336 SEPTEMBER 2000 SELLING STOCK
Volume 11, Number 1
œ2000 Jim Pickerell - SELLING STOCK is written and
published by Jim
Pickerell six times a year. The annual subscription rate is $80.00 to have the printed
version mailed to you. The on-line version is $72.00 per year. Subscriptions may be
obtained by writing Jim Pickerell, 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone
301-251-0720, fax 301-309-0941, e-mail: email@example.com. All rights
are reserved and no information contained herein may be reporduced in any manner whatsoever
without written permission of the editor. Jim Pickerell is also co-owner of Stock
Connection, a stock agency. In addition, he is co-author with Cheryl Pickerell of
Negotiating Stock Photo Prices , a guide to pricing
stock photo usages.
Thought For The Month
Become a possibilitarian. No matter how dark things seem to be or actually are, raise your
sights and see possibilities -- always see them, for they're always there.
Norman Vincent Peale
Story 334 UNDERSTANDING BUSINESS STRATEGY
Contract Negotiations vs. Business Strategy
Contract negotiations is the buzz word among photographers today. Cobris is developing a
new contract (partially revealed, but evidently still not in its final form) which affects
photographers with Sygma, Saba, The Stock Market, Sharpshooters, those formerly with
WestLight and those who have signed directly with Corbis.
As Getty Images integrates The Image Bank, FPG, The Telegraph Colour Library and the other
VCG companies they need to produce new contracts that will let photographers who were
formerly with these companies know where they stand in the new relationship. Getty feels
there is no great rush to develop new contracts because all the existing contracts which
they inherited remain in full force and effect until there is a new contract.
On the other hand, the photographers recognize that the goals and directions of their new
company are different from those of their old companies. There are changes in the working
relationships and the purpose of contracts is to spell out and codify such changes. At the
very least photographers are likely to slow production until they have a clearly defined
deal with the new company.
In addition, Stone's contracts with their photographers are due to expire in the fall of
2001. Already many Stone photographers are talking about changes they want to see in the
There are many issues that photographers want to see changed. I discussed some of these with
relation to the Corbis contract in www.pickphoto.com/sso/stories/st325.htm. Two years ago,
I published an interview with Jonathan Klein (www.pickphoto.com/sso/stories/st169.htm) when
the revised Stone contract was released. It dealt with many of the the issues that
concerned photographers at the time. These stories outline some of the issues, but by no
means all of the places where photographers would like to see modifications.
Business Strategy Analysis
However, the central problem with most current photographer proposals is that they fail to
adequately take into account the radical differences in business strategy between the ways
stock agencies used to operate and the ways the Internet focused businesses of Getty Images
and Corbis intend to operate.
No amount of negotiations will force G&C to operate their businesses as stock agencies were
operated in the past. Yet, that is what many photographers seem to want. G&C believe the
stock photo business will eventually be 100% digital delivery and that the vast majority
will be e-commerce. Thus, unscanned images simply will not exist.
At this point in time maybe 20% of the stock photo business is digital. Last quarter 44% of
Getty's business was e-commerce (excluding TIB and VCG which were not fully integrated at
that point). If sales of CD-ROM's were added to this, more than half of Getty's business
would result from digital sales.
A case can be made that a high portion of gross stock revenue for the industry will come
from researching analog files for a long long time. G&C either don't believe that is true,
or they think it is irrelevant to the success of their business model. Unfortunately, the
future of analog sales is not irrelevant to the business models of many photographers.
If analog images do represent a significant portion of future sales Getty and Corbis will
get little of that business because they are structuring their operations to do away with
their analog files. This won't happen overnight, but Getty's goal is to return all
unscanned images to the photographers and Corbis wants to return all images -- even those
scanned -- to their photographers.
C&G may modify contracts so long as the modifications are consistent with their overall
strategy, but it is highly unlikely that any group of photographers will be able to apply
enough pressure to convince either of these companies to totally alter their business
Each photographer needs to focus on understandings the distinctives of these business
strategies, and their implications for the marketing of the specific type of work the
photographer produces. If the strategy itself has flaws then no amount of negotiation is
likely to provide a satisfactory long term relationship. Nevertheless, individual
photographers may be able to use Getty or Corbis to improve their short term options, as
they continue to look for better long term solutions.
It is interesting to note the number of photographers who were among the top producers at
Stone three to five years ago, that no longer seem to be getting images into the Stone
catalogs. If you are acquainted with any of these people it might be interesting to talk to
them and determine why. They may have figured out early that Getty Image's long term
strategy was not consistent with their long term goals for their photography.
Story 327 GETTY PRICING STRATEGY
An article in the June 2000 issue of Fast Company on Getty Images gave the following
insights into Getty's pricing strategies.
In September 1996, a Tony Stone sales rep made a $63,000 sale -- the largest in the company
history at that time. When Mark Getty went to congratulate her he asked how she had come up
with her asking price. She initially had asked for more, but the customer responded that he
could get a photo from one of Stone's competitor for half of the price. She countered by
saying, "But our photo is twice as good." Then they negotiated. Still thinking about the
company's elaborate, 92-page pricing guide, Getty pressed her again. Where did her original
asking price come from? She shrugged. "I just thought it was a really good photo."
The article went on to say, "That transaction, as successful as it was, is also a legacy of
a pricing system that is both enormously complex and strangely random -- and that has
plagued the stock-photography industry since its inception. Every company starts with "list"
prices based on obscure algorithms that take into account company size, volume of business,
how a photo is used, and duration of exclusive rights. But reps routinely discount or
increase prices based on what it takes to close a deal.
