May 1998 Selling Stock

Posted on 5/10/1998 by Jim Pickerell | Printable Version | Comments (0)

141

MAY 1998 SELLING STOCK

Volume 8, Number 4

Pickerell

six

times a year. The annual subscription rate is $50.00. subscriptions may be

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

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

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

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

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

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

stock photo usages.

Thought For The Month

When you come to the fork in the road -- Take It!

Richard Steedman, The Stock Market

Indecision can be worse than taking the wrong road. No matter how much you plan and

analyze, in today's rapidly changing world there is still a possibility of taking the wrong

road. When you discover a mistake, admit it and reverse course quickly.

Story 139

PHOTODISC & ROYALTY FREE

May 6, 1998

This story is about PhotoDisc, but it also deals with royalty free selling in general and

the

developing trend to purchase images on-line.

Royalty free imagery is the fastest growing segment of the stock photo market. I estimate

the

entire market for stock photography was about $1 billion in 1997 and roughly 10% of that

went to

purchase royalty free products.

Gross sales for PhotoDisc, which is unquestionably the largest single supplier of RF images

was

around $41 million. Of that, "approximately $7.5 million was generated by single image

sales on

the company's award-winning web site (www.photodisc.com)," according to a February 1998

Getty

Images press release.

About 19% of gross sales were spent on royalties paid to photographers PLUS"direct costs of

manufactured products, amortization of costs to acquire or produce photographic images

(wholly

owned product) and other costs such as credit card fees and freight." Since I have no idea

how

much the "direct costs" were, and whether this included all the production costs for the

wholly

owned material, it is unclear what percentage of gross sales actually went to the

photographers.

One thing I can be sure of is that it was probably quite a bit less than 19% of gross sales.

Individual image sales jumped from $500,000 in June of 1997 to $1.3 million in December

which

reflects a dramatic growth in the use of on-line technology to find images.

Web Sales

The $7.5 million in web sales represents a VERY impressive 18% of PhotoDisc's gross sales in

1997. This is very surprising when compared with the sales of other large web sellers.

Our research with agencies that sell images on-line through Picture Network International

(PNI)

indicates that the combined total gross sales of the 36 stock agencies that have images on

their

site was probably in the range of $6 to $7 million dollars in 1997. The PNI agencies had 10

times more images on-line in 1997 than PhotoDisc, and still PhotoDisc generated more

revenue.

Further, we have the Corbis experiment. In their database, Corbis has in excess of 500,000

images supplied by individual photographers. The photographers are paid 45% of gross fees

collected for any uses of their images. Based on information I have received from a number

these photographers, Corbis probably earned less than $2,000,000 from the licensing of these

500,000 images in 1997.

Certainly, a big part of the reason for these variations lies in the fact that a large

percentage

of PhotoDisc's images are commercially oriented while the majority of the images on PNI and

Corbis are much more editorial in nature. PhotoDisc's prices may be slightly lower, but not

significantly so. Even allowing for these advantages the spread in sales is fantastic.

Happy Photographers

I have identified photographers who have produced over 50,000 of the approximately 60,000

images

PhotoDisc now has on-line. (The list of names and number of images each has is listed at

the

bottom of the story we have posted on-line.) I talked to a number of them.

Virtually everyone was very pleased with the working arrangement they have with PhotoDisc.

They

liked the detailed sales reports and the regular monthly payments. They commented about the

excellent research that PhotoDisc does to determine what is in demand and the detailed lists

they

provide outlining subjects they need.

Prior to the development of on-line sales PhotoDisc had a very good idea of the categories

subject matter that were in greatest demand based on their disc sales statistics. Now, they

know

which specific images clients want to use and can focus their future production toward

developing

even more specific content.

Photographers also liked the fact that when they supply new images they are edited, up

on-line

and making sales within a couple of months. This is very refreshing for those photographers

who

have experience in trying to get images into traditional catalogs.

