The new Getty Images Contributor Agreement is now available. It raises a number of issues for Getty photographers. Photographers must sign the new contract before the end or April in order to continue to submit new images. If they choose not to sign Getty will continue to license their images until their current contract expires. At that point their images will be removed from the database.
Transferring RM to RF
The contract raises a number of issues that photographer should carefully consider. Possibly the issue of greatest concern is that the agreement gives Getty Images the rights to move RM images to RF if the image has been on the site for 36 months and never licensed. Once the image is RF it can be included in the Thinkstock product that is a subscription offering.
Currently Getty has 1,798,298 RM images on its site. I estimate that in 2010 they licensed rights to about 500,000 RM images. Many of those that were used were licensed multiple times so the total number of unique images licensed is probably quite a bit less. This means that there are probably a huge number of images that have not been licensed in three years and could be moved to other products like Thinkstock. This would dramatically increasing the size and quality of the Thinkstock offering.
Getty has assured photographers that there will be a “careful edit” before any image is moved and only those that could benefit from being available in another product will be moved. Images will not be automatically or unilaterally moved after three years. Nevertheless, photographers are very unhappy about the possibility of their RM images being licensed as RF. In many cases photographers paid $50 to have their image included in the RM collection and they are disturbed that such images would now be licensed for very low prices, if at all.
Some photographers have asked that they be given the right to remove individual images rather than have then placed in RF, but Getty has said NO. It is believed that the reason for this is that Getty's administrative costs would be too great and they would be unable to make modifications to their offering rapidly enough to meet customer demand. Photographers must either remove their entire collections from the Getty site or accept all future decisions of Getty as to how, and in which collections, images will be marketed. If the photographer then becomes dissatisfied, the new contract does allow the photographer to terminate at any time with “90 days written notice” which is much better than the termination clause in most previous contracts.
Rate Card
Another thing that has the potential to dramatically affect photographer earnings is the change in the method of calculating contributor compensation – for certain uses – from a “royalty percentage” to a “rate card.”
The market for imagery is changing rapidly and dramatically and Getty needs to be in a position to quickly modify content use across a variety of license models, products and services to respond to changing customer demand.
In most cases the fees for these new products and services are likely to be lower than existing prices. In order for Getty Images to profit when making such low priced sales (even with hoped for increased sales volume) the company must keep a larger share of the total fee collected and pay less for the content they are licensing.
To accomplish this they are moving away from the traditional “royalty percentage” as a way of calculating contributor compensation and to a “Rate Card” system. In instituting the rate card strategy for compensation, eventually Getty will be able to change commission rates for many uses by simply posting a declaration of a rate change. No additional signature or acceptance by the contributor will be required.
The first and only “rate card” included in the contract outlines the fees that will be paid for images downloaded as part of Thinkstock subscriptions. In future, all Getty has to do to create a new rate card or adjust rates on an existing card is give 30 days notice on its web site. The rates are then effectively changed in all contracts. Once this strategy is in place it seems likely that a series of rate cards for a variety of different, mostly low budget, products will be instituted. A rate card for various Premium Access uses would seem an obvious likely addition.
Photographers should not be confused by the terms ’royalties’ and ‘royalty rates.’ While the amounts in the rate card are royalties they are not a percent rate calculation, but a flat fee paid for each subscription download.
On the Thinkstock subscription rate card the photographer receives $0.40 for every image downloaded as part of a monthly or annual subscription. Customers are allowed to download up to 750 images a month for either $199 or $299 per month. Thus, if someone really downloads 750 images Getty would only be earning $0.26 to $0.39 per image downloaded and paying photographer more than they receive.
Since it is hard to believe that Getty had decided to lose money the real question is: “How many images does the average subscription customer download in a month?” Getty is never expected to supply that information, but if the average customer downloads between 44 and 66 images a month Getty would be paying out about 22% of the gross fees collected in royalties. If customers download less on average then Getty gets to keep more than 80% of the gross fee paid. If customers start downloading more Getty can either raise its subscription prices, or adjust the Rate Card so photographers earns less.
The Thinkstock rate card also lists 16 different prices for Image Packs, but if you go to
www.thinkstock.com only four different packs are listed. The chart below shows the unit prices, the number of images that can be downloaded for that price and the fee the photographer is paid per download. The next columns shows the total fee Getty would pay for all the downloads, and the average percentage of the total collected that Getty will pay out to photographers. Customers have a year to use their downloads. Some will not use all of them. In such cases Getty earns a higher percentage of the gross paid.
| |
|
Photographer |
Gross |
Percentage |
| |
|
Paid per |
Paid for |
of Gross Fee |
| Price |
Downloads |
Download |
Images |
Paid Photogs |
| $59 |
5 |
$2.60 |
$13.00 |
22% |
| $229 |
25 |
$2.02 |
$50.50 |
22% |
| $799 |
100 |
$1.76 |
$176.00 |
22% |
| $1,499 |
250 |
$1.32 |
$330.00 |
22% |
There is nothing to prevent Getty from creating a rate card for a single customer. Photographers will never have any idea as to how much Getty is collecting for the use of their images when they are paid using a rate card strategy.
The royalty rates defined on the cover page of the agreement will still be applicable for single image RM and RF sales, but when it comes to electronic and digital uses it seems likely that an increasing percentage of total sales will fall into some rate card category.
Today, a huge percentage of total image uses are on the Internet and other electronic platforms. Meanwhile, the market for the use of imagery in print is declining. Getty believes that it needs to develop totally new product offerings and it needs the flexibility to respond quickly to new developments in this changing market.
