After I published “
Moving Forward In Educational Licensing” one of my readers suggested on the Yahoo Stockphoto group that I had “some interesting ideas” about how stock photographers might deal with educational publishers.
Without reading what I had to say, Carl May, owner of Biological Photo Service & Terraphotographics in Moss Beach CA, responded saying, “I hope Pickerell isn't really falling for the line that educational publishers don't know how images will be used in the future and therefore need new pricing procedures.” Carl is not only an experienced photographer and agent, but for over a decade he managed lists of textbooks for several major college publishers. He has an insider’s view of much of the budgeting and operations work at many of the publishing companies. Many of his ideas are certainly shared by others in the stock photo industry.
Carl and I entered into a colloquy over a few days. I tried to explain my position in a little more depth. We apologize in advance for the length of this article, but hope it will provide those who license rights for use of images in textbooks a better understanding of the sorry state of this segment of the photo market.
May’s comments
I hope Pickerell isn't really falling for the line that educational publishers don't know how images will be used in the future and therefore need new pricing procedures. We especially hear this from Cengage and Pearson on the college level and from Houghton and others on the school division level. It is baloney.
True, publishers don't know exactly how images will be used 20 years from now, but they do know how images will be used for the current editions of packages of textbooks (print and electronic) and associated ancillaries. What they are trying to do is pressure image sources into essentially RF pricing, to which they have become accustomed. This pressure is coming from execs in the publishing companies who don't know a good educational photo from the kind of crap we see all over the place in advertising use. They just know that they pay a modest to minimal fee for RF and they don't have to pay or think about it ever again. Nor do they have to pay the picture staff or freelancers to handle reuses.
"Budgets are tight" is also a bunch of corporate crap. They are tight because some (again RF-influenced) exec arbitrarily assigns a small amount of money for pictures in a project. But because images are now provided digitally, publishers no longer have to pay for scanning, which cost more than permission fees for most textbook projects 20 years ago. I mention 20 years because educational permission fees for given amounts of usage are not significantly higher than they were at that time industry-wide. So, has the much lower cost of images helped publishers to keep their prices down? Anybody who keeps up with textbook publishing will laugh at this. Over the last two decades book prices have escalated madly while publisher’s costs to put images in books (permission fee plus production costs) have declined. Digital methods of editing and proofing have enabled publishers to accomplish more with fewer people. The cost of publishing digitally in addition to print is now quite low as standard procedures have become the norm at publishers. So, as the profits have gone way up at even moderately well-managed educational publishers, so has executive compensation. The executives squeezing budgets have a direct impact on their own income. RF and digital have been personal financial godsends for executives involved with the project costs of illustrated educational materials.
For the past 50 years, there have been numerous claims that a sea change in the market for educational materials was at hand. We have seen rounds of modular materials, programmed education, magazine article separates that would be combined to replace books, custom versions of textbooks, subscription programs for materials for educators, disks replacing printed books, online replacing print, free online materials replacing for-pay products (supposedly supported by advertising), and on and on. None of it has ever amounted to a hill of beans in the picture-intensive educational areas. At half or less the price of print, college e-books now typically sell one-tenth (or fewer) the number of copies that printed books of the same titles at much higher prices sell. (Yes, there is strain on the number of printed copies sold in static markets because multiple students can share a single password-protected e-book.)
Changes in educational publishing markets are evolutionary and incremental. As newer products spread and replace existing types of products, picture sources will have plenty of time to create or adapt fair pricing for them. Falling for the propaganda being spouted by a few publishing conglomerates for the sole sake of their additional enrichment is as naive (and ignorant) as falling for the claim RF right on down to micro is a good way for stock picture sources to make a living.
Carl May
Pickerell responds
I agree with you that given the way educational uses are now being defined they are basically RF uses. The publishers are asking for print runs way beyond the maximum they will ever print which basically turns the use into unlimited. We just had a request from Pearson for a 10 million print run. In addition they want unlimited electronic use so there is no restriction on the electronic uses.
The big publishers have “preferred provider” agreements from most of the larger agencies and my bet is that they get 95% of the images they need from those agencies.