When it comes time to make a new disc PhotoDisc first selects from the new material on-line,

then

they put out a general request to all their photographers for additional material on that

subject, and finally they commission assignment shoots to fill the holes.

Photographers are supplying images to PhotoDisc in two different ways. Some produce images

speculation, and submit them for consideration in more or less the same way that images have

traditionally been supplied to stock agencies.

However, it appears that increasingly the emphasis at PhotoDisc is to hire photographers to

shoot

specific projects on a day rate basis. I estimate that about one-third of the images

currently

on the PhotoDisc site were produced in this manner.

When I checked this number with PhotoDisc, Public Affairs director Laurie McEachron said,

"Your

estimate is very high. The actual number is confidential, but we do want to note your

estimate

is very inaccurate."

Sixteen photographers have produced about 42% of the images on the PhotoDisc site. Not all

the

images provided by these photographers were done on assignment, but I believe a significant

portion were produced on assignment. In addition, photographers other than these sixteen

have

also done some assignments.

From my perspective, this production shooting is the forerunner of another big change in the

stock industry. Now, there are an abundance of photographers willing to produce stock

images for

a fee, plus a very small royalty. Most are assignment shooters who think in terms of

getting all

their income in up-front fees whenever they take pictures. Photographers who produce on

speculation need to consider the implications of this new competition.

Several photographers commented that their participation with PhotoDisc started out as a way

test varying market strategies, so they wouldn't have all their eggs in one basket. Doug

Menuez,

who is the current top producer with 3591 images on-line, compared it to the "asset

allocation"

strategy brokers recommend to investors in the stock market. Don't put all your assets in

one

type of investment. Spread them around. Doug views his images as assets and he is trying

find various ways to "invest" them to test varying marketing strategies without becoming

totally

dependent on any one source of revenue.

The few complaints we heard about PhotoDisc from its photographers were minor, and fewer in

number, than those we regularly hear when talking to photographers represented by

traditional

stock agencies.

Production Shoots

Most photographers speak highly of Gretchen Schultz and her assistant who supervise all the

PhotoDisc productions. Shoots are generally several day affairs with some going ten days or

more.

In most cases Gretchen handles all the pre-production work from collecting props to hiring

models. In some cases photographers have had some input in choosing locations and models,

but

most seem to have very little involvement in the production planning. For many this is a

real

plus and makes their job easier.

Photographers indicate that there is an emphasis on "counting frames, not quality," and that

there is a lot of pressure on the shoots to produce volume. After looking at PhotoDisc's

site, I

can see some evidence of this. They not only exploit every conceivable option from a given

location or situation, but they put very subtle variations on-line. A location shoot that

might

produce three to five images for a major print catalog, will generate 30 to 40 variations

for

PhotoDisc's on-line catalog.

According to Laurie McEachron of PhotoDisc, "Your calculation (on the of images produced

from a

day's shoot) is flawed, and the estimate is inaccurate. Numbers of this type we consider

confidential competitive information. It does not serve PhotoDisc or our photographer

partners

well to arm the competition with information about our production rates, selection rates and

other sensitive information." Readers can review the PhotoDisc site and make their own

judgements.

A few photographers indicated that if anything, the shoots were easier than ones they have

with

other commercial clients because Gretchen is such an efficient planner and organizer.

Given the emphasis on volume, flat, simple lighting is often the rule. By looking at the

site

you would think PhotoDisc really loves those overcast, flat days in Washington and Oregon.

But,

I suspect the real reason for such lighting is that it enables the photographers to work

faster

than if they were trying to do some of the subtle things with light that are so popular in

most

of today's print catalogs.

They usually have lots of models on the set so they can get a variety of faces and ethnic

variations doing basically the same thing. In my review of quite a few of the on-line

images, I

would say they are not as picky as TSI, FPG or The Stock Market in their model selection and

styling. PhotoDisc is willing to accept less perfect people, or more real people -- call it

what

you will.

