Photolibrary/Index Revisited

Posted on 12/20/2007 by Jim Pickerell | Printable Version | Comments (0)

Stock Artists Alliance (SAA) continues to seek "accountability" from Photolibrary in the Index Stock situation and says in a press release, "Recent revelations and accusations leave the SAA Board greatly concerned about whether Photolibrary has met its contractual obligation to pay Index Stock contributors all past obligations."

The SAA places great weight on the fact that $2.2 million is owed and the organization wants it paid immediately. As far as I can tell, no one is denying the amount and even the Santos letter said, "Photolibrary will soon come up with a payment plan."

The SAA also says that according to photographer statements "outstanding commissions due are from as far back as January 2001."

Based on available information, here's what I think happened. When Photolibrary took over Index Stock, they made a pledge to immediately pay "for all sales made by Index Stock in the last six months and to pay according to contract going forward from November 1st when they took over." They have complied with this promise.

Based on my experience in the Uniphoto audit, I am amazed they have been able to substantiate records that far back in such a short period of time. Photolibrary is making every effort to determine what photographers are owed and properly compensate them.

The first step in figuring out what was owed was to bring KPMG in to do an "intensive audit". But KPMG concluded that a detailed audit was impossible to accomplish "in a reasonable amount of time" due to the "lack of an integrated accounting system". Thus, my guess is Photolibrary was faced with either using KPMG at $300 or $400 per hour to do manual inputs to reconcile the books or to use staff accountants at $50 per hour. In any event, it looks like Photolibrary staff found the $2.2 million owed.

It appears Photolibrary believes it now has the books in pretty good shape going back to January 2001. Now they are moving to make payments. This is not a cash-rich company. They have already paid out $3.73 million and owe at least $2.2 million more. My bet is this is much more than they expected Index Stock to cost when it took over the company. The debt is much greater than anticipated. I doubt they have $2.2 million sitting in their checking account for such outlays. I would be greatly surprised if there is more than $1 million in total profit per-year from the Index division after they pay royalties, salaries and overhead.

PL is trying to devise a payment plan. It can't really afford to pay it all in one lump sum. It needs to find a fair way to stretch payments out over a period of time.

Photographers have a couple of choices. They can yell and scream. Insist on immediate payment and distract the Photolibrary staff from getting on with business. Or they can give the company a little time to propose a workable payment plan for them and determine if it is acceptable. Give the company till the end of 1Q '08.

It is also interesting that the SAA expected immediate payment of the $2.2 million as soon as the statements were generated. The organization was more than happy to wait four months to be paid after they receive statements from Getty.

The SAA is also justifiably concerned about Index Stock commissions that have not been processed after July 2007, due to the transition to the new Australian IMS system. This problem, outlined in the Santos letter, needs to be addressed, but it is not surprising that such problems arise when there is a transition from one accounting system to another. I would remind SAA members of the problems with Getty's accounting system in 2001 and 2002 as TIB and VCG were being integrated.

Uniphoto audit,:

in a reasonable amount of time:

Santos letter:

Copyright © 2007 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:  


Be the first to comment below.

Post Comment

Please log in or create an account to post comments.

Stay Connected

Sign up to receive email notification when new stories are posted.

Follow Us

Free Stuff

Stock Photo Pricing: The Future
In the last two years I have written a lot about stock photo pricing and its downward slide. If you have time over the holidays you may want to review some of these stories as you plan your strategy ...
Read More
Future Of Stock Photography
If you’re a photographer that counts on the licensing of stock images to provide a portion of your annual income the following are a few stories you should read. In the past decade stock photography ...
Read More
Blockchain Stories
The opening session at this year’s CEPIC Congress in Berlin on May 30, 2018 is entitled “Can Blockchain be applied to the Photo Industry?” For those who would like to know more about the existing blo...
Read More
2017 Stories Worth Reviewing
The following are links to some 2017 and early 2018 stories that might be worth reviewing as we move into the new year.
Read More
Stories Related To Stock Photo Pricing
The following are links to stories that deal with stock photo pricing trends. Probably the biggest problem the industry has faced in recent years has been the steady decline in prices for the use of ...
Read More
Stock Photo Prices: The Future
This story is FREE. Feel free to pass it along to anyone interested in licensing their work as stock photography. On October 23rd at the DMLA 2017 Conference in New York there will be a panel discuss...
Read More
Important Stock Photo Industry Issues
Here are links to recent stories that deal with three major issues for the stock photo industry – Revenue Growth Potential, Setting Bottom Line On Pricing and Future Production Sources.
Read More
Recent Stories – Summer 2016
If you’ve been shooting all summer and haven’t had time to keep up with your reading here are links to a few stories you might want to check out as we move into the fall. To begin, be sure to complet...
Read More
Corbis Acquisition by VCG/Getty Images
This story provides links to several stories that relate to the Visual China Group (VCG) acquisition of Corbis and the role Getty Images has been assigned in the transfer of Corbis assets to the Gett...
Read More
Finding The Right Image
Many think search will be solved with better Metadata. While metadata is important, there are limits to how far it can take the customer toward finding the right piece of content. This story provides...
Read More

More from Free Stuff