510 TEN YEAR LICENSE
October 10, 2002
More and more book publishers are insisting on a ten year license to use an image. It is
understandable that it is costly for the company to keep coming back to the seller and
negotiating additional uses and that often it is more practical for them to pay a much
higher up front fee for a broad range of potential uses than to come back and negotiate
each use as needed.
It wasn't long ago that we were seeing negotiations for a 40,000 print run of an image for
a elementary textbook. Now, the print runs are commonly running to 200,000 to 250,000 with
the additional rights to put the image on a CD that will be delivered with the book and on
a password protected web site. That automatically, raises the price for a usage
substantially, but is it enough?
In a recent Stock Connection negotiation the customer wanted rights for 200,000 copies or
10 years, and they wanted to put the image on a CD and a password protected web site.
That's fine. We could price that usage, but we wanted to know how the CD's and the
passwords for the web site would be distributed. We were told that the current plan was
that there would be one CD per classroom and that the passwords would be given to teachers
for the classroom. That's OK -- but what about the 10 years.
We wanted to put language in the license that said, "No electronic rights will be granted
to non-users of the printed book." This would insure that the 200,000 circulation was a
limit. On this point the buyer balked. They said, "We're not sure, but we may be selling
passwords to home schoolers who won't necessarily be buying books."
Now obviously, that raises the issues of How Many? and What Will Happen Five To Ten Years
I can see that right now the home schoolers may represent a very small number of users and
that it may be insignificant to worry about. On the other hand it seems very possible to me
that in ten years a very high percentage of users, even at the elementary level, will be
accessing their educational information and the schools won't be purchasing anywhere near
the number of books they have in the past.
It seems entirely possible to me that in ten years the company might have distributed less
than 200,000 copies of the book, but they might have also sold a million copies of the
password. The way most of these licenses are written they can sell unlimited passwords in
ten years so long as they distribute less than 200,000 copies of the book and the seller is
not entitled to any additional compensation.
As a seller I fully understand and acknowledge that neither they, nor I have much of an
idea as to how educational information will be distributed ten years from now. My theory,
as described above could certainly be wrong. Some might think that the buyers are trying to
"slip something by us." I don't think that is the case. Rather, it seems to me that the
buyers haven't really considered all the long term implications of what they are asking,
and it is our responsibility as sellers to try to educate them on this point.
I would like to see something in the license that says, "If an electronic use is sold
without a corresponding sale of a printed book to the same customer, it will be considered
as one copy of the printed book for the purpose of counting the total number of copies
sold." With this language, once the publisher has sold 200,000 copies of the material --
regardless of whether it is in print or electronic form -- they will need to purchase a new
license, even if the ten years has not expired.
This language provides the publisher with a great deal of flexibility, but is still fair to
the photographer and the stock agency.
The point is worth thinking about. The fee for 200,000 circulation may be two to three
times what the fee for 40,000 circulation would have been. Many sellers may be so anxious
to grab the higher fee now, that they will fail to consider the wide open side door of that
ten year pitfall. The side door can be closed, but it will take some careful negotiation
and careful writing of the license.