178 WHY PHOTOGRAPHERS NEED STOCK AGENCIES
October 23, 1998
Many photographers look to the global village future and
think that once we move to digital search and delivery for most stock photo
uses they will be able to negotiate sales worldwide without the aid of
A large digital file of the original will be stored in one location. After
proper permissions have been negotiated that file can then be made available,
at the click of a button, for the client to downloaded to his computer.
Such systems are in place at PNI, PhotoDisc and a few of the large
traditional stock agencies. It is becoming quite common to deliver digital
files, rather than film, to clients by next day air. These image files are
written to CD-ROM's or zip discs. As transmission speeds over the internet
improve there will be less need for this intermediate step.
However, even in the digital environment agencies will continue to supply a
number of important services, many of which are often overlooked by the
Some agencies supply a greater variety of services than others. Agencies
also charge photographers, or deduct from royalties, a variety of fees for
various services. There are so many variations that there is no industry
standard. In some cases the fees or percentage paid may be more than can be
economically justified, and photographers need to carefully compare options.
Before signing with an agency try to understand how the agency will handle
each of the activities listed below and how you benefit. In some cases, the
top producers tend to receive, proportionally, much greater benefit than the
average photographer. A few may get extensive production advice and the
small producers end up paying for this service that they never use, through
standard across the board commissions. Make a careful assessment in the
beginning of what you need and what will benefit you and there will be fewer
unpleasant surprises down the road.
Also understand what the agency will expect from you on a continuing basis.
Some have much higher expectations than others.
Always On Call. One important service an agency provides is
being prepared to respond quickly to the customer's need whenever they call.
The epitome is an on-line system that allows the customer to call at midnight
on Sunday evening, search the database, determine the price and download an
image for their next project in a few minutes.
While 24-hour-a-day, 7-day-a-week service is the new buzzword, immediate
response during normal business hours seems to be satisfactory for 98% of the
At the other end of the spectrum is the photographer who tries to handle
sales himself. It never fails that clients call when the photographer is out
shooting. They never call when he is in the office between jobs, or, if he
happens to be in the office to take the call, he is so busy with other work
that he doesn't have time to pull the images the client needs. It never
fails that the biggest stock requests always come on the busiest assignment
day of the month.
The important thing for the photographer to recognize is that the degree of
service offered clients varies from agency to agency. Most agencies are
constantly trying to upgrade their level of service.
Nevertheless, it is important when choosing an agency to have some
understanding of the level of service provided, and how that compares with
Quick Response. When the call comes in at 5:00pm getting the
image out by Federal Express for next morning delivery.
Defining Terms For The Client. It is becoming more and more
important to carefully define terms with the client before delivering images.
The existence of royalty free is causing many clients 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 ship images to clients..
With fax machines this is relatively easy. You get the client to sign off on
the terms before you make the delivery. In spite of its ease, many agencies
don't take this crucial step.
Marketing Systems. Marketing, or letting potential clients know
what images exist, is the major job of an agency. When mailing a marketing
promotion, whether postcard of print catalog, there are economies-of-scale.
Large agencies or large groups of photographers can reach more potential
buyers for a lower unit cost per buyer reached than small agencies or
An agency that can distribute over 100,000 catalogs on a regular basis, or
has a well known on-line site will probably generate many more sales than the
individual working on his own and trying to make clients aware of his
Customers like to be able to go to one or two sources rather than having to
search out hundreds of different sources for what they need.
Large agencies have their own print catalog, their own on-line service and
their own CD's. Smaller or more specialized agencies can offer the customers
one-stop-shopping by participating in products like the Stock Workbook Disc
that contains work from approximately 40 stock agencies. Photo buyers know
that by going to this one product they can see the best work of 40 agencies
rather than having to go to each agency separately.
Another part of marketing is identifying potential users and keeping them
informed of new offerings. This can be a very time consuming and costly
process. Potential buyers move often, so mailing lists need to be updated
Most agencies are testing new systems to try to get a market advantage. With
anything that is untried there is always a risk. Some new ideas won't work.
