November 1998 Selling Stock

Posted on 11/10/1998 by Jim Pickerell | Printable Version | Comments (0)

179

NOVEMBER 1998 SELLING STOCK

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Volume 9, Number 2

published by Jim

Pickerell six times a year. The annual subscription rate is $80.00.

subscriptions may be

obtained by writing Jim Pickerell, 110 Frederick Avenue, Suite A, Rockville,

20850, phone 301-251-0720, fax 301-309-0941, e-mail: jim@chd.com. All rights

are reserved and no information contained herein may be reporduced in any

manner

whatsoever without written permission of the editor. Jim Pickerell is also

co-owner of Stock Connection, a stock agency. In addition, he is co-author

with

Cheryl Pickerell of Negotiating Stock Photo Prices , a guide to pricing

stock photo usages.

Thought For The Month

Will we ever be able to communicate with each other?

In a recent on-line discussion about the meanings of words in American and

English Barbara Coxe wrote, "I'm an American married to a Brit. It took me

years to get straight that "lifts" are elevators, "biscuits" are cookies,

"lorries" are trucks, "the tube" is a subway, and a"tires" is spelled

t-y-r-e-s. To me a "tranny" is a vehicle's transmission - not a slide, and a

"slide" is a 35mm piece of film in a mount - not a zipper.

My question. Will we ever be able to describe pictures with words that can

be universally understood?

Story 176

TONY STONE GOES ONLINE

October 14, 1998

Getty Launches Full Web Commerce for Tony Stone Images

The long awaited Tony Stone images web site is now on-line at www.tonystone.com .

The interface is very attractive and user friendly, and the speed of search (on my

computer at least) is excellent. Searches are possible by using keywords,

photographer name or image number. The site also offers on-line payment and

delivery.

According to TSI, at launch the site had over 40,000 images, with more being added on

a weekly basis. These images were from approximately 900 photographers.

We haven't had time to search for 900 different photographer's, but some of the TSI

photographers with large numbers of images on the site are: Bruce Ayres (851), Lori

Adamski Peek (745), Ken Fisher (360), David Hanover (357), Charles Thatcher (333),

Doug Armand (322), Terry Vine (312), Jon Riley (284), Donna Day (257), Dennis

O'Clair (255), Christopher Bissell (228), Nick Dolding (212), Darrell Gulin (202),

Steven Peters (199), Donovan Reese (198), Ed Pritchard (194), Walter Hodges (165),

Bruce Forster (160), Vera Storman (157), Timothy Shonnard (157), Dan Cox (143), Paul

Harris (135), Stuart McClymont (123), Mitch Kezar (116), Don Smetzer (114), Phil

Borges (108), Peter Poulides (105), Ben Edwards (91) and John Lund (90).

Images Not Included

More interesting are the number of images not on the site and the photographers not

included. When Getty purchased TSI in 1996 they told stockholders that there were

40,000 images in the Master Dupe Collection. Since that time they have been telling

stockholders that they have been adding new images to that file at an approximate

rate of 20% per year. Thus, why is the total number of images on-line not closer to

60,000 rather than 40,000? A major part of the answer lies in the number of

photographers who have not signed new contracts, and who they are.

Major TSI photographers with zero images on-line include: Art Wolfe, Frans Lanting,

Jake Rajs, Nicholas Devore, Tom Bean, Tim Davis, Renee Lynn, Andy Sachs, Brian

Bailey, Greg Pease, Penny Gentieu, Kevin Kelley (World Perspectives), Zigy Kaluzny,

Wayne Eastep, David Muench, Pat O'Hara, Deborah Davis, David Frasier, Will McIntyre,

Stuart and Michelle Westmoreland, David Hiser, Gary Braasch, Randy Wells, Paul

Chesley, Chris Sanders, Eddie Soloway, Mark Segal, Bob Daemmrich, J.W. Burkey, Vince

Streano, Natalie Fobes, Bruce Hands, Joe Pobereskin, Joe Sohm, Don Bosler, Julie

Fisher, Frank Herholdt, Jack Dykinga, Larry Ulrich, Lucien Clerque, Frank Herholdt,

Chuck Pefley, John Lawrence, Stewart Cohen and Tom Alexander.

We understand that there are other photographers who have images on the site, but

haven't actually signed the new contract. These include: Ron Sherman (3 images),

Nick Vedros (7), Vedros & Associates (4) and David Madison (499 images).

