Photographer Percentages

Posted on 1/6/1999 by Jim Pickerell | Printable Version | Comments (0)

186

PHOTOGRAPHER'S PERCENTAGES


January 6, 1999

At Photo Expo 1998 in New York on October 31st Jonathan Klein, CEO of Getty Images

gave a keynote speech entitled "Content in the 21st Century." The full text of this

speech is in Story 180

"Klein Speaks In New York."

During the question period Klein was asked:

    Question - What is the justification for reducing the photographer percentages?

    Will percentages continue to go down?

    Klein - I feel quite frankly that the existing Tony Stone photographer's contracts -

    most of the photographers have now signed -- is the right percentage. That's why we

    proposed it. That's why we stuck by it. We have no intention of further reducing

    it. That percentage is 40% for an on-line in-territory sale and 30% for an

    out-of-territory sale. Now, one can debate what the right percentage is.

    And I have often made the point, and I'll make it again now that the percentage the

    photographer gets is the highest of any industry I know, with one slight exception

    and that is Hollywood. If you take the percentage cost of a movie the star may get,

    sometimes, a higher percentage, but not even then. So I feel that the relationship

    between the talent and the business of marketing and distributing that talent is

    extremely favorable to the talent [in the stock photo business]. If you are asking

    me from the Getty Images perspective, do we intend to change, the answer is no. The

    top selling writers in the world do not even get 15% of the royalties.

Photographer Larry Aiuppy believes there is a fallacy in Mr. Klein's logic when he

compares photographers to movie stars as a justification for reducing the percentage of

gross fee paid photographers. The following story explains his thinking.


By: Lawrance B. Aiuppy

It will seem paradoxical for a thinking stock photographer to be grateful to

Jonathan Klein, CEO of Getty Images (for some, stock photography's Anti-Christ) for

anything he said in New York during Photo Expo. However, as a full-time stock

photographer with major agency representation (not Getty), I thank him for doing two

things.

First, he has finally broken the heretofore biggest taboo in stock photography. That

is, challenging the 50/50 split on gross photo licensing sales. This split, whose

origination is lost in the mists of stock photography's distant past, has been

sacrosanct, a kind of third rail between photographers and agencies that all were

afraid to touch for fear of frying.

This split only made sense when stock photography was the underfed stepchild of the

assignment industry. Back then assignment photographers didn't much care about the

50/50 split, since it was "found" money after being paid up front for their time,

talent, and most importantly the production costs, of assigned images. The agencies

certainly liked such a generous split for simply distributing pictures that cost

them nothing to produce. Who wouldn't. But that was then, this is now.

Contemporary stock photography is now a stand-alone specialty, with its own unique

demands and forms. No agency today can survive without these expensive, difficult to

produce specialized images. Images made by highly skilled stock shooters at the top

of their games producing unique images for which they assume all the up front costs

and risks.

I think we deserve more than a 50% return, not less. However, like everyone else who

understands the economics and traditions of the industry I was willing to leave the

50/50 split alone. Until now. I am delighted that someone with the position of CEO

at a major agency had the temerity to touch the rail. Now that the taboo has been

broken, we can all begin a dialogue about the real cost of producing today's highly

specialized, expensive to make stock photos.

Certainly the agency proportion should not be 50%, I agree with Klein about that. If

things were truly fair and reflected actual economic realities, it should probably

be around 25-35% for the agency, and about 65-75% to the photographer. After all,

what the agencies essentially do is just distribute the images. Stock photographers

assume the bulk of the industry costs and risks- the actual up front production

costs as well as all (or at least most) of the marketing and distribution costs of

catalogs, CD's and now internet marketing. This in the form of "participation fees"

that I have it from at least one PACA agency head cover all an agency's costs in

this area.

I know of at least one agency with the integrity and honesty to work within the

above range, and turn a profit. Why can't the others. I am sure there are plenty of

agencies out there privately furious with Klein for opening up this debate. But so

be it. It is now open.

The second thing I must thank Klein for is his unwittingly, in the broadest sense of

the word, giving photographers a very helpful business model and industry parallel

with which to understand the economics of stock photography. Ammunition to use when

dealing with agencies over "the split."

When Klein, in answering a question following his keynote address at Photo Expo,

compared photographers with actors ("talent") in the movie industry, he got the

overall industry analogy right, just not the particulars. The parallel to actors in

the motion picture industry are models in our industry. Like directors in the

"motion" picture industry, we (the directors of our "still" picture productions) do

use models-actors, but that is as far as that aspect of the analogy goes.

The proper parallel to stock photographers in the motion picture industry is the

entire production side of the motion picture industry. Independent stock

photographers are the same as independent motion picture studios. That is, for the

stock photography industry we are the developers, financiers, producers, script

writers, casting directors, film directors, cinematographers, editors and the

various production units (production department, art department, set construction,

set decoration, prop department, vehicles and transportation departments, special

effects, camera operations, special equipment, grip department, lighting and

electric operations, wardrobe department, makeup and hairdressing dept., set

operations, site scouting and rental department, stage department, post production,

film processing and testing, film editing and effects, etc., . . . as well as the

marketing department). You get the picture (if Klein does not). We, independent

still stock photographer/studios, are all these things rolled into one entity.

The agencies are simply the distributors of our still photography productions.

Should they get 50% of the gross for what they do? You tell me.

Oh yes, one more thing. Since the agencies conveniently forget it, it behooves us to

constantly remind ourselves that out of whatever is left over from our 50% of the

gross, after subtracting all of our up front production costs (see above), we must

pay our studio/business overhead (space rent, upkeep and depreciation; business

liability, equipment (including vehicle) and disability insurance; personnel and

labor costs; office supplies, materials and equipment; camera equipment purchases;

etc., etc.). And after that is paid, we must somehow feed, clothe and shelter our

families, insure our family's health and well being, pay for higher education, and

fund our retirement accounts. I don't think we can do it, long term, on less than

50% of the gross. Not and live like free human beings.


Copyright © 1999 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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