"Getty and his colleagues realized that if one of the basic promises of the Web is
simplicity -- of selection, of acquisition, and of service -- they would have to drastically
simplify their pricing process as well. So Getty handed down an ultimatum. Forget 92-page
pricing guides. The new pricing guide would be one page. That one-page solution became a
slick digital form on the gettyone Web site, where customers answer 12 questions and get
back a price instantly. What's more, once a customer purchases a photo online, gettyone's
Web site immediately updates the photo's licensing rights in the company's database so that
the image is no longer available to other customers."
I agree that pricing stock photo uses is "enormously complex and strangely random," but I
don't see it as a "plague" for the industry. I believe sellers will benefit greatly if the
person closing sales is someone who has a solid grounding and experience in the industry,
who understands why certain photographs are worth more than others in certain situations,
and who is not just an order-taker.
Story 327 GETTY CALL CENTER STAFF
One of the critical issues in the e-commerce environment is the number of sales that will be
fully automatic and require no intervention from a salesperson as compared with the number
where a salesperson will be necessary. Getty Images has more than 665 call center sales
staff worldwide. This number would be much larger if they were to include marketing teams
and other sales related functions.
Getty's on-line pricing for Rights Protected images seems to be structured to drive buyers
to call negotiators rather than complete the transaction themselves on-line. The Royalty
Free pricing is such that buyers could more easily get what they want through an automatic
Story 325 NEW CORBIS CONTRACT
In early July Corbis released another version of their contract. I published an analysis of
that version, along with some recommended negotiating positions for photographers in my
Story 325 on July 14th.
Since the contract's release, photographers have been clamoring for additional
modifications. Corbis has held meetings with photographers in New York, Miami and Seattle.
Corbis now says a new version of the contract will be released shortly.
Director of Editorial Photography, Peter Howe, who has been instrumental in trying to get
Sygma photographer to accept the contract has left the company as of the end of August. The
official statement for his leaving is a follows:
"Peter Howe has decided to leave Corbis for a new opportunity with a technology start-up
company (Rightspring.com). While we are very sorry to see him go, we look forward to
maintaining a close relationship with Peter as we all move into the bright future of an
"As a former photographer, Peter has always been a voice for our photographers' concerns,
and has helped us focus our position within the photographic community. His imprint on
Corbis will be felt for a long time as one of the strongest and most visible leaders of this
company during these formative years. Corbis is quickly becoming the most
photographer-focused agency in the business, and Peter has been a driving force behind that
evolution. We'll now look to other leaders within Corbis to continue the charge, many of
whom share Peter's passion and vision, including Francois Hebel, Eliane Laffont, Patrick
Donehue, Marcel Saba, and Charlie Borst, to name a few. As we complete our acquisitions and
integrations of The Stock Market and Sharpshooters, we'll also welcome the leadership of
Richard Steedman, Edie Tobias and others.
"In an effort to sharpen our focus on photographers even further, we had been planning to do
some internal restructuring. ARCD has done a terrific job of leading our photographer
relations efforts, but we have long wanted to make our entire organization more
artist-centric. It was our plan to distribute the energy, spirit, and function of ARCD
throughout the company, so that our focus on photographers and photography will become
deeply embedded in the fabric of our corporate culture, rather than centralized in a single
unit. We had envisioned Peter in a key leadership role, and are disappointed that he won't
be around to help us affect this change. However, we will move forward with our plans. We
have no plans to replace Peter, but will be restructuring his team's critical artist
relations activities within our broader organization."
Story 337 TANNENBAUM LEAVES CORBIS
While most photographers seem to have issues with Corbis relative to their new contract,
many Sygma photographers are finding the situation untenable. Longtime Sygma photographer,
Allan Tannenbaum, has sent the following letter to his colleagues.
After 20 years as a Sygma photographer I told Corbis Sygma this week that I would be moving
on. I had already asked for the return of my most valuable archives, containing some of the
last photos of John Lennon and other significant subjects. I feel that this is the best
career decision I have made in my life.
You may be negotiating in good faith, but Corbis is not. Over the past year since our
acquisition, they have acted dishonestly and ineptly, breaking promises and arrogantly
telling photographers who built the agency to take a hike if they didn't trust Corbis. We
thought Corbis wanted to restore Sygma to its former glory - instead they went on a search
and destroy mission. The instances and examples have been amply documented.
Corbis wants your pictures, but they don't want you. I told Steve Davis many months ago that
prior to Sygma, Corbis bought collections, but now they had acquired lives. He didn't care.
Look how they treated Jean-Pierre Laffont who was one of the founders of Sygma in the early
70's. At Corbis you will be just a number. The Sygma accountant used to write 125
photographer's checks per month - now he writes 400 for Corbis Sygma photographers.
Les Stone, Andrew Lichtenstein, and I are award winning Sygma photojournalists who have all
had exhibits at Perpignan. We are all revolted by the Corbis way, which had destroyed Sygma,
debased photojournalism, devalued our archives, and disrespected us as human beings. We have
left the agency as has Ted Soqui in L.A. and others following soon. It is profoundly cynical
and hypocritical for Corbis to co-sponsor the photojournalism festival at Perpignan while
treating their own photojournalists with such contempt. That's Corbis: all P.R. and spin.
For someone in a field where honesty and integrity are paramount, it's insupportable.
