352 RANDOM THOUGHTS 25
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
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
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
Given this policy, it seems likely that many file images may not be selected for the
FPG and Gettyone.com sites.