57
Nature Books
January 10, 1997
I have printed below a contract presented to Gary Braasch by Chanticleer Press
for the use of some of his images in the National Audubon Society Regional Guide
series. They expect to produce at least 8, and up to 16, books in this series
in the next few years. In all likelihood hundreds of photographers will
participate in these projects.
Chanticleer is a packager, not the publisher. The publisher (Audubon) is
responsible for manufacturing, advertising and distribution costs. It is
unclear how Chanticleer is paid for their services, but it would appear that, at
least on the CD-ROM products mentioned in the contract, they will get a
percentage of the gross sale price of each product.
Since Chanticleer has no costs of manufacturing, advertising or distribution
they probably receive no more than 20% (we have no way of determining the actual
percent) of the gross sale price of the product. Thus for each book that sells
at retail for $10 Chanticleer might receive $2. We assume that Chanticleer has
a minimum guarantee agreement with Audubon (which would be standard) and this
guarantee would probably cover all photo acquisition costs and most of their
research costs.
Below the contract is Gary's initial response to Teri Myers, the picture editor
on the project, and some of his thoughts after an initial discussion with Ms.
Myers.
Finally, Jim Pickerell has supplied his observations concerning the contract.
Chanticeller Press Agreement for publishing Audubon Society books.
This is to record our agreement covering the use of photographs submitted by you
for publication in the National Audubon Society Regional Guide series
(hereinafter called the "Book"). This agreement also covers additional uses of
your photographs in other titles in the same series or in related book or folder
series, created by Chanticleer Press, such as regional guides, field guides,
nature folders and juvenile books. (All such related publication are
hereinafter called "Other Books".)
As agreed, our payment to you for each photograph included in the Book shall be
as follows: $150 per photograph used larger than one page and up to a double
page spread, $100 per photograph used larger than one-half page, and $50 per
photograph used as one-third page or less. In no event will the total fee paid
upon publication of the Book be less than $100. For each of your photographs
used in the Book, which are then used in any Other Books, we will pay you 50% of
the original usage formula for the first additional use, and 25% of the original
usage formula for each subsequent use.
You have also agreed to allow us to use the photographs you have submitted in
electronic publishing programs and products based on or derived from the Book or
the Other Books, whether or not such photographs appear in such books. In
return for this right, and 10% of all income received from licensing of the
rights to the program in which your photography appears, multiplied by the
proportion of your photographs used in the program to the total number of
photographs used. (For example, if 100 of your photographs are used in an
electronic product containing 500 photographs, you will receive one-fifth of 10%
of the applicable income received by us from that product.) In the event of our
receipt of such income, we will report to you in writing every six months the
amount of your income therefrom, accompanied by payment (by March 31 for the six
months ended the preceding September 30, and by September 30 for the six months
ended the preceding March 31). You shall have the right on reasonable notice to
audit our records relating to such income to assure yourself that the reports
and payments to you are correct.
In allowing your photographs to be used in the Book, in Related Books, and in
electronic products based on or derived therefrom, you are granting to us the
right to publish those photographs in all editions, reprints and revisions, in
all languages, throughout the world for the full term of copyright, and for the
purposes of promoting, advertising, and publicizing the Book or programs,
including serialization.
You warrant that you are the owner of the rights granted herein, and that
publication of the photographs submitted to you will not infringe on the rights
of any third party.
It is understood and agreed that this contract is for the acquisition of
specified rights, not the performance of services. Accordingly, Chanticleer
Press is not responsible for withholding or payment of taxes, social security,
worker's compensation, or for other benefits or cost reimbursements, or any
other payments imposed by any taxing or governmental authority.
We will notify you in writing once photographs have been selected for use. Each
of your photographs will be fully credited to you in all publications in which
they appear. Photographs may be reproduced in silhouette. In the event of a
dispute over loss or damage, the value of the transparencies will be determined
on a case by case basis, with a $500.00 per slide maximum. All of your
photographs will be returned to you as soon as possible after their use by us
and in any event not later than one year from their receipt by us.
We will furnish you with a complimentary copy of each Book in which your
photograph appears, and you shall have the right to purchase additional copies
at a discount of 50% off the list price. We should have your orders for
additional copies in advance of the publication date.
Please record your agreement to the terms of this letter by signing and
returning to me one copy of both pages of this agreement. Payment will be made
upon publication. Retain one copy for your records.
Gary Braasch's Response to Teri Myers
I am responding to your Dec 20, 1966 contract for the Audubon Society Regional
Guides. This contract is largely unacceptable.
We are willing in a book of this scale to accept $50 for a small use, although
our usual small book minimum is $100 or more. We think the price for double
spread should be at least $250 (and we assume the cover use would be separately
negotiated). These would be American rates for up to 20,000 copies -- the world
rights and all language rights you ask for will increase the price by at least 3
times.