In addition there are some Liaison photographers who have had some images accepted

into the TSI catalog, but have no contracts with TSI at all. These include Ron

Krisel (86 images) and Mark Romine (13 images). It is presumed that if they haven't

signed, they will be getting 50% for any sales made of their images unless Liaison

is being given a percentage in which case these photographers might be getting 30%

of the gross sale price.

Of course, some of the reason for only 40,000 instead of 60,000 images on-line could

be that TSI has decided that some of the older images in the Master Dupe Collection

are no longer marketable. We know that is the case with a limited number because

not all photogrpahers with images in the MDC were even offered new contracts.

However, unconfirmed rumors from TSI sources indicate that as many as 15% of the

photographers offered contracts, which could be a total of around 150, have not

signed. Because these photographers are among TSI's top producers they might

represent as much as 25% to 30% of TSI's best selling file.

TSI photographers were given a deadline of September 15th to sign the new contract,

but many have lawyers still negotiating on their behalf because they are unhappy

with many of the provisions of the new contract. Not the least of these is the

reduction of their royalty percentage from 50% to 40% for sales made in their home

territory.

It is our understanding that a few of the major photographers who have signed, and

who have images on-line, particularly a group of Los Angeles based photographers,

got some significant compromises in contract terms. No one seems to have any

knowledge of the specifics or these changes.

One of the key issues in settling with the existing holdouts, is whether TSI can

come to an agreement with the photographers that not only allows them to market the

existing Master Dupe images on-line, but encourages the photographers to continue to

produce.

It should be noted that the existing contracts remain in force until the new

contracts are signed, and thus their is no problem with TSI continuing to license

Master Dupe images as a result of print catalog and file search requests. The only

thing that is being held up is the licensing of some of these images on-line.

Photographer Concerns

As a result of this contract, and other signals being sent by Getty management, many

photographers, both those who are unsigned and many who have signed "image

exclusive" agreements, are beginning to look around for other ways to market their

work. The negative signals from the photographers point of view include:

Getty's constant emphasis to the stockholders that their goal is to decrease

the photographer's share of gross sales. Their goal is to reduce their "Costs of

Sales" and they argue to stockholders that 98% of this cost comprises amounts

payable to contributing photographers and cinematographers.
The company strategy to increase the sales of wholly owned material which has

risen from 5% a year ago to over 19% today. At this point it seems that most of

this rise has been due to sales by PhotoDisc, Allsport and Hulton Getty, but TSI

photographers believe their turn can't be far behind.
The increased arbitrariness of the editing process and the difficultly of

getting very expensive productions into the marketing stream.
The initial offer to pay photographers who signed by September 15th for all

uncollected sales up to that time has raised more issues than it has solved.

Stockholders have been told that if every photographer were to have exercised this

option the one-time cost to TSI would have been about $5 million. Sources within

Getty indicate that number might have been closer to $10 million. We know of

photographers who are owed in excess of $50,000 going back as far as 1994 and 1995.

The first question is why so much bad debt? This seems to be totally out of line

with normal ratios in the industry. Secondly, many photographers who signed on

time, seem to be having trouble finding out how much they will be paid, and when.

In addition, it appears that all these liabilities are not being paid on a dollar

for dollar basis. Some photographers are being told that they get 100% of debt

incurred in the last few months, and a percentage of those that go back a few years.

However, exactly what these percentages will be has not been spelled out in writing

and this has tended to make photographers suspicious of management.
Many photographers who signed the contract quickly believe they were purposely

misled by TSI when the letter that accompanied the contract said, "The agreement has

already been endorsed by Tony Stone Images' consultative photographer panel (the

Photographer Advisory Group) in both the U.S. and Europe." In fact, it came out

later that many PAG members had serious misgivings. Photographers are now unsure

how much they will be able to trust TSI and Getty in the future.
The editors with whom must work on a day to day basis were the main point of

contact for the recent contract negotiations. As a result, in many cases an

adversarial relationship developed between the editor and those who were

holdouts, as well as many who have already signed. As a result, many photographers

are concerned about re-establishing good working relationships in the future.

To add to their problems the stock price yesterday was $9.37 per share having

dropped over 45% since the end of September. During the summer Getty reached a high of

$28.25 per share, but its low a few days ago was $8.62.

Looking At The Site

We've spotted a few minor glitches thus far. If the user wants to print out some of

the information pages such as the history of Tony Stone, or information about model

releases, the text on the right hand side of the page gets truncated. A minor

irritation, but easily fixable. Somewhat more serious is that some photographers

are reporting that a few of their images are not oriented properly.