While this philosophy of lighting, model selection and styling differs dramatically from

what the

traditional agencies have been preaching to stock photographers, it is important to keep

clearly

in mind that this approach is definitely working. PhotoDisc is experiencing greater sales

growth

than any traditional agency I am aware of.

PhotoDisc has also worked heavily with major photographers who have strong assignment

businesses,

but no previous experience in producing and marketing stock. Typically, if photographers

had

previous stock agency experience, it was with a small agency that produced very little

income for

the photographer. For this photographer stock is a sideline, not a major focus or a major

source

of income. For such photographers PhotoDisc has been a real boom given the return they are

providing on a relatively small number of images.

PhotoDisc has recently built an in-house studio and hired Duncan Smith. It is our

understanding

that Duncan will be expected to produce about 250 new images for the database each month.

Laurie

McEachron said, "The studio was created to provide supplemental images to the PhotoDisc

collection in areas where material may be difficult to find. Of course, we always give our

photographer partners first crack at our shot lists, but there are times when they cannot

supply

the desired material."

Compensation - Return per image

A good rule of thumb for the average return per image for disc images produced on

speculation

appears to be about $100 per image per year. Photographers who have been with PhotoDisc for

four

or five years indicate that sales seem to continue for several years.

However, the $100 number can be deceptive when it comes to those photographers who do

production

shoots. As we mentioned earlier a significant proportion of the images are being produced

this manner.

All the contracts of photographers submitting on speculation seem to give them 20% of gross

sales, on new work produced. However, on some of the discs produced before 1995

photographers

got a sliding percentage that dropped as sales of the particular product increased. Thus,

some cases photographers are receiving as little as 5% on sales of some of the earlier discs

even

though they are getting 20% from the new products.

If the photographer happened to be represented by an agency in one of these earlier deals,

and

split the royalty with the agency, the photographer might only be getting 2.5% of gross

sales.

In most cases where photographers have high numbers of images on-line, a large percentage,

if not

all, were produced on assignment.

The average return for many of these people may be $30 to $50 per image and that is for the

single year in which they produced the image. Of course, these photographers had absolutely

production costs to offset.

There are several factors that could account for this big difference. I am unsure as to

what

degree any of these factors are playing a role at this time.

For many of the photographers with high numbers of images on-line, a lot of the

images

have been added recently. It takes some time for sales from new images to "ramp up" and,

therefore, as time passes revenues from the current images in the file may increase.
In the production shoots, photographers get all or nearly all of their income from the

one-time fee. Many get a very small (1% or 2%) royalty on sales which provides, some

income, but

not much over the life of the images.
It appears that even though overall revenues are rising very fast at PhotoDisc, the

total

number of images in the system is rising even faster. Thus, the average return per image on

file

could be dropping.
PhotoDisc tends to select a lot more frames for up-loading from production shoots than

when

the photographer submits images on spec. Photographers who have been around for a while say

the

editing for spec shooting is getting much tighter. One photographer put it this way, "They

used

to take my "B" and "B+" images and I could send my "A+" to other agencies. Now, I have to

give

PhotoDisc my "A+" work if I expect to get anything accepted. And they are still taking a

lot

fewer images."
They upload a lot of variations from production shoots which makes sense when we

consider

that it is often difficult to tell exactly what the art director will be looking for.

However,

from a return-per-image point of view it may result in lower returns because of the

redundancy of

the situation.
It seems clear from the people we talked to that those getting higher returns per image

generally have fewer images in the system overall and fewer images on-line.
As more users turn to buying individual images on-line, rather than buying discs,

photographers may see their return-per-image drop because they are only being paid for

images

actually being used by the client. When clients buy discs they often use only one or two

images

from each disc, but everyone who had images on that disc receives a share of the fee for

that

use.
Photographers with high numbers of images may be updating earlier subject matter and

thus

reducing the demand for their older images. This is particularly true if the photographer

has a

style, or approach to the subject matter that is distinctive.

Payment for On-Line Uses

For many photographers on-line sales in 1997 seemed to represent 10% or less of their gross

income from PhotoDisc. On the other hand 18% of PhotoDisc's total gross revenues came from

on-line sales.

