May 1999 Selling Stock

company handle the marketing of these products for you?

Twenty one photographers reported that they had supplied images to RF discs

or web sites. Thirty two photographers said yes to question 13. In answer

to question 14 eleven said they self marketed their RF images and 21 said

they were selling through another company.

In addition to producing stock photography 12 people said they were involved

in some manner in marketing the work of other photographers.

Agencies Named In The Survey

Photographers responding to this survey were represented by a total 134

different agencies. We have listed these agencies at our online site and

indicated the number of photographers who were represented by each agency.

You can review this information at: http://www.pickphoto.com/sso

Story 214

In March, I published in Selling Stock Online an analysis of the Arriba

Vista's online search engine. Also included was a brief look at Alta

Vista's AV Photo Finder. Several readers commented that, "None of our

professional clients will ever use these sites." In the sites' current

form, I agree.

Nevertheless, it is important to recognize that technology has made a major

leap forward in being able to selectively capture images and index them.

The next step will be a site that only acquires images from certain

qualified sources (professional photographers and agents that request their

images be indexed), requires these sources to thoroughly keyword their

images, and offers a fair and democratic system of randomly presenting all

images on the site.

(Alta Vista has a deal with Corbis which shows all of Corbis' images first

on any search. This means that the images of other suppliers don't get seen

because they are buried too deep in the search pack.)

The major weaknesses of the current Arriba Vista site is terrible keywording

and the inclusion of every image on the web, 95% of which were never

intended for commercial licensing.

A search engine that provides a qualified sample of all web images will be a

desirable business model because it will contain images that are primarily

of interest to professional image users rather than the general consumer.

Professionals will want to use this site. Advertisers trying to sell

products and services to these professional users will want to advertise on

the site in the same way they want to advertise in special interest

magazines.

Distinctives

Arriba has demonstrated that:

separate them from all other related material.

images.

found at individual sites.

are connected with the images.

advertising on their site, not by charging image producers fees for showing

their images.

be able to generate useful keywords for a professional image search unless

the creator of the web site they are searching has supplied those keywords

in a separate file that Arriba Vista's "spider" can clearly identify.

Promotion

The key to the success of such a site will be in how it is promoted to

picture buyers. Online promotion alone will not be sufficient. Individual

photographers may link their images to several such sites and determine from

experience which one works best for them.

Photographers and stock agencies that want their sites indexed will have to

do more work than has been the case up to now, but it should be worth it for

the added control it gives them. For more information see Story 214 at:

www.pickphoto.com/sso/stories/st214.htm

Story 212

The Stock Market has followed the lead of many other major stock agencies in

making Royalty Free Images available on their web site. They now market the

images of PhotoSpin in a separate section of their site. PhotoSpin has

images in 18 different categories which include: objects/backgrounds,

travel, sports/recreation, textures, people, nature/seasons, animals, food,

business, commercial, medical, toys, nostalgia, cars, signs, religion,

junkyard and graffiti.

These images are available online for single-image sales with high

resolution downloads. The current site design gives the user the option of

choosing traditional stock or royalty free. "By entering into this new

venture with The Stock Market, we now may avail ourselves to a brand new

audience, while enhancing our own collection by pairing it with the vast

offerings of TSM's library," notes PhotoSpin CEO, Val Gelineau. Current TSM

photographers may participate on the RF site if they choose.

Story 215

April 21, 1999 -- Many publishers are now claiming that the copyright law

gives them the unlimited right to reuse pictures and text that have appeared

in their publications. They base this right on the Tasini vs. New York Times

decision. At the time images are supplied, photographers and agents need to

be much more diligent in defining contract conditions in order to protect

their rights and receive adequate compensation for their work. Lawyer Robert

Cavallo has recommended a series of steps that creators should take to

protect their rights by contract rather than simply relying on copyright to

protect them.

There is a tremendous erosion of traditional rights in the new era of

electronic publishing. Contributors to electronic publishing should be

looking for three elements in their contracts: Fair compensation on the

traditional advance and royalty basis, In the event that rights are

transferred to a 3rd party, not the original licensor, such as a print

publisher, the author should be compensated by the original licensor on the

traditional basis with the author receiving 85% to 90% of the fee charged

for the use. No use of the work should be made without the author's approval

of the medium, format and content.