You can avoid the disillusionment and frustration that the Sygma photographers have
experienced by getting out now. Solidarity is perfect if everybody just pulls out of the
deal. Corbis is playing hardball, so it's time for us to play hardball too. But not by
their rules, for we shall surely lose against the deep pockets of Bill Gates. The day after
I resigned, I got a call from a Corbis exec asking me to participate in a panel with Corbis
to find out what the photographers were unhappy about!!! I patiently reminded him of our
lunches, the contract meetings, a meeting I had with Steve Davis, a lunch with Peter Howe,
and a lunch with Leora Kahn. He had the PBP (point by point) already. I told him that I
thought they were a day late and a dollar short.
The time and money you will waste trying to reform Corbis will be much better spent
transforming your career. America is wonderful - we have freedom of choice and the
entrepreneurial spirit. If you were looking for an agency, you would never choose Corbis,
which lost $50 million last year, has a bumbling bureaucracy, no real plan, a lousy website,
and is, as a high level Corbis exec admitted to me, "incompetent". This is not a time to try
to appear neutral, or courteous, or unemotional, or timid. We are photographers because of a
passion for the medium, and what Corbis has done to Sygma and what they will do to you is
criminal. In a message to Eliane Laffont which she onpassed to the Corbis honchos, I
compared Corbis to the Titanic, and the Corbis execs to the captain and designer of the
ship, filled with hubris and pride at the size and speed of their ship. The biggest iceberg
is us, followed by the US DOJ et. al. Would you have boarded the Titanic if you knew her
fate? Do you want to be fiddling on the deck while she sinks?
I feel very liberated by my decision and positive things are happening already. I will not
contribute photos, I have my most valuable archives back, my other originals will be
returned from Paris, and whether I leave the remainder of my archives with Corbis depends on
changes that I will continue to fight for. Our open and bright office is being Corbisized,
and my instincts tell me that before long there won't be many people I know there. It's time
to find our collective cojones and walk away from a very, very, very bad situation. You are
all bright and talented people and should not forget that we have the upper hand, not
Corbis, because we have what they want. Don't give it to them!
As Woodie Guthrie sang, "Some will rob you with a six-gun, some with a fountain pen."
ex Sygma photographer
Story 335 FINDING MARKETING OPTIONS
August 24, 2000 - Many photographers believe that Getty Images and Corbis have such a
commanding hold on the market that a photographer must be represented by one of these two
organizations, or he or she will be unable to sell stock images.
I would remind photographers of a few facts. At best, Getty and Corbis control 45% of the
world market. That means that at least 55%, and probably more, of the stock photo revenue
generated worldwide comes from sales made by other organizations.
In the Selling Stock annual survey this spring 62% of the photographers responding were
represented by more than one agency. In a recent PACA survey of photographers 66% of those
responding were represented by more than one agency.
In the Selling Stock survey 37% of photographers earned more from direct stock sales to
clients than from any single agency that represented them. Of the total income reported by
all photographers, 29% came from direct sales to buyers. This figure was up from 24% in the
There are still opportunities for stock photographers. But in the changed environment,
photographers must reevaluate their marketing options. Strategies that worked in the past
may no longer be the surest road to success.
Product and Service
There are two elements in the stock photo business -- production of the product and the
service factors involved in getting that product to a willing buyer. Even Getty and Corbis
don't control much of the production side of their businesses. That is still in the hands
of thousands of small suppliers. Those suppliers still have options.
G&C have set in place systems to centrally control all the service factors needed to place
images produced by freelance suppliers into the hands of buyers. While this is one approach
to the stock photography business, it is not the only approach that will work. It is an
approach that doesn't necessarily benefit ALL the photographers these companies represent.
It is clear from the on-line discussions that photographers are in a reevaluation mode.
Strategies that are more focused on benefiting photographers are likely to develop. Such
strategies may include putting some images with Getty or Corbis, or to be totally separate
from their operations. It is likely that the marketing strategies most photographers will
employ two years from now will be radically different from the strategies they employed two
Here are some of the issues I believe photographers need to consider as they look for new
ways of marketing. There is no priority order to this list.
Centralized search. Clients will not search 10,000 individual photographer
sites to find images. If they know the photographer; have learned of his or her URL through
some means other than Internet advertising; and know that the photographer is likely to have
what they need then they may go to the site. Otherwise they will go to sites that bring
together a broad cross section of material from many photographers with many styles. This
allows them to find what they need in a much more efficient way.
By definition this probably means some type of Stock Agency site. Individual photographer
sites are most useful for generating assignments from buyers who learn of the URL through
some other type of promotion. They are unlikely to be of much use for stock.
A system of worldwide distribution. There are lots of good small to medium
sized agencies around the world still operating very effectively in their local markets. If
these agencies find a way to consolidate resources they could be a very powerful third
An opportunity to get more images seen. Photographers need some way to get a
larger percentage of their production into venues where the images can be seen by potential
buyers. All indications are that both Getty Images and Corbis will only scan a very small
percentage of all the images they currently have in their files. They will be extremely
selective in picking new material from future productions. This does not mean that images
not selected for scanning are unsalable. It simply means that they will not be shown by G&C
to potential buyers.
