At the Picture Archive Council of America (PACA) international conference in Chicago over the weekend PACA and CCC (Copyright Clearance Center) offered a proposal for collecting revenue for the unlicensed use of images on social media sites and distributing a share of that revenue to the creators whose images were used
The first thing to recognize is that more and more images are being grabbed by consumers from somewhere on the Internet and posted on portals like Pinterest, Facebook, Tumblr, Instagram, Reddit and Twitter. The number of such portals, large and small, is expected to grow exponentially and there seems to be no way to slow or stop this activity. In addition such portals are finding ways to place ads beside the uploaded content in order to monetize their operations.
Thus, it is important for professional image creators to, as quickly as possible, try to find some way to receive a share of the revenue generated from this use of their images. While the potential revenue from this activity may seem insignificant today, given the way the world is changing in terms of delivery of information and entertainment, this could become a major source of revenue for many image creators.
CCC’s Proposal
Since 1978 the
CCC has been licensing photocopy rights on behalf of publishers to 35,000 U.S. based corporations with employees in 180 countries. Most of these licenses have been annual subscriptions for unlimited use of the works CCC represent. For the most part, with a few exceptions, the specific works photocopied are not tracked. The CCC determines what to charge for each subscription based on estimated usage. They distribute royalties to the publishers through a complex surveying system that tries to estimate the proportion that each publisher should receive.
Over the last 34 year the CCC has collected in excess of $2 billion and paid out roughly 72% of that to publishers. Virtually, none of that money has found its way back to the actual content creators. In 2011 the CCC collected $238,590 million and paid out $171,064 million. Remember, this revenue comes just from U.S. based businesses. Much more is being collected for photocopying through national collecting societies around the world. Photocopying is a big source of revenue. Internet use is potentially a much bigger source of revenue -- if not now certainly within a few years.
In the past it has only been possible to make broad general assumptions about use. With the CCC’s current system the best they might be able to say is that something from one of Pearson Education books was photocopied a certain percentage of the time in a year, but most of the data they collect is not title specific.
In the Internet environment, thanks to the use of “image fingerprinting” and the insertion of an API on the portal of each subscriber, they will be able to say that an image with a specific image number, taken by Scott Olson from the Getty Images collection was uploaded to Facebook on a particular date. That image may have come from a Pearson Education book, Getty’s web site, or another web site where someone else had posted it. That information is unimportant. The important factor is that the image was created by Scott Olson and that he (or Getty if he is a staffer) is the copyright holder that should by compensated.
While the CCC proposes to develop a system using image fingerprints technology to track image use, they have no experience with this technology and to date have not licensed or developed this technology for broad use.
The CCC has experience in negotiating and licensing subscriptions. It has no experience in licensing rights to portals or in breaking down uses in a granular way so the creator of each specific item can be tracked.
The CCC also recognizes that in order to be able to convince portals that they should purchase a subscription it will need to represent and fingerprint millions of images. On Saturday they were asking PACA members to voluntarily opt-in to there system so they could then go ahead and develop it.
At this stage there is no indication how long it would take to get the CCC system off the ground. It was assumed that there would be no cost for agencies to participate, but that was not specifically stated. A question was asked about the percentage of revenue collected that would be returned to the agencies as a royalty, but at this point the CCC representatives could not provide a number.
It is expected that PACA and the CCC will work together to flush out this proposal and present it with more detail in coming months.
Are There Other Options?
Anyone considering the CCC’s offering should also be aware of the ImageIRC registery. See this story:
New Service Provides Credit & Revenue When Images Are Used On Social Media
This service which is operated by PicScout and now owned by Getty Images has more than 100 million images from over 200 image partners already fingerprinted. This content ranges across news, sports, entertainment and creative imagery categories. Social image-sharing platforms that participate in PicScouts new “
Post Usage Billing Service” will have an assurance that they have a legal license to display a significant percentage of the professional images that their social users might upload to their portal.
PicScout fingerprints images for free. So far, in the beta test period they are only offering subscriptions for images that can be found in the Getty Images collection. The company has not announced what royalty share will be passed on to the image creators. One of the first customers for this service is
SparkRebel.
They expect to start contacting their existing image partners and others in the industry with their proposal for revenue sharing by the end of the year, or early in 2013.
Issues To Think About
When considering either of these options here are some things to think about.
1 – Will they only deal with collections from large organization (in PACA’s case PACA members) or will individual creators with relatively small collections be able to participate? For contributors with any type of significant collection it would be advantageous to be able to deal directly with the organization collecting the information and not have to split the royalty with a distributor.
2 – If the creator has the same image with several distributor’s how will it be decided which distributor will be paid the royalty share?
3 – In the case of ImageIRC a significant percentage of the images that have been made available for fingerprinting by Getty come from other distributors like National Geographic or Robert Harding World Imagery. When a National Geographic photographer’s image is found, and after the basic PicScout overhead is deducted, will Getty take a share before submitting the rest to National Geographic for distribution to the photographer, or will Getty’s PicScout division submit directly to National Geographic without taking an additional percentage off the top?
