Is There A Future In Creating Images For Educational Use?

Posted on 11/1/2012 by Jim Pickerell | Printable Version | Comments (0)

At the PACA International Conference in Chicago in October the keynote speakers was Ken Carson, EVP and General Counsel of Cengage Learning. He outlined many of the challenges educational publishers face today and provided insights as to where content licensing for educational use is headed.

Cengage generates almost $2 billion in annual revenue and has 5,500 employees in 20 countries. Despite their International footprint 86.2% of their revenues came from U.S. sales in the fiscal year ending June 30, 2012.  During that year they used more than 95,000 images in higher education products and 15,000 in reference products.

The industry has been moving from print to digital for a few years, but it may surprise many to learn how fast this shift is occurring. Overall, Cengage’s revenue grew by 6.2% in fiscal 2012, but 37.5% of that revenue, or about $750 million, resulted from the sale of digital products. That was a 17.5% jump from the 31.9% of revenue in fiscal 2011. In the company’s core two- and four- year college and career markets digital sales increased by over 52% compared to the prior year. Obviously, there was a corresponding decline in the delivery of printed products.

The digital transformation in educational publishing presents many opportunities and challenges for both publishers and image providers. One thing that may surprise photographers is that e-books are not a growth area. Publishers have learned that they can’t simply take a printed product and transfer it to an e-book. Instead, in order to engage students they must adapt digital product content to include more visuals and also simulations, videos and even music. Good news; just wait.

In their annual report the company says, “electronic delivery of pedagogical material through laptops, tablet or mobile devices has increasingly become a focus within the industry and is expected to have a significant impact by supplementing and replacing sales of print textbooks. While print textbooks represent the majority of sales in the market today, digital solutions (particularly online homework solutions) sold in connection or together with print textbooks are becoming increasingly important to educators and increasingly relevant to their decisions to adopt course materials for their classes.”

These homework products provide assessment tools for testing and grading and offer teachers immediate feedback. This makes it possible for the teacher to focus on specific student needs rather than being forced to teach to the class average. (One big unanswered question for photographers is the degree to which imagery will be included in these homework solutions. More money for the publishers; not necessarily for the creative community.)

During fiscal 2012, approximately 3.4 million student activated accounts to use Cengage’s homework solutions and they conducted 94.8 million sessions through those accounts. There was a 24.5% increase in new accounts and a 28.2%, increase in session compared to the previous year. As of June 30, 2012, value-added digital solutions were available for approximately 73% of our textbooks.
Carson said publishers will continue to produce both print and digital products for the foreseeable future, but the editorial and content acquisition processes are already evolving to a new digital-first mindset. This shift is also requiring educational publishers to re-think image licensing procedures.

Image Licensing

Carson made the point that, “publishers are strong proponents of copyright protection. We want to make a fair deal…. I want to have a system where people are getting fair compensation and I want to protect copyright and there is no other way for me to look at it.”

However, there are a number of factors that have traditionally been considered when establishing usage fees that no longer work for publishers. Carson said:
    (1) "Publisher do not want to estimate print run or language in advance. It doesn’t work, it’s too hard.
    (2) Term limits, as long as we’re talking about edition-based textbooks, don’t work for us.
    (3) The number of invoices we get makes the administrative burden just horrible. We need to find ways to get fewer invoices. This would probably be really helpful for everyone in this room to do that.
    (4) Finally, we have to get to the point where we have understandable agreements about what the terms are back and forth so there is an understanding going in (before images are selected).”
While everyone in the room was trying to absorb this list and figure out if there is any way to differentiate between a small use and one where the image will be used extensively over many years, if not decades, Carson went on to add:
    “We have recently executed an agreement with Getty that accomplishes all of these things.  It greatly facilitates our moving forward with them in an area where were not going to have to estimate print runs; not going to have to estimate languages; there are no term limits; there are very few invoices and obviously by negotiating our agreement in advance we have standard terms. This will greatly facilitate use. I want to thank Getty for coming to the table and doing this. We have discussions with other players.”
(Certainly Corbis and Alamy lead the list of those to whom they are talking. Undoubtedly, Getty will give all the other educational publishers similar deals in the near future. The standard has been set.)

What’s Fair Compensation?

We have no idea what terms Getty agreed to for this use. The quoted list price on their site for an Image Bank image that is used inside, regardless of size, in a first edition, with no rights for supplemental materials or electronic rights and a term limit of 7 years is $267. If the customer wants to add electronic use, but no supplemental materials add 27% and if the customer wants supplemental materials, but no electronic use add 45%. The first edition price for inside use with supplemental materials and electronic rights is $485. We suspect that under the new agreement Getty is charging Cengage much less than these numbers given the potential volume.

The price Cengage has negotiated is “fair” for Getty because they keep 70% to 80% of the fee, had no cost to produce the images and only have to cover their operating overhead. However, what is “fair” for the photographer who will receive only 20% to 30% of what Getty is paid and had to incur all the costs of production and preparing the images for marketing.

Given the minimal payment to photographers, it seems unlikely that many will be able to continue producing images for educational use as a line of business. Some hobbyist for whom revenue generated is unimportant may continue to produce new images with educational use in mind. In rare instances images produced for unrelated purposes may fulfill educational needs. Otherwise, it seems unlikely that there will be much in the way of new imagery produced for this market.

On the other hand maybe they don’t need new imagery. Getty has over 3 million RM images; almost one-sixth of them from Flicker. They also represent about 2.6 million RF images. And then there is Corbis with probably and equal number and Alamy with more than 33 million. Publishers make the point that there is such an abundance of supply that they don’t have any trouble finding something that is usable at a price they are willing to pay. The imagery in the market today may be adequate to supply the needs of educational publishers for many years to come.

Is It Possible To Negotiate A Better Deal?

Individual photographers and specialist agencies whose images are not available on any of the big three distributors; who have images the publishers absolutely must have and where there is no image of a similar subject available on the big three, or on Flickr, will be able to get higher prices. These instances will be rare.

Carson talked about term limits for edition-based textbooks. He seemed to leave open the idea that term limits for electronic use might be possible. When they release a new printed textbook title they are required by the school systems to be able to deliver additional copies of that title for 8 to 10 years despite the fact that the vast majority of their sales are in the first year and they will release a new edition in three years. Sales used to hold up for three years, but now the used book market has killed a lot of those additional sales. Thus, for printed books they must have a long term. However, as they move more and more to specialized electronic products the rules may be different. Also, in the electronic environment it will be much easier to track specific image use. See here.

They will not give on foreign language rights. While most books don’t translate, they never know when they print a title which country might pick it up. Thus, they want the flexibility without going back to re-negotiate all rights.

“Product family” has traditionally meant anything that was supplementary to a particular title such as: instructor text, state editions, handicapped accessible versions, static e-books, Dynamic e-books, Companion password protected websites, homework solutions, workbooks, assessment tools, supplementary components, adaptations, abridgements, etc.  All these would be counted in the circulation. When they released a new edition that would be a new “product.”

Now, they are often licensing “discipline rights” which means that the image can be used in any future product in the general discipline and it is not necessarily associated with a particular textbook. For example discipline rights for a picture that is used in a biology textbook would mean that the picture could be used in any biology related product including another title, or a new edition without additional compensation.

Copyright © 2012 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, 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:  


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