176 TONY STONE GOES ONLINE
October 14, 1998
Getty Launches Full Web Commerce for Tony Stone Images
The long awaited Tony Stone images web site is now on-line at www.tonystone.com .
The interface is very attractive and user friendly, and the speed of search (on my
computer at least) is excellent. Searches are possible by using keywords,
photographer name or image number. The site also offers on-line payment and
According to TSI, at launch the site had over 40,000 images, with more being added on
a weekly basis. These images were from approximately 900 photographers.
We haven't had time to search for 900 different photographer's, but some of the TSI
photographers with large numbers of images on the site are: Bruce Ayres (851), Lori
Adamski Peek (745), Ken Fisher (360), David Hanover (357), Charles Thatcher (333),
Doug Armand (322), Terry Vine (312), Jon Riley (284), Donna Day (257), Dennis
O'Clair (255), Christopher Bissell (228), Nick Dolding (212), Darrell Gulin (202),
Steven Peters (199), Donovan Reese (198), Ed Pritchard (194), Walter Hodges (165),
Bruce Forster (160), Vera Storman (157), Timothy Shonnard (157), Dan Cox (143), Paul
Harris (135), Stuart McClymont (123), Mitch Kezar (116), Don Smetzer (114), Phil
Borges (108), Peter Poulides (105), Ben Edwards (91) and John Lund (90).
Images Not Included
More interesting are the number of images not on the site and the photographers not
included. When Getty purchased TSI in 1996 they told stockholders that there were
40,000 images in the Master Dupe Collection. Since that time they have been telling
stockholders that they have been adding new images to that file at an approximate
rate of 20% per year. Thus, why is the total number of images on-line not closer to
60,000 rather than 40,000? A major part of the answer lies in the number of
photographers who have not signed new contracts, and who they are.
Major TSI photographers with zero images on-line include: Art Wolfe, Frans Lanting,
Jake Rajs, Nicholas Devore, Tom Bean, Tim Davis, Renee Lynn, Andy Sachs, Brian
Bailey, Greg Pease, Penny Gentieu, Kevin Kelley (World Perspectives), Zigy Kaluzny,
Wayne Eastep, David Muench, Pat O'Hara, Deborah Davis, David Frasier, Will McIntyre,
Stuart and Michelle Westmoreland, David Hiser, Gary Braasch, Randy Wells, Paul
Chesley, Chris Sanders, Eddie Soloway, Mark Segal, Bob Daemmrich, J.W. Burkey, Vince
Streano, Natalie Fobes, Bruce Hands, Joe Pobereskin, Joe Sohm, Don Bosler, Julie
Fisher, Frank Herholdt, Jack Dykinga, Larry Ulrich, Lucien Clerque, Frank Herholdt,
Chuck Pefley, John Lawrence, Stewart Cohen and Tom Alexander.
We understand that there are other photographers who have images on the site, but
haven't actually signed the new contract. These include: Ron Sherman (3 images),
Nick Vedros (7), Vedros & Associates (4) and David Madison (499 images).
In addition there are some Liaison photographers who have had some images accepted
into the TSI catalog, but have no contracts with TSI at all. These include Ron
Krisel (86 images) and Mark Romine (13 images). It is presumed that if they haven't
signed, they will be getting 50% for any sales made of their images unless Liaison
is being given a percentage in which case these photographers might be getting 30%
of the gross sale price.
Of course, some of the reason for only 40,000 instead of 60,000 images on-line could
be that TSI has decided that some of the older images in the Master Dupe Collection
are no longer marketable. We know that is the case with a limited number because
not all photogrpahers with images in the MDC were even offered new contracts.
However, unconfirmed rumors from TSI sources indicate that as many as 15% of the
photographers offered contracts, which could be a total of around 150, have not
signed. Because these photographers are among TSI's top producers they might
represent as much as 25% to 30% of TSI's best selling file.
TSI photographers were given a deadline of September 15th to sign the new contract,
but many have lawyers still negotiating on their behalf because they are unhappy
with many of the provisions of the new contract. Not the least of these is the
reduction of their royalty percentage from 50% to 40% for sales made in their home
It is our understanding that a few of the major photographers who have signed, and
who have images on-line, particularly a group of Los Angeles based photographers,
got some significant compromises in contract terms. No one seems to have any
knowledge of the specifics or these changes.
One of the key issues in settling with the existing holdouts, is whether TSI can
come to an agreement with the photographers that not only allows them to market the
existing Master Dupe images on-line, but encourages the photographers to continue to
It should be noted that the existing contracts remain in force until the new
contracts are signed, and thus their is no problem with TSI continuing to license
Master Dupe images as a result of print catalog and file search requests. The only
thing that is being held up is the licensing of some of these images on-line.
As a result of this contract, and other signals being sent by Getty management, many
photographers, both those who are unsigned and many who have signed "image
exclusive" agreements, are beginning to look around for other ways to market their
work. The negative signals from the photographers point of view include:
- Getty's constant emphasis to the stockholders that their goal is to decrease
the photographer's share of gross sales. Their goal is to reduce their "Costs of
Sales" and they argue to stockholders that 98% of this cost comprises amounts
payable to contributing photographers and cinematographers.
- The company strategy to increase the sales of wholly owned material which has
risen from 5% a year ago to over 19% today. At this point it seems that most of
this rise has been due to sales by PhotoDisc, Allsport and Hulton Getty, but TSI
photographers believe their turn can't be far behind.
