111 THE NEW FPG
November 16, 1997
FPG, a stock agency founded in 1936, was recently purchased by the London based
conglomerate Visual Communications Group, a subsidiary of United News & Media plc. The
new CEO at FPG is David Moffly.
FPG has a staff of approximately 230 in New York and gross annual sales of around $30
million. They represent 150 to 200 photographers who are their core producers and
around 3,000 who have pictures in the files and submit occasionally or are no longer
The agency's marketing focus is catalogs. Mr. Moffly said, "People buy pictures they
can see. The catalogs themselves are a very efficient metaphors for looking at
pictures," said Mr. Moffly. He emphasized that the focus of FPG's energies will be
directed at choosing the images for the 10,000 to 15,000 product slots that become
available each year in various catalogs. These catalog slots are responsible for
approximately 80% of FPG's gross income.
At first glance this sounds like a tremendous increase over the 4,000 to 5,000 FPG has
been distributing annually. But, the FPG photographers will now be competing with
photographers from all the other VCG agencies (Telegraph Color Library, Colorific, Pix,
Bavaria, and Planet Earth) for these coveted spaces.
Current thinking is that FPG and the other VCG agencies combined will put out six
catalogs a years. Some will be general and others specialized. Every catalog has the
potential to be distributed worldwide
It used to be that a catalog produced for the U.S. would go into the International
market as is. Increasingly, a catalog prepared for one market is radically edited
before it is released in the other market. About 25% of the images were changed in a
recent VCG catalog released in the U.S. by FPG.
While the six catalogs a year is a goal, after releasing two catalogs in late summer
and early fall, FPG decided to delay the November release of a CD-ROM catalog and
combine it with Selects Vol. 8 which will be released around the beginning of 1998.
According to David Moffly the feeling was that they were releasing too many catalogs
too quickly. There may be a little shake out in determining the optimum number of
catalogs to release in any calendar year.
A CD-ROM disc will be produced from every print catalog and FPG is working on an
on-line database which will also contain every catalog image. The on-line site is
expected to be launched in December and the URL will be: www.fpg.com. Rebecca Taylor,
Director of Publishing, indicated that they are still considering whether some of the
general file material that doesnoet make it into the print catalogs should be included
on-line. She said, "Ultimately, everything we take into the file may go on-line."
However, Moffly indicated that, for the time being, the only images they will put
on-line are their catalog selects. Thus, it is possible that a single image might be
distributed in a U.S. print catalog, an International print catalog, on a CD-ROM and
A year or so ago, FPG was reviewing over a million images a year and accepting 250,000
for the general files. Moffly pointed out that a relatively small percentage of these
images ever made it into some type of catalog.
About 80% of FPG's approximately $30 million gross sales come from the catalog images
(the 4,000 to 5,000 mentioned earlier) and only about 20% of income comes from the rest
of the file. Moffly feels "that the returns from these two areas of business are all
out of whack. Rebecca (Taylor) has been a guiding force in trying to bring that back
into some sort of equilibrium."
JP. What do you think would be equilibrium?
Moffly. "What we are looking for is about 250,000 submissions annually and we might
accept about 70,000 or 80,000 images for the file."
Rebecca Taylor did point out that a high percentage of the images they accepted in the
past were distributed to agencies overseas. At present, the only images FPG
distributes overseas are dupes of those chosen for a catalog.
Moffly. "There was a program of distributing dupes and originals to the overseas
agents, but I don't think it was a big money winner. It was expensive and didn't pay
Moffly. "FPG has been very pro photographer putting up with submissions that arrive in
a shoebox." (My guess is that submissions this sloppy have not been accepted at FPG
for years, if not decades, but Moflly may believe that is the way the business has
operated). "As a business, we need to work with photographers who take the time to make
organized submissions. We're asking them to take a look at their processes. They
can't just say 'I can't make a decision so you make a decision."'
"They have to be objective about their own work and determine what is good and what
isn't good and try to submit to us only the good. Is that unreasonable?"
JP. There is a very fine line. Part of the problem is that the photographer knows
what he or she has sold in the past, but has no idea what has been requested from the
agency. Also, the photographer has very little idea as to what FPG already has in the
Moffly. "We are asking our editors as part of this whole new process to really step up
to the plate and communicate authoritatively with their photographers (by telling them)
where they see their strengths and weaknesses. Hopefully, the editors will focus the
photographers toward their strengths rather than encourage them to try to be, and
invest in, areas where the images are not going to be up to par, and where they are not
going to sell."