However, your request to get a blanket discount over your minimal rates on later
books, is denied very strongly. If you wanted to put out a children's version
of the exact book, or a revised edition of the same book, some discounts might
normally apply; usually no more than 75% of the basic fee. But each other
separate book must be separately negotiated and priced. Same for revisions.
This is a long-standing understanding in publishing.
Further, I deplore and deny your attempt to gain blanket long-term world
electronic rights, even to photos not used in this first book, on a tiny royalty
percentage. This looks like a request for photographers to subsidize your new
projects. We look on each electronic product as we would a book, and apply
similar pricing of rights grants. We ask a normal payment on publication--and
welcome royalties after that.
Your contract is a very bald attempt to grab many rights for a pittance. We
value our long relationship with Chanticleer. Please try again. I am going to
let other interested parties in publishing and photography know about this
contract, too.
After discussions with Myers, Braasch wrote the following:
I want to follow up on this issue and briefly report on a very cordial and
productive conversation with Teri Myers, Photo Editor for these books at
Chanticleer.
Teri Myers said the contract was not written to take advantage of anyone. It
reflects the realities of the great expenses involved in publishing these
guidebooks. They involve many photographers and much research, and even more
sources are required to produce CD-ROMs (which contain more material). In
addition, the electronic market is still very unknown and risky. Ms. Myers
states that many publications make very little or no profit.
She said that Chanticleer tries to work with photographers, both in adjusting
contract terms, and also buying as many photos as possible from individuals so
that their income is greater. She noted their efforts to write the contract in
plain English so it could be understood. Ms. Myers said that many book series
are interrelated, and that the "Other Books" usage would be in offshoots or
revisions of the basic series, or repeated use of, say, animal ID photos, in
several volumes of the basic series. No use in entirely different books is
intended.
For my part, I said I valued the long history of Chanticleer in using nature
pictures. I knew I could negotiate their contract with her (and would) but that
I was very concerned over the long-term effect of shrinking income from book
revisions and new uses like CD's -- should the terms of this contract become
generally accepted. Nature photographers are also low-profit businesses. I
stated that the contract terms would allow usage of 25% for books we now would
expect 75% to 100% of the original fee, and which are sometimes significant
portions of our income. I stated that if CD revenues does not exceed costs,
photographers would apparently receive nothing for the use of their work, which
is a change from the way books are done.
Ms. Myers did not offer to change the basic contract, but to negotiate with
individuals to reach a satisfactory working arrangement, now and for future
projects.
Observations by Jim Pickerell, editor of Taking Stock
I agree with Gary's initial assessment that "this contract is largely
unacceptable." To change the contract to the point where it might be acceptable
is not a re-negotiation, it is writing a totally new contract.
As to the base price offered, it is ridiculously low for one-time use,
particularly when we consider that there is absolutely no limit on print run.
In the survey we did in November 1995 the median annual stock income for nature
and wildlife photographers was $11,200 per year, and their income was
significantly lower than photographers doing other types of work. They are at
the bottom of the barrel because they regularly face contracts like this one for
the use of their work.
If the demand for a product is not big enough to allow all parties involved in
its production to make a profit, maybe it shouldn't be produced.
If there is great risk that a product will not be profitable, the fairest way to
go ahead with production is for all parties involved to share proportionately in
the risks -- and to share the profits in equal proportions. Publishers, and in
this case the packager, want photographers to accept a disproportional share of
the risk, and not share at all in the profits.
What is intended, and what is allowed by the contract may be two different
things. I am sure Ms. Myers is a very honorable person, but next year someone
else may be in her job -- or worst yet in the accounting department of
Chanticleer publishing. Once the rights are given away by contract, they are
given away -- regardless of any "initial intent."
I would like to know how much their printer or their CD-ROM producer are
discounting the price they charge for their services because this is a risky
venture.
There are two aspects to this contract -- the books and the future electronic
rights. On the book side, there is no specified number of copies in the initial
or subsequent printings. If the packager is not trying "to take advantage of
anyone" and is really interested in their suppliers they would agree to some
type of a royalty system based either on the number of printed copies sold or
the gross revenues from their sales.
The total paid for the creative element of the project ought to be in the range
of 10% of gross revenues from the sale of the book, not revenues after a lot of
the expenses have been deducted, which is implied whey they use the term
"applicable revenue." This amount ought be shared among all those whose work is
included in the product. If the product becomes a best seller, those who supply
the content ought to share in its success.
It is easy for a packager to tell you that every product they produce loses
money, if they have no obligation to report the number of copies sold or to pay
extra when products sell well. The 10% relates to the electronic uses, not the
books. In this situation it is interesting to consider whether or not the
packager is actually getting a percentage of sales. In most book publishing
arrangements where there is a single author the author gets a minimum guarantee
against a percentage of every book sold. Since the packager is functioning very
much as an author in this particular case, it is certainly reasonable to assume
that they will get a percentage of every book sold, no matter how high that
number. Since they are limiting their costs to a fixed amount they stand to
profit from increased sales while those who created the work do not.
