Random Thoughts 28

Posted on 1/11/2001 by Jim Pickerell | Printable Version | Comments (0)

369

RANDOM THOUGHTS 28


January 11, 2001

Invoicing Problems At FPG

FPG photographers have been complaining that their checks are small. It may not

be because sales are off, but because usages that have been authorized haven't

been invoiced.

A major advertising agency trying to close its books at the end of the year was

anxious to pay FPG for usages made months earlier but which had yet to be

invoiced. Repeated calls to the accounting department produced no results.

Finally, they appealed to an industry expert outside of FPG to see if he had any

contacts within FPG who could break the log jam.

The source was able to learn that FPG had only two people handling all the

invoicing and they were months behind in the process. As a result of the inquiry

the ad agency's transactions were moved to the top of the pile and the agency

received its invoice for almost $350,000 worth of uses.

Steedman On Cruise

Richard Steedman and Sally Lloyd left for a four-month round the world cruise on

January 2, 2001. According to sources, when they return they will operate as

consultants for Corbis.

Sales Reps In The B2B Environment

In the January issue of Wired the following appears under the tag line,

"Surprise! B2B makes customer relations even more important"

The article said, "As B2B apps have rolled out over the past year, it's become

clear that the Internet isn't going to eliminate the need for sales reps. At

first, some analysts believed that the 'frictionless' nature of B2B transactions

would make it unnecessary for companies to maintain a sales force for calling on

other businesses. Now it appears the opposite is the case."

"Making products available on the Web allows business customers to choose from

among several sources. This tends to turn high-margin products into low-margin

commodities, which was demonstrated when PCs were first made widely available

online. Computer manufacturers began competing on price alone, creating a price

war that ate up profits. The lesson learned was that companies must

differentiate their products and services beyond just their price tags.

"Though building a recognizable brand name is one way to provide differentiation,

personal relationships between buyer and seller have never been more important in

the business world. As the mechanics of purchasing become increasingly

automated, it will be up to sales reps to provide the hand-holding and service

needed to secure ongoing loyalty.

"The companies that are integrating B2B into their current sales efforts, keeping

the sales reps in the loop, are the ones that are winning today, according to

Harry Wohlhandler. 'Business-to-business selling is still a personal activity,

with negotiation and human interaction,' he explains. 'Companies are quickly

learning that it's a strategic advantage to have a personal relationship with the

buyer.'

"The importance of such relationships is illustrated by the many companies whose

B2B activity is limited to prospecting for new customers, rather than closing

business deals and taking orders. 'Fully 55 percent of the companies doing B2B

today are only using the Internet to generate leads for their sales force,' says

Wohlhandler, 'And even of those companies taking order on the Web, only half of

their orders, on average, are taken on the site.'

"Wohlhandler insists that there are a large number of B2B transactions --

especially those involving service providers -- for which the Internet isn't an

appropriate vehicle to close the sale. While he, like many other market

analysts, predicts that the number of online transactions will grow rapidly over

the next few years, reports of the demise of the sales rep in the B2B world have,

it seems, been greatly exaggerated."

This is GREAT NEWS for small and medium sized agencies with brand identity among

the buyers. It points to the continued need for knowledgeable sales reps,

negotiation and personal relationships.

It should be a strong word of caution for the various startup companies such as

Speedpix.com and Alamy.com that propose to offer a fully automated service with

little need for direct contact with the customers. It also indicates that Getty

and Corbis may not be able to reduce their number of sales reps and this could

have a major impact on their future profitability.

Mark Getty Snaps At Analysts

Mark Getty is upset with industry analysts and charges that they have "forgotten

how to be objective". The interesting thing is that he is not talking about

people like me; he's talking about the investment banking analysts who have told

the world for so long that Getty Images was such a great buy.

Evidently, when analysts start asking hard questions and not accepting the

company line verbatim that is evidence of not being "objective."

He complains that in the past Getty Images had to "carve banks into deals when

they have done absolutely no work for us merely to keep them sweet." This sounds

like Getty was "buying" favorable comments about his company (and that certainly

doesn't sound like it's in the best interest of investors). But what really

upsets Getty is that now the analysts are refusing to be bought, or once they are

bought they won't stay bought.

He unburdened himself to Neil Bennett of the Daily Telegraph in London for a

December 17, 2000 piece. For the full article go to:

Getty Snaps At The Analysts .

P.S. I have tried for over two weeks to license permission to reproduce the

entire article for my subscribers, but I can't get anyone at the Telegraph to

answer e-mails or return phone calls.

Is it any wonder that some people don't pay to use copyrighted material when the

copyright holders make it impossible for them to license the work legitimately?

Moffly Formes Creatas And Acquires Dynamic Graphics

David Moffly, former CEO of FPG has announced the formation of Creatas to sell

high quality, value added products and services to creatives and consumers.

