25
The MPCA Debate
June 18, 1996 - On June 17th the Mid-Atlantic chapter of ASMP held a debate on the issue of "Should ASMP Continue To Fund MPCA?" Speaking for the "Petitioners" side that wants to stop the use of ASMP Funds in support of MPCA were Robert Rathe and Jim Pickerell. Speaking for the ASMP "National Board's" position of continued funding were Matt Herron, former president, and Dick Weisgrau, executive director.
The "Petitioners" spoke first with Robert Rathe leading off and Jim Pickerell following. Their statements are printed below. The statements of the two "National Board" speakers will be published later, if they provide us with electronic copies of their statements.
The debate lasted one-and-a-half hours and after that there was an hour of questions from the floor. After the question period there was a straw vote. There were 19 people in favor of the "Petitioners"' position and 7 in favor of the "National Board" position.
By: Robert Rathe
First of all, I'd like to thank you for coming tonight -- our chapter has a long history of
political activism and tonight's no exception. I'd also like to thank Dick and Matt for taking
time to share their views. While this is billed as the great debate, hopefully we'll all share
our thoughts and exchange ideas -- not to see who wins or loses, but to give you enough
information to make an informed decision on the upcoming referendum.
If we're successful, then regardless of the referendum outcome, we all win -- because ASMP
becomes stronger through the process.
If this were several years ago, I'd be sitting at the other end of the table. It's been a long
and sometimes frustrating journey from there to here. Even now, there is a part of me that
doesn't want to give up on the dream -- that want's to see MPCA succeed --- but not at the
expense of ASMP.
After three years, I'm convinced that MPCA is a failing enterprise that will drag down our
Society; eventually draining our financial resources, our energy and our standing in the
industry. In addition, ASMP's traditional leadership in advocacy and education is being
compromised by the intense focus on MPCA.
Our leadership would like you to believe that MPCA enhances this role, but that's simply not
true. We only have so many resources, and when stretched too thinly, they are ineffective.
As an example -- continuing member education -- one of the core elements of our mission
statement.
With Emily Vickers' departure, the concept of an education director to provide quality and
consistency in member education has been put on the back burner. We've not hired a
replacement, so either the job falls on Dick's already overburdened shoulders or remains
undone. This shifting of priorities in the face of logistical pressures is caused by or at least
exacerbated by the burdens of MPCA.
Another compromise to our core mission is that of objective advisor to our members. Let's
say you get a call from Corbis -- they want to sign you up. You need advice on their
contract, so naturally, you call ASMP. But when you talk to Dick Weisgrau - which hat is
he wearing -- ASMP executive director or the CEO of MPCA -- a Corbis competitor?
For years, a highly valued member benefit was the surveys. These gave the average member
information that was vital to understanding what was going on with pricing throughout the
industry. When was the last time ASMP took a survey of its members? There is (or at least
was when I left the Board) a standing policy requiring the office to conduct regular surveys -
- why isn't this being done and have we again shifted priorities?
These are just a few examples of some of the subtle ways that MPCA saps energy from
ASMP's fulfillment of its core mission.
Individually, I'm sure that Dick can explain away the losses, even putting a positive spin on
them -- but collectively, they begin to form a pattern of the ASMP mission becoming
secondary to the needs of MPCA.
MPCA started out as a good idea with a noble mission. But it failed to progress in logical
steps from theory to an operational entity. Throughout its formation, while I was on the
executive committee, our questions about specifics were always answered with something to
the effect of "that's operational -- don't worry about it now".
In hindsight -- the painful truth is that we were clueless about how we would accomplish our
goals. I don't believe the current leadership is any less so. The strategy of bumping around
in the darkness until MPCA finds the light switch just hasn't worked.
As a Society, we are being asked to invest in MPCA, with our money, our staff resources
and most importantly, our reputation. We need to look at this as we would any investment.
Risks and rewards need to be defined as clearly as possible BEFORE committing our
resources and our credibility. This hasn't been done. According to Jay Asquini, 2nd vice
president, the MPCA business plan is the responsibility of our partners. He states that we're
waiting for the MBA's at the CCC to develop our plan. Instead of leading this parade as
promised, we're cleaning up after the elephants.
They claim as a strong potential market the current customers of the CCC and AGT. While
it may be true, it's no different than you or I claiming as potential clients every designer
and ad agency and in the phone book. We know they buy photography, so isn't it safe to
assume that they will hire us -- would that it were that simple.
Despite my three years on the executive committee and six months on the MPCA board, I'm
still confused about MPCA's supposed niche in the marketplace. It is a midget among
giants. If at this instant, 20 agencies the size of MPCA merged in one spontaneous act of
photographic fury, they would still have fewer images than one Corbis, or one PNI, or one
FPG or Stock Market or TIB or Tony Stone ... this list goes on and on and on.