On the other hand several FPG photographers tell me that their editors seem to be
pushing them to shoot what is needed for the next specialized catalog rather than
focusing on their strength. The editor gets focused on her current need and not
necessarily on subjects that may be useful in a catalog two or three generations down
the road. Thus, when the next catalog is on "family life," as an example, the editor
tries to encourage the industrial, travel or landscape photographer to shoot family
life situations. That often doesn't work and is not necessarily helpful to either the
agency or the photographer.
Moffly. "We want the photographer to focus closer to the essentials. We want tighter
editing. We want photographers to stop overshooting." However he also says, "We want
to increase our file sales. We need a wide, but focused file. We want to accept less
work, but sell more of what we accept."
When photographers are pressured to edit tighter before submitting many salable images
never leave the photographer's studio.
I have the impression that Moffly believes the photographer/editor collaboration can be
systematized to the point that photographers will only shoot what is needed and never
produce anything that might be redundant to what is already in the files. This fails
to take into consideration that fact that the photographers are not employees, but each
is competing with many others in the agency for those coveted catalog slots. They know
that their income will be directly proportional to the number of images they get in the
catalog. They all want to shoot the subjects that are in highest demand and will give
them the best chance of catalog placement.
In addition, the agency relies to a great extent on the photographers to come up with
ideas for the photos. Usually, the only way an editor can determine whether the
photographer's idea will produce an "exceptional" image (by the editors definition) is
to look at the image after the photographer has produced it.
The problem for the photographer is that he or she has no way of determining that fact
unless the images are shown to the editor. Pre-planning is helpful, but no grarantee
that the final results will be "exceptional" in the editor's eyes. This is
particularly true if people are the subjects of the photos.
If an image is rejected by the editor, the photographer has basically wasted his time,
energies and expenses on that shoot. Another factor that plays into this equation is
that, based on past sales experience, photographers know that many of their above
average images are what clients will often buy to fulfill certain specific needs,
provided they know they exist.
Every photographer wants to produce great photography and I believe every FPG
photographer is trying to produce a great picture every time he or she goes to work.
However, for most, "great" doesn't happen every time. There are a lot of good, above
average, and excellent images produced along with the occasional outstandingly great
image. For most, if they can't figure some way to sell a reasonable portion of the
good, above average and excellent images they can't afford to produce the "great"
"premium" images at the prices that are currently being paid for such usages.
Even it the prices can be raised slightly for this higher level of quality that is
being demanded of the photographer, that probably will not be enough to insure the
photographer a profit. When a photographer only receives 25% of the gross sale, any
price increase to the client must be huge for the photographer's marginal increase to
be enough to cover his or her added costs.
There is also the question as to how much pre-planning will actually take place.
FPG has 8 editors for 200 active shooters. Thus each editor is responsible for about
25 photographers. My guess is that an editor could afford to spend no more than 1/4 of
her time on the phone talking to photographers and still get her other work done. That
means that at best she can afford to give each individual 20 to 25 minutes per week of
guidance relative to specific shoots.
Moffly seems to believe that most images are being rejected because they are not up to
proper "technical" standards. I suspect that is not the case unless the technical
standards have been raised to extraordinarily unrealistic heights. I suspect that the
vast majority of imagery that has been submitted by photographers who have been given
an FPG contract are technically at a very high level. My guess is that the bigger
reason for rejection is that there are already better images in the file on that
The dilemma, and this is not only at FPG but at every other major catalog agency as
well, is that the 200 photographers are capable of producing many more exceptional
images than the agency is prepared to distribute or the market is prepared to absorb.
The agency is clearly seeking a balance that will insure its growing profitability.
Photographers should not expect the agency to distribute more images simply because
they are capable of producing more images.
In the past there was some cooperation between the Telegraph Colour Library and FPG in
sharing images for their various catalogs.
Moffly. "We are re-defining our processing systems for the next year to make images
produced by our photographers available to the publishing programs that run out of our
At the same time London is choosing images that will be integrated into the New York
files to be sold to the American market.
Moffly. "The business theory is that the best shot makes it into the catalog. The
challenge for the group is building those bridges to make the best images available in
both places at the same time. It is simply a re-defining both here in New York and
London the way images are reviewed for our publishing program."
JP. Which editors decide what are the best images, editors in the U.S. or the U.K.?