Assessing when a marketing system is outmoded is as important as adopting new
systems. Some believe that print catalogs will be replaced by on-line
catalogs in the near future. On the other hand, PhotoDisc, one of the most
successful digital marketing organizations, relies 100% on digital delivery
and spends as much, or more, on printed marketing materials than most major
stock agencies licensing rights to film.
As a photographer you need to be aware of the various marketing options
employed and determine whether this type of marketing is likely to aid in the
sale of your work.
The industry is in a transition and methods of marketing may change
dramatically in the next few years. Photographers need to test a variety of
options and stay flexible until it is clear which marketing systems will
dominate in the future.
Editing. When it comes to editing it is important to understand
the agency's editing philosophy. You may get a better sense of this by
talking to some of their photographers and getting their perspective on the
editing process, rather than relying totally on the statements from agency
In most cases the philosophy stays the same for rather long periods of time
(years), but in the past year or so we have seen some rather dramatic shifts
at some of the major agencies. These shifts have caught many of the
experienced photographers working with these agencies off guard and has
dramatically changed their ability to earn income from that agency.
You need to understand if they are taking images for catalogs only, or if
they are putting images in the general file. If images go in the general
file, what percentage of sales of the agency are made from the general file.
If the agency is distributing images overseas, is it the same images that are
selected for the U.S. market, or do they select differently? If they select
differently, do they only distribute catalog images overseas, or do they
send dupes of non-catalog images?
It is also important to understand how tightly the agency expects the
photographer to edit.
Maintain Databases. The digital environment provides the
potential for tracking a great deal of useful information that can aid
photographers in their decisions as to what to shoot. The greater the number
of images a seller licenses a month the better idea the seller should have of
what customers want to buy. Those with lots of information should be able to
give the photographer good guidance as to what to shoot, but to be useful
that information must be stored, analyzed and disseminated.
Many agencies have such information but currently don't communicate it well
to their photographers. The photographer wants to look for an agency that
will not only collect the information, but communicate it.
Learning What Clients Want To Buy. Many technically excellent
photographers want to sell what they like to shoot, rather than shoot what
the clients want to buy. This can be very dangerous in a saturated market
like we have today. Many agencies have excellent systems where editors and
art directors work closely with photographers, even attending shoots, and
guide their production.
On the other hand, certain agencies may have a shortage in certain subject
areas and be able to market a photographers work better than the agency that
is known to have a good selection of that kind of material.
Digital Delivery. Being able to FTP a digital file to the
client when needed.
Negotiating the Fee. The more one negotiates particular types
of usages the better idea they will have of what clients are willing to pay.
In addition, some people are naturally better negotiators than others.
This is particularly true when it comes to complex advertising sales where
the picture will be used in ads placed in many magazines and collateral uses
as well. The big agencies to get more opportunities to negotiate high
dollar sales. I know of one photographer whose agency recently licensed
rights to one of his images for $26,000 for one year use and $7,500 per year
for three years to another of his images -- all in a one month period. (The
photographer will receive 50% of these figures.) Big agencies that make
frequent sales of this type know the value of a large advertising usage and
have the courage to ask for decent prices.
Advertising agencies tend to like to deal with the major agencies for this
type of sale because they know they can trust the agency's rights control
system. They do not have the same confidence when dealing with small
agencies or individual photographers.
On the other hand, there are times when the same agencies will seek volume
over price. They may offer bulk deals and attempt to maintain customer
loyalty by always matching a lower price from a competitor. Once the
customer learns that an agency is willing to do this it becomes relatively
easy for the customer to drive down the price on future sales.
While agencies may occasionally get higher fees than the photographer would
be willing to ask, we have seen many cases where photographers ask for, and
get, more than the agency. In pricing unique images, photographers tend to
hold out for better prices, and lose the sale if the offer isn't good enough.