Pricing. Photographers need a system that will maintain good prices for as
much of the work as possible. Royalty free is a fact of life. I estimate that in the U.S.
more than 50% of the uses of stock photography are of RF images. Even if we accept that a
lot of these are new uses that weren't available in the early 90's, it means that a huge
percentage of uses that were formerly available at negotiated rates no longer exist. This
does not mean that in order to make sales you have to match RF prices. Now, when someone
comes to you looking for a negotiated use of a Rights Protected image, for one reason or
another, they have not been able to find what they needed in RF. They will be very happy if
you will give them use of your image for RF prices -- but they will pay more.
The following two stories illustrate this point.
In the first six months of 2000 Stock Connection had average license fees that were $925 per
image. This was up from $705 per image in the same period in 1999, a 31% increase. (By way
of comparison, Getty Images says Stone's average price is around $500.)
One might suspect that by keeping our prices high, we would be making many fewer sales. In
fact, the number of units licensed was off 12% when 2000 was compared with the same period
in 1999. However, there was no indication that the number of sales made, relative to the
number of calls received, was changing in any significant manner.
We believe the number of calls are down because more people are choosing to buy Royalty Free
before they even consider a rights protected option -- a fact over which we have little
control. Nevertheless, gross revenue is up 15% in 2000 over 1999. This certainly points
out that even in today's competitive environment a strategy of holding the line on pricing
can result in higher average prices per unit sold, and overall revenue growth.
On the other hand, a European photographer, represented by one of the Getty Images
companies, reports that he recently received a call from a client who wanted to license
rights to two of his images for the same basic use. The photographer had rights to license
one of the images directly, but rights for the other image were controlled by the Getty
Images company. The photographer negotiated a fee of approximately $400 for the image he
controlled and then gave the client his agent's telephone number.
A while later the client called the photographer. He told him that the agent had licensed
rights to the other image for about $20 (that's twenty, not two hundred). The client said
that while he was happy to get the image for $20, he wasn't complaining at all about the
photographer's price because he thought $400 was reasonable and fair for the usage involved.
He just wanted the photographer know what his agent was doing.
Negotiated Prices. Fixed pricing only works well at Royalty Free rates. If
you want the benefits of negotiated rates based on usage then there must be some provisions
to handle complex negotiations as needed. This becomes particularly complex when you want
to sell outside your home country. When dealing in a foreign country you may have little
information about local use rates, and you may have to negotiate in another language and
deal with collection problems.
Supporting Analog File. One of the critical issues with Getty and Corbis is
that, long term, neither expect to be managing an analog file. Their plans are to edit the
cream, aggressively market the cream, and return the rest to the photographers. One of the
intangibles, of course, is how they define cream.
The best way I know is to talk to photographers who have been with these companies for a
long time and learn from the experience they have had in the recent past. Those experiences
would indicate that a lot of good pictures that would sell if they were available for
clients to look at will not be put into G&C's files. The question is where to put these
pictures so they can be seen. This may require some new ways of thinking.
Local Sales and Marketing. The world may be getting smaller through
communications, but people in different parts of the world still have widely diverging ideas
about the kind of images they want to buy and how they want to do business. Local marketing
and service will be important to effectively sell to these people.
Local Editing. Systems need to be in place where local sellers participate in
the editing of the files. Photographers who submit directly to mid-sized foreign agencies,
or to specialist niche agencies, often find that the image selection these agents make is
markedly different from the selection made by big agency editors in New York, Los Angeles,
Seattle or London. Photographers tend to make more sales when multiple editors, coming from
different perspectives, review their work, than when there is one single central arbitrator
determining what is a "good" image.
The more G&C focus their editing to one, or a few locations, the more opportunities the 55%
have to expand their markets by making available to their customers images that G&C would
Experienced Researchers. Many buyers will continue to want and need picture
research. Often it is impossible to fulfill their needs from the limited number of on-line
digital files. The images they want are only available in analog form. Research needs to
extend beyond the digital files. Experience with particular analog files and experience in
a specialty is invaluable.
In the process of acquisition and consolidation it is likely that much of the "experience"
at some of the major companies will be lost. This will put some of the smaller companies
that have avoided acquisition in a better position to serve the customer.
Selling Direct To Clients. All photographers need to develop better systems
for making direct sales to clients. The principle benefits of direct selling are that you
retain 100% of any fees negotiated and you retain control. This works well if you are a
specialist and can easily identify the majority of people who would be interested in your
type of imagery. The downside is that in addition to the marketing you have to personally
handle all the negotiating, delivery and collection tasks that an agent would normally take
care of for you. If you have an easily identifiable prime customer base, then dealing
directly can be the most efficient way to market stock.
Some agents are willing to handle some of these services for you, for a lesser percentage,
and still allow you a lot of say in how the images are marketed and priced.
More Control. Some of the factors are: pricing whether the image will be
licensed at bulk rates, or not; length of the contract; ease of moving to a different agency
when your not satisfied; return of work when necessary. There are lots of variations
Return of Images. There are two issues here. First, images that are offered
to the agent on an image-exclusive basis should be edited promptly and those not chosen
quickly returned to the photographer so he or she can attempt to market them elsewhere.
Secondly, if images have been accepted into the general file, but are not being marketed
aggressively through a print of digital catalog then the photographers needs to be able to
get these images back so he or she can attempt to market them elsewhere. This should be
possible without the necessity of the photographer terminating the agency agreement for
those other images which the agency is marketing aggressively.
The trick here, if you are represented by one of the many agencies that have been recently
acquired, is determining that point when only newly produced images are being considered for
the on-line catalog and the agent has stopped mining the older files for possible on-line
images. As long as there is a possibility of getting file images into the on-line catalog
it is probably wise to leave them with the agency for consideration.
