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RANDOM THOUGHTS 12
October 15, 1999
New CEO At Liaison
Richard Ellis, former Reuters photographer and one of the founders of
Newsmakers has been named CEO at Liaison effective October 4th. George
DeKeerle is Liaison's new Managing Editor. Ellis and DeKeerle were responsible
for the development of the web-based Newsmakers agency concept.
Discussions are underway for Getty to acquire Newsmakers, but no final
agreement has been announced.
Liaison photographers should consider the possibility that Getty may redesign
the Liaison operation along the lines of the Newsmakers model. At Newsmakers
Ellis had been acquiring an increasing amount of event coverage on a full
buyout basis at an assignment rate of $150 plus expenses per shoot. Several in
the industry have reported that Ellis has no trouble finding photographers
willing to work for this rate.
The buyout philosophy fits well with Jonathan Klein's desire to wholly own more
content, and the philosophy of Steve Powell who is in charge of Getty's
editorial division.
Gamma Purchased
French publisher Hachette-Filipacchi has purchased 75% of Gamma. Some believe
this will lead to a severing of the long-standing relationship between Gamma
and Liaison and the establishment of a separate American operation by Gamma.
Hachette capital could be just what Gamma, which has been struggling in recent
years, needs to survive in the changing stock photo market.
Digital Delivery
At a recent conference in London Mark Getty stated that in five years all of
Getty's image delivery will be digital. Jonathan Klein has been quoted in
several places saying, "We see our entire business on the Web in three years."
One TSI photographer reports that currently the percentage of digitally
fulfilled sales appears to be very small. Since last October less than 1% of
his sales have been digitally fulfilled Many sales are researched and
contracted for on-line, but clients still request delivery of film in the
traditional way. Of course, the sales of PhotoDisc and EyeWire are 100%
digitally fulfilled.
Getty Growth
Analyst Keith Benjamin at BancBoston Robertson Stephens that Getty is
projecting sales of $227 million in 1999 and $360 million in 2000. The $360
million will include The Image Bank which will not be a part of Getty's 1999
sales.
However, if TIB's gross sales of around $70 million are added to Getty's 1999
projections the total is less than $300 million. To
reach $360 million Getty will probably need to make a number of other
acquisitions in 2000. Without additional acquisitions their growth of sales
would be have to be around 20%, and it seems highly unlikely that the growth of
the companies they currently own today will reach that level.
RF VS Traditional In Europe
Brian Yarvin has made some interesting points about the potential for growth in
RF market and on-line distribution in general outside the U.S. It may be
slower to develop than I, and others, have suggested.
"Your article in Selling Stock missed a few important points on the RF vs
traditional issue outside the U.S. On my last trip to Italy a few months ago,
and in many other non-U.S. markets, I noticed that the difference in cost
between traditional and RF stock is minimal. In Italy, a small one time use
from an agency is less than 1/5 the cost of buying a disk and comes with perks
that disks don't include.
"If a client picks up their image at the agency, they will get a chance to
discuss images and trends with the agency staff. If they are freelancers
working for any agency or publisher, the stock agency will bill their client
directly, a far better arrangement than laying out the money for a disk and
waiting to be reimbursed.
"Online presents a different set of obstacles; it costs about 400 lire a minute
to be on the web via regular modem in Italy and more than twice that for an
ISDN connection. Thus, the cost of searching for an image can easily add up to
a big chunk of a modest stock photo usage.
"Keyword searches are extra frustrating in a language you don't know either.
"If and when unlimited internet becomes a reality in Europe, people might be
more inclined to search, but the barriers of language and culture are still
there, and of course, there's no price incentive.
"It's a different ball game altogether," says Brian Yarvin.
Billing For Travel
This strategy is for assignments, not stock, but it is such a useful idea that
it needs wide dissemination.
One photographer who travels a lot has successfully adopted the a strategy of
billing for fly time separate from shoot time. He used to fly and shoot the
same day and bill a day. Now he bills fly time separately, no matter how far
he goes. Fly in the am and shoot in the pm and it's 1.5 days plus space. If
it is a fly/shoot/fly it's a double day rate against space. The photographer
says this strategy has helped during those weeks when taking pictures feels
like a very tiring connect the dots on a map board game. No Picture Editor has
ever complained, and in fact they are sympathetic and appreciate that the
photographer isn't wasting time in hotel rooms.
New McGraw Hill Rights Request
McGraw Hill has changed the rights clause in many of their contracts and
sellers need to carefully evaluate the new terms before accepting them.
Rights Granted: For the ten (10) year period commencing April 14, 2000,
licensor hereby grants to MH the following non-exclusive rights for inclusion
of the Licensed Materials in the Program materials: i. the right to edit and
use the permission material in the Program Materials and in connection with the
Program, including use in minor revisions (concerning no more than 25%) of the
Program..."
Our areas of concern include:
the 10 year period,
that they are allowed to use "Licensed Material" that was chosen for use
in a book in a related CD or on-line "Programs" without any additional
compensation to the rights holder, and
that a 24% change in the product would not be considered a revision, and
thus no additional compensation needs to be made for this use.
iSwoop
FPG photographers have recently received an announcement that VCG will launch a
new royalty-free company called iSwoop in February 2000 with the release of a
CD collection of 30 titles, a 252 page printed catalog and a fully
transactional web site.
They estimate that the royalty-free segment of the market will reach $200
million yearly gross in the near future. They say that new buying patterns for
low visibility usages such as small community bulletins, company newsletters
and new media will propel this continued growth.
They are inviting photographers already represented by the VCG companies to
participate in an initial portfolio review. FPG requires world-wide
exclusivity to the images they select, and their similars, but the images will
be marketed globally for non-exclusive, unlimited use.
Some photographers have asked if lower licensing fees won't generate lower
returns.
FPG's answer is, "Just as top retailers are recognizing the value of adding new
brands that cater to a lower price point, royalty-free recognizes the buying
power of markets out-priced by traditional stock. Royalty-free marketing is
based on volume and repeat sales. CD unit sales produce income for all of the
images on that CD. Single image downloads from the web site will generate
additional revenue for individual photographers. iSwoop will publish more
titles than you are accustomed to with traditional stock, and we have the
capability of getting these images to market at record speed. As we analyze
the results of our on-going efforts, iSwoop will republish and redistribute the
best selling titles. When all is said and done, return on your royalty-free
production investment has the potential to equal rights protected returns."
Magazine Assignment Rates
Doing an assignment or selling stock to a new publication. The Editorial Photo
web site www.editorialphoto.com has a list of over 100 magazines and the day
rates they are paying. Click on the Magazine Section to see the list.
One thing is clear. There isn't a single "editorial day rate." There are wide
variations. Be sure to check this site before you accept an assignment or
quote an assignment fee to a publication with whom you have never worked. You
may be undercutting yourself if you have a fixed day rate for your services.
If you have a different experience with a publication on the list, or one that
is not on the list, be sure send EP an e-mail so they can integrate the
information into their chart.