MPCA Moves Ahead

37

September 20, 1996 -

By: Jim Pickerell

The ASMP board met in Orlando on September 18th and 19th. They spent most of
the afternoon of the 19th considering the referendum results and discussing the
future of MPCA. I was invited to the meeting to help the board try to better
understand the Petitioners position.

The board stressed that they heard the Petitioners concerns, had carefully
considered them, and tried to make some accomodations to them. They also
pointed out that they were in a no-win situation. If they did what the 696 who
voted for the Petitioners position asked, they would upset those who voted for
the board's position. Margo Taussig Pinkerton pointed out in the meeting that,
"Generally people who don't vote in an election either are satisfied with the
status quo, or are not upset enough by it to take the trouble to vote." Since
only about 19% of the total eligible to vote actually voted for the Petitioner's
position, by that logic most members support the board's position.

My Presentation

Prior to the beginning of the discussion I presented the following memo. My
goal was to try to offer an "olive branch" and find some point of compromise
between the position's of the Petitioners and the Board. It was my hope that we
could find some common ground that a majority might be able to live with and
from which we might begin to rebuild some mutual trust and respect for each
other's position.

Memo

First, I want to point out that many of the photographers who supported the
petitioners resolution believe that the results of the referendum are a clear
mandate for the board to immediately discontinue funding of MPCA. They will not
be satisfied with anything less.

However, others that voted for the petitioners resolution might be willing to
accept continued funding of MPCA for a while longer provided:

- the board publically acknowledges that it had an incorrect assessment of the
level of member support for MPCA prior to the vote,

- the board demonstrates through immediate action that it is reevaluating its
positions on MPCA,

- the board makes some actual operating changes in MPCA in the near future,
and,

- the changes are significant enough to indicate that the board has heard the
petitioners concerns.

Changes that might encourage this second group include:

1 - The establishment of a realistic goal for sales between now and November
1997. This figure should be published in the near future and the board should
agree that if this goal is not reached, or exceeded, by the November 1997 board
meeting, ASMP will stop funding MPCA. If the goal is not reached, ASMP would
then require that members who wish to continue to participate in MPCA fully fund
future MPCA activities after November 1997.

Note: To cover Dick and Victoria's salaries alone gross sales in the next year
would need to be somewhere in the range of $400,000.

Dick spends 10 days of his time - 1/25th year - estimated salary & benefits at
$125,000 - 1/25 = $ 5,000

Victoria spend half time - estimated $ 30,000 salary estimated salary
& benefits $30,000 1/2 = $15,000 See Correction at Bottom

ASMP gets to keep about 5% of gross sales (Actually, I learned in the meeting
that it is 10% which would mean $200,000 gross sales to pay back the above
costs.)

2 - Restructure the MPCA board so that the majority of directors are not members
of the ASMP board and that no more than two or three ASMP board members are also
on the MPCA board. Attempt to recruit some people with stock photo experience
to serve on this board.

3 - Get the CCC moving toward developing the system for collection and
distrubution of fees for secondary rights. This could potentially benefit a lot
more members than primary rights selling is likely to benefit. Writers have set
up an organization called The Authors Registery that recently paid out more than
$150,000 in royalty payments for photocopy and electronic use to writers around
the country.

4 - Raise the participation costs to MPCA members somewhat in an effort to begin
covering some of ASMP's ongoing administrative costs for this project. This way
those who stand to benefit from primary rights sales more fully fund the basic
operational costs.

5 - Restructure MPCA so the focus is less toward image acquisition and licensing
primary rights, and more towards just licensing secondary rights.

6 - Discontinue Matt Herron's world tour to sign up foreign photographers and
organizations for MPCA.

7 - Seek outside financing for MPCA.

The Discussion Begins

The MPCA discussion started with Dick making a presentation of one-hour and
forty-five minutes outlining the history of MPCA and concentrating on bringing
everyone up to date on recent developments. I will not spend a lot of time on
history, but will try to focus on new developments that may not have been
reported previously.

The purpose of MPCA is to:

1 - Influence behavior (of the buyers) by direct participation in the
marketplace.

2 - Circumvent, to the extent legally possible, the government regulations
which prevent associations from participating in collective bargaining.

MPCA is currently acting as an agent for 680 individuals. Dick hopes to
increase that number to at least 750 in the next year and maybe 1,000. About
180 have submitted images at this time. This is up from about 100 in May.

The alliance between MPCA, AGT and CCC now has the offical name of MIRA. MIRA
is the Spanish word for "behold" and is an acronym for Media Images Resource
Alliance.

