446 PHOTOGRAPHER PAYMENT AT GETTY
December 14, 2001
In the last few months Getty Images has been struggling with the integration of the many and
varied accounting systems that they acquired when they purchased Visual Communications Group
(VCG) in March 2000. These problems began to come to light in the summer of 2001 when they
started the migration of data from the old accounting systems to their new Oracle based
Alliant accounting system.
This has resulted in multiple sales and payment reports to photographers raising the level
of photographer concern about the accuracy of Getty's reporting. It is important to note
that payments to Stone, TIB and other non-VCG photographers were not affected by these
In late November and early December Getty took the unusual step of arranging conference
calls with VCG photographers. CFO Liz Huebner and two VP's of Finance were available to
answer questions. They emphasized that, "We want our photographers to know that getting them
paid, and putting in place new systems to prevent such problems from recurring, is a top
priority for Getty Images."
Huebner acknowledged that, "we underestimated the difficulty of the first part of this
transition. We didn't allocate enough people at first, but we learned from our mistake. We
are moving through the second part of the transition with many more people and resources in
place to be sure every transaction migrates properly to the new system. We have now made
this a company-wide effort, and have dedicated our entire internal audit team to royalties.
Although we can expect some typical problems that occur whenever a new system is put in
place, we're confident that we won't incur problems on this scale again."
For over a year Getty has been cutting staff throughout the company and particularly at VCG.
They have refused to give Selling Stock any numbers regarding how many staff were in
accounting at the time of the acquisition and how many were left at the time these problems
started to manifest themselves. However, it appears they may have cut way too fast and the
remaining staff were simply overwhelmed by the work load. Nevertheless, now they seem to be
bringing the necessary people resources to bear to deal with the problem.
Roger Ressmeyer, VP of Strategy & Corporate Development, has said that the current problems
will be corrected by the time the December statements are mailed. He continued, "We are well
into the transition process, which should be largely completed by the middle of 2002. We
have an extensive team of employees, consultants and experts working on the project to
assure that nothing is "lost" in the process. Continuous audits will assure that any
problems in transition are detected, reported and corrected. If photographers find something
on their reports that we haven't yet caught, that information can help as well, especially
if it is submitted to us right away."
In some cases photographers will continue to receive two sales reports a month until the
transition is complete. Some of the old data will not be imported into the Alliant database
and the old systems will continue to be used until photographers have been correctly paid
for all sales made through those systems.
One thing that has added to the confusion is that under the old systems photographers were
issued a sales report in the month after the sale was booked, but were paid after the fee
was finally collected from the customer. This often made it difficult to compare a reported
sale with a payment.
Under the new photographer contracts a new payment policy has been put into effect. A sales
report and royalty statements will now be issued in the month after the sale is made. Checks
will be mailed 90 days after the reports regardless of when the customer pays Getty, and
will match the sales statement. This should make it much easier for photographers to track
when sales have been paid.
During the conference call CFO Liz Huebner said, "our new systems are integrated, so the
company can't recognize revenue until the sale is recorded and flows through to royalty
payments. Among other reasons, we are highly motivated to pay every photographer properly
so we can recognize the revenue. This is just one more way that our interests are aligned
with those of our contributing artists."
When Getty acquired VCG each brand had its own accounting system with data formatted in many
different ways. There were a myriad of unique conditions and special contracts. Sales were
reported in the local currency of the country where the image was licensed and often the
currency used was not clearly indicated.
In the process of migrating this data some agent sales were inadvertently entered at the
gross sale figure, rather than after the agent's split, overstating the amounts received
from sub-agencies. Once this was recognized it was necessary to cancel transactions within
the system and input revised transactions. This unusually large number of cancellations
created concern among the photographers. Getty says, "We are auditing all cancellations to
make sure they are entered at the same royalty rate as the original transaction."
Roger Ressmeyer says, "In the short term, while new systems are being phased in, there are
more cancellations and more confusion than usual. This will unfortunately continue until the
transition is complete. If a photographer finds something on a report that seems incorrect,
we would like to hear about it immediately. This can be accomplished by e-mailing
email@example.com. We greatly appreciate this kind of assistance."
Among the other problems that have concerned photographers are:
Response Time - Getty has been slow to respond to some photographer complaints.