These products include stock images, (photography, illustration and film),

publications, and education to creators and consumers of these services. Creatas

has also acquired Dynamic Graphics, a leading provider of visual content,

knowledge and solutions for the graphic design community.

Dynamic Graphics known mostly for their Subscription Services and Royalty Free

Images with four individual units, Clipper, Print Media Service, Designers Club

and Photography and Footage also has a vibrant business in trade publications,

Step by Step, Dynamic Graphics and Step by Step Electronic Design .

Dynamic Graphics educational unit is the Dynamic Graphics Education Foundation,

which conducts educational seminars teaching design tools and techniques. Sales

for Dynamic Graphics in 2000 were in the range of $20 million.

Moffly won't rule out the possibility that one day Creatas will license rights to

Rights Protected images, but for the moment they are only interested in selling

Royalty Free. He is anxious to talk to RF suppliers about representing their

line.

"We are thrilled to make an acquisition of such a quality company. Dynamic

Graphics is the market leader in Art subscription services and has a Royalty Free

business that is leading the industry with its growth rates" noted David Moffly,

Creatas CEO.

"With this acquisition we have a platform to build a powerful creative services

company with global reach. The company already has vibrant offices in Europe and

Australia and we intend to build on these successes. Dynamic Graphics is unique

in that its products and services touch the professional creative at various

points in their professional lives. The magazines take a look inside the

creative process, the art services businesses supply essential illustration and

design elements, the photo and film businesses add a depth of choice and the

school gives professional creatives important skills improvement opportunities."

There have been rumors in the industry that Moffly and Sheldon Marshall of

GlobalMedia would be getting together in some type of joint-venture. Moffly says

that GlobalMedia has no interest in Creatas, but that Creatas will be licensing

rights to the John Foxx line of RF images which are a GlobalMedia property.

Freelance Writers Start Agency

Freelance writers have always been an independent bunch and tended to sell their

services directly to publishers on a project by project basis.

Now David Wallis has launched Featurewell.com, an on-line marketplace for writers

and editors that functions much like a stock photo agency in licensing multiple

use to stories.

Wallis has signed up more than 225 journalists, including David Margolick, Jimmy

Breslin, Justin Kaplan and Peter D. Karmer. Contributing writers receive 60% of

the license fee; editors receive exclusivity within their market, but all other

rights are reserved. Fees are based on the level of usage.

For more about this company see:

Juggling The Needs Of Editors .

The URL is: http://www.latimes.com/living/20010101/t000000204.html

Graphic Design Trends

Trend Watch reports that after the big move last year by creatives to do web site

design projects, their latest survey shows that "Collateral Print Projects" are

coming back and now slightly exceed the number of web site projects. Also high

on the current list are direct mail projects.

With some of the recent dot-com failures, creatives are going back to print to

pay the bills, according to Trend Watch. Many of the e-tailers and other dot-com

advertisers are looking more to print to promote their products and services.

Even E-tailers like Amazon.com are producing print catalogs.

Look for a fall-off in advertising as the economy cools.

Dot-Com Advertising Shakeout

The dot-com shakeout has forced several internet oriented magazines to cut pages

and cancel plans to spin off new publications.

Industry Standard staffers were told that the magazine expects to sell 4,500

pages of advertising this year, down 35% from the 7,000 pages in 2000. Meanwhile

the cost of a page in the Standard has gone from $12,000 a year ago to $25,000

now.

Business 2.0 has cancelled a spinoff publication, Fuse, citing weak advertising.

Red Herring has laid off 50 people.

The sagging economy is also affecting advertising for traditional media such as

network television, and general interest magazines. The New York Times Co.

announced Sunday that they are laying off 69 people from their online operations

and attributing it to a "slowdown in the rate of growth in online advertising."

Getty Struggles With Branding

Sources tell us that Getty executives have been meeting in London, Los Angeles

and New York to try to develop brand definitions. They seem to have settled on

the niches for Stone and TIB, but they can't identify alternative niches for FPG,

Telegraph and Bavaria.

They are talking to customers to try to figure out what they want, and to try to

identify a style of pictures not already covered by the Stone or TIB brands.

My guess is this is an exercise in futility. If they come up with something that

is certainly the kind of images FPG photographers will be instructed to shoot.

There are indications that lower level staff is in a state of uncertainty on many

fronts, not just the branding issue. Many staffers say that they have come to

expect that this week's instruction are sure to be reversed in the following

week.

Getty is also having trouble developing an acceptable procedure for migrating

photos from one brand to another. Since royalties and catalog costs differ from

one brand to another, photographers are not going to be happy if their photos are

pushed into a brand that pays lower royalties, or charges higher catalog fees.

On the other hand, there is the gettyone.com site that lumps all the brands

together anyway so what's the point of branding anyway?


Copyright © 2001 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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