The MIRA Alliance plans to launch an advertising campaign by mailing a brochure
to a total of 6,000 buyers in October. The mailing will go to a qualified list
of editorial, educational and multi-media users as well as about 2,500 graphic
design firms. The buyers will be asked if they are interested in having a
catalog disc which will work on either MAC or Windows and which has 5191 images
on it. The master disc is complete, ready for pressing and is being reviewed by
Matt Herron and Dick Weisgrau.

This new promotion is aimed, not at producing huge sales, but at establishing
the MIRA identity and getting a toe hold in the industry. MIRA believes that
once they begin to promote the database sales will develop; photographer's
confidence in the MIRA Alliance will be built and more photographers will sign
up and want to provide more images for the database.

Anyone wishing to purchase rights to an image on the catalog disc will get
fulfillment from AGT. They will negotiate rights with CCC and receive a license
based on the set of pricing approvals provided by all photographers whose images
are included on the disc. All agreements are based on ASMP model forms. CCC
will handle collection and will pay photographers directly 30 days after receipt
of payment.

The MIRA partners plan to spend over half-a-million dollars in the next year to
promote the database. All but $23,000 of this will be expended by AGT and CCC.

MPCA's sole responsibilities in the MIRA Alliance is to:

1 - Recruit photographers into the system.

2 - Solicit content.

3 - Coordinate getting CCC the pricing information the photographer wants them
to have, and any restrictions the photographer wants to place on usage.

The photographers MIRA represents make their own decisions concerning
concerning the prices they want to charge for usages and the type of
organizations to whom they will allow their images to be sold. The
photographers may also pull out at any time with thirty days notice. Up to now,
in order to control the price of their work, photographers have had the right to
approve or disapprove general price lists. Now, each photographer can take a
base price list and modify it by a percentage, on an item by item basis.

MPCA's costs for the next fiscal year are budgeted at $23,010 plus an
additional $20,000 that was authorized in the board vote. MPCA currently has
about $30,000 cash on hand which came mostly from annual dues paid by MPCA
members last year. MPCA dues have not been paid this year, but any dues
collected will be offset by the right to a certain number of free scans.
Therefore, technically, dues paid this year should be a wash. The new budget
does not provide for an editing function by MPCA.

One new concept that was announced is a plan for an on-line database by
mid-1997. This will also include the ability for editorial photographers to put
new picture stories on-line and market them worldwide. Negotiations for usage
of such stories will be handled by CCC in conjunction with the photographer.

Digital marketing and licensing was never in the original plan, but MPCA
changed its approach fundamentally in October 1993 as they recognized that this
was the way to go.

MIRA will probably produce more discs, but, at this time, they do not plan to
build an extensive library of disc. Through extensive research AGT has
determined, and MPCA agrees, that they must be prepared to do licensing through
the internet. Thus, by mid-1997 the will have the on-line licensing operation
in place. The technology for this is currently in place, but they have decided
not to move ahead with the on-line service for a few months in order to give CCC
time to get up to speed in the handling of primary licensing.

It was also reported that CCC has hired at least one new person who will deal
with the negotiations of rights and it is believed this person has stock agency
experience. However, at the board meeting they were unable to supply the name
of the individual or any details about her experience.

Dick said, "Now, it has to be proven whether the system that has been developed
works."

Options Outlined

Dick Weisgrau outlined the following three options that he felt were open to
the board.

1 - Take MPCA as it exists and sell it. There are parties who were interested
in purchasing it at one time and probably still are. ASMP could probably
arrange to get some percent of revenues for a long period of time and might be
able to get most of their investment to date back.

2 - Support MPCA to the degree the board sees fit. This might include
increasing financial support.

3 - Follow the letter of the petitioners language. But if you choose to do
that the following will happen:

A - The enterprise will fail.

B - The board will look foolish.

C - I (Dick) would judge such an act irresponsible and if you choose to do it
I would no longer be able to work with the board.

D - Vic Perlman interjected that the board would also bebreaching its
fudiciary responsibility by not trying to get the best deal they could get.)

[In retrospect, I think there were other options in addition to the three
outlined. I think some combination of actions along the lines of my proposal is
at least one other option, and there may be other variations. Nevertheless, I
did not make that point at that particular juncture and I believe the board went
into its discussions focused on these three options.]

Discussion By Board Members

At this point the board began what turned out to be an hour and forty minute
discussion prior to the vote. A motion was made early on in the discussion, and was
revised
several times before the vote. I include the length of discussion time here to
emphasize the point that much careful consideration was given to the decision.
From my watching the board in action there is no question that they are trying
to do what they believe is best for all ASMP members.

