66
CORBIS
March 4, 1997
I spent more than a month, off and on, reporting this story. During that
time I had a telephone interview with Charles Mauzy and spoke to many photographers
represented by Corbis. I also made many attempts to get additional information
from Corbis.
When the story was in final draft form I sent a copy to Doug Rowan, president
and CEO of Corbis, for his comments and corrections. He responded that,
"It is full of factual errors." However, he refused to cite specifics
or to help me correct these supposed errors.After repeated attempts to try
to find out what he calls errors of fact, he said, "What I am NOT willing
to do is to start going through point by point because it is just too far
off. If I saw two or three things I would say let's talk about it, but there
are just too many. It was sort of overwhelming. I am not willing to go down
the path of saying let's take some of these points and try to correct them
because it is overall too far off the mark."
This story that begins on the next page offers facts, to the degree that
I could determine them, and my assessment of the situation at Corbis. Time
will tell if it is accurate, or not.
The only way I have of calculating Corbis' sales is by talking to photographers.
I have only been able to find a couple photographers whose 1996 earnings
from Corbis exceeded $1.00 per image in the database, and then only slightly.
Many received much less. This would indicate that gross sales for Corbis
would probably be no more than $2.25 per image in the database, and probably
less.
Corbis says they have slightly less than one million images in the active
file. If we look at their print catalog of 211 images and their on-line
site (http://www.corbis.com) which shows a cross section of an estimated
5,000 images we see that a large percentage are from Bettmann Archive and
the Getty Communication's Hulton Deutsch Collection.
For many reasons I believe there is less demand for historical images than
for images shot by contemporary stock photographers. Thus, the historical
and fine art parts of the collection are probably earning less than $2.25
per image.
Doug Rowan says the number of images on which they will be paying royalties
to photographers is probably 50% to 60% of the total file. This is the section
of the file that interests my readers, and I estimate it to contain about
500,000 images. Therefore gross 1996 sales of this material at $2.25 per
image was no more than $1.125 million.
Most photographers were given an advance on future sales of $4.50 per image
when their images were selected for the file. This means that Corbis has
paid out around $2,250,000 just for the right to license digital usages
to these images. The sales reports we mentioned, were not additional cash
paid the photographers, but a drawing down on their advance. At the current
sales rate, it will be after the year 2000 before the average photographer
is likely to receive any additional cash for the use of his or her images.
It is also important to note that the figures above do not reflect what
Corbis earns from traditional sales made as a result of fulfilling requests
for film or prints from Bettmann Archives, LGI or the Roger Ressmeyer Collection,
all of which Corbis owns. Their earnings from traditional customers of the
Bettmann file are probably much greater than from the rest of their collection.
Similarly, these figures do not reflect income from the sale of CD-ROM products
that Corbis produces.
Personnel Changes
On February 1st Corbis established a new position of coordinator for the
entire acquisition program with Ellen Boughn as its head. Ms. Boughn is
the former owner of the Los Angeles based After Images stock agency which
she sold to Tony Stone Images in the early '90s. After Images' major marketing
focus was toward corporate, business and advertising, not editorial. The
agency was known for its stable of advertising shooters, and for its "California
Style" imagery.
In contrast, Corbis has focused on acquiring editorial and documentary images.
The general categories at Corbis' on-line site, which reflect the nature
of their archive, are: Historical Views, World Art, Entertainment, Contemporary
Life, Animals, Nature Scenes, Science & Industry, Travel & Culture and Eco
Challenge.
The three divisions of the acquisition program which Ms. Boughn will oversee
are:
1 - Professional Photography - This is the division that
acquires digital licensing rights to the existing files of stock photographers.
2 - Assignment Photography - The focus of this division is to assign
photographers to projects that will fill gaps in the comprehensive coverage
that Corbis is trying to achieve in their selected categories.
3 - Fine Arts - The primary focus of this division is in acquiring
rights to museum collections, but it considers any work in the fine arts
area. (Incidentally, Nathan Benn, former chairman of PNI, is now working
as a part time consultant for the Fine Arts division.)
Charles Mauzy insists, "We are not anticipating any changes in overall
strategy. We have a solid business plan. There will be no radical changes."
But, he also says, "We are always open to new ideas."
Ms. Boughn has a strong business background and a reputation for being forthright
in expressing her point of view, even when it doesn't support current theories.