Moffly. "It depends on who is editing the book. The principle editor in London is Tim
Lund and here in New York it is Phyllis Giarnese. Both have teams working with them
who are responsible for the selection for future books."
The editors who review the photographers' initial submissions choose those images that
they think are of catalog quality and offer them to the catalog editors for
consideration in the next catalog. The international versions of future FPG catalogs
will be edited in London. Rebecca Taylor pointed out that Selects, Vol. 8 is in that
process right now.
Taylor. "The multi-cultural section in the American catalog will not be as extensive in
the international version and many of the images that are stylistically American will
be replaced with images from European photographers that have a more international
Future Of General File
With the cutback in the number of images to be accepted for the general file the
criteria for getting images accepted is certainly being raised.
JP. Do the photographers that have a high proportion of their sales coming from the
general file need to begin looking for another agency to handle their work because of
FPG's catalog emphasis. Many of these photographers shoot material that has more of an
editorial bent rather than being aimed toward advertising.
Moffly. "I don't think so, even if it has an editorial slant we want it to be "good"
photography. If they are not achieving the technical standards that are being
communicated to them by the editors, they are not achieving. I think overall in the
industry, at least in the market we are trying to address, the bar is being raised."
"We have been a file company and we expect to continue. We feel it is an important
component (about 20%) of our business. There is a need. The challenge is to make sure
that the images coming out of the file are of the same caliber as the images coming out
of the catalog. The reality is that you only have so many product slots in your
catalog and you have a lot of great photography and the images have to go somewhere so
they go into the file. The challenge is to have a tightly edited, terrific file so you
don't send out non-model released stuff and stuff that isn't great. I don't expect the
percentage of sales from the file to grow, but I think it will stay about the same."
I asked Rebecca Taylor, "If photographers who have made a large portion of their
income from general file sales can't get the same quantities of material into that
file as they did in the past, will they feel they need to go somewhere else to get that
She said that so far no one has come to her with this problem, but if the problem
arises, they will have to look at it on a case by case basis. "We are not trying to
lock up our photographers, and would try to work out some arrangement that is mutually
beneficial," she continued.
It would appear from this statement that FPG might be open to letting exclusive
photographers market certain shots elsewhere if they are not accepted by FPG.
Some agents have indicated that they see the possibility of a resurgence in general
file sales because there are too many catalog images for the clients to search through.
As a result the clients are turning to the agencies with a description of what they
want and asking that they do the searching.
A few agencies say their sales are already moving in this direction. But Mr. Moffly
doesn't see this happening at FPG, or think that is where the market is heading.
The Star file is a 40,000 to 50,000 image file, mostly of catalog images, but including
many top quality images that have never been in catalogs. At present, nothing is going
into that star file that does not make the catalog. According to Mr. Moffly the file
was created to make it possible to bring certain images that didn't make the catalog to
a higher level of consideration so they could be pushed and brought to market faster,
given the length of time between catalogs. But, he says, "I don't know that it ever
really brought images to market faster."
JP. As you move into web products do you think there will be more opportunities for
additional images to get shown, or is it just going to be the catalog images?
Moffly. "It used to be, and it was the thinking in the film business as well (Moffly
was President of the Grinberg Film Library in New York before coming to FPG) that what
differentiated you was the more images the better. It was important to have 20 million
feet of film or 14 million images. The universe of images is really irrelevant to the
fact that you need to have the right image at the right time to meet the customers
needs. I don't think we are going to make more available, but this quite honestly may
"We don't do a lot of food in our catalog, but we have some depth in food in the files.
We might put more of these images in an on-line offering."
Photographers should not expect to see a big increase in the number of general file
images that appear on-line once the web site is in operation. Given current thinking,
it seems likely that the site will be very tightly edited for several years.
FPG will not be using a Digimarc on their web images as a means of protecting them from
misuse. Moffly says that their tests have indicated that this mark is too easy to
remove. At present they are exploring the Signum SureSign technology, which is a
successor of Highwater FBI in the UK. FPG may use that product for image protection
Moffly's background before coming to FPG was in helping entertainment industry
companies manage the process of transferring computerized data from one system to
another. Expect him to put a lot of energy into web development.
JP. How many of your customers are ready to use the web?
Moffly. "I think the web use follows a demographic breakdown. Those in their 20's are
very wedded to the web metaphor. FPG was a bit of a luddite* until we came in.