Moving Away From RM
It seems clear that Getty is moving away from the whole concept of RM. They will reduce the size of the RM collection and focus much more on achieving a volume of small uses. This does not mean Getty will give up RM licensing all together, but photographers can expect to see a steady decline in the number of RM images licensed. RM sales which may already be less than 2% of all images licensed will continue to decline as a percentage of total images licensed. This expected decline is clear justification for the new licensing strategy.
As I pointed out earlier, in 2010 Getty probably licensed rights to about 500,000 RM images. Many of those licenses were at Premium Access prices. They probably licensed rights to about one million images at traditional RF prices. Meanwhile, iStockphoto licensed rights to between 22 and 25 million images and all the microstock sites together probably licensed rights to about 100 million uses. Clearly, there is a whole new market out there that is not interested in RM images. No matter how great the quality of these images the customers are simply not willing to pay RM prices. Getty wants to address this new market. But they can’t do it with RM images.
Whether Getty can be successful in reaching out to this new market is another question. They have a perception problem. Customers view them as the high priced product. Offering some low priced content is not enough. Customers for the imagery Thinkstock will have to offer know of iStock and Shutterstock and have been using them. On those sites the customers are able to find what they need. They will not switch easily.
Customers looking for an image for Internet use tend not to be as picky about what will satisfy their needs as an ad agency art director designing a full page ad as part of a major print campaign might be. Customers will not run to Thinkstock just because Getty has a new product.
Exclusive and Non-Exclusive
In light of the recognition that the market is changing dramatically and that Getty needs to adjust its sights toward the new Internet customers and small business users it may be time for the company to modify its position on exclusive representation of all images and bring its position more in line with that of iStockphoto.
If an image is being licensed as RF there is very little justification for Getty being the only company to represent it. If the image is being licensed on Thinkstock it would be in the photographer’s best interest to also make that image available through multiple microstock sites around the world. A photographer would probably earn more from either Shutterstock and iStockphoto than he will earn from Thinkstock. The ideal situation would be to have the image available non-exclusively on all three, and other microstock sites as well. In such a situation it is hard to imagine that the Thinkstock sales would represent even a majority of the revenue earned by the image. But, Getty has said NO to non-exclusive representation of Thinkstock images.
iStockphoto accepts photographers on both an exclusive and non-exclusive basis. They give their approximately 5,500 exclusive photographers higher royalty payments and these photographers are allowed to participate in certain higher priced brands that are not available to non-exclusive photographers. With iStock there is a real benefit for being exclusive, but only about 6% of the iStock photographers have chosen to go exclusive. The rest are either not active enough to qualify to be exclusive or feel they benefit more from having many agencies represent their work. The main thing is that the contributors have a choice.
iStock contributors are also given a choice when it comes to participation on Thinkstock.
Only few of the top iStock contributors have accepted the Thinkstock/photos.com deal. Getty is not willing to give its contract photographers the same choice.
Getty continues to insist that any of a photographer’s images accepted for marketing by them must be exclusive to Getty Images. However, a lot of the Getty Image Partners are free to license the same images through their own web sites and through other sub-agencies around the world. This is particularly true if the images are royalty free.
It is interesting that Getty currently has about 3,410,647 RM and RF images on the Creative section of its site. Only about 47% of those images come from photographers that will have to sign the Getty Contributor Agreement. The rest come from Image Partners for whom Getty handles some of the marketing of their images. The Image Partners deal directly with their photographers and tend to get a lower royalty percentage than individual Getty photographers. The Image Partners must split what they receive with their photographers. On the other hand, if there is a big movement toward “Rate Card” fees the Image Partners may end up having more control over how their images are licensed on the Getty site and they might even get more than the photographers dealing directly with Getty will receive for their usages. The other big advantage of dealing with one of Getty’s Image Partners is that the images will be distributed through lots of other distributors around the world in addition to Getty.
Getty photographers faced with the choice of accepting this new contract might want to explore the option of letting their current Getty contract expire and submitting their new images, and any that Getty returns to them, to one of Getty’s Image Partners.
Educational Use Relicensing
Still another problem with the new agreement is that “Educational use re-licensing for the same use as the original licenses, is set at five renewals.” The standard license term for an educational use on the Getty web site is 7 years, although we hear that in some cases they are licensing rights for 20 years.
The language in this new agreement means that once the photographers has signed it, and even if he/she later terminates the agreement Getty has the right to renew the licenses five times for a total of 42 years and possibly up to 120 year. Since most licenses now include electronic use that means that even if the publisher stops printing books it will still have the right to continue to use the photographer’s image in any kind of electronic delivery system.
According to the Getty web site publishers can license a Stone+ images for unlimited inside use, any page size, for 7 years including unlimited use on the web for $425. After 7 years, if the publisher comes back for a reuse it get the image for another 7 years for $261. It sounds like in 2038 Getty will still be licensing use to an image first licensed this year for $261. Forget about inflation.
Serach Return Order
It is not clear where the images of those who choose not to sign will be placed in the search return order. One would think that the images of those who sign might be moved up in the search return order in an effort to generate more revenue for them and give them some encouragement. If this were to happen the images of non-signers would drop toward the bottom of the search-return-order, and be less likely to be seen or used. There is no confirmation of this. Getty has said they will not treat the images as if they had been submitted when the contract is signed which would move them higher in the search-return-order.
For more discussion of the new contract check out the Getty forum.