David MacTavish introduced the following motion. In introducing it he said,
"What we have done (with MPCA up to now) is correct. We should take a stand
that may not be popular. MPCA is the only way." (What I have printed below is
the final version of the motion.)

Motion

That the board authorizes that the executive director and legal counsel can
expend the time necessary to protect and promote the assets of ASMP and MPCA
with the MIRA Alliance and may expend, with executive board oversight, and
development of performance goals to be reviewed by the board at the Spring 97
board meeting, up to $20,000 in fiscal 97; that staff can respond to inquiring
parties regarding MPCA; that MPCA may keep in the ASMP offices such materials
and furnishings as currently exist.

(The executive board has been charged with developing some "performance goals"
as a way of measuring what results should be expected from the new marketing
effort. The board indicated that the executive board would probably establish
these goals in the near future and report them to the membership immediately
rather than waiting for the next board meeting in the Spring of 1997, but they
did not work that language into the motion so it is not required. The $20,000
authorized expenditure will probably be taken from the reserve fund.)

Comments

The following are some comments made during the discussion prior to the vote.

Matt Herron: The original motion did not have any provision in it to provide
additional funds that might be needed to recruit new members for MPCA. Matt
pointed out, "My problem with the motion is that we have an obligation as a
partner in MIRA to actively recruit. The result of the (referendum) vote gives
us the right to do this. Our fiduciary responsibility is to set goals and drive
forward. The petitioners have legitimate concerns, but we are just starting to
see results from our efforts so far."

Paul Bednarski (chapter presidents representative): "On behalf of the chapter
presidents, I want to give MPCA a vote of confidence."

Stephen Seeger: "The power and clout we have (through MPCA) is amazing. This is
just the first permutation. This is the time for us to invest our energy and
capital, not to pull back. Many of the petitioners seems to have a myopic,
simplistic view that MPCA is a stock agency. It is so much more. It is a
vehicle that can change the assignment industry. We have put a team together.
Through MIRA we have the collective clout that can go after infringers. MIRA
goes much further that what agencies do, or can do."

"MPCA will handle sales for you in your retirement and for your estate. MPCA
will be able to handle copyright registration of images. Stock agencies could
use the MPCA system to register images so they can be tracked."

Dick Weisgrau: "The copyright office has picked the MPCA system to be one of the
beta testers of new image protection systems." When asked if he could use
additional funds if they were appropriated he commented, "Appropriating $20,000
for additional recruiting would go a long way."

Eugene Mopsik: "I'm in favor of the motion. We have never used the percentage
of membership that would be helped by a particular program as a criteria as to
whether we should fund it or not. We have looked at programs on their merits.
Money needs to be made available so we can actively recruit photographers for
MPCA."

"Currently there is no plan for the use of the funds we want to appropriate.
We can allocate the funds, but before we expend any of them there needs to be
demonstrable need and a budget for how they will be expended." (It was agreed
by the structure of the motion that this would happen.)

Don Luce: Don asked Victor, "Can MPCA fulfill its obligations to the Alliance
through passive recruitment? Are we required to actively support?"

Victor Perlman: "We have a legal responsibility to our fellow participants in
MIRA. They might have claims against us." (Dick commented that he felt it was
unlikely that the partners would sue MPCA if for any reason it was forced not to
fulfill its obligation although he did acknowledge that legally they did have
that right. He also pointed out that with six months notice any party in the
alliance can terminate the relationship and remove itself from the alliance.)

Les Reiss: "We have to do what we would think is best for the members."

Dick Weisgrau: "Imagine five years from now that MIRA is successful. Maybe we
will have made millions in sales. Who knows? MPCA has to be a game changer.
Suppose we have operations that will give photographers 70% and the right to set
the price on their work. Won't MIRA have a better chance of attracting
photographers at that point than the stock agencies that are left and which
don't offer such favorable deals? At that point we will have clout and
photographers will want to support MPCA.

"The argument that MPCA is not currently viable is not valid. ASMP has
supported many operations that have not developed as we had hoped. Our job is
to try to make things better for photographers, not just support projects that
are insured of success.

"In the last five years we have spent $250,000 trying to change the
registration rules for copyright. It looks like that is nearing completion, but
that doesn't mean that every photographer will take advantage of it and register
his work.

"ASMP's job is to do the impossible and make things better for photographers."

"I question the rationality of the Petitioners." I believe they are led by a
"group of people who for their own reasons set out to destroy MPCA."

"ASMP needs to try more and keep working at it."

Dick Weisgrau: (later) "Corbis is only about a year ahead of us."

