Random Thoughts 25

Posted on 11/8/2000 by Jim Pickerell | Printable Version | Comments (0)



November 8, 2000

Index Stock Closes Offices, Cuts Staff

Index Stock Imagery has closed all their offices except their New York headquarters

and reduced staff by about 20% They currently have about 100 people at their New York

headquarters. They have also cut staff salaries across the board by 5% and CEO Bahar

Gidwani has taken a 10% pay cut.

These cuts were a condition investors placed on the company before they would provide

the balance of a $20 million round of funding. The investors expect the company to

reach the break even point and become profitable in January 2001.

Index had received some of this $20 million in order to keep it operating through

2000. In 1998 Index received $12 million in funding. With this new round investors

have put $32 million into the company. Mr. Gidwani will not reveal how much cash

remains, but it is clear that after January investors expect income to more that cover

the costs of operations.

While there have been significant staff cuts, some work like scanning, previously done

inhouse, will now be outsourced.

Index is also late in paying photographers commissions for the last quarter due to

continuing problems with their sales tracking and accounting system. The goal is to

have an on-line system that enables each photographer to determine how much he or she

is owed at any point in time.

We first reported in March

(See Story 289) that Index was having problems with this

accounting software. At that time they said the system would be fully functional in

July 2000.

Index has approximately 530,000 images on-line and 85% of their customers are served

on-line. Index is implementing a preference system which will bring the best of these

images to the top on any keyword search.

Thomas Speight Joins Zefa

Thomas Speight who has managed The Stock Market office in Dusseldorf, Germany for

several years will be joining Zefa

Visual Media on January 1, 2001.

Global State Acquires WestStock

Shelon Marshall, CEO of GlobalState has acquired WestStock, whose headquarters are in

Seattle, and John Foxx Images, a RF company in the Netherlands. GlobalState also

acquired Adventure Photo or Ventura, CA earlier this summer.

Marshall founded Visual Communications Group in the mid-80's and built it into the

second largest stock agency group before he was replaced as CEO in early 1999


Story 193) .

When Marshall left VCG they owned FPG, Telegraph Colour Library, Bavaria in Germany,

PIX in Paris, Colorific in London and some other smaller libraries.

Marshall is interested in putting together a company that provides a variety of

services to the B2B buyer. At the moment he has three channels to this service --

ImageState, VideoState and MusicState.

The VideoState channel is the film division of Adventure Photo. The ImageState still

division has the still section of Adventure Photo, WestStock and John Foxx. WestStock

has both Rights Protected and Royalty Free images, but Marshall sees most of their

offering as closer to RF, in terms of pricing, than it is to RP.

Adventure Photo will be releasing a new catalog in February that will include a broad

selection of lifestyle photos as well as the "adventure" material that has been

Adventure Photo's specialty in the past.

WestStock was one of the pioneers in Royalty Free photography when in 1989 PhotoDisc

adopted their 21st Century Media prototype. All the original images for PhotoDisc

came from WestStock photographers. Mark Karas and Rick Groman will continue to

jointly manage the WestStock division.

Sensitive Issue Releases At FPG

In the past FPG had informed photographers, and obtained special permission, if

someone wanted to use an image in a way that might upset the models. In such cases

they required that the photographer or the model sign a "sensitive issue clearance


Effective immediately, they have decided that they will no longer accept images unless

they are backed by a release that meets their minimum requirements for sensitive issue

uses. Use of these new images will be allowed for any purpose whatsoever without any

additional clearances.

Their terms and conditions will continue to prohibit clients from using images in a

defamatory or pornographic manner, but they are amending their back office procedures

and revising their Online Licensing Agreement to eliminate the requirement that the

client obtain prior clearance for sensitive issue uses.

In a letter to photographers FPG says, "We have devoted a considerable amount of time

and resources to carefully examining this issue in order to arrive at a decision. The

primary reasons for retiring the policy are detailed below:

    "The practice of going back to the photographer or the model for additional permission

    calls into question the validity of the releases themselves.

    "Having the Photographer sign off on a Sensitive Issue usage on behalf of a model may

    place that photographer in a position of liability.

    "Requiring the photographer to go back to the model for signature is cumbersome and

    sometimes impossible when the release, if it meets our minimum requirements, is in

    place to cover all uses, including sensitive issue uses.

    "And additional special clearance step represents a considerable disadvantage in an

    e-commerce environment where the client's experience must be as fast, easy and as

    seamless as possible. As is true with any e-business; optimizing the client's on-line

    experience is paramount."

They believe that since a release, in and of itself, represents the model or property

owner's specific consent, it is not judicious to ask them, or the photographer, to

give consent a second time.

Their lawyers believe that elimination of the sensitive issue policy not only

streamlines the licensing process, but it reinforces and protects the intent of the

release as proof of the specific agreement between the photographer and model or

property owners.

Given this policy, it seems likely that many file images may not be selected for the

FPG and Gettyone.com sites.

Copyright © 2000 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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