At the CEPIC Congress in Barcelona on Wednesday June 12th there will be a discussion on a new initiative that could generate significant new revenue for image creators whose images are “crowd sourced” and posted without authorization to various domains on the Internet.
As part of the Collecting Society track ASMP and PACA will present information about the “Winston Project,” a system for collecting revenue for “Passive Image Use.” A Passive Image Use is when a user uploads an image created by someone else to a “crowd sourced” domain, or when a user clicks on an image or shares it within the domain.
The first thing to recognize is the potential that Winston and new technology offer is very different from the activities in which collecting societies have normally been engaged. Collecting societies in various countries were designed to collect revenue for the use of copyrighted materials, primarily related to photocopying. In such cases there was no practical way to determine exactly which materials were being copied and how frequently. This is known as “non-title specific” copying. Determining who should be compensated, and to what degree, has been based on surveys and extrapolations based on the volume of material each creators had that could potentially be copied.
The big difference in the world today is that with the advent of image fingerprinting and the Internet, it is now possible to know exactly whose images have been used and how frequently. Rather than relying on estimates uses can actually be tracked. The system for paying royalties for such uses also need to be dramatically different.
Identifying Uses To Pursue
Today, there is wholesale, and seemingly uncontrollable, grabbing of professional images by Internet users. Pinterest, Tumbler, Facebook and others crowd sourced domains encourage users to upload any image they like, not just ones they created themselves. As Winston defines passive image use it would also include user clicks on one of these images, or sharing an image within a domain.
Passive Image Use does not include: (1) commercial use by a third party or the hosting domain or (2) Editorial use by anyone, including a user, third party or the hosting domain. Such unauthorized uses would be left to others, or the individual creators, to pursue.
The domains that Winston will focus on are those that earn revenue, mostly through advertising, as a result of the activity of their users. The belief is that without the work of professional creators there would be much less of interest to share. This would result in less advertising revenue and a lessening in the overall value of the domain. Thus, the creators are entitled to some share of the revenue generated by the domain.
Why Would Domains Share
Why would Pinterest, Tumbler, Facebook and other similar domains want to share any of their revenue with photographers? The same could have been said of colleges, universities, corporations, law firms and other that have for decades paid collective societies for the right to photocopy professional works.
There is the copyright law, and the threat of potential legal action against such users. Consequently, commercial organizations look for a way to indemnify themselves against this threat. In the U.S. there is the Digital Millennium Copyright Act (DMCA) that makes it relatively easy for photographers to request the removal of their image from a site. A domain opens itself to a legal risk if it doesn’t respond in a timely manner. Even when the domain responds there are costs in dealing with DMCA takedown notices. If they can greatly minimize the likelihood of receiving such notices that has a value. More and more photographers are sending such notices.
But, if this plan or anything similar is to be considered there are a number of issues that should be examined. They include:
1 – Can enough revenue be generated to make it worth the trouble?
2 – What organization will handle the negotiations and collection of revenue?
3 – How will such a collection of images be put together?
4 – How Would Collecting and Distributing Revenue Work?
5 – How will creators be compensated?
Choosing the wrong path as the industry implements such a program could dramatically affect the long term ability of image creators to receive a reasonable share of the revenue social media sites will eventually generate.
1 – Can enough revenue be generated to make it worth the trouble?
In 2011 the
Copyright Clearance Center (CCC) collected $238,590,000 from various users for the rights to photocopy copyrighted materials. The
Copyright Licensing Agency (CLA) in the UK collected over $100 million in 2011. There are copyright collectives in virtually every developed country in the world collecting and distributing revenue for photocopying of copyrighted works. Since 1992 the CCC has collected over $2 billion in reprographic use rights. The majority of these revenues was for the photocopying of textual materials, but clearly a lot of the work photocopied was also photos.
2 – What organization will handle the negotiations and collection of revenue?
The Winston proposal envisions the Copyright Clearance Center handling the negotiations with the domains. Clearly, the CCC has a lot of experience in negotiating rights for the use of copyrighted material, but there are other issues to be considered.