Vote

The above motion, offered by David McTavish, passed with 12 For and 2 Against. Against
were Greg Kinney and Rhea
Rippey. (In discussions with Greg Kinney after the meeting he indicated that
both he and Rhea had voted against the motion because they felt there were still
some issues that needed to be discussed at the time of the vote. However, they
were both substantially in agreement with the position the majority took.)

After the vote

Forrest McMullin: "What I believe the board has just done is choose to disregard
the petitioners referendum. Does anyone see this differently?

Margo Taussig Pinkerton: Margo responded, "We have tried to address some of the
petitioners concerns by providing some accountability, by setting goals and by
setting time tables, but we choose not to accept all of the petitioners wishes.
We also did not reinstate the board's previous stand."

Dick Weisgrau: "The board did not reject the petitioners position. It did what
it was charged to do. It made decisions as to what it deemed to be in ASMP's
best interests. I hope it will not be necessary to use the $20,000."

Board Considers Positioners Positions

It should be noted that the ASMP board did consider the suggestions I offered
prior to the beginning of the discussion on MPCA, and it believes it was
responsive to my suggestions in the following ways.

On Point 1

The board believes they were taking into account the Petitioners request by
voting to develop "performance goals" before expending up to $20,000 in an
effort to recruit new members.

On Point 2

New board member Jim Scherer raised the issue about restructuring the MPCA
board in order to bring in stock photo expertise. In the discussion it was
concluded that this was unnecessary partially because MPCA's role in the MIRA
Alliance is now so minimal. MPCA's major role now is to recruit new
photographers and encourage them to submit images. Without a formal motion or
vote the board concluded in their discussion that the ASMP board was in the best
position to manage MPCA.

The agreement that MPCA has with CCC says that once CCC has primary rights
working they will then begin to set up a system for collecting secondary right.
The implication was [though this was not stated in exactly this way] that if,
for some reason the primary rights system doesn't work, CCC would not be
interested in developing a secondary rights system for photographers. Dick also
indicated that he did not believe the writers system (The Authors Registery)
will really work. He pointed out that such a system would be extremely complex
to set up and require the expertise of an organization like CCC to manage.

On Point 4

Since their goal is to dramatically increase participation in MPCA the board
felt it would not be wise to raise the costs of participation at this time.

On Point 6

Matt Herron pointed out that with the exception of some efforts in Canada, he
has been going out of his way not to recruit foreign photographers for MPCA.
Instead he is trying to encourage local photographer organizations in the
various countries to build their own organizations that are similar in structure
to MPCA. It is then hoped that eventually there will be an alliance of all
these organizations "cooperating to protect photographer rights in the world
marketplace." He pointed out that, "As I have suggested more than once, I
believe this is the only way creators will ultimately be able to stand off the
huge corporate forces bent on monopolizing copyright."

He acknowledged that there has been considerable misunderstanding in foreign
countires of ASMP's intentions, but now they have support in both Japan and
Australia and are much better known in Europe than they were two years ago.

My View:

During the discussion phase Margaretta K. Mitchell asked me if I had heard
anything during the discussion that caused me to change my opinion of what
should be done about MPCA. I said NO. While I had received some new
information relating to the future plans and the degree of promotional effort
the partners intended to put into trying to make MIRA work, it still seems to me
unlikely that MIRA will produce enough sales for photographers to be judged
by them to be successful. I also pointed out that if the photographers
themselves wanted to continue MPCA as a private organization - separate from
ASMP - I, and I felt most of the Petitioners had no problem with them continuing
to operate MPCA as long as they provided the funds necessary for its operation.
This was not considered a satisfactory response by Margaretta, and I believe by
most of the board members present.

CORRECTION

In my article, " MPCA Moves Ahead ", I published an estimate salary
for Victoria Satterthwaite. That figure was purely speculative on my part, and I have
learned that it was completely inaccurate. I regret publishing this misinformation
and apologize to Ms. Satterthwaite for any embarrassment or damage that I may thereby
have caused her.

In the paragraph where these figures were published I was trying to estimate the
minimum cost of staff time for the MPCA project. Higher salary figures would have
actually strengthened the point I was trying to make, but I was trying to be fair to
MPCA and not push the costs too high. I want to repeat that I had absolutely no way
of knowing Ms. Satterthwaite's actual salary, and I did not mean for anyone to
interpret that this was necessarily all she was earning. It may well be much higher
than my estimate. I regret having used this figure in an effort to try to illustrate
costs of MPCA. Again, I apologize to Ms. Satterthwaite for any embarrassment or
damage my actions have caused.

Jim Pickerell

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