Tony Stone Goes Online

Posted on 10/14/1998 by Jim Pickerell | Printable Version | Comments (0)

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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

delivery.

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

territory.

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

produce.

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.

Photographer Concerns

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.


©1998 SELLING STOCK

The above copyrighted article(s) are for the sole use of Selling Stock subscribers and may

not be copied, reproduced, excerpted or distributed in any manner to non-subscribers without

the written permission of Jim Pickerell, the editor. For subscription information contact:

Selling Stock 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-251-0720,

fax 301-309-0941, e-mail: jim@chd.com.

Rules for supplying feedback


Feedback:

Ron Sherman

To add to your most recent story...yesterday I had 3 images on the TSI

web site and today there are zero.


Feedback:

Joe Polillio

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.


Feedback:

David Stover

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.


Copyright © 1998 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 301-461-7627, 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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