Photographers doing production shoots should watch this ratio of disc to on-line sales

carefully.

It could provide useful information when negotiating future production shoots.

One explanation for why photographers seem to be earning less from on-line sales may lie in

the

fact that a very high percentage of on-line sales may be for images either wholly owned by

PhotoDisc, or where the photographer receives a minimal (less than 4%) royalty.

It is clear that PhotoDisc has been putting a very high proportion of "production shoot"

images

on-line, and that a much higher percentage of assignment images are accepted for on-line

display

than when the photographer submits images he or she shot on speculation. In addition, most

the images produced on assignment are of subject matter that PhotoDisc's sales data has

shown to

be in greatest demand.

Also, the way the database is organized, the most recently added images come up first when

any

search is made. Since a lot of the wholly owned images were shot recently, and are first in

line

in the database, they may get selected more frequently than older disc images. Given these facts,

something like the following may be happening.

Total gross sales of $41,000,000

CELLPADDING="5">

Disc Sales

On-line Sales

Photographers Receive Royalties

85% of sales

40% of sales

PhotoDisc Wholly Owned Images

15% of Sales

60% of Sales

Basis for Photog Payments

$28,475,000

$3,000,000

Photogs Receive Percentage of Above Numbers

percentages. But

these numbers show it is theoretically possible for photographers royalties from on-line

sales to

be 10% of their total income while PhotoDisc's on-line sales are 18% of their gross

receipts.)

In over 85% of the disc sales, photographers get some royalties because a relatively small

portion of the images on the discs are "wholly owned." This will change with time, but it

was

probably true in 1997 given the rapid rise of on-line sales at a time when PhotoDisc was

cranking

up production shooting and putting a lot of these images on-line. But, when it comes to

on-line sales, a

much higher proportion comes from images wholly owned by

PhotoDisc.

It is also easy to see the tremendous benefits for PhotoDisc in increasing wholly owned

production shooting relative to the number of images they accept from photographer who have

produced work on speculation.

Laurie McEachron points out that, "No photographer has ever been forced to do assignment

shoots

for us." But the photographers who do these shoots might want to consider the possibility

taking a lesser up front payment and trying to negotiate a larger royalty based on usage.

Another aspect of the photographer payment for on-line use is somewhat confusing. PhotoDisc

has

three prices for on-line uses: $19.95, $69.95 and $129.95 depending on the file size. But,

the

photographer's sales reports show a variety of other gross prices on which certain royalties

are

calculated. These include: $10, $25, $35, $75, $135, etc. This raises the question as to

whether there are three simple rates, or a variety of fees. When asked this question Laurie

McEachron said that there were three rates, but would not explain the inconsistencies. She

said,

"Discussing the details of photographer payments and royalties would be a violation of our

non-disclosure agreement."

Based on my discussions with photographers I think several don't understand where these

numbers

are coming from, and I would think they have a right, even if I don't, to know how these

gross

fees on their sales reports are arrived at. I would encourage them to ask.

Return From Productions and Negotiating the Deal

The payment for the assignment shoots is usually about $2500 to $3000 a day plus all

expenses.

The fee varies with the shoot and depending on what royalty percentage the photographer

wants.

In some cases photographers take less up-front and receive a greater royalty.

However, I have also heard that in some cases photographers are offered lower fees for

current

assignments than they were paid for assignments a year or so ago. It is unclear whether

this is

because the work they are being asked to do on the recent assignment is perceived by

PhotoDisc to

be of lesser value, or because now there are simply more photographers willing to work for

PhotoDisc, and thus they can get away with paying less.

It appears that there is often some royalty in addition the basic fee on production shoots,

but

often it is only one or two percent.

It would seem to always be to the photographer's advantage to try to get some royalty, even

only 1%, so he or she would have some idea which images are selling and how well. This

information could be useful in planning other stock productions and in negotiating for

future

shoots.

