog

image. Sales are influenced by many factors: subject matter, quality of the image,

prominence (not simply size), territory of sale, etc.

VCG/FPG - The current per image catalog placement costs for VCG/FPG as stated in

the new contracts are the following:

"5">

     

 Up to 1/4 Page   

 1/4 Page or Larger   

  North America   

 $170   

 $230   

  Rest Of The World   

 $300   

 $370   

  Both Editions   

 $470   

 $600   

In addition they are charging $75 per image for placement on a CD, but this charge only

applies to images that are not in a print catalog. If a CD is a companion to a print

catalog the cost is covered in the catalog fee.

While these current fees are listed in the new contract they may be adjusted for future

catalogs through the use of a contract addendum.

TIB - The following are prices for some catalogs.

"5">

  Catalog 22   

 $425   

  All 1998 Catalogs   

 $395 - $500   

These are the prices no matter what the size of the image. The price also included all

the extra dupes that are distributed with the catalogs.

Diane C. Fannon, Senior Vice President of TIB said, "The MAXIMUM we charge the artists

is 50% of production costs. We don't generally hit 50% in our charges to them, it usually

ends up being around 45%. We can't possibly have 'fixed catalog production costs'

because it varies by the size of the catalog, the print run of the catalog, whether it's

sheetfed or web printed. If we go overbudget for whatever reason, we eat that overage

and do not pass it on to the artists. That's why their fee is sometimes under the 50%,

but never over."

    2 - How many copies are printed and distributed?

TSI - I don't know how many copies of Interpretations or Flagship 8 catalogs were

distributed. However in 1995, TSI distributed a Business and Industry catalog and gave

their photographers the following numbers for distribution:

"5">

  North American   

 122,380   

  Rest Of The World   

 130,470   

  Total   

 252,850   

Recently, Stephen Mayes told us that the Worldwide distribution of catalogs is

approximately 200,000 but that varies with each product.

VCG/FPG - While the numbers vary from product to product, approximately 80,000

are distributed in the U.S. and 120,000 in the rest of the world outside the U.S. for a

total of approximately 200,000.

TIB - Officials at TIB did not dispute my estimate of the number distributed at

being between 150,000 and 200,000.

    3 - How are catalog fees calculated?

TSI - According to Stephen Mayes of Getty Images, "TSI does not have a fixed

catalog charge, although we do have a standard formula for sharing the production

expenses with Contributors. It is very simple:

    1) TSI pays 50% of the entire costs of design, production, printing and distribution

    2) Contributors pay the remaining 50%

    3) Contributors' charge is divided pro rata according to the number of images in the

    catalog

    4) The charge is deducted from sales of each image, so the Contributor pays nothing

    until the image generates sales, at which point the charge is deducted from commission

    due to the Contributor. Therefore if the image fails to sell TSI absorbs 100% of the

    cost."

Thus, the charge to Contributors is variable from catalog to catalog. However, TSI has

stabilized production costs so the key variable is the number of images per catalog

which dramatically affects the per-image cost of publication. In addition, the number

of catalogs distributed, especially when dealing with specialty catalogs can have a

major impact on the price.

VCG/FPG - The price is fixed in the contract and is based on the photographers

paying 50% of the costs. However, the contract does allow for future addendums that

might raise the price of future catalogs.

TIB - They say they charge photographers 50% of what it costs to produce and

distribute the catalog.

    4 - How do photographers pay these catalog fees?

TSI - TSI is moving this year to a system where they will withold 50% of the

entire monthly remittance, not simply 50% of the remittance due on a specific image.

For example: assume a photographer had ten images in the Interpretations catalog and

owed $8,159.60 in catalog fees. In the first month three images from this catalog sell

for a total of $700 (photographer share). The photographer owes a maximum of $2,447.88

for these three images. The total due the photographer this month from all sales is

$5,000. Since 50% of the total monthly remittance can be taken (a) 100% of the money

collected from these images ($700) could be used up to pay the catalog fees or (b) the

entire $2,447.88 owed for these images could be deducted because it is less than 50% of

the total owed the photographer for that month.

I could not confirm which option they intend to use which may mean they are still

trying to decide. Photographers with TSI should make sure this is clearly explained

before they begin production of images for the next catalog.

VCG/FPG - Out of sales of the specific images. If the image does not sell, no

fee is charged.

TIB - Out of all sales at the time the catalog comes out.

    5 - How are the monies deducted?

TSI - No more than 50% of the entire monthly remittance will be deducted from

any statement.

VCG/FPG - Deduct 100% of the monies collected for the sale of any specific image

included in the catalog until the cost is paid off. Thus, if you owe $600 for an image

and initial sales total $600, the entire $600 will be deducted before the photographer

is paid anything. If your image fails to sell you contribute nothing.

TIB - Money deducted immediately after the catalog is released for all images no

matter whether they sell, or not. No more than 25% of monies owed are deducted from

any statement.

    6 - Does the agency supply the photographers with a detailed breakdown of costs,

    from which the photographer's share is calculated?

TSI - supplies a detailed breakdown of costs and the total number of copies

distributed so the photographer can see how the 50% was calculated.

VCG/FPG - does not supply any breakdown, but has a fixed cost that they say is

based on their paying 50% of the costs.

TIB - does not supply any breakdown. They say the fee they charge is based on

their paying 50% of the costs.

    7 - Does the agency charge for images placed on CD's?

