Occupy Book Publishers

The Occupy Wall Street movement’s “we are the 99 percent” campaign is basically about a fairer distribution of wealth. Photographers and those who handle the distribution of images to end users need to launch an Occupy Book Publishers movement.

Economic outcomes are shaped by political decisions to a great extent, but they are also shaped by the 99%’s unwillingness to stand up for fairer treatment and to organize in a way that their individual voices can be heard.

Here’s a few facts about the general shift in wealth in the United States.



The Congressional Budget Office (CBO) found that in the 28 years between 1979 and 2007 after tax income grew by:

•    275 percent for the top 1 percent of households,
•    65 percent for the next 19 percent,
•    Just under 40 percent for the next 60 percent, and


•    18 percent for the bottom 20 percent.

According to an analysis of Federal Reserve data by the Economic Policy Institute between 1979 and 2007 the top 0.1 percent (approximately 115,000) households received 36% of all the gains in income during the period.  Another 23.9 percent of the gains went to the rest of the top 1%. 31.5 percent of the gains went to the rest of the top 10 percent and only 8.6 percent of income gains have gone to the bottom 90 percent. (During this same period inflation rose $173.84% or something that cost $1.00 in December 1979 would have cost $2.74 in December 2007.)

To grow the economy the 1% wants the 90% to get out to the malls and buy more products, but they are not leaving the 90% any money to spend on those products.

The top 1 percent of Americans possess more wealth than the entire bottom 90 percent. The 400 wealthiest Americans have a greater combined net worth (cash, stock and property) than the total assets of the bottom 150 million Americans.


 
In 2009, the average wealth held by the wealthiest 1 percent of U.S. households was 225 times greater than that held by the median household.

In the Bush expansion from 2002 to 2007, 65 percent of economic gains went to the richest 1 percent.

So how does that relate to textbook publishers?

North American Education is Pearson’s largest line of business. In 2010 this division of the company had sales of £2.6 billion (over $4 billion) and operating profits of £469 ($725) million. But they can’t afford to share a little of that with the creators of the content.

In 1989 I started publishing the first of five editions of Negotiating Stock Photo Prices. The following were the recommended prices for 1/4 page use of an image in a textbook with a circulation of 40,000.

	1/4 page	Circulation	Territory
NSPP 1989	$175	40,000	U.S.
NSPP 1992	$190	40,000	U.S.
NSPP 1995	$200	40,000	U.S.
NSPP 1997	$200	40,000	U.S.
NSPP 2001	$219	40,000	U.S.

During that period the contracts we had with the publishers said that when it came time to print another 40,000 books the publisher would notify us and pay 75% of the original fee for an additional 40,000. It turned out that in many instances publishers failed to notify creators as they printed and sold for ever higher fees hundreds of thousands of additional books.

Today, the following are the list prices the major distributors charge for 1/4 page use of an image in a textbook.

	1/4 page	Circulation	Duration	Territory
Corbis Standard	$220	40,000	5 years	U.S.
	$430	1,000,000		U.S.
	$245	40,000	7 years	U.S.
	$475	1,000,000		U.S.
	$275	40,000	10 years	U.S.
	$535	1,000,000		U.S.
Corbis Ivy (Premium)	$275	40,000	5 years	U.S.
	$535	1,000,000		U.S.
	$305	40,000	7 years	U.S.
	$590	1,000,000		U.S.
	$345	40,000	10 years	U.S.
	$670	1,000,000		U.S.
Alamy	$240	50,000	10 years	U.S.
	$335	1,000,000	10 years	worldwide
	$385	50,000	25 years	U.S.
	$535	1,000,000	25 years	worldwide
Getty Images
TIB (Standard)	$387	unlimited	7 yearrs	worldwide
Stone+ (Premium)	$425	unlimited	7 years	worldwide

At first glance it appears that prices might have increased somewhat, but that does not take into account a few additional facts. All these companies have “preferred provider” agreements with the major publishers. These agreements offer the publishers substantial discounts on the distributor’s publicly quoted list prices.

In addition the above prices include unlimited electronic use as well as print use. Electronic use was not a factor in the 1990s. Publishers are moving rapidly toward massive electronic use of imagery. And finally, the ridiculously low fees charged for higher circulations do not adequately compensate creators for the value publishers receive.
 
Occupy Book Publishers

There is general agreement among image licensors that the current system of compensation for the use of creative content in educational materials is no longer working. (Carl May, among others disagrees. See here.)

The first thing that is needed is general agreement among the 99% on an alternative strategy that would be fairer to creators. One of the major problems for Occupy Wall Street is that there is no focused alternative suggestion.

The strategy must:

1 – Be workable for the publishers from an administrative point of view. (Publishers seem unwilling or unable to track each new use in the rapidly changing technological environment in which they operate today.)
2 – Allow creators to share the wealth of successful projects without making it too expensive for publishers to test new ideas that may not generate much revenue.
3 – Get back to the idea that at least 10% of gross revenue generated from sales of the product should be shared among the creators. This is not an unreasonable expectation on the part of creators.

Creators need to mobilize to discuss possible solutions. Creator organizations need to join forces to represent the interests of their members with regard to this issue. To some extent this is happening, but it is taking place behind closed doors and progress is painfully slow. The fear is that if the substance of discussions is revealed before an action plan is formulated publishers will stop purchasing the work of anyone engaged in such discussions.

The danger in this approach is that the 99% are not given a chance to weigh in with their ideas, or even be aware of the various aspects of the debate. As a result they have an insufficient understanding of their options and are marginalized and excluded from meaningful participation in solving the problem.

An additional problem is that much of the work obtained by the publishers is supplied by distributors. These distributors are worried about covering their overhead next week and immediate profits, not the long range value of the work they represent, or even of their own businesses.  Individual creators have no power to demand that their representatives not license their work below certain fixed prices.

Instead of camping out in a physical location everyone engaged in producing and selling images for educational publishing should be camping out in a central location on the Internet and engaging in the debate.