The model release information may also be somewhat confusing or misleading. In good

salesman language they lead with, "Choosing one of our property- or model-released images

means you don't have worries or extra work when using our pictures." If I were a

photo buyer that would make me think that everything is "fully released"

and I don't have anything to worry about when using any of these pictures.

However, they go on to cover themselves by saying, "While Tony Stone Images controls

access to these images and licenses them to the public for commercial purposes, Tony

Stone Images does not possess model or property rights for the people, property or

places in every picture. If in any doubt please contact a web client service

specialist who will be happy to advise you on matters."

The problem is that many releases won't cover uses that may be considered defamatory

by the individual. Many users who are inclined to make what others might consider

defamatory use of an image don't consider what they are doing defamatory.

Consequently, these users don't think they have a problem. It seems likely that

some of this will be worked out in litigation and under the terms of the new

contracts the photographers whose images happen to be involved get to share in the

cost of that litigation.

We will do more analysis of the actual workings of the site in coming weeks.

Feedback:

Ron Sherman

To add to your most recent story...yesterday I had 3 images on the TSI

web site and today there are zero.

Feedback:

Joe Polillio

I want to correct one item in your piece with regard to Liaison Photographers.

Liaison Agency had their photographers sign a TSI contract last March to get

them into the fold of TSI. At least I know that I signed and was told others

did as well. Therefore we are entitled to the same commission as all TSI

photographers without Liaison taking any percentage of the sale. Even before signing this

contract I was paid money for images TSI sold without anything being taken by

Liaison. I hope this clarifies things. I also have 78 images on the TSI Web site

(two of which are not mine which has be freaked out) and I have not signed the

new TSI contract.

Feedback:

David Stover

Could you clarify a point in the new TSI contract? When it is stated that

photographers will be paid for uncollected sales, what are uncollected sales?

Are these sales that are good sales where payment has not yet been received or

are these sales that were made, the images used and the client never paid it's

bill? If it is the latter is this estimated amount of $5 to $10 million typical

of an agency of this size?

Jim Pickerell's Response

We have been unable to get a precise answer to this question from Tony Stone Images.

More to the point, Tony Stone photographers don't seem to be able to get a precise

answer to the question. Most who have been able to get some kind of a number as to

what they will be paid have discovered that is way below what they expected to be paid

when they signed the contract, but they can't get anyone at TSI to explain how the

number was calculated.

It is believed that this figure covers both categories of payments that are

described above. According to photographers some of the obligations go back years but

the bulk of what is owed is probably for fairly recent sales. No photographer that I

know has any idea as to what the total might

be in either category and TSI is not telling. If TSI has gross sales of around $70

million and they pay out 39% of it to photographers that would make the total pay to

photographers a little over $27 million annually or $2,275,000 per month.

If all their clients took on average over four months to pay their bills that might

explain over $9 million. However, keep in mind that according to the contract on

the 25th of each month "TSI will pay the amount due ...in the month ended three

(3) months prior to the start of the relevant Payment Month..." Thus, payments

on October 25th will be for sales booked on June 30th or before. To come up with $10

million we would have to go back four months from here to February and say that on

average clients who book their sales in February don't pay the agency until June and

then the agency pays the photographer for those sales in October. Based on my experience

in the industry, I don't think the "float" is this bad at most stock agencies.

Story 177

FPG LAUNCHES WEB SITE

October 23, 1998

Comparing FPG's Site With Those Of Other Agencies

One week after Tony Stone Images introduced their on-line site (See Story 176), FPG

launched a site that includes images from all the Visual Communications Group (VCG)

agencies. Now, all of the world's major agencies have a

significant number of images available for on-line viewing and sale.

The URL for the FPG site is www.fpg.com . FPG

had between 16,000 and

18,000 images on the site at launch. FPG is uploading additional images on a regular

basis.The other VCG agencies with images on the site

include Telegraph Colour Library, Colorific, Planet Earth Productions, Pix, Giraudon

and Bavaria Bildagentue. FPG expects to have a fully transactional site in the months to come.

FPG uses slightly larger thumbnails than most of their competitors and pays a price

in download speeds. In our search tests the FPG site was much slower than those of their

principle competitors. Twelve thumbnails seem to come up on the FPG site in about 70 to 80 seconds.