For example if a photographer were earning $1,000 a month on a 2% royalty, he could jump

that to

$5,000 a month if he were getting a 10% royalty. This additional royalty return over a

period of

years might justify the photographer accepting a much lower initial assignment fee to do the

work.

One way to determine what to ask for in such negotiations is to try to estimate the number

on-line images that might be produced from a given shoot. Let's assume 200 from a 5 day

shoot.

Photographers who are getting 20% royalty seem to be averaging between $50 and a $100 per

image

per year.

If the images where the photographer gets a 20% royalty only produce an average of $50 per

image,

per year and PhotoDisc is willing to pay $3,000 per day ($15,000) it would take a

year-and-a-half

of sales to generate that much income. It might be better to take all the money up front.

the other hand, if the images are hot subject matter 200 images might produce $20,000 in

royalties in one year. Keep in mind that sales will probably go on for several years.

Another way might be to base part of the up-front fee on the number of images finally

selected to

go on-line.

PhotoDisc may only offer jobs under certain "take-it-or-leave-it" conditions, but it does

appear

that there have been a variety of types of deals negotiated in the past. At any rate these

factors are worth considering as you negotiate.

Most photographers doing assignments are hoping that they can develop a long term

relationship

that will work into a routine of a fixed number of projects per year to supplement there

other

assignment work. However, with the number of photographers knocking at PhotoDisc's door,

and

willing to work for less, there may be few long range guarantees.

Other Benefits

Photographers have also found new clients as a result of having their images on the discs or

on-line.

Occasionally, a PhotoDisc client needs a larger file of a particular image or wants to work

from

film. In these cases PhotoDisc refers the client to the photographer and the photographer

charges his normal rate.

In other cases the image on the disc is not what the client wants, but he would like to find

something similar to it. PhotoDisc refers the client to the photographer and in several

instances photographers have been able to strike lucrative deals for other images in their

file.

These sales are particularly appealing to photographers who earn most of their income from

assignments and have little experience in selling stock.

Image Quality

Several PhotoDisc photographers believe that "going on-line has hurt the quality" given the

push

to get a volume of images into the on-line environment.

This is particularly true of the photographers who are doing assignments. This is not to

say

that these photographers are not good photographers, but when they are pushed by the

production

team to produce a high volume of variations in a given day, they can't take as much time

with

each setup as they might if the focus were more on quality.

By way of comparison I would point out that it is not unusual for a Tony Stone photographer

spend one to several days, including pre-production planning and gathering props, to bring

together just the right elements to produce one image for the catalog. This effort may be

considered excessive by some, but it produces a unique image that can be licensed for very

high

fees.

If you look at the selected images in PhotoDisc's disc catalogs the quality has certainly

been

getting better and better.

Database Organization

It is interesting to consider how placement on-line will affect sales. The database is

organized

so that newer images always come up first. This means older images slowly get pushed to the

bottom of the pile.

If they were keyworded extensively so clients might tightly define their needs some of those

older images might pop to the top, but this does not seem to be the case.

When a client does a search they get 9 thumbnails on a page. If they want to wait longer

for

thumbnails to come up they can choose to look at 21, 60 and 99 thumbnails at a time. It

takes 3

to 3.5 minutes to load 99 thumbnails on an ISDN line. Once loaded it is quick to flip

through

and review them. It the client wants to jump to the next page or randomly pick a page

within a

group of ten, that is a fairly easy process. But, if he wants to randomly jump to page 48

it is

quite a bit more time consuming. The question in one's mind always is, "If I don't go

through

the pages sequentially what am I missing," but on the other hand few researchers have the

time to

go through all the pages. The fact that they put so many slight variations side by side

also

makes finding a variety of totally different situations more time consuming.

What probably happens is that users go through pages sequentially until they find something

that

works and then they quit. There are at least three very interesting questions: (1) what

percentage of the users jump to pages randomly rather than going through sequentially, (2)

how

much patience does the average user have, and how many pages will they go through, before

they

quit and go to another search, or (3) how many use the default search which is 9 thumbnails

at a

time, rather than choosing another option. My guess is that most people go sequentially and

that

they don't have much patience. (PhotoDisc certainly has access to data that would answer

these

questions, but it is understandable that they don't want to share it.)

