Randon Thoughts 125

Posted on 10/6/2006 by Jim Pickerell | Printable Version | Comments (0)



October 6, 2006

AP Takes Aim On Editorial Stock Users

The Associated Press has redesigned its web site and launched a new image licensing division in an effort to expand its secondary use of editorial and historical images. One big target is textbook publishers who license a lot of this type of imagery. I estimate that the worldwide market for photos used in books and allied products is in the range of $300 million annually.

The new site has over 3 million images and features an archive of 500,000 historical photos dating back 150 years. Customers will also be able to access AP's news wire service.

Ian Cameron, VP of AP Images, told Photo District News, "I want those media firms to be able to come to us for whatever images they need. Ultimately, I want AP Images to be a favorite on every DOP's desktop."

AP has 300 staff photographers and 600 stringers producing thousands of news, sports and entertainment images each day. They are encouraging all these photographers to produce stock photos in addition to the hard news images that are the company's primary business. Based on a new contract that went into effect early this year AP staffers are now allowed them to shoot stock images on their own time and will receive 35% royalties of license fees.

It also appears that AP is also prepared to represent images from other outside agencies and it is rumored that they are about to sign a deal to represent some of the JupiterImages collection.

Industry Slowdown

According to Troy Mastin, analyst for William Blair & Company, there was a more than usual slowdown in demand for stock photos during the summer and he described demand as "sluggish". His observation resulted from recent meetings with members of the management teams of Getty, Corbis and Jupiter and from conversations with buyers.

He attributed this slowdown to a "confluence of factors including: more intense competition; growth in micropayment imagery; internal disruption; a modest industry slowdown and a gradual maturation of the industry.

While still optimistic "regarding the long-term outlook for the industry" Mastin believes third quarter results (for Getty Images) are likely to be lower than expected, and "there is risk that fourth quarter and 2007 estimates will come down further." He said, "the sorely needed inflection point in Getty's growth may still be a quarter or two away."

He also observed that, "Getty management acknowledges that things have changed in the royalty-free (RF) market. Most notably, the cost to create and upload high-resolution digital photography has dropped dramatically. In short, the creation of content has been 'democratized,' and Web sites and tools have emerged to facilitate the editing, uploading, and licensing of imagery for the hobbyist photographer."

Attitude of Many Micropayment Sellers

Many of the people who supply images to microstock fully recognize they aren't going to make much money selling their pictures, but IF THEY HAVE THE PICTURES ANYWAY, WHY NOT TRY TO EARN SOME MONEY FROM THEM.

In many cases they have taken photos for fun or other purposes. Even if it isn't much, it's money they would not have had otherwise. And if they sell a few images they can write off their photography expenses on their taxes!

Online Ad Revenue Grows 37 Percent

Internet advertising revenues in the United States grew 37 percent in the first half of 2006, reaching a new high of $7.9 billion according to the Interactive Advertising Bureau. However, only a relatively small percentage of this revenue comes from ads that use pictures.

Keyword ads displayed alongside search results account for 40% of revenue and classified ads 20%. Online ad revenues reached $12.5 billion last year and it is projected that U.S. online ad spending will grow 26.8% this year, to $15.9 billion. While this is growth that should satisfy any industry it is down from July projections of $16.7 billion for the year.

Given a slightly downward trend David Hallerman, senior analyst of eMarketer, pointed out that if a few of the 100 largest U.S. advertisers adjust their spending slightly it could mark a big difference. The 100 largest accounted for 37.4% of all media spending in 2005, but these same advertisers only accounted for 31.9% of online ad spending.

Despite the growth, Internet advertising accounts for only about 5 percent of all U.S. advertising revenues

Art Directors Speak Out

A couple observations made by art directors responding to the Graphic Design USA annual stock survey are worth considering.

Ryan Breske said, "There is a tendency to too many staged shots, especially of people interacting. They end up looking like a collection of images from the 80's and not genuine at all."

Matthew Hitola said, "As the consolidation of stock agencies increases, the depth and breath of stock photography is decreasing."

Alamy Changes Rate Structures

Alamy has announced that they will discontinue the Alamy Green rate structure of 75% with photographers paying annual storage fees. From now on all new photographers will receive a 65% royalty and no storage fees will be charged. Those who are currently on the 75% rate structure will continue at that level.

Alamy has also changed the percentage charged to photographers living outside Western Europe and North America. Previously if they were on the Alamy Blue plan they received 55% instead of the 65% that other photographers received and it they were on the Alamy Green plan they received 65% instead of 75%. Now, all photographers will receive the same no matter where they live.

This is one of the few times a distributor has RAISED royalty rates on their own initiative.

Corbis To Handle Veer's Solus Imagery

Veer has announced that many of the newer images from its Solus collection will now be available for worldwide sales through Corbis. Some of the older Solus images are available through Getty Images as a result of an agreement inherited when Getty purchased Photonica.

More than 2,200 Solus images have been submitted for consideration by Corbis editors. Included in this group are images from Veer's recently-launched "New Old" collection, which features the aging baby boomer generation. The tightly-edited Solus collection contains about 12,500 images.

Corbis also announced that a new web site feature will let Corbis customers search individual image collections. Corbis offers 27 rights-managed libraries, 20 royalty-free collections and six news offerings.

Corbis Outline Senior Staff Move

Bill Hannigan has been named head of Contour Images, MediaVast's celebrity portraiture service, has announced that Bill Hannigan will take over as senior vice president of content development in November.

Hannigan left Corbis Outline in May to purse other opportunities and was contacted shortly thereafter by MediaVast which also owns Wireimage.

Elodie Mailliet, former director of photography at Corbis Outline has also left and taken a position at Exclusive by Getty Images.

Corbis Outline is by far the best established, but Contour and Exclusive by Getty Images hope to take market share in the highly lucrative celebrity portraiture business.

Corbis Names Brotman VP Licensing Ventures

Adam Brotman has been named vice president of licensing ventures at Corbis. Brotman and his team will focus on developing businesses for new markets and customers. Brotman was the founder and CEO of PlayNetwork, Inc., an audio and video media provider for businesses.

Corbis executives recently expressed interest in the new "micropayment" stock photography market segment. The company did not specifically mention micropayment stock in announcing Brotman's appointment, but it is likely that this is one "new business model" he will explore.

What's A Photo Worth?

British TV's Natalie Pinkham owns photographs of her and Prince Harry taken in a bar in 2003. The photos were printed in The Sun newspapers on August 15th and in the Daily Mail on August 16th without permission.

Rex Features, a stock photography agency in London, has said the rights to publish the photographs legally might have cost up to $500,000 if sold on the open market, but according to the London Press-Gazette if Pinkham sues the Daily Mail, the newspaper might have to pay double that price.

Copyright © 2006 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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