Mauzy also indicates that Ms. Boughn has an additional responsibility of,
"developing tighter links with the licensing group in order to get
a better sense of client demand so the acquisitions group can better tailor
selection of images for the file to demand."
If the goal is profit, it is conceivable that Ms. Boughn will end up suggesting
that some different types of imagery be added to the file and that additions
to many of the existing file areas be slowed dramatically in order to produce
a more profitable mix. It will be interesting to see if such suggestions
occur and how they are received.
Assignments
In addition to Ms. Boughn's arrival, Win Scudder, former head of the Assignment
Photography Division, has left Corbis. Win was an editor at National Geographic
until he joined Corbis a little over a year ago.
Charles Mauzy says, "He left (Corbis) to pursue other interests."
However, rumor has it that the position of Director of Assignment Photography
was rather suddenly eliminated. Mr. Scudder has been unavailable for comment.
For the time being Sid Hastings will be handling requests connected with
this program until Ellen Boughn has a chance to review the file and determine
if there needs to be a change in focus for future assignments, or if a new
director should be appointed. Mauzy says the program will continue.
Under Scudder's administration some photographers were told, "Define
your dream assignment and we will finance the shoot." This kind of
thinking could easily result in a very expensive file for which there is
insignificant demand. It is unclear whether such assignments were ever financed,
but most observers expect that, at the very least, there will be much tighter
control on future assignments.
Some photographers have as many as 40 to 60 days remaining on there assignment
contracts and are beginning to wonder if those days will ever be assigned.
Marketing The File
There are a number of theories as to why sales are so weak. Each may play
some role in the dismal sales results thus far. I would like to examine
a few.
Corbis Has Not Been Trying To Sell. Corbis has always given the impression
that they were building the file for the long term and that they were not
concerned about immediate or near term sales. On the other hand, a year
ago I as told that Corbis would be aggressively promoting the file in 1996
in an effort to begin generating sales.
Certainly, their print ads have been everywhere, and they have produced
a 211 image print catalog designed to interest customers in using the database.
It is not clear how many copies of this catalog have been distributed.
This promotional work seems to have yielded very little in the way of results.
On-Line Presence . Corbis has been slow to produce a competitive on-line
presence, but on March 14th or 15th they are expected to launch a new system
using keyword search that will enable direct access by clients to the entire
archive.'
The new search system has been tested by 49 businesses since July. Doug
Rowan ays search results will be sequenced according to relevancy, in much
the same way as the PNI "natural language" search engine operates.
His example was that if a user asks for "JFK and Marilyn Monroe"
the first images shown will be of both of them together. Then it will show
pictures of each of them separately. (If a customer asked for pictures of
them together, I'm not sure why the customer would want to waste their time
looking at pictures of them by themselves or with other people. If the customer
wants to see any shot where either of these people appeared, it would seem
logical to use the word "or" instead of "and" or to
do separate searches.)
With the new Corbis system customers have two options. They will be able
to do the searching themselves, or Corbis researchers will do the searches
for them and put the selection on-line in a custom file for the client to
preview.
This new site may give Corbis an advantage over PNI because of the aspect
of being willing to do some searches for the client. However, subject matter
is the key question.
Everyone says, "This is Bill Gates, he must have the best technology
available."
In my view this is not demonstrated at Cobris. Corbis is way behind the
times when it comes to on-line search. The only explanation I can offer
is that Gates made the same miscalculations in deciding when users would
be ready for on-line search and delivery as he did in deciding when to develop
Microsoft Network. In the case of the Microsoft Network, he delayed development
and let Netscape get a commanding lead in the market.
Focus on CD-ROM . Early on Corbis believed there would be a huge market
for images on interactive CD-ROMs. That market now seems to have been a
bust, not just at Corbis, but industry wide. Maybe, it will develop into
something in the future, but it is currently very uncertain as to the kind
and quantity of visuals the market will need.
The cost of producing good new media content has turned out to be much more
expensive than producing a book due to the high cost of computer programming.
Some of the people who have developed critically acclaimed products are
now turning away from this market because they feel there is no money to
be made.
The volume of sales for special interest discs is not approaching a level
that would allow producers to cover their cost, let alone make a profit.