PhotoDisc brings up 9 thumbnails instead of 12, but does it in 15 to 20 seconds. Both

The Stock Market and Tony Stone Images show 12 thumbnails at a time. TSM loads these in 30

to 36 seconds and TSI has a slightly longer load time at about 40 seconds. This test was

conducted on a PowerMac with a single channel ISDN connection (56K). Many corporations

and advertising agencies have faster connections.

Thumbnail size is only one of many factors that effect download speed. Other factors

that may effect download time include sender and receiver proximity to an Internet trunk line,

routing, modem speed, image compression, number of simultaneous users of the site and receivers

ISP. This is not an all inclusive list and many of these factors are beyond the control of

the stock agency or the client. Thus, there are likely to be wide variations in experience

between various users.

FPG users may download hi-res, watermark free files that may be used for full page,

full bleed, true-color comps, presentation and/or layouts for a a $50 service fee. Service

fees are normally not shared with the photographers.

FPG also offers a highly customized digital service that enables users who

require certain specifications (retouching, color correction, etc.) to work

with FPG to make changes, then have the images transmitted in a matter of

seconds.

Keyword Problems

For a site that is supposed to have over 16,000 images, very few come up when

clients search on often requested concept words. It is not clear whether this is due to

very poor keywording, or software problems. It is surprising that such a problem exists

given the fact that FPG has been Beta testing the site for well over a year. The site

was originally for release in the fall of 1997.

Rebecca Taylor explained that FPG has a proprietary system that

takes data from several different files maintained by FPG. At present all this data

has not been loaded into the on-line search system. It is FPG's intention to begin testing the

on-line system with minimal data and slowly add data, in increments, to

determine just how much is really needed.

Ms. Taylor said, "We hope to add additional data in a week or two and to have all the data in

place in at least a month. When we start adding data it will not be attached to all images at

once, but will be uploaded batch by batch." When asked if FPG was concerned that users would

take one look at the site, find

it inadequate, and never come back, she said, "We hope that doesn't happen." Art directors are

already receiving mailings from FPG encouraging them to "log on", and Selling Stock assumes

print ads will be following shortly.

The FPG search engine is designed to put "or" where ever there

is a space. Thus, when searching for a phrase such as "three generations," "good life," or

"rocky mountains" it is necessary to enter

"and" between the words in any phrase if you want the search to pull up only

images that have both words. If you look

for "three generations" it will find all images that have the word "three"

and all images that have the word "generations". FPG is trying to modify their

search engine so the default will be "and" instead of "or" whenever the computer finds

a space between words.

Accurate keywording of what is already there is also a problem. FPG has 25 images

keyworded "banking", but several have no

relation whatsoever to this concept. For example the images keyworded banking include:

a family group forming a human pyramid, a childs birthday party, a father and

son looking into an aquarium and a portrait of a female executive. Also included under

"banking" are two pictures of city skylines that are captioned

"Bank of China Building". Unfortunately, there is no information to tell the user

the city where this building is located. The hills in the background look something like

Hongkong, but when we search on Hongkong, Shanghai or Singapore none of these pictures

appear.

According to Rebecca Taylor, FPG's site is not keyword based in spite of the

fact that users are asked to enter keywords. Instead, she says it will rely

heavily on a thesaurus, not currently in operation, to make the site fully functional

for clients. The thesaurus is scheduled to be installed in a few weeks. Ms.

Taylor is confident that the thesaurus will greatly improve site operation. For the

real answer, go to the FPG site in a month, or so, and check some of the words on our

list and see if you get a better selection of images.

Site Comparisons for Selected Keywords

The following is a comparison of hits using various keywords. FPG www.fpg.com has 16,000 to 18,000

images on their site. Tony Stone Images www.tonystone.com (TSI) has approximately 40,000;

PhotoDisc www.photodisc.com (PhDisc) has

75,000 and The Stock Market www.stockmarketphoto.com

(TSM) has 35,000. While agencies tend to list the total images on-line in their promotional materials,

the more important number is the appropriate number of hits the user gets when

looking for any particular subject or concept.

