Quotas At Getty

6

February 18, 2005

Some photographers who have images with several of Getty's 3rd Party Partners have noted that some of the brands that represent their work have posted a lot more of their images than others. These photographers want to get as many images as possible on Gettyimages.com and they believed that once their images are accepted by their agent, a Gettyimages Partner, these images would also be automatically posted on the Gettyimages.com.

When this doesn't happen, and the images don't make it to Gettyimages.com, the photographers tend to conclude that it's their agents fault and their agent is running an inefficient operation. That may not be the case.

There are two other factors that may have a lot more do with the number of images from any particular supplier that make it onto the site - quotas, and Getty's desire to maximize their percentage, or increase their margin, of every sale.

Image Allowances For Partners

According to Michael Teaster, VP, Images Partners at Getty, "We must manage the Image Partner submissions in the context of Getty Images' overall portfolio to ensure our customers have access to the best, most relevant imagery. The primary filter for us is always the client."

What this means in practice is that Getty looks at the specialty of each agency and the type of imagery it normally has to offer. Then it looks at the number of that type of images it wants to add in the coming year. Finally, it establishes an allowance for the number of images each Partner can add to the site in the coming year. I have no idea what the specific numbers are for any given Partner, but sometime last year Getty determined that if the Partners, particularly those newly added, were allowed to add as many images as they would like in 2005, it would be many more than Getty was prepared to handle. Thus, it became necessary to put some limits - a quota - on the number each Partner could add.

Getty wants to add quality imagery and does not want to let their site get too large. Too many images may discourage customers if they get too many returns on any given search.
Quotas tend to force partners to edit tightly and choose the images they believe are most likely to sell, and this would seem to be in the best interests of everyone. Most Partners I've talked to seem to think the quota concept is a good one because it will force everyone to be more careful editors.

I suspect that the quotas are not based on a proportional share of the number of images a Partner already has on the site because that would give an unfair advantage to those who have been on the site for a long time. It would seem logical that each "quota" was negotiated separately in an effort by Getty to achieve some balance on the site among the various partners and among the various types of work - RF, travel, editorial, images from Asia, etc.

This could mean that some Partners that already have a large number of images on the site may have very low quotas and some of the new additions to the site could have high quotas. (To get an idea of the number of images each Partner has on the site take a look at my Story 681 to see the counts for each Partner in November 2004.)

Thus, if a photographer happens to have images with Digital Vision and Brand X which have been on the site the longest, and he also has images with Image Source which was just accepted as a partner last fall, he might find that a higher percentage of his IS images are being added because IS has been given a larger quota so that it might reach parity with the other RF brands.

Another factor that could come into play since all the brands have quotas and cannot post everything they would like, or everything that is on their own site, is that the brand is choosing to post images other than those belonging to the photographer because they believe these other images are likely to generate more revenue for them. For example if the brand has some wholly-owned images and some where they pay the photographer a percentage one would expect them to post all their wholly-owned images first because they get to keep the greatest percentage of sales of these images. The brand could use up all of their quota slots before they get to the images on which they pay their photographers a percentage.

As they edit, the Partners will also want to choose those images that they believe are likely to generate the most revenue. Thus, if they have a general collection, it would seem they might want to concentrate on business and lifestyle images rather than some of the other subjects that tend to not sell quite as well.

As part of their editing process the Partners might look at what is already on the Getty and try to determine where the holes are for their own submission.

It is important for photographers to understand that there are two editing processes. The first is to choose images for their own web site and other portals that place no restrictions on what they will accept for marketing. In this case it simply has to be a good image. The second level of editing is picking images that are likely to earn the most revenue when they made available through Gettyimages.com. These are two very different editing processes.

Improve Margin

The other factor that may influence the size of the quota Getty's desire to impove its margins. CEO Jonathan Klein has made it very clear that Getty Images is moving to increase its margins with its Partners. This means negotiating agreements with new Partners for lower royalty percentages than were available to some of the existing Partners when they signed on, and re-negotiating some of the existing Partner agreements.

I have no actual knowledge of the specific percentages of any of the Partner agreements, but let's look at how this might work.

Digital Vision and Brand X were two of the first Image Partners Getty signed two to three years ago. I suspect that the percentage that these companies receive may have been in the range of 40% to 50% of gross sales. It is rumored that the percentages for companies that signed last fall were no more than 35% at the top and in some cases 30% or lower.

In November Digital Vision had 33,201 images on the site; Brand X, 15265; Image Source, 3255 and Stockbyte, 1094. Both Image Source and Stockbyte have lots of images on their own sites that they could put up on the Gettyimages,com. Assuming that the percentages Getty must pay to Image Source and Stockbyte are lower than those they pay to DV and BX, if they have a choice it is in Getty's best interest to sell an IS or Stockbyte picture rather than one from DV or BX. One way to try to drive sales toward IS and Stockbyte is get more of their images online, thus improving the odds that one of their images will be chosen. This can be accomplished by giving them much higher quotas than DV and BX.

I have no way of knowing for sure that this is happening, but if a photographer has images with IS, BX and DV and discovers that IS is posting a higher percentage of his images on Getty than the other two sites, this might be part of the explanation.

Getty may also be using the quotas to encourage Partners that receive high royalty percentages to re-negotiate their contracts. If they are willing to accept a lesser percentage they might be given a higher quota. The more Partners Getty has vying for a limited number of slots, the easier it will be for them to lower the royalty rates paid to all Partners and increase their margins.