Traditionally, the activities of collecting societies have been handled on a national level, partially because the copyright laws differ in every country. Also, when copyright collecting societies were established there was no Internet and nowhere near the cross border commerce that we have today. The national collecting societies will certainly want to be involved in some manner, but it makes very little sense for 10, 20 or 50 different collecting societies to operate redundant tracking facilities and collect revenue from all the same domains for citizens who happen to live in their country.
This is particularly true since the works of many individuals are likely to be uploaded and shared by users in many different countries. The important thing to learn is the overall worldwide use of a particular image relative to the overall payment by the domain for the rights to display the images.
A major problem with the CCC running the show is that it has an abysmal record in paying out any of the monies it collects to actual creators of the content. Publishing companies founded the CCC as a way to collect revenue for the copying of their copyrighted content. Most monies paid out have been short stopped by the publishers and gone into their coffers. The agreements the CCC has with publishers is that the publisher will compensate individual creators if the publishers believe the creators are entitled to a share of what they receive. There is no evidence that photographers have ever been paid any share of any monies the publishers have received. One big question is whether the CCC will be able to develop a system that fairly compensates individual creators.
Collecting societies in Europe have done a much better job of developing systems to distribute money to creators. They are generally well respected by creators in their countries.
It seems clear to me that if this is going to work at all the negotiating with the domains must be done by one central organization that represents image creators worldwide for this limited type of use.
(For more information on how collecting societies have operated see these stories.
Collecting Societies and Photocopy Licensing,
Compensation for User Generated Web Usage and
Photographer Compensation For Social Media Use.
3 – How will such a collection of images be put together?
Assuming that a Centralized Organization (CO) can be established it would seem there are three possible ways for it to get images.
1 – Photographers would submit images directly. The only requirement for acceptance is that the image be available somewhere on the Internet.
2 – Agencies would submit the images of the photographers they represent exclusively.
3 – Both
Let me deal with agencies first. One big advantage of getting images from agencies is that it might be possible to get a much larger number of images in a short period of time than if the CO focused on acquiring images from individual photographers.
On the other hand many photographers are used to submitting their images to online websites. In this case the requirements would be fairly simple. All a photographer would have to do is size his images (approximately 500 pixels on the long side) and upload them along with basic contact information. There would be no editing. If the image can be found on the Internet it is accepted.
One problem for many agencies is that a significant number of images in their collections are represented non-exclusively. They would need to be sure they were the only representative of each image they submit to the CO database. Most photographers have non-exclusive agreements and have placed the same images with several agencies. Agencies would probably be unable to submit some of their most used images.
Another problem is the royalty cut. Most agencies keep 60% to 80% of any revenue generated. That seems unreasonable considering the amount of work required on the agency’s part to generate this revenue. The CO will be doing all the work. No keywording, marketing or editing will be necessary. The image will only have to be submitted once. The CO will know the photographer’s name and could easily make direct payments anywhere in the world in much the same way as microstock agents make payments today.
Each image in the collection will need to be unique. If photographers are submitting images directly, and the CO has their contact information, it will be easy to determine the rightful owner and who should be compensated when two exact copies of an image are found. Undoubtedly, there will be a few people who try to upload and claim ownership to images they didn’t create. There will need to be a process for quickly identifying, and taking legal action, if necessary, when duplicates are found. The CO will need to regularly check its file of image fingerprints for duplicates and notify both parties when fingerprints are found.
The discussion that took place at the
PACA meeting last fall, and the one that will probably take place at CEPIC, was all about stock agencies being the image suppliers. I would like to see the bulk of the images come directly from photographers.
As I pointed out earlier photographers are used to submitting their images directly to websites. The submission process would be very similar to what microstock contributors are used to, except there would be no editing. I would think it would be possible to get millions of images from microstock contributors very quickly. PhotoShelter could easily make it possible for any of the collections of its more than 70,000 contributors to be automatically added to the CO database, provided each contributor agreed. Many photographers with images on Flickr would like to control the use of their images and understand how frequently their images are being shared in social media. They would also like to receive a little compensation, if possible, anytime their images are used. There should be no problem in getting lots of images directly from photographers.