In order to become a player, MPCA must acquire content, and yet, according to Dick
Weisgrau, only about 100 of its 500 members have submitted images -- hardly a vote of
confidence.
It's not hard to understand why. At MPCA, there are no professional editors. A
photographer must spend time evaluating each image using guidelines supplied by MPCA.
Then, each caption must be entered into an special MPCA computer program. Then, in
addition to a caption, each image must be keyworded to ensure that it can be found with a
digital search engine. Because MPCA has no researchers, it's up to the photographer to
think of the appropriate keywords so that images may be seen by the most potential users.
According to knowledgeable stock professionals, this process can take 5-7 minutes per image
to do properly. Then on top of all this, the photographer has to spend $2 per image on
scans. To put this in perspective, a modest file of 5000 images would cost the photographer
$10,000 upfront and take roughly 420 hours -- (10 work weeks) to keyword and prep for
submission. It could be years before you get out of the hole -- even at 70%.
What will MPCA offer the buyer that they can't get at any existing stock house or digital
library? Common sense tells you that the new agency on the block, with a small inventory,
doesn't bring much to the marketplace. In order to establish a market presense it must offer
value to potential clients.
Assuming that MPCA quality is equal to the top agencies, then the remaining elements of
value are service and price. Since MPCA has no editors, no researchers, no account reps,
etc., and claims next day delivery of a CD as its cutting edge technology, that pretty much
leaves price as the sole option to increase market share. Yet, we've been told we won't be
the cheapest guy on the block --- how can that be?
The causes for MPCA's problems are complex -- there are no easy answers. In fact, the
simple truth may be that there are no answers at all -- that MPCA faces fundamental
problems that cannot be solved. It's not reasonable to expect our board or staff be
magicians. They're trying hard to make this work -- perhaps too hard.
While we cannot fault our leaders for not having all the answers, we can demand that they
admit the obvious. After vast amounts of time, energy and money expended, we've made
little headway. The time has come to cut our losses.
On the upcoming referendum, the board will try to convince you that your loyalty to ASMP
depends upon you standing by silently; allowing MPCA to continue to stumble along. But
true loyalty takes courage -- the courage to admit we were wrong and move on. We need to
have the courage that our leaders don't and make the tough call that they won't. I urge you
-- for the future of ASMP -- stop the funding for MPCA. Thank you.
By: Jim Pickerell
Our goal is not to kill MPCA. We simply want the board to stop using ASMP funds and ASMP staff time to support MPCA. ASMP has provided enough "seed money." It's time MPCA became self-sufficient. We have no problem with MPCA members continuing to operate the organization as long as they, and MPCA's affiliates, pay the costs of operation. Photographers who have chosen not to participate in MPCA should not be forced to fund it.
However, I believe it is highly unlikely that MPCA will ever become an operational success.
After three years, and spending over a quarter million dollars, MPCA has only been able to get about 100 photographers to supply images. This is less than 2% of ASMP members. The number of images actually in the database a few days ago was 12,272 and Dick says there are another 17,000 awaiting annotation. Every image submitted is placed in the file. There has been no editing.
Let me give you a little perspective on why quantity and quality are important. In 1994 The Image Bank photographers did a survey and determined they were earning on average $.89 per year, per image on file. This number is consistent with what has been reported for many years as the industry average. Most would agree that the TIB photographers are among the most talented in the world. The TIB file is a carefully edited file.
On average TIB photographers get 32% of gross sales. Which means that the $.89 photographers receive works out to a gross sale average of $2.78 per image, per year. Multiply this per image price by the 29,000 MPCA images, and we discover that annual gross sales might be somewhere in the neighborhood of $81,000.
That's if, the file is seen around the world as is TIB's
If, the selection of images is comparable to TIB's
If, the images are marketed to the high end advertising and graphic design clients as are TIB's. Which, from all we can determine, is not MPCA's plan.
And, If, the images in the file are of the type that high end clients often request,
Which are not the type of images MPCA has been telling photographers to submit.
Keep in mind that 70% of the $81,000 goes to the photographers. This leaves about $24,000 annually. Most of that goes to MPCA's affiliates for their services. Dick has said that MPCA would receive far less than 10% of the gross collected. That might work out to something between $4,000 and $8,000 per year in revenues for MPCA. It is hard for me to see how you can operate a business on this level of annual income.
There is no evidence this type of statistical analysis of market potential was ever presented to the board for its consideration.
A month ago, Ari Kopelman and I spoke at the New Jersey chapter. We did portfolio reviews prior to the meeting. A couple MPCA members showed us a selections of 40 to 60 images they had put in the MPCA database. They asked if they should put some of the images on either a Digital Stock Connection disc or in Direct Stock. We advised them not to waste their advertising dollars.