It should also be recognized that the agent has two incentives not to go to the trouble of
pulling images from their files and returning them to the photographer. First there is the
expense. In addition, if the photographer has an opportunity to place the images elsewhere
they could end up competing against some of the images the agency has spent so much money
promoting. It is better from the agency's point of view to keep these images out of
circulation and the best way to do that is to keep them in their files.
Embrace the efficiencies of the web without ignoring the efficiencies of older
Web efficiencies include:
1 - Production and distribution of a catalog of images.
2 - Updating of the catalog.
3 - Developing specialist catalogs within a larger catalog.
4 - Delivering images to the buyer.
5 - Reducing the need for dupes (if large file is available on the web)
Web inefficiencies and limitations include:
1 - Scanning and keywording are too costly to make all images available on the web,
particularly since this is an up front investment.
2 - The cost of generating high-res scans of ALL images makes the continued use of original
film and dupes more efficient in certain cases.
3 - On-line search does not solve the problem of finding images that only exist in an analog
4 - Fixed pricing has its limitations as discussed above.
Story 330INTERNET SELLING WORLDWIDE
August 11, 2000 - Many photographers believe that the Internet will totally eliminate
the need for sub-agents to handle the licensing of their images around the world. They
believe there will be centralized sites where they can place their images and clients
worldwide will rush to buy and pay by credit card.
This belief is encouraged by "dot com" designers, who often have little or no experience in
selling anything, let alone photography. Nevertheless, they are convinced that the Internet
can solve every problem in the universe. They offer to totally eliminate the middleman,
which can be very seductive to photographers. Some are offering to give photographers up to
90% of all fees paid by the buyer. Don't accept such promises on simple faith. Consider
whether it is really possible.
Our industry definitely has some advantages when it comes to on-line marketing. Unlike many
other industries who must use traditional methods to deliver their produce, we can deliver
on-line. Also, customers can determine by looking at our product on-line whether it will
meet their needs exactly. This is not true in many other industries. But the Internet does
not eliminate EVERY problem.
Consider A Few Things:
1 - Are ALL customers likely to be willing to pay by credit card?
2 - If they are willing to use a credit card, will they enter the number into their
computer, or do they want to call and talk to someone who will accept the information over
3 - Is it possible to provide a price schedule that adequately covers the wide variety of
rights protected uses, or do on-line price schedules tend to push pricing in the direction
of the Royalty Free model?
4 - Is it possible to get many customers to come to your site without print marketing?
Getting customers is not cost free.
1 and 2 - First, a few facts about Getty Images, the leader in e-commerce sales of
stock images. Forty-four percent of their core business revenue last quarter (excluding TIB
and VCG who are not very e-commerce enabled at this time) resulted from pictures found on
the web. But, Getty has more than 665 sales people worldwide manning their call centers.
Would they need that many people if everyone was paying by credit card? [This 665 does not
include marketing teams or other sales support functions such as picture researchers who
pull images from analog files. If those people in support functions were added to the number
of people just taking sales calls, the number of people involved in sales at Getty Images
would be much larger.]
Getty won't tell us what percentage of their digital sales are performed without human
intervention, but it can't be much if 665 sales people are required to deal with the rest of
3 - If you are trying to sensibly price for a rights protected use, recognize that
every use is different and has unique characteristics. There are price schedules such as
"PhotoQuote" and "Negotiating Stock Photo Prices" and many others. These provide STARTING
POINTS, not THE PRICE. Judgement by an experienced sales person is necessary, if you want to
establish a win-win "price."
Automatic prices can work with Royalty Free sales where the customer gets a particular file
size for a fixed price, no matter what the usage. Automatic prices will seldom work
effectively in the rights protected arena.
To give an example, lets take a look at Stone's automatic price schedule. It is a single
page. For some uses like advertising, point of sale, billboards and book covers the customer
is required to call no matter what the usage. But let's look at one of the listed usages
with a price.
The price for inside brochure use, between 1/8th and 1/2 page, with a circulation of between
10,000 and 100,000, in one country for one year is $740.
Consider this from the customers point of view. Suppose the customer's print run is going to
be 15,000; or the usage size is 1/4 page; or he expects the brochure to be used more than
one year; or he expects a small quantity to be distributed outside the U.S.; etc. etc. etc.
Isn't that customer going to want to call and negotiate rather than pay $740 for the usage?
The only time the customer should be happy with the $740 price is if the picture is actually
being used half page and the print run is close to 100,000. Is this "customer friendly"
pricing? All a price schedule with such broad ranges does is get the customer into a general
ball park before he or she makes the call. It also takes care of those very rare emergencies
when the customer needs instant response and doesn't have time to call.
4 - If print marketing is not needed, why does Getty Images continue to produce so
many printed catalogs? Here's some of the catalogs produced by the Getty brands since
Stone -- 1999 - V18, Life, Work
2000 - Road Trip, Quest, and Play/Players
TIB -- 1999 - C24 Perceptions, C25 Attitude, Bokelberg 7, C26 Annual
2000 - People/Contemporary Living and Retrospective 2
FPG -- 1999 - Selects V9, Historical Select Volume 4, StockDirectory 7, Sports,
2000 - Temptations, Business
VCG -- 1999 - Stock Directory 8, Best of Selects, Business
In 1999 the combined print runs for all catalogs were -- more than 400,000 for Stone; more
than 500,000 for TIB; more than 200,000 for FPG; and unknown for the rest of VCG.