Choosing Not To Participate
Some photographers will not want to participate. They will want to retain the right to issue DMCA takedown notices for some of the images they find online and to bring a copyright infringement lawsuit where appropriate. There will be cases where the photographer was happy to allow some social media uses, but later licensed exclusive rights to the image and needs to have all other copies removed. There will need to be a provision that allows creators to remove some of the images they have posted to this collection.
The existence of the CO will not eliminate all DMCA takedown notices, or infringement actions, but their number would certainly be dramatically reduced. A huge percentage of those who are likely to be most upset when their images are used in social media would likely participate in the CO. While there will be millions of image creators who will not bother to participate they are also the ones who would be least likely to have any problem with their image being used.
While up to now I have focused on photographers, the CO will also represent the works of illustrators.
Many commercial organizations actively post images on social media sites as part of their marketing effort. They want their images shared. There are two reasons why these organizations will also join the CO database. First, they would get data on the actual number of times their images are shared. In addition, they would get some revenue that would offset any cost they might have in creating the images.
4 - How Would Collecting and Distributing Revenue Work?
The Central Organization (CO) would handle negotiations and collect revenue from the domains. This same organization may actually collect the images from participants, fingerprint the images and search selected domains (not the entire Internet) for uses of the fingerprinted images. However, the image handling and image search may be provided by a separate organization that works for the CO under contract. (Note: None of the collecting societies have experience in building a database that would track large numbers of uses of specific copyrighted materials.) The image search part of the operation will identify the images posted on a given site and the number of times they have been “shared” or “liked.”
5 – How will creators be compensated?
For example, with a site like Pinterest the search operation would count the number of pins, repins and likes of each unique fingerprint in its database. Many images would never be used is a social media way. Some would be used frequently. Contributors with many images in the collection would not necessarily have the most pins.
Assume that for a given period the total pins and repins was 8 million. Whatever this number it seems likely that it will only be a small percentage of the total pins, repins and likes that a site has during this time period. Pinterest would like to not have to deal with DMCA notices from these image owners and the disruption to its service that such notices might cause. Through negotiations the CO and Pinterest would determine what the assurance that these image owners would not be making claims is worth.
Assume the negotiated fee is $100,000 and that 20% of that goes to the CO to cover the monitoring and other operational costs. (The CCC pays out about 72% of the money it collects to the publishers keeping 28% to cover its operating overhead. In 2011 the CLA in the UK retained 11% of the money collected to cover its overhead and paid out 89% to copyright holders.) There needs to be a clear explanation of what overhead costs are estimated to be before moving ahead with this project.
In this example the remainder is shared among all creators depending on the proportional share of the total pins, repins or likes. In this example each pin would be worth one cent ($0.01) The value would vary from site to site and from monitoring period to monitoring period.
In the next monitoring period more people may have added images and there may be heavier use of the site. In this period there may be 12 million pins, reprins and likes. Assume the fee remains the same. This time around the value of each use will be less than a penny ($0.0066). Chances are that the more people participate the less value each pin will have. However, there is the possibility that uses will grow faster than the number of new images being added.
Each creator would be able to go to the site at any time, enter a password, and determine the revenue earned to date. A creator would need to have at least $50 in his/her account before being able to make a withdrawal. Payments would be made through bank transfer, a paypal account or by dollar check.
What Photographers Do Now Is Important
Initially, the revenue generated may not be that significant. That’s the way it was back in 1977 with reprographic use when the CCC was established. Photographers didn’t make a comments (probably weren’t even aware of it) and a system for compensating copyright holders was developed that remains essentially the same today.
In the early 90s a new system for licensing images called “Royalty Free” was developed. It was argued at that time that because the developers would have huge marketing costs (print catalogs), costs of delivering the product (Photo CDs) and a limited amount that they could charge for their product, they could not build a business unless the traditional royalty of 50% was reduced to 20%. Then later when the cost of print catalogs and CD delivery went away, and the price charged for a RF image rose dramatically, the royalty remained 20%
And when new Royalty Free models called Microstock and Subscription came along, at an even lower price points and with very different costs the 20% royalty rate became defacto for them too. In fairness, some of these companies have raised royalties somewhat as they have raised prices, but they are still taking the lion’s share of the revenue generated.
Whatever is established now with regards to compensation for social media use is likely to be with us for a very long time.