Photographer Payment at Getty

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December 14, 2001

In the last few months Getty Images has been struggling with the integration of the many and
varied accounting systems that they acquired when they purchased Visual Communications Group
(VCG) in March 2000. These problems began to come to light in the summer of 2001 when they
started the migration of data from the old accounting systems to their new Oracle based
Alliant accounting system.

This has resulted in multiple sales and payment reports to photographers raising the level
of photographer concern about the accuracy of Getty's reporting. It is important to note
that payments to Stone, TIB and other non-VCG photographers were not affected by these
problems.

In late November and early December Getty took the unusual step of arranging conference
calls with VCG photographers. CFO Liz Huebner and two VP's of Finance were available to
answer questions. They emphasized that, "We want our photographers to know that getting them
paid, and putting in place new systems to prevent such problems from recurring, is a top
priority for Getty Images."

Huebner acknowledged that, "we underestimated the difficulty of the first part of this
transition. We didn't allocate enough people at first, but we learned from our mistake. We
are moving through the second part of the transition with many more people and resources in
place to be sure every transaction migrates properly to the new system. We have now made
this a company-wide effort, and have dedicated our entire internal audit team to royalties.
Although we can expect some typical problems that occur whenever a new system is put in
place, we're confident that we won't incur problems on this scale again."

For over a year Getty has been cutting staff throughout the company and particularly at VCG.
They have refused to give Selling Stock any numbers regarding how many staff were in
accounting at the time of the acquisition and how many were left at the time these problems
started to manifest themselves. However, it appears they may have cut way too fast and the
remaining staff were simply overwhelmed by the work load. Nevertheless, now they seem to be
bringing the necessary people resources to bear to deal with the problem.

Roger Ressmeyer, VP of Strategy & Corporate Development, has said that the current problems
will be corrected by the time the December statements are mailed. He continued, "We are well
into the transition process, which should be largely completed by the middle of 2002. We
have an extensive team of employees, consultants and experts working on the project to
assure that nothing is "lost" in the process. Continuous audits will assure that any
problems in transition are detected, reported and corrected. If photographers find something
on their reports that we haven't yet caught, that information can help as well, especially
if it is submitted to us right away."

In some cases photographers will continue to receive two sales reports a month until the
transition is complete. Some of the old data will not be imported into the Alliant database
and the old systems will continue to be used until photographers have been correctly paid
for all sales made through those systems.

One thing that has added to the confusion is that under the old systems photographers were
issued a sales report in the month after the sale was booked, but were paid after the fee
was finally collected from the customer. This often made it difficult to compare a reported
sale with a payment.

Under the new photographer contracts a new payment policy has been put into effect. A sales
report and royalty statements will now be issued in the month after the sale is made. Checks
will be mailed 90 days after the reports regardless of when the customer pays Getty, and
will match the sales statement. This should make it much easier for photographers to track
when sales have been paid.

During the conference call CFO Liz Huebner said, "our new systems are integrated, so the
company can't recognize revenue until the sale is recorded and flows through to royalty
payments. Among other reasons, we are highly motivated to pay every photographer properly
so we can recognize the revenue. This is just one more way that our interests are aligned
with those of our contributing artists."

Cancellations

When Getty acquired VCG each brand had its own accounting system with data formatted in many
different ways. There were a myriad of unique conditions and special contracts. Sales were
reported in the local currency of the country where the image was licensed and often the
currency used was not clearly indicated.

In the process of migrating this data some agent sales were inadvertently entered at the
gross sale figure, rather than after the agent's split, overstating the amounts received
from sub-agencies. Once this was recognized it was necessary to cancel transactions within
the system and input revised transactions. This unusually large number of cancellations
created concern among the photographers. Getty says, "We are auditing all cancellations to
make sure they are entered at the same royalty rate as the original transaction."

Roger Ressmeyer says, "In the short term, while new systems are being phased in, there are
more cancellations and more confusion than usual. This will unfortunately continue until the
transition is complete. If a photographer finds something on a report that seems incorrect,
we would like to hear about it immediately. This can be accomplished by e-mailing
anthony.harris@gettyimages.com. We greatly appreciate this kind of assistance."

Among the other problems that have concerned photographers are: