Sorting Out IndexStock Obligations

Posted on 10/7/2008 by Jim Pickerell | Printable Version | Comments (2)

When Photolibrary acquired IndexStock in late 2006, it took on the obligation of paying contributors all they were owed by the previous owners. To date, Photolibrary has paid out $1.96 million to 632 individual photographers. (All pre-acquisition monies owed to third-party suppliers have also been paid.) One of Photolibrary’s first moves was to pay all contributors the amounts owed for sales booked in the six months prior to acquisition.

As Photolibrary examined Index’s books, the new owner discovered cases where contributors had not been paid all they were owed since 2001. The royalty resolution team also discovered other issues: Some sales had been misattributed. Close to 30% of canceled sales were not reflected in photographer statements.

Cancelled sales are common. When a sale is booked, its commission is typically credited to the photographer’s account immediately. If the sale is subsequently canceled, this commission amount is deducted, which has not always been done at IndexStock. To properly pay photographers, Photolibrary had to match each cancelled sale to the proper account.

Last November, Photolibrary’s then-new comptroller Carlos Santos emailed statements to many of Photolibrary’s contributors. These statements had not been audited for cancelled sales or sales credited to the wrong photographer and were thus inaccurate in some, but not all, cases.

Copies of these statements reached the Stock Artists Alliance, and this association began lobbying for prompt payment to all photographers.

In February, Photolibrary announced a priority system for reimbursing individual photographers:
1. Artists owed over $250 in the past 12 months (and continuing to submit images to Photolibrary)
2. Artists who continue to submit images to IndexStock and are not in group 1
3. Artists owed over $250 for sales during the last two years that are not in group 1 or 2
4. Artists owed $250 and below with EFT details (with no review of account)
5. The remaining dormant contributor base that does not fit into the above categories

There were over 1,700 photographers listed in Index’s records, and 1,538 were owed some money at the time of its sale. According to Photolibrary, all the artists in categories 1, 2 and 3 have been paid. There are 486 artists in category 4 who have not been paid because they have not supplied Photolibrary with electronic transfer details as requested several times. The combined total amount still owed to category 4 artists is $28,000.

This leaves 420 category 5 contributors who are dormant (no longer submitting images to Photolibrary). The company has contact information for 80, but needs to contact them again. The rest are missing in action. There are amounts above $250 up to many thousands of dollars due some individuals, but in financial terms Photolibrary expects the total some to be small compared to what has been paid to contributors in the first three categories.

Last week, SAA issued a statement that said it made telephone contact with 93 IndexStock contributors from among the 400 owed between $1,000 and $23,000, according to the Santos records. Together, these individuals were owed $435,000 in past royalties. The SAA had access to Index’s list of telephone numbers and also used lists from other associations to find working numbers. The organization said that only six of those it contacted had been paid without pursuing Photolibrary; 18 had received payment after calling the company upon receiving the “unauthorized” Santos statements or as a result of SAA’s pressure.

The remaining 69 told SAA that they had never received payments, schedules or any notice of past royalties due. Photolibrary says it has sent out four communications, including letters and emails, to every photographer on its mailing list. According to SAA, contributors who contacted Photolibrary at SAA’s urging were immediately scheduled for payment on a first-come, first-served basis.

SAA believes Photolibrary should do more to speed the process and find those with inaccurate contact information. Photolibrary says it will shortly publish an online list of contributors it has had trouble locating. All individuals who had images with Index between 2001 and 2006 should contact Photolibrary representative Dan Russelman at (212) 929-4644 or darn@indexstock.com to request an accounting, confirm your current contact information and provide bank details.

Some photographers are happy with the new owners. Dave Bartruff recently wrote: “A couple days ago, I received $9,000-plus from Photolibrary for Index royalties held back by Bahar from parts of 2004-2006. It arrived a month after they said it would, and was received with gratitude, of course.”


Copyright © 2008 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.  

Comments

  • Betsy Reid Posted Oct 7, 2008
    Hello Jim,
    Thank you for reporting on SAA's efforts to get photographers paid.

    We are glad to see the surge of activity by Photolibrary following SAA's revelations of last week to quickly schedule payments, make efforts to locate artists, and release detailed information.

    Your readers will be interested in finding out more about what SAA's investigations found in our press release at
    http://www.stockartistsalliance.org/photolibrary-sept08

    Betsy Reid
    SAA Executive Director

  • Betsy Reid Posted Oct 8, 2008
    Hello Jim,
    You note that "Photolibrary says it will shortly publish an online list of contributors it has had trouble locating."

    Could you please post the URL for this list when it is available?

    SAA would be glad to ask our fellow trade associations for their help in locating these hard-to-find photographers, and we've already had some success in doing so. In early January, SAA and ASMP quickly identified 70 of them, and forwarded their current emails to PACA's Ethics & Grievance Committee and Photolibrary. We hope that those photographers were promptly contacted.

    I'm sure many of your other readers could assist with this project as well.

    Betsy Reid
    SAA executive director

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