As such, I am recommending that the following concepts be included in

contributors contracts when they provide works to print publishers who have

no intention of publishing them electronically.

1 - Allow the print publisher to issue the work in electronic form to a

third party only on condition that the terms of the use be negotiated

immediately prior to electronic publication.

2 - Divide the proceeds of the licensing of electronic rights to reflect

the print publisher's role as an agent for the sale of those rights with 90%

going to the author.

3 - Retain the right of approval over all electronic licenses.

Where the print publisher is also the electronic publisher or licensor, the

following should be attended to:

1 - Grant electronic rights only on an advance and royalty basis.

2 - Grant the right to issue electronic versions of the work only in

specified existing formats, preferably on a non-exclusive basis.

3 - Retain control over any abridgement or anthologizing of the work and

over any illustrations to be added to the work.

4 - Unexploited electronic rights should revert to the author.

5 - Grant periodical publishers the right to republish an article

electronically only in the same format and context as the original article.

This grant should be non-exclusive.

6 - Insist that periodical publishers pay an additional fee at the time of

the electronic republication following traditional industry practice with

syndication.

7 - Publishers should indemnify authors for all claims arising from

illustrations or other materials added to the author's works.

8 - The work should not be considered in print because there are electronic

versions of the work available.

9 - The publisher should be responsible for obtaining publication

permissions in electronic publications.

10 - Royalty statements should contain accurate records of production runs

and number of units sold and accessed, etc. A photographer or author may not

be able to get all of the things I have requested above, but it is necessary

to at least try.

Robert M. Cavallo, an attorney specializing in all areas of photography law

Avenue, New York, NY 10022.

Story 216

Justice Delayed Is Justice Denied

Brief arguments on the appeal of Jonathan Tasini et.al. vs. the New York

Times et.al. were heard on April 26th. When the case was first heard in New

York District court in late 1996 it took Judge Sonia Sotomayer almost eight

months to release a decision. Photographers should not be surprised if there

is no decision on the appeal before the new millennium.

On the basis of this August 13, 1997 decision many publishers have been

re-purposing large quantities of work, without additional compensation to

the creators, arguing that "Tasini" allows them to do this. That will

certainly continue, and accelerate, if the lower court decision is not

reversed by the appeals court. For more background on this case see stories

86, 88 and 107 online.

This case has greatly diminished the value of copyright protection in the

United States. To protect their rights, photographers must be much more

vigilant than they have been in the past in drafting contracts for

assignment and individual stock sales.

Agency Loses Liquidated Damages Case

In a Utah case for reimbursement for 34 lost transparencies a judge has

ruled that The Stock Solution and its photographers suffered little or no

financial loss because the photographers still had similar images which were

not lost.

In The Stock Solution vs. Axiom Design, LC, Judge David S. Young ruled that

Axiom had indeed lost 34 original color transparencies that were received

from The Stock Solution. However, he also ruled that the $1,500.00

liquidated damages provision in four signed delivery memorandums was

unenforceable because the agency and the photographers had other "similar"

images that were not lost.

The expert witness for the plaintiff, James Kay, argued that images

delivered to a client and later selected by the client usually constitute

the best images taken by the photographer. Loss of such images can cause a

potential loss of future income according to Mr. Kay. Judge Young did not

agree.

At one point, the judge interrupted Mr. Kay's testimony, took out a

calculator, and proceeded to divide James' total number of stock photos into

his annual income and announced that his images were only worth about $8.00

each.

Judge Young also ruled on April 14th that The Stock Solution must pay about

$7,000 for Axiom's attorney fees and expenses. TSS has only until May 14th

to file an appeal and post a bond in the above amount.

Royce Bair is seeking financial assistance to pursue an appeal of this

decision. Anyone wishing to contribute to a trust fund for this purpose may

contact him at 801-363-9700.