*Luddites were organized bands of employed and unemployed workers in the UK at the
time of the industrial revolution who rioted and destroyed machines in the textile
industry because they were afraid that the machines would eliminate their jobs. I
think Moffly is not implying destruction, but simply that FPG had been slow to accept
the potentials of the new technology, and that since his arrival we can expect to see a
much more rapid adoption of new technology in every way.
Moffly. "We have installed 4 T1's. Everybody, company wide, has at least e-mail, if
not internet access. I would expect that to be relatively similar in the near future
with most of our clients. Our bigger clients have developed their own corporate
intranets and are starting to build their own in house databases."
The web offering will initially offer about 20,000 images from Selects 5, 6, 7, and
CD-3 as well as the Stock Directory products and the Lifestyle catalog from the UK."
FPG is using PLS (Personal Library Software) for a search engine. All of these catalog
images are currently available as 28mb JPEG files which can be delivered to their
customers by disc or on-line once a licensing agreement has been reached.
The FPG site will also have a visual search engine that will search for similars in
terms of pixel density, patterns and color. "Quite frankly, I am not sold on it as a
search engine. I think the most efficient way is by keywords such as sunsets or people
walking on the beach and that type of thing. However, we will offer out clients both
Moffly. "The current FPG price for print catalog space is $350 per image, but that is
changing a little bit as we standardize with VCG. VCG charges by the size and by
whether it is a domestic, US or international catalog. It is actually funny because
VCG photographer were getting a cheaper rate to get into the American market than the
FPG photographers. So we are upping the international photographers a little bit to
bring them in line. There should be no difference between the FPG and the VCG
photographers in the rate charged to be in a given catalog."
Since Selects Volume 7, FPG only charges the photographer when the image sells. Images
are not cross-collateralized. Thus, if a photographer has ten images in the catalog,
but only six of them ever sell the photographer only pays a maximum of 6 times $350 or
$2100. If one or two produce thousands of dollars in sales the photographer still only
pays $350 for each of those images. If the total photographer's commission on one is
$250 that is all the photographer pays for that image.
FPG has also found it necessary to remove logos and clean up a number of images prior
to putting them in the catalog. In the past they had charged the photographer an
additional $100 on top of the catalog fee for this service. In the new operation that
fee will be dropped because VCG's policy is to work these costs into the general costs
of the catalog.
FPG currently charges $75 per image to put them on a CD. At this point FPG has not made
a determination as to what they will be charging photographers to place images on-line.
Moffly points out that the on-line economics are entirely different.
JP. How is clip photography affecting your market?
Moffly. "I think clip photography is a broadening influence in the overall market.
What they are really promoting is the use of stock photography. As an overall
statement clip photography is very, very helpful. They are pushing the awareness of
the use of images where people may not have thought they could use an image. I think
it is very valid entry point into the market for clients."
Moffly. "What is our saturation point? I think the oversupply in the market has
driven, to some extent the phenomenal success of the royalty free market. There is an
over saturation of photography in the market."
JP. Does FPG plan to put out a clip disc?
JP. What about VCG?
[Other sources tell me that VCG will offer a "Royalty Lite" product either on-line, on
CD or both early in 1998. The images will be licensed for certain minimal uses for the
basic cost of the discs, but higher fees will have to be negotiated for advertising
uses. It is expected that Royalty Lite will really take off when it is tied to images
that are researched and delivered through an on-line catalog.]
Moffly. "As a group I think we would be foolish not to address what we essentially see
as a different price point in the market. We tend to use the derisive term of "clip
disc" for these products, but there is no reason for this derision.
"The producers of these products will very quickly, in the next year or so, be in the
JP. PhotoDisc is already licensing rights to single images.
Moffly. "Yes, they do say for $50 you can have this single image to do with what you
want, but that's not a licensing product."
JP. What makes you think they will move to the licensing of rights.
Moffly. "Because I think it is a logical extension of their business. Fifty bucks a
download for a medium resolution file is a terrible business, but a couple hundred
bucks for some kind of rights control product is a real good business."
JP. All the sellers in the traditional market would be a lot happier if we saw some
movement in that direction.
Moffly. "I think you are going to see the prices of these royalty free discs go up
this year. My guess is that you will see the web offerings of PhotoDisc come up in
price. (They have recently raised the price from $49.95 to $69.95.) Other players will
offer more premium oriented photography, fewer images on a disc, less compression and
higher prices. Their previous business model was built on a sale of $250 or $300 and
the reality is that when you bought that disc you were only going to use one image.