- The increased arbitrariness of the editing process and the difficultly of
getting very expensive productions into the marketing stream.
- The initial offer to pay photographers who signed by September 15th for all
uncollected sales up to that time has raised more issues than it has solved.
Stockholders have been told that if every photographer were to have exercised this
option the one-time cost to TSI would have been about $5 million. Sources within
Getty indicate that number might have been closer to $10 million. We know of
photographers who are owed in excess of $50,000 going back as far as 1994 and 1995.
The first question is why so much bad debt? This seems to be totally out of line
with normal ratios in the industry. Secondly, many photographers who signed on
time, seem to be having trouble finding out how much they will be paid, and when.
In addition, it appears that all these liabilities are not being paid on a dollar
for dollar basis. Some photographers are being told that they get 100% of debt
incurred in the last few months, and a percentage of those that go back a few years.
However, exactly what these percentages will be has not been spelled out in writing
and this has tended to make photographers suspicious of management.
- Many photographers who signed the contract quickly believe they were purposely
misled by TSI when the letter that accompanied the contract said, "The agreement has
already been endorsed by Tony Stone Images' consultative photographer panel (the
Photographer Advisory Group) in both the U.S. and Europe." In fact, it came out
later that many PAG members had serious misgivings. Photographers are now unsure
how much they will be able to trust TSI and Getty in the future.
- The editors with whom must work on a day to day basis were the main point of
contact for the recent contract negotiations. As a result, in many cases an
adversarial relationship developed between the editor and those who were
holdouts, as well as many who have already signed. As a result, many photographers
are concerned about re-establishing good working relationships in the future.
To add to their problems the stock price yesterday was $9.37 per share having
dropped over 45% since the end of September. During the summer Getty reached a high of
$28.25 per share, but its low a few days ago was $8.62.
Looking At The Site
We've spotted a few minor glitches thus far. If the user wants to print out some of
the information pages such as the history of Tony Stone, or information about model
releases, the text on the right hand side of the page gets truncated. A minor
irritation, but easily fixable. Somewhat more serious is that some photographers
are reporting that a few of their images are not oriented properly.
The model release information may also be somewhat confusing or misleading. In good
salesman language they lead with, "Choosing one of our property- or model-released images
means you don't have worries or extra work when using our pictures." If I were a
photo buyer that would make me think that everything is "fully released"
and I don't have anything to worry about when using any of these pictures.
However, they go on to cover themselves by saying, "While Tony Stone Images controls
access to these images and licenses them to the public for commercial purposes, Tony
Stone Images does not possess model or property rights for the people, property or
places in every picture. If in any doubt please contact a web client service
specialist who will be happy to advise you on matters."
The problem is that many releases won't cover uses that may be considered defamatory
by the individual. Many users who are inclined to make what others might consider
defamatory use of an image don't consider what they are doing defamatory.
Consequently, these users don't think they have a problem. It seems likely that
some of this will be worked out in litigation and under the terms of the new
contracts the photographers whose images happen to be involved get to share in the
cost of that litigation.
We will do more analysis of the actual workings of the site in coming weeks.
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Rules for supplying feedback
To add to your most recent story...yesterday I had 3 images on the TSI
web site and today there are zero.
I want to correct one item in your piece with regard to Liaison Photographers.
Liaison Agency had their photographers sign a TSI contract last March to get
them into the fold of TSI. At least I know that I signed and was told others
did as well. Therefore we are entitled to the same commission as all TSI
photographers without Liaison taking any percentage of the sale. Even before signing this
contract I was paid money for images TSI sold without anything being taken by
Liaison. I hope this clarifies things. I also have 78 images on the TSI Web site
(two of which are not mine which has be freaked out) and I have not signed the
new TSI contract.
Could you clarify a point in the new TSI contract? When it is stated that
photographers will be paid for uncollected sales, what are uncollected sales?
Are these sales that are good sales where payment has not yet been received or
are these sales that were made, the images used and the client never paid it's
bill? If it is the latter is this estimated amount of $5 to $10 million typical
of an agency of this size?
Jim Pickerell's Response
We have been unable to get a precise answer to this question from Tony Stone Images.
More to the point, Tony Stone photographers don't seem to be able to get a precise
answer to the question. Most who have been able to get some kind of a number as to
what they will be paid have discovered that is way below what they expected to be paid
when they signed the contract, but they can't get anyone at TSI to explain how the
number was calculated.
It is believed that this figure covers both categories of payments that are
described above. According to photographers some of the obligations go back years but
the bulk of what is owed is probably for fairly recent sales. No photographer that I
know has any idea as to what the total might
be in either category and TSI is not telling. If TSI has gross sales of around $70
million and they pay out 39% of it to photographers that would make the total pay to
photographers a little over $27 million annually or $2,275,000 per month.
If all their clients took on average over four months to pay their bills that might
explain over $9 million. However, keep in mind that according to the contract on
the 25th of each month "TSI will pay the amount due ...in the month ended three
(3) months prior to the start of the relevant Payment Month..." Thus, payments
on October 25th will be for sales booked on June 30th or before. To come up with $10
million we would have to go back four months from here to February and say that on
average clients who book their sales in February don't pay the agency until June and
then the agency pays the photographer for those sales in October. Based on my experience
in the industry, I don't think the "float" is this bad at most stock agencies.