Stories 212 and 216

Getty Images plans to move their corporate headquarters from London to

Seattle and has leased 72,000 square feet of office space in the Quadrant

Lake Union Center, located in the Freemont district of Seattle. The space

offers high-quality data cable capable of handling networking speeds of

100Mb and higher to each desktop. Each workstation is wired with advanced

telephone, ISBN, and fiber optic cable, as well as the capability of graphic

images and video to the desktop. Getty currently has approximately 240

employees in Seattle and expects to occupy the new office space by late

fall. The space was formerly occupied by Adobe Systems, Inc., the Center's

major tenant.

The decision to relocate is based on the Company's increasing emphasis on

e-commerce and is in line with its strategy to further integrate the six

separate brands it has acquired over the past four years. Approximately half

of Getty Images's $185 million in 1998 revenue was generated in the U.S.

Getty Images has approximately 690 employees in North America. Total

employees worldwide is 1,350. Jonathan Klein and Christopher Roling, Chief

Financial Officer, will be relocating from London to Seattle. Mark H. Getty,

Executive Chairman, will continue to spend a significant amount of time in

London.

In other news Getty's revenue growth in 1998 was 84% over 1997 sales, due in

large part to acquisition. Klein expects revenue growth in 1999 to be about

15% over 1998 sales. Sales in 1998, excluding acquisitions grew 18%.

New TSI Catalog Format

Tony Stone Images Volume 11 catalog introduces the next generation of

catalog design by presenting the image collection in a metal covered, 3

ring-binder. They believe the format will be more conducive to designers'

work styles and it offers the following features:

• A compact 8x8" book complete with spine handles allows for easy

  portability to internal meetings and off-sites.

• Pages can be removed and scanned or rearranged and organized per

  project.

• The book lays flat when opened to the desired image page.

• Subject color and divider tabs increase the effectiveness and

  efficiency of image searching.

• Four images per page and more overall images than previous catalogs.

• It is designed to enable easy location of conceptual or illustrative

  imagery.

• Photographer Ernst Haas has his own subject divider for his unique

  image collection.

Some TSI photographers have nicknamed this catalog the "tin can."

Getting Images Seen At TSI

The period between image selection for Master Dupe Collection consideration

and the point at which it is duped and available to potential buyers has

many TSI photographers concerned. Some report that it can be as much as 18

months.

Worse yet, after this waiting period the London office may come back and

say, "Sorry, this image was not accepted," and return it. At that point the

photographer has lost 18 months and now has to try to find somewhere else to

place the image. In the past TSI has held images for catalog consideration

until the catalog selection was made, rather than placing them into the

files. Then they dupe those selected for the catalog and after all catalog

images are duped, they consider whether to dupe non-catalog images or return

them.

TSI is now considering the possibility of putting images into the on-line

catalog immediately after selection and making print catalog selections from

those images that are on-line.

Image Rejection At TSI

On top of this, TSI travel and nature photographers are reporting that they

have been told by their editors that TSI is no longer accepting new material

on these subjects. Many top shooters have had no new images selected from

their submissions for months.

Despite these photographer reports, Patrick Donehue says, "I can assure you

that it is NOT the policy of TSI to exclude travel or nature photography

from our collection. As with all imagery, these subjects must be

photographed in a new and innovative way that would differentiate such work

from the photography that already exists both within TSI and in the overall

market. We expect our photographers to produce imagery with this in mind. If

they do, their photos will get selected. If they don't, their photos won't

make it into the collection. It all really comes down to photographic

vision, innovation and the ability to take a creative risk or two."

Story 216

Losing Deal For Photographer??

There is some indication that getting one's image used in a stock agency ad

campaign that appears extensively in industry magazines and direct mail

promotions does not help generate more sales for that image.

I have heard several stories that certain images that have been chosen for

ad campaigns have never made a single sale after the ads appeared. The

theory is that the image got so much over exposure in being part of the

stock agencies ads that no client wanted to use it for their own projects.

This is a very important consideration for photographers because normally

stock agencies pay nothing to use photographers pictures in their ads. It

should be noted that these usages are totally separate from images that

appear in agency print catalogs. Print catalog placement definitely

generates more sales for photographers. I would like to hear from

photographers whose images have been use in agency print ads to determine if

the few examples I have heard of so far are the exception, or the rule.