Preferred providers are limited in how much they can charge for additional circulations. They are afraid to demand an adjustment for fear of losing the sales they are currently getting.
If an individual photographer has an image that is truly unique and the publisher can’t find a substitute for it anywhere else then that photographer can get a large fee. Otherwise the photographer is stuck. If he demands a fee that is too far out of line with what the preferred providers are charging the publisher will either go somewhere else, or never call that photographer again for another usage.
I do agree with the publishers when they say they don’t know how the image will be used. We really are in the midst of a “sea change” in how educational information is being delivered. New ideas and products are being developed all the time. When the publisher licenses an image he has very little idea of all the ways he may want to use that image a year or two down the road. It is understandable that the publisher wants the flexibility to use the image in the new products without having to go back and re-license. Education is in a period of rapid transition from printed book to a variety of electronic delivery systems (some of which may not have even been invented yet). That shift is going to happen in three to five years not 20, although there may be totally different shifts 20 years from now.
Some agents think they are protected by licensing rights for use in a specific title. My feeling is that the material in any 1,000 page title can be sliced and diced in so many different ways that the licensor will never be able to tell which title a given use is related to. And, of course, the publishers aren’t going to supply creators with that information anyway.
I disagree with your argument that changes will be “evolutionary and incremental” and because of that “picture sources will have plenty of time to create or adapt fair pricing to them.” The clearest evidence that such adapting will not take place is what has happened with increasing circulation over the last decade. The publishers have been doing two things. First, they have been printing a lot more copies of each title than they licensed and ignoring their obligation to tell the licensor. And they haven’t paid for those extra uses. Only in the last three years or so have licensors begun to recognize that these unauthorized uses have been taking place on a massive scale. Collecting for such uses has been an ongoing nightmare. To date only a fraction of what is owed has been uncovered.
Second, to solve their problem for the future, publishers have been asking for ever larger circulations. The “adapting” sellers have done is to charge up to twice the 40,000 circulation rate for one-million circulation. This figure is ridiculously low proving only that picture sources don’t know how to demand fair pricing.
Clearly we are not going to get fair prices as long as we continue to operate under the old rules.
What I argue in my story (http://www.photolicensingoptions.com/ViewArticle.aspx?code=JHP2491) is that we need a whole new system of pricing the educational uses of our work. First we must accept the facts that (1) publishers are greedy, (2) they will not honor license agreements and (3) they will not give us accurate information about how they are using our work.
Given that we have no way of tracking how an image is used my proposal would give the publisher unlimited rights (not including advertising) to use an image in educational materials for 2 years. (One year would be better, but we will be lucky to get publishers to agree to 2 years.) At the end of that 2 year period we send another invoice and keep sending invoices every two years, forever.
Creators should no longer wait for publishers to send them a request for an invoice. They must take a pro-active position. All the publisher has to do to stop the invoices is stop selling the products that contain the image and remove the image from their database. Some books do go out of print. Some images need to be replaced and updated with newer material. We are rapidly moving to a time when publishers will maintain databases of images that can be accessed by many users for many different purposes. You can bet that each time there is a use the publisher will get an additional fee. Tracking individual uses in such situations will be impossible for creator’s to monitor. (Publishers may track the information, but they will be unlikely to share it.)
Jim Pickerell
May responds
When the publishers slice and dice material for derivative publications, abridgements, etc., they are creating *new* titles. Yes, most are maintaining company archives of images they are using or have used (and, good grief, some of these archived image files are of terrible quality), but it is no problem at all for images in the overall database or the database for a title to be tagged for RM clearance. This, in fact, has been going on for more than a decade at places like the Pearson brands, Mc-Graw Hill, Wiley, etc.
The matter of some publishers not telling of extended print runs/uses has been going on even longer, since well before I started my agency in 1980. That was after a decade of managing lists of textbooks for several major college publishers, which gave me insight into how budgeting and operations work inside publishers. I still have a number of friends in educational publishing companies who are editors and executives, and I deal regularly with several long-time friends who manage the use of images in the remaining few independent college publishers. I don't deal with publishers as black boxes, as so many in the photo industry do.