TSI - Yes, but I was unable to confirm how much.

VCG/FPG - Does not charge for catalog images that are placed on a companion CD.

That cost is covered in the catalog charge. They do charge $75.00 per image for

non-catalog images placed on specialty CD's. At the present time they are not putting

catalog images on specialty CD's, but when they do there will probably be some charge

for these placements.

TIB - No

    8 - Does the agency charge for electronic enhancement or retouching?

TSI - gives the first 40 minutes work on an image free, but charges $281.40 per

hour. This figure is recalculated annually, by averaging the rates charged by three

high-end studios and discounting by 25%. "We are not charging for "cheap & cheerful"

retouching, but for the highest calibre of artistic work, much of which is performed on

Barco workstations with Creator software. The photographers are notified in advance,

and they must give approval for the work and the charge," said Stephen Mayes.

Some photographers have incurred hundreds of dollars in additional fees for the

enhancement of a particular image. The majority of the images in the TSI catalogs have

had some electronic work done on them.

VCG/FPG - does not charge for digital retouching or outputs.

TIB - They do all retouching at no charge to the artist.

    9- Are there charges for dupes for the catalog?

TSI - Stephen Mayes said, "TSI does not make any charge for the production or

distribution of any dupes.

VCG/FPG - does not charge for dupes

TIB - According to Diane C. Fannon, Senior Vice President, when an image is

selected for the Core file TIB makes 75 dupes free of charge. If TIB determines that

more than 75 dupes are needed then they charge $.35 per dupe for each additional 35mm

dupe. Regardless of the format of the dupes, large or 35mm, the dupe costs for catalog

sets are included in the one catalog fee.

These fees are deducted from the net monies due the photographer irregardless of

whether the images ever sell.

    10 - Does the agency have an on-line catalog?

TSI - At present, they do not have an on-line database. However, as a result of

acquiring PhotoDisc Getty-Images has the technology to put a catalog on-line using the

same search engine that PhotoDisc uses. It is my understanding that the TSI catalog

images will be put on line in the near future.

VCG/FPG - At present, they do not have an on-line database, but we understand

that a site with about 30,000 images is being tested and has been demonstrated to many

large photo buyers. I believe that site will be publically available in a few months.

TIB - TIB, as a subsidiary of Kodak, has acquired rights to the Picture Network

International (PNI) technology. It is our understanding that TIB has a PNI private

database with approximately 100,000 images on it. This site has been made available to

some large picture buyers (advertising agencies) who have been given a private password

to search for images on this site. I believe this database is also being used

extensively by TIB researchers internally as they search for images for other clients.

Digital delivery of all files on the TIB database is currently possible.

    11 - What is the percentage of sales that the photographer receives?

In comparing costs of catalog placement it is important to keep in mind the percentage

you will receive of the gross fees collected. Different agencies calculate the

percentages in different ways so 50% can mean many different things in different

agencies.

TSI - pays photographers 50% of the gross fee collected in the home country.

Thus, an American photographer that deals through the U.S. office receives 50% of U.S.

sales. American photographers who deal through the UK receive 50% of the UK sales and

a lesser percent of US sales.

Countries who do not pay photographers directly usually retain 40% of any fee collected

and remit the remainder to TSI's London headquarters. This 60% of the gross fee

charged is split with the photographer.

The gross company figures that were reported when TSI went public in 1996 showed that

on average photographers received 39% of all sales.

VCG/FPG - American photographers who have been represented by FPG will receive

two statements - one for North American sales, and one for the Rest of the World. The

"North American" statement comes from FPG. The "Rest of the World" statement comes from VCG.

Photographers receive 50% of the gross fee from FPG and 50% of what VCG receives from

its sub-agents. VCG operates as a holding company and thus all the agencies in the

various countries where VCG licenses images pay VCG a percentage of gross sales. The

wholly owned VCG agencies including the Telegraph Colour Library in the UK, PIX in

France and Bavaria in Germany keep 50% of the gross fee to cover their operating costs.

They submit 50% to VCG which then splits that money with the photographer giving the

photographer 25% of the gross fee collected.

Some of these agencies keep 40% of the gross sales and others keep 50%. Thus, in most cases,

what the photographer is actually receiving is 25% of the gross sale.

TIB - TIB photographers receive 50% of the gross fees collected from the New

York and Boston offices. They receive half of the payments TIB receives from all the

other offices. On average I believe TIB photographers are receiving 32% to 33% of

actual gross sales.

All the figures above are before the catalog and dupe costs are deducted. When these

costs are taken into consideration the actual percentage of the gross fee collected

would be lower.

Analysis

Many of these costs may seem high to those who have never had an image in one of these

catalogs, but the real question is how much can someone earn from an image promoted

worldwide in this manner.

Photographers would like to pay less, but the biggest complaint I hear from

photographers with these agencies is that they cannot get enough images into these major

catalogs.

What bothers photographers more than the price paid for space is when they spend

thousands of dollars producing unique shots on speculation and then their agent refuses

to promote the images in the catalog.


©1998 SELLING STOCK

The above copyrighted article(s) are for the sole use of Selling Stock subscribers and may

not be copied, reproduced, excerpted or distributed in any manner to non-subscribers without

the written permission of Jim Pickerell, the editor. For subscription information contact:

Selling Stock 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720,

fax 301-309-0941, e-mail: jim@chd.com.


Copyright © 1998 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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