Keywording

Keywording at PhotoDisc produces some interesting results. For example, if you look for a

picture of "tigers" the first pictures you see are pictures of dromedary camels. This is

because

one of their suppliers which has 120 images is a company called "Lions, Tigers & Bears" and

the

"tigers" search starts by calling up all of their images.

If you try to narrow the search by asking for "tigers" and "asia" you find that there are

none.

If you enter the singular word "tiger" you do get to see some tigers in action, but the

first

picture you see is a tiger shark.

You can get rid of the sharks by using the boolean "not" feature and saying "not fish" or

"not

shark".

If you search on "wildlife" the first frames you get are some beautiful shots of ticks. It

turns

out that in their wildlife category they have recently added 208 images from the U.S.

National

Tick Collection. Since the name of the photographer or organization is a keyword all the

ticks

which are keyworded "wildlife" come up first.

Anomalies like this are likely to develop with any system of keyword search. At Stock

Connection, for example, we have a photographer whose last name is Child so all of his

pictures

come up whenever people look for a "child". Unfortunately, his area of specialization is

corporate and business not family life and children.

One way to solve these problems is to have extensive keywords so you can narrow the search

several different ways. PhotoDisc has about 25 to 30 keywords per image, which in my

estimation

is no where near as extensive as it should be with a database of 60,000 images.

With so few keywords categories will get larger. There is no way for the user to more

specifically define their needs so that some of those older images at the bottom of the pile

will

be brought forward. The keywords that identify specific features of the image, or concepts

that

make them unique are missing.

There are 9359 images of business, 2331 couples, 1273 family, 1124 sports and 854 elderly.

However, there are only 17 seniors so pray that everyone understands that they are suppose

to use

"elderly" instead of "seniors" when searching in this database. If you are looking for

"elderly"

who are "active" and search on those two words you get no hits. If you really look through

elderly pictures you are going find some people who look pretty healthy and active, but that

"active" keyword is not attached to the image.

On the other hand we can't forget that PhotoDisc had on-line sales growth of 160% in six

months

(June 1997 to December 1997) so maybe customers are happy to put up with this inconvenience

order to buy their images on-line. Maybe it doesn't make any difference.

In their race to get more and more images in the database they may be lowering the chances

that

users will find some of their older, and possibly better quality images. To counter this

effect

PhotoDisc has put up a second site: www.photodisc.com/2. This site contains a much smaller

file

of what the PhotoDisc editors believe are their best images. These images also appear in

the

main PhotoDisc site.

Users

Sources from inside Tony Stone Images tell us that 50% of the on-line buyers are people who

have

not been traditional buyers of stock images. Laurie McEachron says, "This figure is

incorrect.

What we can tell you is that the market for imagery is growing, and that many new customers,

such

as those doing web and multimedia design, may not have been stock photo buyers previously.

believe that the availability of image-manipulation tools, improvements in printing

technologies

and the increase in accessibility via the web has brought many new customers to the stock

photo

market."

The 50% (or slightly higher) figure dovetails with the information we have received in the

past

from the agencies that have images on PNI.

Given the revenue generated from these on-line sales, this new market is significant,

although

still only a small fraction of the total market for stock photography.

The RF industry has argued since its inception that it was reaching out to a new industry,

and

certainly that seems to in part be the case. On the other hand, photographers and stock

agencies

have been concerned about that other 50% who had traditionally paid higher prices and are

now

getting images at lower rates.

One of the things we have said for a long time is that RF is here to stay. Photographers

need to

accept it as a reality in the market and learn to deal with it.

In addition, given the continued rise in sales, it would seem that PhotoDisc lost very few

customers when they raised the price from $50 to $70 for unlimited use of an image acquired

line.