But neither you nor anyone else has to drink the publishers' Kool-Aid, either. Just look at where the money is being made at the moment. It is being made with printed textbooks. Right now, all the whizbang electronic gimmicks are like planets, or even moons circling the planets, going around the massive print suns for the standard textbook-using courses. Much of the electronic stuff other than e-books that must, indeed, now be offered to sell the "package" (including supplementary photo collections and videos in many cases) is being *given away* to users of the textbooks. The publishers can't figure out how to charge for it because anyone who tries this will be clobbered by competitors giving the same kind of stuff away. The textbook e-books aren't selling at all well in the standard course markets, not even the first few that are now appearing tailored for tablets.
The answer is obvious--no standards or uniform technology so far allows the electronic versions to match a printed book in terms of market size that justifies the expense of publishing. Beyond that consideration, especially in the school division markets, not all schools and not all students in schools have access to the electronic technology carrying electronic educational programs. Where a kid only has access to a computer at school, the kid can't study at home. Custom versions of titles are another right being asked for by publishers wanting blanket rights, and so far sales of these versions are very small--easy to lump into the permission fee. Most teachers and professors are busy enough without having to take the time to discover and remodel what a publisher can provide for a title into a custom version, so most go for the standard textbook and ancillaries that fit how and what they want to teach (and *must* teach in many states on the school division level--those adoption committees with dictatorial powers that get together in the big, key states every five to seven years for different K-12 areas of education don't allow teachers to pull whatever they want off the Internet or change examples to whatever they wish).
Look at the list of fads in my previous message. At the time, all had people preaching they were going to be the next big thing in educational reading and learning materials. The world was going to change completely with each one. NEA and other conventions were full of sessions touting one revolution after another. None happened. None became the model for a brave new world knocking out the brave old world. Some of the revolutionary ideas did take hold eventually as they were assimilated and became part of the bigger picture over the years. They were, accordingly, evolutionary. In publishing terms, a few innovations, especially electronic ones, worked their way in over a number of editions or as aspects of new titles that appeared.
Another change in college publishing that has come about over the decades is that texts for the basic courses are now on three-year revision cycles--a new edition every three years. Charging fees by edition is perfectly fine and easily keeps up with any innovations in revised titles or new titles appearing in the marketplace. There will be editions of titles for the foreseeable future, as each edition provides a chance for publishers to call attention to their titles. Selling educators on constantly morphing material without going through editions, as has been suggested by some promoting the flexible electronic marvels of times to come, is a non-starter as educators aren't going to spend all their time going over the constant changes and altering their teaching accordingly. Any publisher trying that is going to get clobbered by the sales efforts behind new editions at the competitors.
So, no, there is not going to be a sea change in three to five years in how images are used in education because of the new products that will come into being. That is a line being put out by a few big publishers to get their way with rights grabs that will give them another small measure of salary-puffing profit. Naturally they have photo people in their companies and freelancers running scared and parroting their desires--some are survivors who have seen photo staffs slaughtered already and want to drag out their own days as long as possible and some are pixel-pushers who replaced the real photo people. So what? No photographer has to give in to it. In fact, giving in is just as suicidal as giving in to RF and micro.
Any RM stock photographer or agency who is still around and making a living is already dealing with the Getty/Corbis bulk arrangements and has a way of doing business that succeeds in spite of the stock conglomerates sleeping with the educational publishing conglomerates. The old rules for making images that are better and/or different from what is available and then controlling those images are still in play for those who don't accept life as one inevitable wave after another crashing over them until they drown. Publishers know what they are going to do over the lives of editions of titles being published, so they know what rights are needed at the outset of each title published. If new rights are needed in the middle of editions, it is a simple and cheap matter with picture source databases for titles to get in touch with the image providers. One simple approach would be to create PLUS pricing packages for the type of use needed.
