With the introduction of The Costco Art & Image Gallery,
Corbis and Costco will sell individual prints and posters as retail products.
The images offered are a select group of some 20,000 professional pieces of
fine art, photography and illustration from the Corbis collection of more than
6 million images.
Traditionally, photo-related retail items—such as greeting
cards, posters, calendars, décor prints and other similar merchandise—have sold
through a middleman that manufactured a volume of an item and agreed to pay an
upfront licensing fee for the right to produce and sell a certain volume of the
product that featured an image. The Corbis arrangement with Costco eliminates this
middleman, and the creator receives an individual payment every time a unit is
sold.
As print-on-demand technology has improved, there is much
more demand for unique and custom products that fulfill each customer’s
specific needs and interests. Costco, through its 577 membership-club
warehouses worldwide, offers a service that enables members to buy posters,
prints and other photo merchandise using their own photography. With the
introduction of The Costco Art & Image Gallery, the retailer has expanded its
offering to allow customers to also choose from professionally produced images
supplied by Corbis.
Initially, there has been a lot of negative reaction from
photographers, because it is anticipated that the fee for each individual use
of an image will be very small. Corbis declines to indicate how much each
photographer will receive for an individual use of his image, because the “terms
of the Corbis agreement with Costco are confidential for competitive reasons.”
When a photographer receives a royalty statement, it will detail whether an
image was used for a print or a poster and the size of the use. Since the
photographer will know how much Costco charged the customer for this product, a
simple calculation will determine the percentage of the gross sale price allocated
to the image producer.
Photographers should also recognize how much they are
currently earning, per unit sold, for print or poster uses. While prices vary
somewhat depending on the image, the Corbis online pricing template puts a
five-year license to print 10,000 posters at $1,365—which makes the picture on
each poster worth 14 cents at best (or $0.1365, to be exact). The photographer receiving
a 40% royalty would get $0.0546, or a little more than a nickel, for each poster
sold. According to Dan Perlet, Corbis director of communications, “The per-unit
licensed royalty will be much more advantageous to the image creator than the
current licensing structure.”
Getting paid for each unit sold is probably a fairer system
than the current lump-sum method. It may also result in a greater variety of
imagery being used for posters and wall art. It might even result in
photographers getting paid for all
the uses of their images, since there is great suspicion among photographers
that when customers license rights to 500 or 5,000 items, they often end up
printing more without ever telling the photographer.
But with customers having greater choice, the volume of
sales for any single image may never reach the levels a few have achieved in
the past. It stands to reason that, if customers have a greater variety of
imagery, they may be less likely to purchase as many copies of the few that are
marketed heavily in the best-selling category. We’ve seen this happen in the
music business. Many artists who were unable to get a contract with a major
record company are now earning through iTunes. Meanwhile, a lot of the
mid-level artists who had been represented by record companies for a few years
prior are finding that they make fewer sales today than they used to, because
customers have more choices.
The same is happening with books. Borders and Barnes &
Noble handle about 3,000 titles in their stores. If your book was not carried
by these stores, not many copies would be sold—or so it was before you could
buy books at Amazon. Now, the online retailer sells more copies of independent
titles that those represented by Borders and Barnes & Noble combined. Customers
may not be reading more books, but they are reading books on a much greater variety of topics.
As more and more options become easily available to photo
buyers, many customers will make different choices than before. Henry Ford once
said: “The customer can have his automobile any color he wants, as long as it’s
black.”
Most people do not like change. Most photographers would
like to see things stay the way they have always been, because they know how to
make money and beat their competition with the old systems. But we are not
going to stop change. We are not going to eliminate print-on-demand technologies.
Previously, it was not practical or cost-effective to go on press with a short-run
poster. Now, through Costco—and many other sources—the cost of printing a few posters
makes sense.
How will that change customer demand? Will different types
of images now be used on posters? How will customers—both business and personal
users—find the images they want to decorate their walls?
While we are talking about direct-to-consumer sales, another
service to think about is Encyclopaedia Britannica’s recently launched Universal
Education Image Library. Much less of the future demand for imagery will be
from major publishers and consolidators, and much more directly from individual
consumers.