Seldom will the agency get double what the photographer would ask,
off-setting the 50% commission paid the agent, but very few photographers are
able to reach as many clients or make as many sales as an agent.
Weighing the price vs. volume issue is almost impossible to do in advance of
actual experience with a specific agency. Nevertheless, photographers should
watch this closely and recognize that it is a potential benefit offered by an
Determining Usage. There are at least two reasons for being as
specific as possible when determining usage. First, a client's initial
description of the usage is often not totally accurate. If you base the
price on that initial description you may be selling the image for less than
you could have received. It is important to get as detailed an understanding
as possible of the actual usage. People whose full time job is to negotiate
sales tend to do this better than photographers.
Second, you need to determine if this is a sale you are really comfortable in
making. Does the photographer want to sell to anyone, no matter what the
usage, or are certain buyers unacceptable to the photographer or models. Is
a model or property release needed for this use and is the one available
We gave some examples in our story on PhotoDisc that illustrate this point.
David Falconer took a cheek to cheek photo of friends of his at their 50th
wedding anniversary. He placed the image on a PhotoDisc CD-ROM which does no
checking of its users.
Whitaker Wellness Institute purchased a copy of the disc and used the image
in a brochure to market vitamins and other products entitled "Healing
Miracles". The wife was given a fictitious name and a quote that said, "I
was saved from a $300,000 heart transplant by using...."
Friends of the wedding couple received the brochure, recognized the couple
and started making jokes about the heart transplant and other "healing
miracles". The couple was upset and humiliated by this use.
In another brochure Whitaker used a Falconer photo of a young couple kissing
at sunset on a Hawaii beach under the title "Dr. Whitaker's Uncensored
Secrets to Sizzling Sex at Any Age..."
At Stock Connection a few months ago, a bank in Southern California wanted to
use one of our close-ups of a elderly couple for their brochure. They found
the image on the Stock Workbook disc. However, they had to come to us to
license rights and get film.
The copy they intended to use under this picture was, "My husband was laid
off from the aerospace industry and we were about to lose our home. XXX bank
gave us the loan we needed."
The couple had signed a model release, but they were also friends of the
photographer, and certainly hadn't anticipated their photo being used in
connection with something that implied this type of false personal testimony
and endorsement. The photographer was contacted and together we decided to
refuse to make the sale. When a selling agent is talking directly to the
client refusing to do business remains an option.
Photographers need to recognize that the way images are used may totally
mis-represent who the people are, particularly if there is no checking or
control on the users.
Additional Caption Information. In some markets - mostly
education and editorial - the client often needs additional information about
the image that is not supplied on the mount. Often the agent can supply this
information from their own knowledge, but if not they serve the client and
the photographer by tracking down this information so the sale can be
Due Diligence. Establishing the credit worthiness of a client
before a sale is extremely important. Given the nature of our business every
agency is often making sales to people in other states with whom they have
had no previous experience. Every agency occasionally has some uses on which
they are unable to collect, but proper procedures will keep these to a
In their recent contract, Tony Stone Images took the unprecedented step of
guaranteeing photographers that they would pay them their share of any
negotiated fee, even if TSI is unable to collect on the sale.
Invoicing. The paperwork must clearly define the use. This is
extremely important if we are to continue to be able to sell multi-use
rights. There must be a clear understanding with the customer as to what
rights were licensed, and exactly what the customer can legally do with the
material in his or her possession. There are an increasing number of
instances of clients claiming more rights than was understood from the verbal
The photographer has no protection if the rights were not clearly spelled out
in writing and even then it is often difficult to collect. When digital
files are delivered this can still be handled by faxed paperwork.
Collecting. Once the job has been invoiced there needs to be
systematic follow up until the invoice is paid. Many companies have policies
of not putting invoices on the payment list until they receive a follow up
call from the company that submitted the invoice.