If the educational publishing world gets away from putting out titles by editions and all that goes along with them, something like charging reuse permission fees automatically every few years might make some sense. Even then, the parameters would need to be controlled for rights management. Right now, neither photographers nor publishers will gain by going to that methodology. There would need to be multiple fee systems going at the same time. Publishers have already paid for some images far into the future. You suggest that they would pay on a semi-subscription basis for other uses. You don't know publishers if you think they would not have trouble keeping all that straight, just as they would have found it impossible to pay royalties for number of times an image was actually reproduced instead of the broad numerical categories we now use in fees. It would mean permissioning, accounting, and budgeting unlike anything they are doing now. And add to the mix that some of our best clients have no problem with the system we have now--they, too, have figured out how to maintain their identities and businesses in spite of publishing conglomerates trying to force their industry into a mold created by bullying corporations.
Carl May
Pickerell responds
I agree that it is not a problem for publishers to tag images that require RM clearance in their databases. The problem is that most publishers refuse to tell stock agencies or creators when they use the image in a new product or print more than the number of copies authorized in the license. This may have been a problem for decades, although I think it is much worse today than it used to be. But, just because we have consistently allowed publishers to exploit us does that mean we must continue to allow exploitation forever?
I was recently involved as an expert in a case against a major publisher where the publisher used six images in 47 different products without informing the photographer. If this were an isolated instance it might not be worth mentioning, but in the last few years there have been enough legal actions against publishers (mostly settled out of court) that it is clear there is a general, wide spread practice throughout the industry of ignoring print runs.
The numbers are available, but for the most part the only way a licensor can get access to them is sign a non-disclosure agreement. Even then it takes months. Thus, while a few may know the circulations of particular texts, they are prohibited from telling the hundreds of other photographers whose images are in the same text so they can attempt to collect the money owed them.
Recently the door to such information was opened a crack in the case of DRK Photo vs John Wiley & Sons that was tried in U.S. District Court in Arizona. In discovery Wiley was forced to produce a list of 40 chemistry, physics, psychology and other science related books that contained DRK’s images. Wiley had printed and sold more copies in all 40 titles than they licensed to print. In fact the sum total they licensed to print was 1,622,000 and the total printed was 4,379,805.
Wiley asked the court to seal this circulation information because they claimed it was a “trade secret.” But, Judge Frederick J. Martone denied the defendant’s motion and the information that shows title, print run and the actual number of books sold is now publicly available. You can find it in my story (http://www.photolicensingoptions.com/ViewArticle.aspx?code=JHP2494) or you can search the court records. Since this is the type of imagery your company specializes in supplying my guess is that you probably have images in some of these titles and could collect a substantial amount of money if you’re interested in pursuing it.
The problem isn’t with the picture editors we deal with. They are either not given the information concerning actual print runs, or are told that they will lose their jobs if they reveal any such information without prior authorization from above (usually the legal department). We can have great personal relationships with the people we deal with but these relationships mean nothing when it comes to being paid fairly.
So the question is: “What do we do to get reasonable compensation for out work?”
Must we accept exploitation to get our images used? I hope not. But since we can’t trust the publishers to pay us fairly, I think we have to find a way to exercise more control over how we will be compensated.
Maybe you’re right about the business never changing, but I think technology will bring some major changes in the education business – just as it has in so many other businesses – and I think it will happen very quickly. Regardless of which of us is right, the fact remains that we are not being adequately compensated when our imagery is used in educational materials and we need to find some way to solve that problem.
Jim Pickerell
May responds
With my narrow view from our small, somewhat specialized collection and you with your broader industry outlook, we are actually quite close in our assessments. Probably, something to do with age.
No question that there has long been a general problem with pricing for print runs and then having those runs exceeded without notification of image sources. I guarantee you there are few mechanisms at publishers for tracking numbers of copies against rights granted. This would, in fact, be a large new accounting job for heavily illustrated textbooks due to the different arrangements with different picture sources involved in each title. Now, in the larger markets this job is even more complex with the explosion of multiple ancillary products to support each text. These products use many of the same images.
For decades I did an end run around the whole mess. Knowing what sales of successful texts were in most of the course markets we serviced, I simply set permission fees according to the numbers being achieved in an edition by the better selling titles. So our fees were by edition, not by print numbers. I just shook my head at the standard request language in the forms from the publishers that gave only a number for the first printing. Yet, many photo sources focused on the first printing rather than total number of copies for an edition--the famous "40,000" for many titles for many years.
