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
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
"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
"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,
"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
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
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?