In fact, there were a few types of uses like packaging and book covers where higher fees

were

charged in 1997, but those restrictions have been eliminated in 1998.

Misrepresentation

David Falconer had one problem which photographers should carefully consider when supplying

images to PhotoDisc or any RF company. Overall, Falconer is very happy with his

relationship

with PhotoDisc and the income he receives from selling in the RF environment.

But, like many photographers Falconer tends to use friends and acquaintances a models. At

one

point he shot some pictures at the 50th wedding anniversary of some friends and got a nice

picture of the couple cheek to cheek. Fortunately, he got a model release.

The image went on a PhotoDisc produced disc and Whitaker Wellness Institute in New Jersey

purchased a copy. Whitaker used the image on a direct mail brochure entitled "Healing

Miracles"

that it uses to market vitamins and other products.

In the brochure the wife was given a fictitious name and a quote that said, "I was saved

from a

$300,000 heart transplant by using...."Friends of the wedding couple received the brochure

in the

mail, and when they recognized the couple they started questioning them about their heart

transplant and other "healing miracles" they had experienced. The couple was disparaged and

humiliated and were very upset with Falconer for allowing their picture to be used in such a

way.

They wanted distribution of the brochure stopped.

Also used in the brochure was another of Falconer's photos of a young couple on a Hawaii

beach.

The title over the young couple kissing at sunset read, "Dr. Whitaker's Uncensored Secrets

Sizzling Sex at any age..."

Falconer contacted PhotoDisc, but they were unwilling to do anything, in spite of the

language in

their license agreement that says "pornographic, defamatory, libelous or otherwise unlawful

use

of PhotoDisc images is prohibited." It would seem that this use is "defamatory" and

possibly

"libelous".

To try to get some satisfaction, Falconer contacted Whitaker Wellness Institute himself.

The

response of their lawyers was, "all professional models know the product is not as presented

and

you (David), as a professional photographer who sells photographs, should know there is no

truth

in advertising."

Falconer, "felt sorry for the couple in the photograph," but there was little he could do.

Fortunately, he did have a release that protected him.

This clearly illustrates one of the problems that can arise when the sales process is fully

automatic and specific uses are not discussed with a representative of the seller.

Falconer now puts an extra label over all "people" stock photographs that says, "Not to be

used

or published for mis-leading advertising." Of course, no royalty free company is going to

able to accept an image with such conditions for use in their products.

We had a similar experience at Stock Connection a few months ago. A bank in Southern

California

wanted to use one of our close-ups of a elderly couple for their brochure. They found the

image

on the Stock Workbook disc. However, they had to come to us to license rights.

The copy they intended to use under this picture was, "My husband was laid off from the

aerospace

industry and we were about to lose our home. XXX bank gave us the loan we needed."

The couple had signed a model release, but they were also friends of the photographer, and

certainly hadn't anticipated their photo being used in connection with something that

implied

this type of false personal testimony and endorsement. The photographer was contacted and

together we decided to refuse to make the sale. When a selling agent is talking directly to

the

client refusing to do business remains an option.

Photographers supplying images for royalty free products should recognize that the way the

images are used may totally mis-represent who the people are. The photographer should be

sure

that the models they use understand this, and are comfortable with such an arrangement.

This may be another reason why PhotoDisc is moving more to production shoots where they

control

the models and the releases.

Final Thoughts

The more I investigate, the less worried I am that RF will take over the market. RF has its

place and will certainly gain a larger share, but there traditional stock offers a much

greater selection and visual variety. The ability to control usage is also be important for

many buyers. Consider the fashion industry with "high fashion" and "ready-to-wear." Both

co-exist and some designers produce both products.

Based on conversations with other photographers, per image returns from Digital Stock are

about the same as PhotoDisc. Digital Stock has lower gross sales because they have fewer

discs in circulation and are just beginning on-line sales of individual images.

PHOTODISC PHOTOGRAPHERS

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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 301-461-7627, e-mail: wvz@fpcubgbf.pbz

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

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