Random Thoughts 68

585

October 3, 2003

Mayes Leaves Image Source

Stephen Mayes is leaving Image Source to return to New York to work with "Art and
Commerce", an assignment agency, representing influential artists such as Annie Liebowitz,
David LaChapelle, Steven Meisel and Ellen von Unwerth.

Mayes joined Image Source a year ago with a very specific brief -- to put Image Source on
the map as an innovative image agency and challenge industry perceptions on royalty free.
Image Source Chief Executive, Christina Vaughn said, "Stephen has over-delivered on all his
tasks and has been instrumental in the professional development of the team which has
produced two ground breaking, intelligent catalogues in Unseen and Mustard ."

Vaughn continued, "We have come a long way in a relatively short period of time. Indeed, it
is only three years since we launched our first book and we are now one of the leading
lights in the Royalty Free industry and one of the few stock companies, actually making
waves. It is a very exciting place to be -- and we are still travelling!

Francis Hodgson who joined the team in May to head up the creative department as Director
of Photography will continue to drive the innovative creative vision. Previously he
developed pioneering companies including Eyestorm and Zwemmer Fine Photographs. Supporting
Francis will be Miffy Evans who takes over as Creative Manager having re-engineered the
workflow processes at Image Source over the past year.

Stephen Mayes will continue his professional relationship with Image Source on a
non-executive basis.

PictureArts to Launch Botanica at PACA Conference

PictureArts Corporation is excited to announce plans for the official launch of its new,
high-end photography brand, Botanica. The Botanica brand is an elegant, contemporary
rights-managed collection that explores the ways in which nature influences our everyday
lives. It features a vast array of new botanical images mixed with lifestyle concepts.

To celebrate the launch of Botanica, PictureArts has organized a grand affair at the House
of Blues Voodoo Garden in New Orleans famous French Quarter, on Friday November 14, 2003,
the weekend of the PACA International Conference. The open-air venue's eclectic, mystical
dÇcor is sure to provide a unique ambiance for the party.

All attendees of the PACA Conference are invited to partake in the festivities. Botanica
images will be showcased at the event, and will also be featured within the PictureArts
display at the actual PACA Conference.

"We will be extremely proud to officially bring this brand into the marketplace," says
Jeffrey Burke, President of PictureArts. "There isn't another stock collection that so
smoothly melds the aesthetics of natural and still life photography with lifestyle
pictures. I think its distinctly elegant content paired with our new international
distribution structure will yield great success for the Botanica brand."

Veer Honored With Two Awards

Veer has won two awards for the Veer web site: Best B2B Website from Applied Arts, a
Canadian design magazine, and Best B2B Website at the Web Marketing Association's
WebAwards.

The site presents a collection of unique imagery, motion and typefaces in a rich, visually
appealing way that resonates with creatives.

Explaining the Veer philosophy, Brock Bohonos, one of the founding partners said, "For us,
it's about being more than an image vending machine. It's about truly showcasing the
imagery and type we carry in ways that are meaningful to creatives. Try-before-you-buy
tools like Image Zoom and our font application, Flont, show details and real-world uses
that help creatives choose products more effectively. But it's more than that -- it's
speaking in a language, visual and verbal, that creatives understand and appreciate."

Do Not Call

Troy Mastin, investment analysts for William Blair & Company suggests that the new national
Do Not Call list may cause advertisers who have been spending money on telemarketing
to shift those advertising dollars to print promotions.

He points out that, "Nearly 50% of Getty's stock imagery revenue is derived from direct
mail, collateral material, brochures, and digital communications, areas that will likely
benefit from marketers' continued focus on measurable mediums."

All stock agencies that sell into this segment of the market could benefit from an
increased use of print advertising as telemarketing declines.

Kodak's Problems

Eastman Kodak Co. has received a lot of negative press lately after cutting annual
common-share dividend for the first time in 100 years. The dividend was $1.80 per share and
they dropped it 70% to $.50 per share.

For several years Kodak has been trying to transition from its dependence on
chemical-photography businesses, but the switch by consumers to digital photography has
come much faster than expected. Consumer and professional photography businesses account
for about 60% of Kodak's sales which were $12.8 billion last year.

Kodak announced in July that it was eliminating up to 6,000 jobs this year which shrinks
their global payroll to around 62,000. At their 1983 peak they had 136,500 employees.

Wire Transfer Ripoff

One difficult issue when licensing rights directly overseas, or in dealing with foreign
sub-agencies, is how to get paid. In the past, it had been common to make bank-to-bank wire
transfers, but banks have raised their fees for this service to the point that it is now
impractical to receive payment in this manner unless the amounts owed are in the
multi-thousands of dollars.

This was driven home to me recently when I received an $82.50 payment for a $100
subscription to this newsletter. The normal process for making a wire transfer payment is
for the seller to supply his account number and bank routing number to the buyer. The buyer
then has his bank transfer the funds. One would think that in the age of computerization
that once such information is supplied the funds could be transferred relatively seamlessly
from one international bank to another.

However, even when you deal with a large international bank with offices around the world
(my bank is Bank of America) it seems that it is common practice in the banking industry to
send the funds to some other bank (a 3rd Party) who takes a cut before sending the money on
to correct bank. (Let's give as many orgainizations as possible a piece of the action.)

In my case $100 was sent from a bank in Sweden to Bank One in New York (not Bank of
America, my bank) and they took a handling fee of $17.50 before passing the funds on to my
bank. Normally, Bank of America would charge the recipients an additional $15 for a wire
transfer, but because I am one of their "Advantage Customers" they didn't charge me
anything for this transaction. So in effect I lucked out. It only cost me 17.5% instead of
32.5% of the amount owed to receive this payment. On top of this the sender paid his bank
an additional fee to do a wire transfer.

This is significant because many photographers receive small payments from foreign agents
or their customers. They can lose a big part of their fee by having it eaten up in bank
charges. It also explains why some agents don't want to make payments if the amount owed is
less than $100. By the time the photographer would receive the money there would be little
left.

One consolation in all this is that the fees are less for a wire transfer than for cashing
a check written on a foreign bank, or in a foreign currency. Foreign checks can take months
to clear and are something everyone wants to avoid.

Today, the ideal way to receive relatively small fees is to be paid by credit card.
Granted, the recipient gives up 3% to 4% to the credit card company, but that is a lot
better than 17.5%. The credit card holder doesn't pay anything.

While wire transfers used to be a great way to move money, now that credit cards are so
widely used banks are no longer interested in doing wire transfers of small amounts of
money. Consequently, they have raised their fees to discourage such use. Hopefully, after
reading this you are also sufficiently discouraged.

If you are thinking about getting out of the stock photography or the stock agency
business, setting up your own bank might be something to consider.