Try to think of any major "dot com" company that hasn't used a lot of print and TV ads to
draw customers to their site. Have the RF companies stopped sending out catalogs as more and
more of their sales are on-line? Sixty percent of PhotoDisc's sales were on-line in the last
quarter. How did any of these "dot coms" draw customers to their sites in the first place?
Is any of this advertising to attract customers free?
With the answers to these four questions you should be getting the idea that sales people
and extensive print marketing will continue to be needed, even if the image catalog is
on-line and delivery is on-line. Only if you are willing to settle for RF prices are you
likely to be able to make significant on-line sales without sales people involved in the
transaction. At present, the average price for a RF usage of a single image is
approximately $80. The average price for single image licensed by Stock Connection in the
first 6 months of 2000 was $925. (See Story 327) Take your pick. And don't forget that
marketing costs are not free.
So when someone tells you they will give you 80% to 90% of the gross sale, consider how many
sales they are likely to be able to make if they don't have a sales staff and they don't
spend much on marketing.
But that isn't the end of our story. If you are a U.S. photographer making sales in the U.S.
maybe you can negotiate your own sales. Maybe you can find some way to share, on a co-op
basis, the costs of marketing your site so users will know where to find your images.
What about the overseas sales? Close to 55% of the worldwide revenue generated from stock
photo licensing comes from outside the U.S. For some U.S. photographers, and with certain
types of work, the percentage of sales outside the U.S. is even higher. What is the best way
to deal with such sales from a U.S. base? Do you know:
What prices are reasonable and fair in the UK, Germany, France, Belgium, Italy, Spain,
etc? What are comparable rates in each of these countries for a particular usage? Where are
How are you going to market and let buyers in these countries know that your images
exist? Will the marketing strategies you use in the U.S. work in these other countries?
What rights are normally licensed in these countries?
If negotiation is necessary, how do you communicate with someone who doesn't speak
your language? Do you only do business with those who can communicate in English?
What are the customs relative to negotiation in the country where you are trying to
What are the various business and legal rules for operating in each country? What are
the copyright laws? (Hint: They are not the same in every country.)
What do you do about the time differences if there are deadlines?
If the customer wants to be billed instead of paying by credit card what do you do? Do
you require that the client make a bank transfer before you deliver the file? What will that
cost both you and the client in bank fees and time wasted? Is this user friendly?
On the other hand, if you bill, how do you collect if the customer is slow in paying,
or just decides not to pay at all. (Read about collection problems further down).
How do you monitor usage to make sure the client isn't making more use than they paid
Clearly, photographers are going to need help if they want to maximize the sale of their
work overseas. At the moment there are basically two options -- Getty and Corbis -- with an
infrastructure in place capable of effectively marketing worldwide. On the other hand there
are well known disadvantages to dealing with Getty and Corbis that I won't take time to
Will there be a third, fourth or more choice, and when? There are PictureQuest and Workbook
in the U.S. with sites that consolidate the work of many agencies, but so far neither of
these companies have much reach outside the U.S. There are foreign agencies with sites, but
most of them don't sell much in the U.S. There are lots of options in the planning stages,
or the early stages of development. Before the end of 2001 photographers will have many more
What U.S. photographers need is strong representation in the U.S. and some type of
affiliation program that will allow their work to be agressively marketed and licensed in
other parts of the world. One solution is for photographers to make their own separate
arrangements with many different agencies throughout the world. The other solution is for
the photographer's U.S. agency to make such arrangements on the photographer's behalf.
It is highly unlikely that the perfect solution is going to present itself and be obvious to
everyone. Most photographers will need to simultaneously test various options for a period
of time in order to settle on what works best for them. This probably means that
photographers need to be more agressive in seeking image-exclusive, or non-exclusive
relationships as they move ahead.
Online Sales And Nothing Else
Don't lock up your images so they can only be sold on-line. Some on-line operations want
the photographer to give them image-exclusive (with similars) which means the image can't be
made available for sale in any other way, but on-line. This is probably not in the
photographer's best interest at this time.
After the first two quarters, Getty Images is on a growth track to have about $170 million
in sales in the year 2000 that resulted from on-line search. For the most part, on-line
delivery was also supplied with these sales. This should represent about 36% of Getty's
total sales for the year. Add in the sales made by Corbis, PictureQuest, the agencies
represented on Workbook and individual agency sites around the world, and I estimate that
the gross sales worldwide in 2000 that result from on-line search will be in the
neighborhood of $250 million, or 18% to 20% of the worldwide sales.
Every stock photographer ought to be involved in devising ways to market their images
on-line. But at the same time there is still a huge demand for analog material and most
people in the industry believe that is likely to continue. Photographers need to position
themselves so their work can be available in both the digital and analog environments -- at
least for a while.
Certain types of users -- textbooks for examples -- may rely on analog files, and their
depth, much longer than hard news users who have greater need for speed, and for whom image
resolution is not as big an issue. Unfortunately, many of the current digital options focus
exclusively on digital at the expense of analog.
Why Photographers Need Foreign Agents (Sub-Agents)
The material above provides a general summary of why photographers will need agents to
handle marketing and sales of images in on-line catalogs when these sales are being made
outside the photographer's local area. The following will explore, in more detail, many of
the reasons for this continuing need. It should also make clear that foreign sub-agents are
legitimately entitled to a significant share of the usage fee they generate.