In a recent letter to Corbis photographers whose work has been used in the
FDR and Leonardo da Vinci CD-ROM projects, Stephen B. Davis said: "To
be honest, our sales to date have been slower than expected in the early
release of these products. The CD-ROM market continues to be a difficult
one to predict. Because of this, and because we always want our source partners
to feel they are fairly compensated for their work, we have decided that
we will pay you (and other source partners who are entitled to royalties)
a minimum royalty of $45 per image for each image included in FDR and Leonardo
da Vinci."
Weak Sense Of What Clients Want . Corbis has been collecting images
without any sense as to who will want to use them. Most commercial files
are usually built in conjunction with selling. This way the editors have
a constantly growing and developing sense of what is of interest in the
marketplace.
Editing is a difficult job when you have a clear understanding of how the
images will be used, or at least a sense of who the end users will be. But
if there are few guidelines and editors are left to choose what they like
it is easy to develop a beautiful, but unmarketable file. Even with the
benefit of sales information, the best edited stock agency files seldom
license rights to more than 5% of their images.
Hiring Ms. Boughn to help collect and disseminate information on what customers
want may be the result of a recognition that their is much less customer
interest in large segments of their file than originally anticipated. On
the other hand there is a question as to whether they have much information
worth analyzing at this point. If sales are any indication of the number
of requests handled, the sales department probably doesn't have much useful
data.
Photographers indicate that their sales reports show a preponderance of
sales to Microsoft, Discovery Channel, Collier and other digital encyclopedia
producers. This is a very small segment of the market.
Consumer Use . Doug Rowan says that the first on-line consumer applications
will be available at the end of 1997 or early 1998. He says an example of
the kind of thing that will be seen first is the segment on Thomas Jefferson
by Ken Burns that is currently on the Corbis web site.
This is worth checking out (http://www.corbis.com) to get some feel for
how on-line products might be developed. I can see how a site with such
features might be useful to educators. Students might be required the use
such sites as a supplement to their standard curriculum. However, finding
a way to charge for such usage will be a greater challenge.
As things currently stand, photographers whose images appear on a Corbis
site like this are considered "creative suppliers." As a group
they will share 3.5% of the gross sales of the product. It is unclear whether
photographers will receive any compensation, if the product is put on-line
free of charge.
There is a lot of talk about the school kid who will go on-line and purchase
images for their reports at $.25 to $1.00 per transaction. No one has made
an attempt to really market to this kid. No one has any real idea what he
will need, except everything. No one has any idea how many transactions
might take place at these prices.
But if this is the expected market the only practical instruction to an
editor are, "pick any image that you think someone might like."
That leaves a lot of latitude. I have no idea what the editors have been
told, but it is hard to see where to place limits if nothing is known about
eventual use.
Price . Corbis has been maintaining the price. Photographers report
that most of the new media sales have been in the $80 to $120 range, and
other sales have been close to traditional rates.
It might be argued that the low sales at Corbis are explained by the fact
that heir new media price has been higher than PNI's $40 base fee. I suspect
the bigger reason is that PNI has subject matter which Corbis has ignored.
Weak Editing . Charles Mauzy says, "Photographers like us because
we are looking for images that would never be in demand otherwise."
Could it be that the reason no stock agency has been interested in these
images is that the agencies have been unable to find clients who are willing
to purchase that type of material. Most photographers seem to be surprised
at what Corbis selects. They say the editors tend to pass over images with
proven sales records and pick images of more obscure subject matter. One
photographer said they picked images he had been on the verge of throwing
in the trash when he did his initial edit because he couldn't imagine anyone
being interested in them.
(Observation: This could mean that if, at some future time, Corbis decides
that they want to move more toward selling to the traditional buyers of
photography they will have to go back to photographers they have already
seen and re-edit because they left much of the "good stuff" in
the photographer's files!!!!)
Focus On Quantity . From the beginning Corbis has aimed at building
a large file with the view that eventually users will be able to search
the entire file.
At the same time major stock agencies are beginning to recognize that they
need to focus more of their efforts on identifying and making available
images that are likely to be in high demand. They are editing tightly and
putting much less emphasis on the overall size of their files.
They are selecting images from their general file that will receive special
marketing emphasis, not only in print catalogs and on CD-ROM's but in special
master dupe and digital collections. The major agencies haven't gone to
the point of getting rid of the general file material, but they are being
much more selective about how much depth they take of any new coverage and
what they retain.
