Random Thoughts 26

Posted on 12/4/2000 by Jim Pickerell | Printable Version | Comments (0)

362

RANDOM THOUGHTS 26


December 4, 2000

Sarah Stone Goes To Workbook

Sarah Stone, daughter of Tony Stone and creative director at Tony Stone Images

before it was acquired by Getty Images, has been hired as Director of Content for

the new Workbook site.

Getty Promotes Corbis

The name of the game on the internet is how many different ways you can tell

customers about your site. Get your banners on every conceivable site related to

your business. If you can get your competitor to promote your site, all the better.

Back in January Getty Images purchased a small Ontario Corporation called I/US

Corporation. They issued 49,565 shares of Getty's common stock which had an

aggregate value at the time of $2.3 million in exchange for all of the issued and

outstanding capital stock of I/US Corporation.

I/US, All Things Graphic, is a portal which is aimed primarily at desktop

publishers. However, advanced business users and graphic designers also use the

site. There are also aspects of the site that seem to be aimed at advanced amateurs

and students. It is unclear how the site itself is being marketed. It can be

reached by going to www.i-us.com.

What is interesting to us is that although this site is owned by Getty, it has three

sponsors -- Adobe, CORBIS and EyeWire. Each sponsor pays advertising dollars to get

their "sponsor" position. Sponsors have a permanent button on the left hand side of

the home page. The Corbis button is the same size as the EyeWire notice. There is

no mention of Gettyone.com or PhotoDisc on the home page.

While it mentions Royalty Free under the Corbis button, if you click the button it

takes you to the Corbis site and immediately gives you the option of searching for

either Rights Protected or Royalty Free images. Corbis also has banner ads

appearing on the site.

I find this willingness of Getty Images to promote the Corbis name and venue very

interesting. Maybe next we will see Corbis being promoted on Gettyone.com -- if

they are willing to pay enough for the position.

It is also interesting when we consider that Getty doesn't want the photographers

they represent to offer to Corbis, images Getty is unwilling to accept. Likewise,

Corbis doesn't want their photographers to make any images Corbis won't accept

available to Getty for marketing.

Stone Catalog Prices

One Stone photographer has calculated, based on the per image fee

photographers are being required to pay, that the costs for production and

distribution of the "Work" catalog which contains about 1100 images was $2,395,272

($786,830 for the North American edition and $1,608,442 for the Rest of the World

edition).

We asked Getty Images about two months ago how many copies of "Work" they had

distributed and if these figures were accurate.

They have been unwilling to comment.

In checking with a major producer of quality catalogs in Europe we have determined

that they have recently been able to produce and distribute 100,000 copies of a 428

page catalog with about 2200 images (twice the number of images as in "Work") for

the following costs.

Printing, including shipping and insurance   

$400,000   

Separations   

$100,000   

About 70 dupes of each images for at total of 160,000 dupes   

$240,000   

In country mailing to customers varies

but averages $4.00 per book   

$400,000   

Total   

$1,140,000   

It they had distributed 200,000 copies the total cost would have been about

$1,940,000. These figures do not cover any internal labor costs for editing and

design work. Also keep in mind that "Work" has a page size that is about 40% of the

traditional catalog page size so Stone probably had much lower paper costs for

printing.

Another thing to keep in mind is that because Stone is only putting about half as

many images in a catalog as the other agency the proportional cost per image will be

twice as high.

If Stone is paying for 50% of the catalog costs and the total fees charged

photographers was $2,395,272 then Stone probably distributed close to 500,000 "Work"

catalogs worldwide.

PhotoDisc Price Increases

In 2000 PhotoDisc has instituted some dramatic increases in prices for single image

sales on-line.

     

Nov 1999   

Feb 2000   

Sept 2000   

% Increase   

600K   

19.95   

24.95   

29.95   

50%   

10MB   

69.95   

79.95   

99.95   

42.8%   

28MB   

129.95   

149.95   

179.95   

38.5%   

Disc prices are also up slightly over what they were a few years ago. Prices for

their major line are $329 per disc. They also offer their Signature Series and

Designer Tools at $279 and the Object Series and Backgrounds and $179.

While the Royalty Free business used to be based totally on selling disc in 2000

there has been a dramatic shift to buying images on-line. Published information has

indicated that at least 60% of the dollar volume currently being generated by

PhotoDisc is for single image sales. The majority of those sales are for the 10MB

file size.

It has generally been assumed that most customers who bought discs purchased them in

order to use a single image. Frequently they never use any of the other images on

the discs. Now when it is easy for customers to buy just the images they need, and

to get rapid delivery on-line rather than having to wait for a disc to be shipped by

Federal Express, the average price per unit sold is dropping -- $99.95 vs. $329.

This may also result in an increase in unit sales. (Those people who actually used

two pictures off a disc are now making two purchases instead of one.)

Other RF producers are reporting that in excess of 70% of current sales are for

single images rather than discs. It seems likely that disc sales are on the way

out. In the future all buyers will purchase the image they need, as they need it,

be it RF or RP. It also seems likely prices for single image RF will continue to

rise as a way of making up for the loss of revenue from disc sales.