4 – During the PACA presentation there was a question about why portals would be willing to share some of their revenue with content creators. It was argued that nothing would be likely to happen until there were some law suits with big settlements. This argument fails to take into account the Digital Millennium Copyright Act (DMCA) of 1996.
There is
already law that requires portals to promptly take down an image when they receive a properly formatted DMCA Takedown Notice. For more about how to format such a notice check out lawyer
Carolyn E. Wright’s blog post.
Portals are already receiving lots of DMCA takedown notices and it is a costly administrative hassle for them to deal with these notice. Most of these notices are from professionals who feel they should be compensated when their work is used. The portals might be willing to pay a reasonable subscription fee for the assurance that the number of DMCA notices they receive would be dramatically reduced.
Many image creators don’t bother to send take down notices because it takes time to research the uses and there is not much chance that they will receive any compensation for their efforts. Now, in a round about way, there is a chance to receive compensation if the portals pony up some subscription money. If image creators want to encourage portals to purchase subscriptions the best course of action would be for those creators to flood the portals, or one specific portal, with DMCA notices. We don’t need a legal action that will take years to work its way through the courts.
5 – When one of these services searches a portal – Facebook for example – and they find a photographer’s image, how will they know whether the photographer posted it (which would be a legal use), or someone else copied and posted it (which would be an unauthorized use)? Will both uses count in the same way toward the photographer’s share? If that is the case, then it might be in the photographer’s best interest to actively post as many of his/her images as possible on portals that are paying subscription fees and to actively encourage sharing. Consider the
Noam Galai’s picture and the revenue that image might generate if he were sharing subscription fees.
6 – If you choose to participate on one of these services does it have to be with all of your images, or can you continue to hold some of your best images and continue to pursue infringers when you find them?: In theory, a creator could have two collections – one where he agrees to accept a share of subscription fees when those images when those image are copied by someone and posted on the web. The other collection could be kept separate. The images in the other collection would not be in the main fingerprint collection and when an unauthorized used is discovered the photographer would be free to pursue the user legally. This could work if the photographer was uploading images directly to PicScout or CCC, but Getty or other distributors may not be willing to continue to license images if they are not available for portal subscription use. This is an important point to nail down as the offerings are further defined.
7 – When the service finds an image how often will it be counted? Will it only be counted the first time it is posted? If an image is posted on Pinterest and then it is re-pinned 100 times will that be counted as one use or 100 uses? If the image stays up indefinitely will it be re-counted ever so often?
8 – Assuming that a service make a deal with Facebook for a three-month subscription fee, how will the number of images that share in that subscription be counted? Will it only be the number of images that are uploaded to Facebook in that subscription period or will it be all images that are on the Facebook site during that subscription period (a significantly larger number meaning that the value of each image would be much lower)? If the “all images on the site” strategy is used -- and assuming that once posted images are never removed -- image creators would get additional revenue during every subscription period.
9 – In another PACA presentation that discussed rights Denise Phillips of Microsoft said that when she licenses an image she also wants to get the right to post it on Pinterest and other social media sites. She licenses over 100,000 images a year for use on MSN. Assuming the posting right is granted, when she posts an image that has already been licensed for that purpose is it also counted as part of the photographers total on Pinterest during that period? (There is probably no way not to count it.) If 100 other Pinterest user re-pin the image on their boards are all those re-pins counted?
10 – Will agencies and distributors adjust percentages for this type of use? The normal percentages that these organizations retain seem inappropriate here. In many cases all they will be required to do is submit all new images for fingerprinting and then sit back and wait for a check to be delivered. Once they have received money they deduct their share and use the data provided to write new checks and distribute the money. There is no selling of marketing and very little administrative overhead. This doesn’t sound like it is worth 50% to 80% of the money collected. To determine what might be fair it might be good to look at what the
European collecting societies are receiving.
Which One To Choose?
It will probably not be in the supplier’s interest to have two competing organizations offering this service. If two different organizations go to portals saying they represent much of the same content the buyer will play one supplier off against the other, driving the price down. All the stakeholders on the supply side lose. If the organizations have different images, then the one with the most will probably win -- unless the one with the smaller number can demonstrate that its creators will be much more aggressive in filing DMCA take down letters and generally harassing the portal until it agrees to pay an acceptable subscription.
There will need to be transparency about how each of these services intends to operate. Creators and distributors will need detailed information in order to make educated decisions about how to best manage their collections. The level of secrecy that has traditionally been a part of this industry will not be satisfactory.
Most of all, this is not a time for content creators and providers to sit back and wait to see what happens. The decisions we all make in the next few months could well establish precedents for years to come. Remember, that back in the early 1990s it was argued that Royalty Free companies couldn’t afford to pay out more than 20% in royalties because they had such huge startup and overhead costs. The general attitude of creators was, “Well this RF thing is never going to be important anyway, so either I’ll ignore it, or the 20% will be OK.” Then the overhead costs went way down and profits went up for the owners. Now those owners are doing IPOs, getting venture capital and private equity investments and the creators are still struggling to make do with peanuts.