However, in the last couple weeks we have received some reports from photographers
indicating that Getty may now be responding in a more timely manner. Based on this evidence,
I would advise photographers who might have given up in frustration to try once again.
Ressmeyer assures Selling Stock, "We are keenly aware that we need to improve our service
response times with photographers. While we currently respond to many photographer inquiries
within 24 hours, and many more within a week, we need to do better. If any photographer has
a longer standing issue that is not getting resolved, they should contact Anthony Harris
(firstname.lastname@example.org) so he can make sure the inquiry is elevated to the Artist
Relations priority list."
No Longer Representing Certain Images - Some customers are being told that
Getty no longer represents certain images that are in some of the VCG catalogs.
Ressmeyer said, "Periodically our collections are reviewed to ensure that client searches
produce relevant, saleable and, where applicable, contemporary results. This process
requires us to remove some of the older, poorer selling images. For this purpose, two large
reviews of the TIB and VCG collections were undertaken in recent months, as our contractual
relationships allow. Images in older VCG catalogs have either been removed from the
collection as part of our review process, or are now in our production department being
prepared for upload to the web. This process of scanning, retouching, and keywording older
catalog material will be completed over the next few weeks."
In the past year Getty has returned almost 10 million of the 70 million images they claim to
represent, mostly to Stone, Image Bank and VCG photographers. Ressmeyer says that returning
images continues to be a major effort and many more images will be returned in 2002. Because
the images are filed by subject and must be resorted by photographer, the work is tedious
and painstaking, but it is ongoing.
Ressmeyer emphasized that photographers who are on image-exclusive contracts are free to
market the returned images elsewhere, as long as the image is not a similar to any that
remain in the collection. "If a customer contacts Getty to license an image that has been
removed from a catalog, we do our very best to put the photographer in touch with the
customer so the artist can complete the transaction," he continued.
Falloff in Sales - Many VCG photographers have seen a substantial falloff in
sales compared to what they were earning a year or two ago. Part of the answer to this seems
to be that until recently many of these images were not available on the Getty Images site.
Ressmeyer says, "Since core VCG images are now web-enabled on the new, international Getty
Images site, we are confident that VCG sales will follow the same healthy pattern that Stone
and TIB have enjoyed. Some photographers' sales have diminished and others' have increased
in all our brands, as has always happened in the industry. Royalties for specific images and
styles have always fluctuated, driven by changing customer tastes and needs, by the overall
economy, and by the submission and acceptance rates of individual artists. Photographers who
are working to meet customers' needs, as articulated by our art directors and editors, are
seeing the most revenue growth."
Bavaria - In October 2000 the creative department of the Bavaria brand was
closed and future editing moved to Getty Images in London. Since that time many
photographers and stock agents who had images in Bavaria catalogs have had trouble getting
paid for uses, and in finding out when their images would be returned. The telephone number
89-98339-146 was provided, but answers were not forth coming when this number was called.
The old systems for VCG's European brands didn't produce sales advises in the months when
there weren't any sales. The new Alliant system will issue a report every month for every
photographer, even if there has been no sales activity for their images. Getty's records for
every month of the past year show payments to all Bavaria photographers who had sales. If
any Bavaria photographer feels he or she is missing a sales report or payment, they should
contact Maylene Lowe in the Royalties team (email@example.com) or Goranka Ferger
in Artist Relations (firstname.lastname@example.org).
The images of the Bavaria artists whose work is not being marketed are being prepared for
return under the terms of photographer contracts.
Planet Earth Pictures - Some Planet Earth Pictures (PEP) photographers had not
received sales statements for one or two quarters. These payments have been delayed because
the old accounting systems that dealt with them were increasingly unstable. Getty's
transition audits detected these problem, corrected them, and at this point in time Getty
has caught up on the delayed reports and payments. Additional audits are in process to make
sure no other transactions go unreported or unpaid for any of Getty's brands.
Getty Images has been very open, honest and direct with photographers about these
transitional problems and what they are doing to fix them. While this period has been very
frustrating for many photographers, it appears that Getty is getting very close to a final
solution in this area and that the new Oracle database system will be a major improvement
over the accounting and payment systems of the past.