The images were technically excellent and might have been useful as screen savers, if the subject matter happened to strike the fancy of some program developer. But, in our educated opinions, the subjects of the photographs were not high demand stock subjects.
Bob Llewellyn has 1236 images in the MPCA file. These travel, landscape and scenic images were submitted two years ago as part of an MPCA request for screen saver images. Bob was amazed that every image submitted was scanned with no editing. Carl and Ann Purcell submitted images at the same time and have well over 1,000 in the file. Thus, two members of the Mid-Atlantic Chapter have approximately 20% of the images currently in the MPCA file.
Neither Llewellyn nor the Purcell's have received any payment from MPCA. Llewellyn was concerned about the time his staff had to spend in captioning these images. He doesn't like the idea of paying $2.00 per image and doing all this captioning. He'd rather spend his time producing new images and send them to Pictor, his agency. Pictor has editors, and market statistics that enable them to make intelligent selections for their catalogs. He's not bothered that with Pictor he earns a lesser percentage than with MPCA, because Pictor makes a huge volume of sales for him.
Photographers need educated guidance on what to submit. They need a good editor. Neither MPCA, nor its affiliates, have any one ready to provide that guidance.
Consider the option of Corbis, where some photographers who are MPCA members are also putting their work. Corbis has hired some of the most experienced editors and marketers in the industry. They know what sells. They are choosing material for their file with a definite plan in mind as to how the material will be used. Many of us don't like the percentage arrangement with Corbis, but you can't deny that they are producing a carefully edited file. And, instead of charging photographers for scanning, they pay photographers a draw of $4.50 per image for each image they put in the database. Like it or not, MPCA must compete with Corbis.
Signing Up Photographers
When the fee for joining MPCA was established, I believe the board made the decision based on what they thought photographers would be willing to pay -- not what it would cost to operate the service. I don't think the board was ever shown figures that would indicate MPCA, could provide the proposed service, for the amount photographers were paying to join.
When MPCA didn't generate enough cash to get the service up and running, they had two possible sources for additional cash. They could either get AGT and CCC to make up the difference, or go to their primary "cash cow", the ASMP members who had made conscious decisions not to participate in MPCA.
When MPCA didn't draw enough members at the price they were initially charging they lowered the entry fee, and offered free scanning to earlier members as compensation. In Alan Goldstein's report to the board he notes that Mr. Weisgrau says this free scanning will cost MPCA $137,000 over four years. To break even on this cost MPCA would have to sign up 2,740 new members, or 685 per year.
Dick stated to the board last November that ASMP should be prepared to fund MPCA in the future, just like any other ASMP project -- without regard to MPCA's profitability. This sounds like a totally open ended funding request with a forever committment to continue to subsidize anyone who joins MPCA. At the time this proposal was made MPCA had no business plan with sales projections and spending targets that could define for the board what future income was likely to be.
With the recent consolidation of administrations, there are no checks and balances to control MPCA's tapping into ASMP funds.
File Makeup
MPCA is seeking editorial and documentary images, and discouraging photographers from submmitting generic images. On the other hand, the subject matter in greatest demand, and most commercially successful, is generic images that illustrate concepts and images of model-released people. MPCA has chosen to ignore these market facts.
Most clients have no idea as to how to view the MPCA database, if, in fact, it is currently possible. A multiple disk catalog is scheduled for release this fall. However, many of you were here last June when Dick promised that the first disc with 3,000 images would be out in the fall of 1995. We're still waiting.
Most stock agencies will provide you with the names of photographers who are their top producers. Not MPCA. When I asked Dick for the names of a couple people who had made at least $1,000 in sales he responded that he could not provide me with any names, or information about sales. I've checked with some of the photographers whose images are on the ASMP/MPCA home page, and so far I haven't been able to find anyone who has made a sale.
Of the 579 MPCA members, 130 are in arrears in paying a $50 dues assessment. Many of the others seem to have become disenchanted and indicate they are not planning to supply images.
Price Schedules
MPCA's goal is to use on-line price schedules. This may work for low end sales, but it is not going to work for the high end ones. We find that the negotiating process is the key to getting good prices at the high end. There are more and more instances of multiple uses with unique characteristics that require negotiation. What the market will bear varies greatly from client to client, and use to use. Fixed price schedules tend to either be so high that they chase potentially good clients away, or so low that you end up charging many clients less than they would be willing to pay.
Every time there is a negotiation we have the opportunity to take one small step in educating the buyer to the value of good photography. We can point out the value they are getting from the particular usage. We can emphasize the difficulty of production, and the uniqueness of the image. On-line pricing turns our product into a commodity. We need to try to avoid that, not encourage it.