At college publishers, you could ask a photo editor or researcher at most the major publishers how reprints would be tracked and how image providers would be contacted for extended rights for such additional copies, and they would look cross-eyed at you. I can tell you from personal experience, there were no such tracking mechanisms at W.B. Saunders in Philadelphia, at W.H. Freeman when they were in San Francisco, and at J.B. Lippincott when they had a college division. I won't embarrass a number of others where I know no such accounting existed. There are many business decisions that go into determining numbers for first printings and reprints--several times I printed only enough for the comp copies for the springtime sales effort and had arrangements with printers and fulfillment people to do quick summer reprints and shipping of larger numbers once the first year's sales could be forecast more accurately as adoptions came in.
What image providers need to know are total numbers for a title, not individual printings except when the first printing is all there is. You can see how easy it is for a publisher with executives and list editors not well versed in copyright and permission to think they have put a title to bed with the initial payments upon publication for image uses. On the school division level, publishers tended to be somewhat better about tracking uses, but that tailed off in the 1990s for us as widespread consolidation took place in educational publishing, non-publishing executives who knew even less about image use called the shots at the new conglomerates, and in-house photo staffs were decimated.
I am fully prepared to agree with you and believe the problem of unauthorized reproduction of RM images has grown since. Certainly, there have been law suits against both school division and college publishers. And we haven't even begun to discuss the depressing (for image sources seeking to be paid for reproduction rights) monkey wrench thrown into the mid-90s tangle of consolidation and reshuffling of educational publishers by RF undercutting.
Read more closely and you will see I allow for a lot of change in educational publishing and acknowledge the massive (for that industry) changes that have occurred. All I am saying is change in the products of educational publishers will not happen at a pace that cannot be handled by modified pricing as they occur. What Cengage and Pearson are trying is not driven by a sudden redirection of educational products. What they are trying is to reduce picture costs, get rid of worrying about such troublesome matters as quantities and reuse fees, and end the need to inform picture sources of the products in which images are being used.
Sound a little like RF? Of course it is, and image sources brought a lot of this on themselves with the stupid notion RF and micro would serve mostly new markets and not destroy established markets. A whole generation of image users, including educational publishers, has been trained to think RF first--and image providers are the ones who trained them. And after they get blanket rights on into the future, they'll get rid of even more of their picture staffs and stop calling freelancers who will no longer be needed.
Sorry, but at first review I see your idea for billing every couple of years for blanket rights to an image as a sort of "timed RF subscription." Control over uses of images will be lost. You'll have no idea where and how the images are being used. A publisher may say, at some future rebilling, that an image is no longer being used, but how can you know that is true when an image may be scattered all over a conglomerate with brands and offices here and there in a number of countries? Do you imagine everyone in the corporation will get the word? Abuses will be legion, and lawsuits will not be a thing of the past. At an agency like mine, where photographers trust me not to allow certain misuses of their images, there would be no way to live up to that trust. (Just last month one of the publishers now pushing for blanket rights contacted me about rights to use images in a "custom version" of a title for a religious college pushing creationism and intelligent design, uses that would have been more than embarrassing for our scientist photographers.)
Now, changes in how images are used may eventually make something like your scheme--or some other radically different way of charging permission fees--more urgent and compelling; but if there aren't refinements that maintain control of images by their creators, I'll stop servicing the publishers involved before I toss images to the winds. In fact, one of the biggies has already promised to mark our images for replacement if I don't go along with their bullying, and I'm fine with that.
So, yes, RM image providers need to work on publishers to get their houses in order and end abuse of copyright by overuse. Not an easy task for us and getting more difficult with all the encouragement of RF, micro, and subscription. I created a revised textbook rate schedule last year with more substantial changes than for any other revision over the past 30 years and with categories for number of copies per edition for the first time. I also offer to create PLUS pricing workups for textbook packages instead of using our own format--PLUS is the only trade group in the U.S. worth a damn on these matters so far. And I signed two negotiated pricing agreements with independent publishers over the past year (for durations of a relatively few years) that do *not* give away vaguely defined blanket rights. There is nothing going on that adaptation can't handle, though the exact nature of the adaptations will necessarily vary among us.
Carl May