SAA Investigative Shopping

Posted on 3/30/2004 by Jim Pickerell | Printable Version | Comments (0)

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SAA INVESTIGATIVE SHOPPING




March 30, 2004


Exploring Usage Fees


In late 2003 the SAA (StockArtistsAlliance) began an ongoing study of Rights Managed
usage fees worldwide. Their initial work has uncovered some surprising price
differentials.


In one of their initial investigations they went on the Getty Images site and priced
a FoodPix RM image for an Intranet use, for educational purposes, for one month.
They found that UK based buyers were asked to pay significantly higher prices than
U.S. buyers to license rights for this use - regardless of the country where the
image was to be used.


For example, if the user is based in the U.S. the fee for this Intranet Educational
use for one month is $120. If the buyer was ordering the images from the U.S., but
wanted to use it on a UK site the price was still $120.


However, if a buyer was located in the UK, and interested in using the same image
for the exact same usage, the price would be 330 pounds or about $560, regardless of
whether the image was to be used in the UK or on a site in the U.S. Prices in
France, Brazil and New Zealand were reasonably comparable to the U.S. prices with
France being slightly higher.


The only usage type where prices seemed to be relatively consistent across all
countries was editorial use.


It is surprising that prices are higher in the UK than in the U.S. because
for years the opposite has been true. But even more unusual the price
is based on where the BUYER is located, not where the USAGE will occur.


The researcher contacted the UK sales team and spoke to three different Getty
representatives to ask why buyers are charged so much more in the UK than in other
countries to license RM images. All the Getty sales representatives explained that
the difference is consistent with the higher costs of other goods in the UK such as
cars, CD's and shoes and encouraged the buyer to use RF if the price was too high.


The SAA then asked Getty management for an explanation and was told that "specific
regional pricing is partially based on local economic and market conditions and that
pricing is subject to continuous review to achieve fair and equitable pricing in all
regions."


Some photographers believe that Getty is intentionally driving small users to RF
rather than making RM images available for small uses at more competitive prices.
Given that Getty offers both RF and RM this pricing differential might make good
corporate sense if their goal is to encourage more buyers in the UK to take a hard
look at RF. On the other hand, if they are selling too much RF relative to RM in a
particular market (as may be the case in the US) they can lower the RM prices in
that market to try to encourage more RM use and bring the overall use back in
balance.


3rd Party Distribution Splits


Another reason for licensing a Foodpix image from the Getty website was to determine
what share of gross revenues the photographer was making due to the sub-distribution
split. SAA paid $120 for a license that netted $30 to the photographer. Thus, it
appears that Getty Images' commission is 50% of the gross license fee, the
photographer then splits the balance received by Foodpix, and nets 25% of the gross
license fee.


The photographer was unable to obtain this information by inquiring of PictureArts
(Foodpix) directly as it was described as "proprietary". SAA contacted Foodpix
with the results of its license and asked for confirmation of the commission paid to
Getty as a "sub" distributor. They were told that the terms of the sub-distribution
agreement were proprietary.


While Getty's pricing strategies were the first to be explored, the SAA intends to
purchase images through other agencies in other parts of the world to learn more
about price variations, sub-agency splits and how quickly sales are reported to
photographers.


Copyright © 2004 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.  

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