In a letter to MPCA members dated March, 1996, Dick acknowledges the problems they have in getting their stated prices. He says, "We made numerous submissions and quoted many fees. We lost most sales to stock agencies which priced work below the limit set by MPCA and its members. (Then he goes on to say) A halt was ordered to these forays into the marketplace. To make sales by underbidding would only detoriate the marketplace more."
So instead of selling at low prices, MPCA has stopped selling. Is that the way we increase profitability for photographers?
A goal in MPCA's Mission statement is to increase profitability. MPCA's leaders tend to argue that because photographers are getting 70% they will be making greater profits than they could by selling through stock agencies. This fails to take into account factors that influence profit.
- You may realize more profit from an agency that makes a large number of sales and pays a 50% sales commission, than from an organization that makes many fewer sales, but pays a 70% commission.
- If sales volumes are equal from two agencies, but you have greater costs in suppling images to the organization that pays 70%, you may actually make more profit from a stock agency that is paying you 50% or less.
False Hopes
I believe there is a danger in raising false hopes. Photographers are being misled into thinking that somehow MPCA will be able to market work they have been unable to sell themselves. In fact, there may be very little market for certain subjects photographers have chosen to shoot, and call stock. Many photographers may be wasting their time and money in these efforts. They need education as to what will sell, not encouragement to waste more time and money.
At a recent Michigan chapter meeting photographers were told "MPCA will save your copyright for you." This is ridiculous. I think photographers should be focusing on what they need to do for themselves, in terms of careful negotiation and documentation rather that relying on an "impossible dream." Even if MPCA is wildly successful, it would have no more impact on the marketplace than any other moderate size stock agency.
Compromised Position
ASMP has also compromised its position as a "trade association." It is no longer in a postion to give unbiased advice to its members about stock agencies and digital marketers. James Amos, ex-National Geographic photographer, who was unable to be here tonight points out, "There is a loss of objectivity on the part of ASMP that I believe has been triggered by its association with MPCA. I refer especially to all the negative ASMP comments regarding Corbis. In my view they have been strident and unreasonable. I see a definite conflict of interest that won't go away even if the financing problem is solved. I certainly don't want my membership dues being used to fund MPCA. But, I wonder if it is in my best interest to continue paying membership dues to an association, whose objectivity, I question."
Referendums
Now, let's look at the two referendums.
Frankly, there are problems with the language of both. The "Petitioners" referendum requires ASMP to cease spending any money on MPCA. However, it does not - could not - prevent the ASMP board from spending money to develop plans for new inniatives.
On the other hand, the boards referendum gives them carte blanche to spend as much as they want on MPCA. There are no limits.
Since this issue has come to the point of referendum, after the vote there will definitely be a mandate to do something. A vote for the board referendum will be viewed by the board as a mandate to do everything possible to make MPCA work. And fast. That could get very expensive.
So, How should you vote. I think the voters will fall, more or less, into one of three distinct categories.
- If you think the board has been doing a good job of managing the MPCA project, and that they should spend whatever is necessary to make it work, then you should "Affirm" the Board's referendum.
- If you believe MPCA members should pay the total cost of MPCA's operations and nothing should be taken from the ASMP general fund for this purpose, then "Affirm" the Petitioner's referendum.
- If you would like to see MPCA have another year to show what it can do, but you want it to have a business plan with some controls and some realistic goals that they must meet in order to continue, I would recommend that you still vote to "Affirm" the Petitioners referendum.
Here's what I think will happen, in that eventuality. The Board would have a clear idea of how many members think that, at a basic minimum before moving ahead, the board should have a business plan with realistic income goals, realistic cost estimates and realistic estimates of the anticipated file growth. Not just visions. If the plan calls for additional capital from the ASMP general fund, there must be absolute limits on the amount spent until certain goals are met.
The board can then present the plan to the membership for approval, in a new referendum.
If the board takes this course, there would be very little objection from our side. But their proposal will need to be thorough and make economic sense, or it is not likely to receive member approval.
The board says it will coming out with a business plan in early July. Shouldn't we just delay the referendum and wait to see that?
I would not find that satisfactory. Until the plan is examined carefully, we have no assurance it will work. Getting the plan into acceptable form could take months. Meanwhile, funding needs to be put on hold. Also, both sides need to hear from the members NOW, and understand the depth of support for each position.
The board has had many opportunities earlier to listen to member concerns, and try to provide information or compromises that might have satisfied those concerns, Instead, the board has charged ahead insisting that any and all dissent was coming from a few people who were out to damage ASMP. No attempt was made to deal with the issues raised or to be conciliatory.
We need a vote to settle the issue of whether the majority wants continued open-ended funding of MPCA or not.
Thank you.