Language and Time. Probably the most important service the foreign agent provides is
having someone available for the customer to talk to in their own language and their own
time zone. Particularly during the early adoption phase of on-line usage there needs to be a
lot of customer education. They will need help in learning to navigate the site and use its
various features effectively. With constant software upgrades this is likely to be a
continuing need. Customers may also need larger scans, next day delivery of film, or other
Frequent buyers may need less support as time goes on. Infrequent users are likely to need
help every time they enter the system. Even large publishers who buy lots of images may
have staff turnovers that require continued training and support for new users. The
customer wants to be able to talk to someone when they have a problem. Preferably it is
someone local and someone they know.
Consider the problems an English speaking seller will have in trying to make a sale in
another country; where another language is spoken; where there are different business
traditions; and where there are different attitudes toward copyright.
Research. Many buyers will want someone to help them with research and e-mail
thumbnail catalogs of selects. This will be particulary true when the image was originally
keyworded in English and the customer's native language is different. Yes, it will be
possible to use other languages for searching, but not every language.
In certain specialty areas, having researchers with expertise in the field is of great
value. This is the kind of support niche agencies have always provided. A few examples of
subject matter where special expertise is invaluable are: automobiles, aviation, food, fine
art, history, medicine, biology, education, wildlife, underwater, travel location, religion,
theater and dance, sports, dogs, cats, horses, science, etc. Many buyers need more
information than captions provide. The chance that a sales person in a large impersonal call
center is going to have this knowledge, or have any idea how to get it, is slim.
Keywording. English keywords may not translate conveniently. If you think the
Internet is going to easily solve this problem then you ought to read "Hello World" in the
May 2000 issue of Wired Magazine. This article is available on-line (in English, of course)
at http://www.wired.com/wired/archive/8.05/tpintro.html. This in depth study is must reading
for anyone who thinks translation of keywords into other languages will be a snap.
Basically, the more images in a database, the more complex the keywording must be. The more
likely there will be a communication breakdown in translation. Good keywording is
necessary. But there will be users who need aid in the search process, particularly when the
language of the searcher is different from that of the keyworder.
The sales and marketing system that doesn't take this problem into account in its basic
structural design is likely to eventually fail -- even if it makes a fast start.
Marketing. Foreign agents know the local buyers. They have the best lists of
potential customers. They also understand what marketing strategies work with their
customers. These strategies tend to be different in every country, and among various user
groups. It is important to understand these distinctions if you want to reach a large user
base. It is important to adjust your marketing to local conditions. U.S. photographers, and
for the most part U.S. agents, will need to develop marketing relationships with local
foreign agents, rather than trying to market in other parts of the world themselves.
Catalog marketing is changing. Getty Images is producing catalogs that are physically
smaller and often on specialized topics. They mail more frequently rather than just mailing
one major catalog a year. Catalogs may become more positioning pieces designed to draw
buyers to the Web, rather than to sell specific images in the catalog.
Other means of advertising and promotion may become as important, or more important than the
print catalog. If possible, photographers should participate in and test several different
marketing strategies in this transition period for the industry.
Negotiation. Most U.S. buyers use Royalty Free images for many purposes. This is
likely to be true worldwide in the not too distant future. Thus, with fewer opportunities to
negotiate, each negotiation takes on greater importance. It is critical for the seller to
speak the buyer's language, understand local customs and laws, including the local
understanding of copyright and to have experience in licensing rights.
This is particularly true when it comes to complex advertising sales where the picture will
be used in a variety of magazine ads and collateral uses.
Restricted Use. Some customers are willing to pay large fees to restrict competitors
from using an image during the duration of their license. Such uses need to be carefully
negotiated and monitored.
Defining Terms For The Customer. It is becoming more and more important to carefully
define terms with the customers before delivering images. The existence of royalty free is
causing many customers to believe that any time they pay a fee, no matter how small, they
have unlimited rights to use that image forever. Those who are licensing specific usage
rights need to get that understanding in writing before they allow customers to download
their full size image files.
With fax machines this is relatively easy. You get the client to sign off on the terms
before you make the delivery. But, the discussions and the writings must be in the buyers
native language. If these kinds of details are taken care of in the "negotiating phase"
there are often a lot fewer problems in the "collection phase" of the sale. I will discuss
collection problems a little later.
Large Users. Certain large users, like book publishers, prefer to deal with agencies
that can supply them with a broad cross section of the imagery they need. This can reduce
the publisher's administrative costs. Often the publisher is able to negotiate per image
discounts based on the quantity of images they are buying. Smaller agencies and individual
photographers are usually locked out of the chance to make sales of this type.
This method of selling has advantages and disadvantages for the photographer. Photographers
should try to understand how the agency's pricing and discount strategies work, and
carefully weigh the benefits of participation. There is a potential for volume sales but at
lower prices. It is not always clear that the individual photographer benefits enough from
the volume to justify making the images available at lower prices. On the other hand,
holding out for higher prices and giving up the opportunity to participate in this market
can be frustrating.
Usually, the agency has a particular strategy and photographers are only given one choice.
The only option open to the photographer is to move to a different agency. However, in the
Internet environment it is technically possible for each agency to offer photographers
greater flexibility and to allow each photographer to make certain images available to the
Large User (Bulk Sale) market and restrict others to the high end market only. It will be
interesting to see if some agencies offer such options as Internet marketing develops.
Model Releases. Customers may need to check releases to determine if they adequately
cover the use. In some countries laws vary as to when releases are needed to publish
pictures of public buildings or private homes. France has new laws that protect the privacy
of individuals photographed in news situations and photographs used in news publications.