CEPIC

The sixth CEPIC Congress will be held in Amsterdam from Thursday May 24th to Sunday

May 27th, 2001. CEPIC, the Coordination of European Picture Agencies Press & Stock,

is headquartered in Paris and has offices in Berlin.

The main topic of the conference will be the crossover between

journalistic, documentary photography and commercial stock photography, and an

examination of the use of photo-journalistic style images in advertising. There

will also be an examination of the increasing use of royalty free photography.

Results of a European Stock Industry Survey will be available and there will be

up-dates on the new EU Copyright Directive. The complete program will be available

in December 2000. More information is available by e-mailing CEPIC at:

cepic@akg.de.

or going to their web site at

www.cepic.org.

All discussions at the conference are in English with simultaneous translation in

French and possibly German this year.

The World Press Photo exhibition will be on display during the conference and on

Saturday there will be an opportunity to visit the Naarden Photo Festival 2001 about

20 kilometers from Amsterdam.

Corporate Advertising Magazines - House Organs

Corporations sometimes produce magazines and newsletters directed toward their

customers, that are designed solely as marketing pieces. The term "House Organ" has

been used for years to describe this type of publication.

Often such publications are easy to distinguish from a regular consumer magazine

because they have little in the way of advertising pages and all advertising found

within them is for the company itself.

Recently companies are taking this "House Organ" strategy one step further and

selling ads to a

variety of other companies who provide non-competing services that might be of

interest to readers. In this way they offset some of their cost of advertising.

Often the producer of such magazines will be one of the large publishers who also

produces general interest consumer magazines and does this type of work on contract

for the corporation.

An example of such a magazine is "IQ Magazine" produced for Cisco Systems by

Hachette Custom Publishing. To quote the magazine itself, it is "the senior

executive's atlas to the Internet economy. Using the successful models of Cisco

Systems and its customers, the bimonthly details how business can harness the power

of the Internet to gain a competitive advantage and increase profitability."

The editorial content is primarily profiles of Cisco Systems clients who have

integrated the internet with their businesses in a highly successful way. Each of

these articles briefly mentions Cisco Systems' role in this process - basically a

very smooth customer endorsement.

The magazine is not subscription based. It is distributed free to customers and

prospective clients of Cisco Systems. Until the last issue the distribution had

been confined to the U.S., but now they are branching out to the foreign market.

It is a beautifully produced product - thick paper, beautiful binding, 5-color

covers, etc. It also runs big expensive

ads from companies like Mercedes-Benz, Jaguar, Cadillac, AT&T, AC

Anderson, etc.

To price such usages

Negotiating Stock Photo Prices has rates on page 206 for External House Organs.

These prices are very close to advertising rates and way above the recommended consumer

editorial rates. The new edition of NSPP which will be out in 2001 will

probably push these rates up by another 10%.

In the case of assignments for pictures that go with editorial content within such

publications, we believe you should charge very close to what you would normally

charge to do an advertising assignment, not your normal editorial rate. Publisher

will try to get you to do the work for the same fees charged for consumer

magazine assignments. This should be resisted.

One argument for charging more is that the images produced on such shoots will

usually have much lower resale value as stock. It should also be recognized that

charging more for this type of publication has been an industry standard since

before Negotiating Stock Photo Prices started publishing in 1989 and for as long as

ASMP has published pricing guidelines.

PPA Settles Copyright Suit With KMart

Kmart and the photographic trade association Professional

Photographers of America (PPA) have negotiated a settlement that will end the

association's federal copyright suit against the discount retailing giant.

"In negotiating a settlement, we've been able to work with Kmart to create practices

and standards that will offer reasonable copyright protection at their retail

stores," says PPA President Dominic Iodice. After four years of repeatedly

contacting Kmart's corporate headquarters and several of its stores concerning

reports of copyright violations, PPA filed its copyright lawsuit in late 1999,

alleging that Kmart violated federal law by copying images without the permission of

the copyright owner.

The legally binding agreement will result in Kmart instituting some of the strongest

copyright protection methods in the retail industry. These steps include improved

employee training and procedures, the creation of a "mystery shopper" program, and

the revision of Kmart's disciplinary standards for employees who unlawfully copy

professional images. Kmart will also add highly visible signage with copyright

warnings on or near each of

its copiers. They will assign a senior executive from its national office to act as

a liaison to PPA and be responsible for ongoing implementation of the program.

These changes should be fully implemented in approximately six months. "These steps

set a wonderful example for other retailers with image copying equipment to follow,"

says President Iodice.

In addition to ensuring reasonable protection against unauthorized

copying, Kmart has agreed to pay PPA the sum of $100,000. "The majority of the money

from the settlement, along with the funds we raised prior to filing the suit, will

be consumed by legal and investigative fees," says Iodice. "But that's irrelevant.

The important thing, is reaching a mutual agreement that will reduce the possibility

of professional photographs being illegally copied at Kmart stores."

In settling the case, no admission of any violation of law or liability by any party

is implied.


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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