Feedback

After the above story initially appeared online Tim Conaway of FoodPix made

the following comments.

"FoodPix is somewhat different than most agencies since we specialize in

commercial images of food, but we have experienced a high sales response

with images used in ads and promotions. On one direct mail piece using

fourteen images, 9 of them have sold since the piece went out, and a couple

of those have sold more than once. On another piece using one image, a sale

occurred less than a week after the piece was mailed, and that image has

generated sales of other images in the same series. On a two-page print ad

that uses 26 images, eight have sold, and others have generated searches and

subsequent sales of similar images (usually from the same series). Sales are

pending on at least three more of the images on that ad. We generally hear

that buyers are "starved" for good food images, so that may be why our ads

seem to turn directly into sales."

Photographer Ted Rice had the following experience. "I had a picture used in

a small stock agency ad last year. It ran not large but quite extensively in

design and ad trade magazines. I was initially pleased but was concerned

that it was uncredited. After inquiring, I was told it was not company

policy to credit. My position was that I was happy to have them use the

picture to extend their brand, but, in lieu of the obvious value of the

picture in support of ad copy, that I would appreciate credit to further

extend mine as well. As yet, the picture has not sold (it is only a few

months since it was used.) In that it was used extensively, I had exactly

the concern you expressed- that its value is diluted by the overexposure.

Especially in light of the fact that I am thousands of dollars in the hole

to them due to catalog fees, the practice seems quite unfair."

Story 217

There is an increasing trend among stock agencies to produce print catalogs

that are designed as "image builders" rather than to sell the specific

images found therein.

Photographers need to understand the difference between these two approaches

to the market, and carefully track sales of their images.

Much of the "edgy" material chosen for catalogs is designed to catch the art

director's eye and draw him or her to the "web site", not necessarily sell

the particular image found in the catalog. This is a relatively new

departure from the traditional approach to image selection for catalogs.

Art directors end up using the generic images found online -- one agent

calls them, the "white bread" of stock. Increasingly, these images are only

available on the web, or through a general file search, not in many

catalogs.

Simultaneously, there is a move at some agencies to pressure photographers

to produce "edgy" material and to accept less and less of the "white bread"

images that photographers produce.

If "white bread" is what is selling then why aren't agencies accepting it?

There are two answers. First, they already have a lot of it in their files.

Second, when they want to update "white bread" images they produce the work

in-house so the agency can retain a larger percent of the fees generated

from such images. Look for these trends to continue -- more rapidly at some

agencies than others.

As one agent explained it, the problem is that the "edgy" stuff is almost

impossible to assign. For this they need a broad base of photographers with

differing creative visions. When it comes to the high demand "white bread"

images, the agent can generate statistics on their best selling subjects,

and easily shoot file material that fills a similar need.

Steps For Photographers To Take

with other photographers who have had this type of imagery in print

catalogs. It is critical to understand how well this type of stock imagery

is selling, and the portion of total sales it represents.

agent because the agent needs to keep you producing "edgy" material.

producing "edgy" images, based on how well those you have produced in the

past are selling.

in the catalogs, insist that the agency include a liberal proportion of your

"white bread" work in their online catalog.

placement costs are compared, and as we move ahead in the next couple of

years, it may be more to your advantage to get more images on the web and

fewer images in the print catalogs, particularly if those catalogs focus on

showing very "edgy" images.

Story 209

In the March issue Getty reported that e-commerce sales were 15% of total

sales for the final quarter of 1998 and that in January 1999 10% of TSI's

North American sales were e-commerce.

The question everyone else is asking is can the small agencies and

individual photographers participate in this e-commerce trend?

This article compares sales results for PNI, Stock Workbook Online and MPCA.

For PNI and Workbook the figures are based on sales made by Stock

Connection which is a small percentage of the total data for these two

organizations. The reader should recognize that the averages may not be

valid for any agency other than Stock Connection, but they may give some

indication of the possibilities at the moment.