Similars . Photographers report that initially Corbis was selecting
many similars of a subject, although in recent months it appears the editing
is getting tighter. The editors had probably been told that "new media
will need sequences." Thus, when they found a series of pictures of
a baby or a noted author, initially they had a tendency to select every
frame available rather than picking the one or two best.
If similars have actually found their way into the main database the numbers
quoted for its size may be deceptive. But, as pointed out above, size is
not all that important.
Such editing is initially good for the photographer because he or she gets
$4.50 for each frame digitized. But a lot of redundant images could discourage
potential buyers not interested in sequences from using the database. This
will be particularly true when the buyers are doing their own online search.
Once it is possible to search the file on-line we may get a sense of how
this has been handled.
Delivery of Images . Part of their current sales problem may be because
they have aimed at total digital delivery rather than film delivery. The
vast majority of print users are not ready to work that way at this time.
Also, for some reason the digital scans they have aren't always satisfactory.
Some photographers report that they have had to send certain images selected
by customers back for re-scanning because the original scans weren't large
enough for the customers needs.
Providing Images To Corbis
Some photographers who have done assignments for Corbis have been able to
earn much more from the assignment outtakes than they have earned through
sales by Corbis. This is good in that it points out that there is value
in the outtakes, even though the photographers feel Corbis has kept the
best of what they shot and all the similar frames. But it is disappointing
for the photographers because they feel their best work is not being actively
marketed or seen.
One photographer who has done assignments for Corbis says he won't do any
more on subjects he really cares about because it is too painful to see
some of his best work locked up in this file and not marketed effectively.
He said he will take assignments to shoot subjects that are of no particular
interest to him.
On the other hand, if he is not really interested in the subject how strong
is the work likely to be. If he gets interested in the process of shooting
he will be frustrated again. This seems like a no-win situation.
At present it is unclear whether there is any limit on the amount of material
that can be acquired at Corbis as long as it is deemed of professional quality.
There are some indications that they may be slowing their expansion, but
Charles Mauzy would not confirm that.
Mauzy says they have an abundance of photographers who want to put their
images with Corbis. But if Corbis starts to get more choosey and takes 500
frames from a photographer's file instead of 5,000 will it be worth the
photographer's time and trouble for the $4.50 per image.To solve this problem
many photographers have been getting a guarantee that Corbis would take
a certain number of images before the photographer goes to the trouble of
letting Corbis do the editing. Those guarantees may get harder and harder
to come by.
Who Will Use This File?
Doug Rowan says the Corbis charter is: "To capture the entire human
experience throughout history." This is a noble, but possibly very
costly pursuit.
The goals that Bill Gates has for this file are certainly not clear.
Is his purpose to build a file that will eventually produce a significant
profit, or
Is the purpose to produce a historical document for scholarship and
exhibition as a museum might do?
Museum's are not expected to make a profit and in most cases are largely
supported by grants and donations. A file of educational and cultural images
may benefit society, but it will not necessarily benefit Bill Gates' financially.
Corbis has some major hurdles to overcome. The costs are astronomical compared
to the return. It is my understanding that they have a staff of about 140,
not counting the people at Bettmann and LGI in New York. In addition to
their direct acquisition costs paid to photographers and other suppliers
they have costs of editing, scanning, keywording, marketing and, of course,
administration as they build the database. Gates can afford to lose money
in this way, but how long will he be willing to continue to do so?
Gates may be able to wait a long time for sales, but how long can the photographers
wait before they decide to focus their energies in other ways? These are
small business people who must earn a living from their production. The
advances are nice, but most photographers were expecting a long range return
of much more than $4.50 per image. Will they continue to supply new material
if better returns don't begin to materialize?
The big question is whether the problems are fixable -- with money, or whether
there is a fatal flaw in the business plan. My vote is for fatal flaw. The
subject matter they have chosen to market will, I believe, in the best case
scenario, be low demand material. Sales will not justify the costs of maintaining
the file.
If they try to change the makeup of the file and go head to head with major
stock agencies in selling to the advertising community, I believe many of
their image suppliers will refuse to provide new images because of the relationships
these suppliers already have with proven stock agencies.
Photographers who have images on both PNI and Corbis are discovering have
almost twice the per image earnings from PNI as they do from Corbis. This
is true in spite of the fact that they get 45% of the sale price from Corbis
and only 30% from PNI. It is interesting to note that receiving a higher
percentage of sales does not necessarily result in higher gross income for
the photographer. In the final analysis photographers are interested in
income.