Tracking Lost Sales. Agencies receive a number of requests that
don't develop into sales. Sometimes the price was too high, sometimes the
buyer finds a better image somewhere else and sometimes the project is
canceled. Following up on requests and determining why the sale was lost can
be very useful for future planning. Many agencies have procedures for doing
this. Few photographers have time to devote to this activity.
Checking on Usage. It is important to follow up after the sale
has been made and check on actual usage. Getting tearsheets, or tracking
on-line uses can be difficult, but we often find that in spite of our best
efforts to define the use at the negotiating stage the client actually made a
larger use than was authorized in the invoice. When this is discovered there
is an extra fee.
The ease of scanning, the difficulty in defending against misuse, and the
proliferation of the idea that all images should be "royalty free" is making
this step more and more important. Nevertheless, with careful attention to
what happens after the sale photographers can protect their rights and get
significant extra income from second uses.
Research. Having researchers that understand the special needs
of certain clients is where small specialty agencies really shine. They can
often out perform big general agencies because their researchers have a
better understanding of their specialty subject matter.
Their are all kinds of specialty subjects where this can be important
including: historical, fine art, medicine, biology, education, wildlife,
underwater, aircraft, cars, etc.
Preparing Images For Delivery. For people working from a large
general file this can be a very time consuming process, even if the file is
well organized. It is not unusual for a complicated request from a textbook
publisher to take a day or more to research.
As clients tend to request images specifically from catalogs, this process
can become much easier because the seller will be dealing with many fewer
images and it is much easier to organize them in a simple numerical order
rather than subject categories.
Image Return. Follow up to make sure the images are returned.
A small percentage are lost and photographers need to get payment for such
Refiling. Refiling of single images chosen from a catalog is
not that big of a job, but if 50 of more were pulled from the general file
for client consideration, the time to replace them in the file may be
substantial. Thus, the refiling job varies with the kind of clients you are
trying to sell to.
Remounting. Most images that are used need to be re-mounted
before they are returned to the files. This is a time consuming, but
Keywording. As on-line search is used increasingly to find
images, the quality of the keywording becomes extremely important. Most
agencies handle the keywording for their photographers. Keywording is a
difficult and time-consuming skill to learn, but the more images you keyword
the better you can do it.
International Distribution. Many agencies provide international
distribution of the photographer's work through sub-agencies and sometimes
wholly owned offices. Approximately 55% of the worldwide sales of stock
images are made outside of North America.
Legal Action. Instituting legal action occasionally to force
compliance with rules. This doesn't happen often, but the fact that it does
happen encourages buyers in general to be honest. Some agencies have
substantial collections for unauthorized uses.
Some large agencies have lawyers on staff, and most small agencies have
established an on going relationship with a lawyer to provide legal counsel.
Thus, when problems arise it is easier for them to get solid legal advice
than it is for photographer. Recognizing this fact, clients who might try to
legally intimidate the individual photographer are more reluctant to take the
same position with an agency.
Collecting through the legal process can be extremely difficult and time
consuming. Negotiation is the better course, if possible. In a recent
situation Price Costo used images of Galen Rowell and a number of other
photographers in in-store advertising without their permission. Rowell sued
for copyright infringement. As they moved toward trial there were 100
separate filings with the court, most of them multi-page, time consuming
reports to prepare. The case was finally settled out of court for an
In the marketplace, there is a constant need to pile contract provision on
contract provision and clause upon clause to try to protect oneself, and this
often falls short in the end.
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.
Some photographers believe that stock agencies should provide all these
services for 50% of the fees collected. Increasingly, agencies are saying,
"we can't make a reasonable profit if we only get 50% of the fee. Thus, if
you want to work with us we have to get a larger cut."