The true price for that image was a couple hundred bucks."
JP. In their effort to gain market share what is to keep them from keeping prices low
until they drive everyone else out of the business, and then raise the price.
Moffly. "Who knows, we certainly won't be out of business soon based on their pricing
JP. Are you seeing traditional clients use royalty free material instead of FPG
Moffly. "I think we would be fools to say that our traditional clients only use FPG.
What we are seeing is on the insignificant stuff where it really doesn't matter they
buy at a different price point. When they need the products that we have to offer they
The focus seems to be very much on the price point that produces a profit for the
agency. It doesn't seem to take into account that the price point where the
photographer can realize a profit may be markedly different, given the different costs
involved. The goal, according to Moffly, is to compete at all the different price
points. If small brochure sales start to go to "Royalty Free" or "Royalty Lite," that
fine. The agency will just compete at those price points.
One question to consider is will the photographers who can't get images accepted into
the premium catalog make those images available for the "Royalty Lite" products as the
only way of earning something from the rest of their production.
Discounting and Research Fees
Moffly did not seem to be as concerned about the in roads that Royalty free might make
into the market as he was about the trends to cutting fees for traditional uses.
Moffly. "What I think is more problematic to us (than clip), on a competitive level,
is the deep discounting that we are seeing from Tony Stone Images. They have been
engaged, really, on an international level in some very very systematic, deep
discounting, targeting at specific areas where they want to grab market share. They
are playing a different game. They are giving away the store to grab market share."
JP. It doesn't seem to me that they are picking up all that much market share.
Moffly. "No, it's foolish to me. I saw this in the stock film business. Everyone all
of a sudden went to no research fees. Nobody actually gained any more business by
waving the fee. What they succeeded in doing is upping their volume of research where
there are no opportunity costs for the photo editor to call five companies as opposed
to three. So the job volume goes up and the close ratios go down, and really as an
industry everybody loses and everybody suffers. The photo editor doesn't have to make
a decision up front. They can get everyone's pictures."
"We still have a research fee, but it is only for when you use research and don't buy
anything. It is a very important component. We want to be sure when clients they are
serious. Market pressures may change this, but by giving away the store you actually
gain much except to add to your own costs."
Style of Images They Want
I wanted to try to get an idea of how far the kind of images FPG is looking for and how
far they would be pushing the "cutting edge" in their catalog. Defining in words the
characteristics of this look is very difficult (which also points up part of the
problem editors are going to have in explaining to photographers what they want them to
shoot.). Finally, by way of example, I referred to the Tony Stone Images
"Interpretations" catalog. And we focused on that as a definition of what is "edge" or
Moffly. "We call that a 'hearts and minds' book. I think that 'Interpretations' book
is a marketing piece. TSI in my opinion is attempting to tread that fine line of
saying to the creative director 'we understand what you want,' 'we understand you and
this book is our affirmation of that understanding,' 'we have what you need.' At the
end of the day that book as a sales generator is not going to be a very big number.
But, our challenge, and TSI's challenge, is to excite that art director with
interesting, sort of edgy photography, and also give them the beef when that is what
is needed to fulfill a particular client's requirements."
"In the TSI context I think it is a great vehicle to imbed themselves in their client's
mind as "cool, hip, edgy, I've got it" and it ties in very nicely with their print
JP. But, their are two purposes for putting out a catalog, Selling Specific Pictures
and Getting Clients To Come To You To Buy Other Pictures. Which direction will FPG go?
Moffly. "The answer is that we will not be putting out an 'Interpretations' catalog."
JP. Is it fair to photographers to have to pay for the marketing piece that is aimed
at reaching for the "hearts and minds," but is really not going to sell their specific
Moffly. "That's a fair question for TSI, but at FPG we will not be asking our
photographers to do that. We expect a significant piece of revenue from each book.
We have a financial model about how much it costs to produce and distribute our books
and what we expect as a return on investment."
Opportunities For New Photographers
JP. Are you interested in accepting new photographers?
Moffly. "Yes, but even if you are a great young photographer, and you are full of hot
stuff and you come to FPG, we have someone we have been working with for fifteen years
who has saturated the file with their great photography. The poor young guy has very
little chance coming to us, or any of the major agencies, because we still have a very
good, balanced, mature list of photographers."