Micro Contract Terms More Favorable than Traditional

Posted on 4/21/2009 by Jim Pickerell | Printable Version | Comments (1)

Given the rapidly changing trends in the stock photo industry, photographers need to pay close attention to the duration of new contracts they are being asked to sign. There are a number of strategies for marketing stock images, but customer preferences change. The strategy that seems right today may not the best a year from now. To maximize earnings, a photographer may need to switch agencies and go where the customers are.

Consider that when Getty Images purchased iStockphoto the microstock industry barely existed. Now, it is entirely possible that by the end of 2009, microstock revenues will exceed those generated by traditional royalty-free images. Based on current trends, by 2012 microstock sales should exceed commercial rights-managed revenues (not including rights-managed editorial imagery).

When making an agreement with a new distributor, most photographers tend to focus on the royalty rate and ignore many other terms of increasingly long and complex contracts. Recently, several photographers asked my opinion on Corbis’ “Survival Period” contract clause that deals with termination. Some photographers thought this clause was a new addition to the Corbis contract, when in fact it has been in the company’s contracts since 1999.

Nevertheless, what seemed benign 10 years ago may be problematic for photographers today. The initial term of the Corbis contract is three years, a significant commitment given the rapid changes in today’s stock photo industry. However, the contract also grants Corbis an additional three-year “survival period,” during which Corbis will continue to have the exclusive right to distribute the photographer’s images after the contract has been terminated. Effectively, this is a six-year contract. A photographer who has been with Corbis for 10 years and signs a new contract is obligated to stick with Corbis until 2015, unless the company goes out of business.

Corbis is also under no obligation to actually market a photographer’s images during the survival period. This could prevent the artist from earning any revenue from these images during this time period.

Getty’s contract duration is more favorable to photographers. Its initial three-year term automatically renews for successive one-year periods, unless either party provides notice. The only survival rights Getty asks for is one-time rights to renew existing licenses, on substantially the same terms, provided that there is no break in the licensing period.

Then consider microstock Web sites’ terms. iStockphoto’s agreement can be terminated at any time with a 30-day written notice; in fact, in most cases of termination, images are removed from the Web site in fewer than 30 days, and the photographer is free to go elsewhere. Likewise, Fotolia contributors may terminate their agreement by logging into their membership account and sending in a termination request. Shutterstock allows non-exclusive contributors to terminate at any time and removes images within 60 days.

Long contract terms used to make some sense when the industry was dealing with film and it took a long time to find and gather together all of a photographer’s images, which either resided in an analog file or were out with clients. Now, all an agency has to do is search for all the photographer’s images and hit the “delete” key. There is absolutely no reason why traditional agencies should not be offering termination clauses similar to those of the newer microstock agencies.

Photographers may not like microstock as a strategy for marketing their work, but they must admit that if some better way of marketing images comes along in the future, today’s microstock agencies provide those they represent with a lot more flexibility to move and take advantage of that better way of marketing than do traditional agencies.

Copyright © 2009 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.  


  • James West Posted Apr 21, 2009
    Readers should be aware that Alamy pioneered the concept of releasing photographers from unreasonable contractual constraints 10 years ago. We offer a 45 day termination period, we're non-exclusive, we welcome both Royalty Free and Rights Managed material, we let our photographers decide what to sell, and we pay 60% royalties.

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