MPCA

According to Dick Weisgrau the average gross sales for MPCA photographers

with MIRA (MIRA has direct relationships with certain photographers who are

not MPCA members) is currently about $5,000 per month or approximately

$60,000 per year. Seventy percent of this is distributed to the

photographers, or approximately $42,000 on an annual basis. The MPCA

photographers have about 60,000 images currently on the site so, on average,

a photographer will receive $.70 per year, per image on file.

A year ago MPCA had 39 qualified buyers. Now they have 600 qualified

buyers. About 350 photographers currently have images with MPCA ranging

from a low of about 25 images to a high of approximately 1,000. Weisgrau

said, "MIRA is meeting its sales targets and they are pleased with its

growth."

Workbook and PNI

By way of comparison, Stock Connection has about 2000 images on the Stock

Workbook site. In the seven months from September 1998 through March 1999

our average sales resulting from this site were $4,880 per month. Assuming

that average continues for the rest of the year the photographer's average

return will be $19.03 per year, per image on file. Photographers receive

65% of gross sales.

Stock Connection also had about 1900 images with Picture Network

International at the beginning of 1999. Our number of images on-line is

growing and we are seeing month to month growth in our sales. Total gross

sales in the first two months of 1999 were $19,845. In this situation PNI

takes 40% of the gross sale off the top and, we split the remainder 35/65

with the photographer. Thus, the photographer actually ends up getting only

39% of the gross sale. PNI has 47,000 qualified buyers.

If we assume that our PNI sales remain level throughout 1999, as we have

assumed with the other organizations, then Stock Connection's total sales

for the year for 1900 images will be approximately $119,070 and the share of

that which is divided among the photographers will be $46,437. The average

each photographer will receive is $24.44 per year, per image on file.

It should be noted that these are averages. Sales for some individuals will

be higher and others much lower. There is no guarantee that any of these

organizations will maintain the same level of sales month to month, although

in all cases sales growth has been showing a steady increase.

It should also be noted that Stock Connection is only one of about 60

agencies on the PNI site and the total images in the database from all these

agencies is approximately 400,000. There are 46 agencies on the Workbook

site with a total of about 30,000 images. We have no way of knowing whether

our returns are better or worse than the other agencies who obviously

represent the vast majority of the images.

Gross sales is one factor, but not necessarily the only factor, that needs

to be considered when determining where to place ones images.

Story 192

Todtri Productions has still made no payments to stock agencies or

photographers who supplied images for their Picture Perfect 12 catalog.

Capstone Financing is no longer returning telephone calls from agencies and

it appears they no longer intend to participate in the refinancing as

discussed in the March newsletter. Images are still being licensed, but

creators are not being paid.

Story 216

According to TrendWatch the total number of professional creative

organizations in the U.S. marketplace is 62,000 -- 26% graphic designers,

20% commercial photographers, 18% corporate designers, 16% magazine and book

publishers, 13% ad agencies, 4% graphic illustrators and 3% catalog

publishers. The total number of individuals working in this market are

219,000--35% corporate designers, 20% graphic designers, 19% ad agencies,

17% magazine and book publishers, 5% commercial photographers, 3% catalog

publishers and 1% graphic illustrators. Nearly 15,000 firms will purchase

stock photo images this year led by graphic designers, corporate design

departments and ad agencies.

Story 216

More and more people are turning to online to get their information. Some

futurists predict that we will begin to see a decline in the use of paper

publishing in the next decade.The need for video images will increase. Many

still photographers are already producing video stock. Selling Stock is

exploring the possibility of expanding our coverage into the production and

marketing of video stock. If you have any interest in video; if you own or

have used a video camera even if you haven't yet been able to sell the work;

we would like to know who you are and start building our database of

videographers. Send an e-mail to: jim@chd.com

Story 211

At the 1999 Spring Seybold Publishing Conference in Boston, Ray Kurzweil,

author of the "The Age of Spiritual Machines." provided a daunting view of

where technology will take us in the next 30 years. For a summary read

Story 211 online at: www.pickphoto.com/sso/stories/st211.htm