Photographers will have to decide, with all the costs they already have,
whether it is worthwhile to continue to produce and attempt to market stock
images with these added marketing costs. Their production costs already
include: cameras, film, developing, mounting, scanning (sometimes),
captioning, transportation, shipping, computer manipulation, responsibility
for model releases, litigation expenses, increased editing duties, risk of
loss of transparencies, insurance, office, office equipment and staff
Sometimes it seems that the photographer is paying for everything and the
agency is paying for nothing. But, the photographer will somehow have to
cover the costs of the above services if he chooses to market and sell
directly to the clients. The real question is what is a fair fee, or a fair
percentage for providing these services.
So maybe there is value in having a U.S. agency, but as digital selling
becomes more common can't that agency handle foreign sales without the
necessity of getting a foreign sub-agent involved in those overseas sales?
I believe foreign sub-agents will still be needed and legitimately entitled
to a share of the usage fee for the following reasons:
Language and Time. Probably the most important service the
foreign agent provides is being someone the client can talk to in their own
language and their own time zone. Regardless of the degree of digital
automation there will always be some need for human to human contact.
Marketing. The foreign agent knows the local buyers and
currently controls the market lists in their country. They will be the ones
to either encourage or discourage the use of various on-line services. If
they are cut out of the loop they will naturally discourage on-line usage.
Particularly during the early adoption phase of on-line usage there will need
to be client education. The foreign agent can facilitate that education.
Negotiation. If there is negotiation, which is to the seller's
advantage, someone will be needed who can speak the local language and who
understands local trade customs. In a negotiated deal it is important to
have an understanding of the going rates in the local environment.
Collecting. If all payments are not made by credit card at the
time of the sale (unlikely) someone will need to collect funds in the local
currency and arrange for transfer to the seller. Collections in the stock
photo industry are difficult in the best of times. They become virtually
impossible if there is not someone local who speaks the language to follow
up. The goal is not to get images used. The goal is to get paid for the use
Monitor. It will be 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 and that is only practical if brought in the country where the
infringement took place.
Service. There will be service issues in making sure that
everything is supplied in a format that can be used and in a timely manner.
Keywording. English keywords may not translate conveniently and
users may need guidance and support in order to learn to use on-line search
Research. Some foreign clients will want local agents who are
bi-lingual and understand the photo research process to do preliminary
research for them and forward a tightly edited selection.
Restricted Use. Some customers will want to restrict
competitors from using an image during the duration of their license.
Clients are willing to pay large fees for such restricted use, but this will
need to be negotiated and carefully monitored.
Model Releases. Model releases may need to be checked. In some
countries laws vary as to when releases are needed to publish pictures of
public buildings or private homes. 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
into trouble. Various professional organizations are trying to find ways to
identify divergent rules and harmonize the rules internationally.
Local Laws and Customs. The foreign representative is aware of
local laws and customs that regulate the industry in their country.
Copyright laws are different.
Analyzing Data. The digital environment will provide a lot of
data about client needs that was never before available. This data is
useless unless analyzed. Proper analysis and dissemination of the
information can enable photographers to do a better job of producing images
that will be needed in the future and lead to less wasted effort of producing
The duties of the foreign stock agent may change. In a few years many may no
longer maintain large files of images. They won't have to worry about
getting transparencies back and re-filing them, but they will need to find
ways to be sure that the client doesn't make unauthorized uses of the digital
files that have been delivered. This should result in staffing changes, but
there will continue to be a need for foreign agents.
My estimate is that 55% of the market is outside the U.S. Many of these
sales are for images produced within the U.S. Some U.S. photographers make
as much as 70% of their gross income from sales outside the U.S. Do not
avoid the foreign market.
Typically, the photographer gets 25% to 30% of such sales, if their U.S.
agency is handling the distribution through a foreign sub-agent. The actual
return can be even less if catalog costs and dupe costs are taken into
The reverse will be true for European, Asian and South American photographers
who want to sell in the U.S. Their local agencies will become the primary
agency that handles the scanning, keywording and other preparation of the
image for the digital database. The U.S. agency will provide the negotiating
and collecting services of a sub-agency and remit monies to the foreign