Precedents For Electronic Rights Use

Posted on 6/3/2013 by Jim Pickerell | Printable Version | Comments (0)

Given the prices publishers are charging for their digital products, they are establishing a precedent that images – in fact, all the content – is essentially worthless.

Clearly, the world is moving in a direction where the vast majority of educational content will be delivered online. Almost half the new educational content publishers are preparing for 2013 and 2014 release (see here) is for digital products.

One publisher is giving schools online access to a pool of 500 books for an annual fee that ranges from $400 to $1,300 depending on the size of the school and whether students have home access as well as school access.



What is the use of a photo in such a product worth?


Currently 1000 schools have subscribed to the service. Assume the average school pays $850 per year and has 500 students with approximately 100 of them interested in the subject matter of any particular book given that the educational material will differ for different ages. The publisher gets $850,000 a year and 100,000 students get unlimited access to the educational material they need.

In this case I would hope the publisher would be willing to share 50% of this revenue stream with creators since the publisher has very little additional cost in providing this service over and above the cost of producing his print products. Half of the creator share should go to the creators of the textual content and the rest to the visual content creators. Thus, there might be a pool $212,500 to divide among the photographers and illustrators.



We don’t know the subjects of the books or how many illustrations might be in each. Some high school books have as many as 1,000 photos and illustrations while children’s books may have fewer than 50, particularly if they are mostly illustrations. Assume there is an average of 200 illustrations per book. That would mean that there are about 100,000 illustrations in the package making each worth about $2.12. Maybe the publisher would buy rights for 5 years. That would make each image worth $10.50.

The publisher might agree to pay an annual royalty based on actual sales but it seems unlikely that the subscriber base will grow enough for that to make much of a difference. And, most publishers want to pay a single fee for unlimited future use. They don’t want to deal with the hassle of distributing royalties.



EB Comparison


An interesting comparison is Encyclopaedia Britannica’s Image Quest project. Instead of making a series of texts available, EB started with a database of 2.3 million images. When schools license rights to use the database students and teachers are encouraged to access as many images as they like. The number of times each image is viewed is tracked. Each photographer receives a proportional share of the total revenue collected when his or her images are viewed. With this system it is possible that some of the images will never be viewed, and thus not earn any revenue.

Initially, the Dallas, TX school system with 25,000 students paid $16,250 for a one-year license. After the EB and agent shares are deducted photographers split about $2,437 or 15% of the gross on a proportional basis. In the first three months of use the Dallas students viewed images at a rate of about 700,000 transactions per year.

Thus, if a photographer’s images are accessed 200 times in a year his share of the fee paid by the Dallas school system would be about $0.70. If use of the service increases the photographer’s share will decline.

Publishers may be able to raise prices as use of these digital products becomes more common. But based on past experience when a publishers are able to charge more for their products they usually keep all the additional revenue for themselves and tend not to increase the amount they are willing to pay content creators.


Copyright © 2013 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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