Going by U.S. law because you produced the picture in the U.S., or are selling the picture
from the U.S. may get you in trouble. Various professional organizations are trying to find
ways to identify divergent rules and harmonize the rules internationally, but it may be
quite some time before such "harmonizing" becomes a reality.
Collecting. If all payments are not made by credit card at the time of the sale
(unlikely) someone needs to collect funds in the local currency. Collections in the stock
photo industry can be difficult in the best of situations. They often become impossible if
there is no one locally to provide systematic follow up. The goal is not just to get images
used. The goal is to get paid for the use of images.
As part of this process it is important to establish the credit worthiness of a client
before the image is delivered. Get a faxed signature on a delivery memo before supplying the
high resoultion file. It is important to also recognize that you are not even safe when you
are paid by credit card. While stolen credit cards are used in only 1.2% of all Internet
sales, e-tailers are ten times more likely to be ripped off by credit card buyers than
bricks-and-mortar stores who are able to get signatures from their customers and check ID's.
Stolen cards are much more likely to be used to purchase consumers products than for
business-to-business transactions. Nevertheless, Deborah Williams of Meridien Research told
USA Today that as much as 26% of on-line sales made by some sporting goods and clothing
e-tailers are fraudulent. Other vulnerable web sectors are computer hardware and software,
electronics, music and games.
In the U.S. there are on-line sellers in the stock photo industry who have as much as 20% of
the sales they invoiced six to twelve months ago still unpaid. Much of this is likely to
turn into bad debt. Part of the solution to this problem is more attention to detail in the
negotiating phase of the sale and persistent follow up.
Why might this problem be more prevalent on-line than in the traditional system of personal
negotiation? First, in the personal negotiation process you build a relationship with the
client and you work out a clear understanding of the rights your licensing for a particular
price, before the image is delivered. With on-line there may be too much pressure to say yes
to everything and quickly close the deal. Every image is different, every use unique and
there can be endless variations. It takes time to negotiate a sale properly. Often the
people assigned to buy images are clerks, not experienced art directors. They often need a
lot of education (through the negotiating process) as to why we are asking for a particular
price, and what the industry standards for such transactions are.
If a little more time is spent during initial negotiations nailing down certain details, a
lot of aggravation in collection can be saved later. Assuming that foreign buyers are no
more or less honest than those in the U.S., photographers can benefit greatly from having
Some Internet marketing systems are designed to eliminate communication as much as possible;
to make it easy for the buyer to get something he or she wants; and then collect, if
possible. The more automatic the sales process becomes the more likely photographers will
be giving away uses for no fee through bad debt.
Monitor. It is helpful to have someone to monitor usages. Without such monitoring, or
its threat, there will be a great temptation to make uses beyond those licensed. In some
cases legal action will be necessary. That is only practical if the action is brought in the
country where the sale and usage took place.
Legal Action. This doesn't happen often, but the fact that it does happen encourages
buyers in general to be honest. In the marketplace, there is a constant need to pile
contract provision on contract provision and clause upon clause to try to protect one's
One thing that agencies can usually do better than photographers, because they have the
manpower and more incentive, is keep up with industry developments and changes that need to
be built into the paperwork and processes. One of the ways they do this is through
participation in trade associations.
All things considered, it is not even a close call as to whether you need a foreign agent
representing your interests. By now it should be clear that any photographer who wants to
sell outside of his or her local territory needs a representative in every region where
sales are to be made.
Many photographers who have listened to the mantra of the Internet gurus, and believe that
the Internet should be eliminating the middleman, are beginning to get much more upset about
"double dipping" or the situation where a parent agent in the U.S. makes arrangements with a
foreign sub-agent to handle sales for them in a particular territory overseas.
This is particularly distasteful and hard for photographers to accept when the foreign
office is wholly owned by the parent. Photographers want to receive the same percentage of
the "gross fee paid by the customer," no matter where the sale is made.
Nevertheless, there are legitimate reasons for why the costs of marketing and selling will
increase as the sales chain from producer to buyer gets more complex. If a photographer is
producing something in San Francisco and selling directly to a customer right around the
corner there is a much less complex sales chain than if that same photographer is trying to
sell to someone in Greece who he has never met and knows nothing about -- and if the
photographer hopes to collect for the use of his image.
I have outlined above all the things the selling agent does to earn his share of the fee.
Depending on the specifics of the situation the Primary Agent or the Parent Agent certainly
has less costs in making overseas sales than when that agent makes sales in their home
territory direct to clients. The parent agent is not involved in the negotiation or the
collection of the sale. Thus there may be an argument that the Parent agent is entitled to a
lesser share of the fee.
The parent agents participation in the foreign marketing may be less. The parent does have
the additional costs of putting together a network of foreign agencies and making sure they
are the most efficient operators in a particular country. The parent agent also has to make
sure funds are transfered properly and that photographers are paid promptly.
The foreign selling agent is involved in the most critical work. There is an argument that
the Primary agent has less invested in the foreign sale than in a local sale and thus should
take a lesser percentage. On the other hand even if the prime agent's percentage stays the
same they are earning less in real dollars because it is calculated on the remainder after
the selling agent takes their percentage. As we move from analog selling to digital selling
there may need to be some adjustments as to which group receives what percentage of the
gross sales, but clearly all parties -- photographer, prime agent, foreign sub-agent -- are
still providing necessary and important services, and each must be compensated.