In connections with future electonic uses the clause "You have also agreed to
allow us to use the photographs you have submitted in electronic publishing
programs and products based on or derived from the Book or the Other Books,
whether or not such photographs appear in such books," raises some interesting
issues.
1 - It entitles them to retain scans of any images "submitted" -- not
necessarily purchased for one of their books -- and to use those submitted
photos in future unspecified digital products.
2 - They also are allowed to hold onto your images for one year and scan them
at their convenience without compensating you in any way for holding the images.
3 - The photographer will never be able to license "exclusive" rights to any of
the images submitted because Chanticleer will always have the right to use them
at any time, even if the originals have been returned to you. (Chanticleer says
they will not use the images for these new projects without first checking with
the photographers, but the contract does not require them to do that and they
refuse to change the standard contract to be more specific.) This could
severely affect the potential for future calendar and greeting card uses.
4 - While the photographer shares 10% of the "applicable income" from the
licensing of the rights to the program, it is not clear from the contract what
"applicable income" is. There are two points to be considered here.
(A) If they actually produce the product and thus have to pay all the
production, marketing, distribution and another costs out of the revenue they
receive, they can deduct all those costs before arriving at the figure they will
use to calculate the 10%. Applicable income could be interpreted to be all
income after production costs are deducted. The language is not clear.
(B) On the other hand Chanticleer says that they probably won't have these
costs and thus the photographer will get 10% of everything they receive. The
question here is that under these conditions is 10% fair.
The 10% figure that is often used in the industry is based on the gross
"retail" price of the product. There is room for some negotiation around this
figure, but this is the ballpark. Thus, if a book sells for $10.00 all the
people who have supplied creative material should share about $1.00 of that fee.
(The rest goes to manufacturing, marketing and distribution.) If Chanticleer
only receives 20% of that $10.00 they should split it 50/50 with the creators.
If they only get 15%, they should give the creators 75% so the creators still
end up with 10% of the "gross sale price."
The percentage looks reasonable if Chanticleer were the publisher, had all the
publishers costs and was calculating the percentage on the gross sale price.
For a packager to keep 90% out of the percentage they receive for their research
services seems excessive, and grossly unfair.
One of the many problems with this contract is that the photographer has no
way of knowing what percentage of the retail price of the product he or she will
receive.
5 - Chanticleer could decide to produce an on-line or CD-ROM product that is
basically a "loss leader" used to promote and market other products they might
produce. If your images were used in that product and little or nothing was
charged for it, the photographer would receive 10% of little or nothing. The
publisher benefits. Chanticleer benefits because they get 90% of what the
publisher is willing to pay for finished content. The person supplying the
creative material loses big time.
The person supplying the creative may have no say once he or she has signed
the initial contract and supplied images for consideration. Chanticleer says
now that they will notify the photographers prior to these future uses, but they
are not required to do so in the contract.
Chanticleer also gets to hold your money for from six to 12 months before paying
you. If your stock agency happens to make a deal with Chanticleer then you have
to add their normal payment delay onto the above.
I have not figured out how digital technology has enabled photographers to go
out in the field and produce 10 or 100 times more usable images in any 24 hour
period, than they were able to do before. I have not been able to increase my
productivity in this way. In fact, it costs me more than it did a few years ago
to produce the same number of saleable images. Maybe I'm just not a very good
photographer. But, if we expect to make a profit at greatly reduced rates for
usage, somehow we have to become much more productive. Frankly, I think such an
increase in productivity is impossible. The fact that publishers more images
per product for new products that will sell at the same price, or less, than
books have traditionally sold for, does not reduce the photographer's cost in
producing, filing, researching, marketing and delivering the images so the
publisher has something to consider for their product.
In my opinion world rights should not necessarily be three times U.S. rights.
The price should be related to the number of copies distributed in the U.S. and
the number of copies distributed in other parts of the world. For example if
100,000 copies are sold in the U.S. and only a total of 5,000 copies sold in a
few countries overseas, there is no justification for charging three times the
U.S. price for world rights. On the other hand, it they are selling 100,000
copies in the U.S. they should be paying a lot more than an "over 40,000" price
for the U.S. usage.
The standard practices for pricing book usage are greatly outdated. The way
books are produced has changed radically. Pricing needs to be restructured so
it is based on the actual number of copies sold, regardless of where they are
sold. The kind of fees we have been getting for under 40,000 should be for
under 20,000 copies distributed anywhere in the world and the fee for additional
distribution should rise proportionally.
It appears that the packager, like many magazine and newspaper publishers today,
is trying lock up many future electronic rights to material for an extremely low
fee. Granted, they have offered a percentage of sales, but the amounts received
by the packager and those received by the creative have very little to do with
the real value offered by either party, or the risks either party takes.