Keyword	FPG	TSI	PhDisc	TSM	Keyword	FPG	TSI	PhDisc	TSM
Action	20	577	226	2321	High Tech	0	0	290	1
Affection	0	1082	595	3995	Holiday	4	1798	1863	359
Americana	0	1020	1528	706	Industry	22	1500	4990	3054
Babies	351	1316	269	1315	Integrity	2	87	15	535
Banking	25	0	56	123	International	60	1431	776	559
Beach	811	1493	2659	1200	Joy	3	262	157	2717
Beauty	1	2459	1299	452	Kindness	0	575	7	407
Bizarre	0	546	0	0	Leadership	0	45	276	1035
Business	188	3204	13924	2933	Love	2	2568	1378	5091
Caring	8	575	213	4112	Medicine	15	1192	1745	2164
Celebrations	17	1060	695	390	Model	22	2680	488	43
Change	0	2030	720	857	Nature	4	4252	11714	2502
Childhood	0	0	1307	2034	Order	17	64	401	55
Communications	14	1946	6	4304	Organization	6	104	455	823
Community	14	130	586	60	Peace	0	1388	636	1834
Competition	5	868	624	1174	Power	41	1902	1746	2007
Concentration	0	448	658	3994	Pride	0	314	536	2758
Conflict	0	132	132	227	Recycle	3	0	34	37
Cooperation	0	300	92	2845	Reliability	0	61	14	1870
Couple	1569	2504	2869	2947	Role Model	0	70	42	0
Craftsmanship	0	0	254	52	Romance	0	525	770	1672
Disaster	0	402	127	110	Service	5	721	621	16
Ecology	0	4943	219	530	Sharing	3	241	147	1082
Education	3	997	2283	1402	Speed	3	639	846	928
Effort	0	438	78	3923	Sports	0	5739	1558	4149
Elderly	61	578	1036	1057	Stability	0	23	81	7
Energy	1	922	0	1447	Strange	0	320	40	48
Entertainment	0	1340	940	840	Strength	1	310	1565	1377
Excellence	0	247	6	2474	Success	0	440	735	1412
Family	390	2203	1384	4358	Teamwork	0	766	1086	2754
Fitness	4	5210	7674	2422	Tech	14	0	291	0
Fun	1	1541	1000	5352	Technology	4	861	3734	3762
Future	5	284	369	1655	Tenderness	0	1082	94	2307
Futuristic	0	284	8	3	Three	130	2129	189	1901
Generations	120	105	2	1318	Three Generations	245	5	0	272
Global	12	192	1029	705	Time	32	988	1168	2150
Good Life	0	6	2	0	Travel	13	1577	8326	2684
Happiness	13	3492	2457	5953	Victory	7	108	186	301
Hard	7	90	492	2	Wealth	0	318	443	3760
Hard Work	0	23	2	1	Winning	3	172	37	571
Health	8	2954	1805	1966	Work	105	6588	290	2565
Healthy	1	2954	96	543

So What?

Why should photographers care how many images any of these agencies has in particular

subject categories?

This comparison gives dramatic evidence of the critical importance of

keywording when it comes to finding images in the digital environment. The

differences in the number of hits is dramatic, and does not necessarily have any

relation to the total number of images on the site. It is important to keep in mind that

it is possible to narrow categories by using multiple keywords separated by "and". On the

other hand, it is very difficult to expand the number

of images in a category if the images have not been adequately keyworded in the first place.

A useful exercise in judging the effectiveness of a site is to choose a category and

determine if a substantial number of the images that come up in that category are

appropriately keyworded. For example, in

PhotoDisc's "craftsmanship" category there are a number of images of hard hat

workers. That may not be what clients really had in mind when they think of "craftsmanship"

as opposed to a "craftsman".

We searched on "three" separately because we were also searching on "three

generations". On the TSI site entering the word "three" brings up several images

that do not have three of anything in them. This indicates sloppy checking and may be

indicative of the way TSI approached the keywording of other images.

Also at TSI the same images come up for both "future" and "futuristic", but these

two words do not always have the same meaning. The same is true with the words

"health" and "healthy". Not all images that are related to health care will

show healthy people. Some might show people in very unhealthy conditions, but be

legitimate "health care" images. In fact, one of the early images to come up under

"healthy" shows a very unhealthy looking person.

It should also be noted that PhotoDisc puts many more

slight variations of a situation on their site than do most of the Rights Protected agencies. Thus,

the total number of hits on the PhotoDisc site is not necessarily indicative of the variety of

situations being offered the user. These slight variations may generate a greater

volume of sales. On the other hand,they may encourage the client to go to a site like

The Stock Market's where, if they take the time to look at 100 images, they will find

a much greater variety of situations than

they will find looking at 100 images on PhotoDisc.

For photographers represented by one these agencies, the agency's ability to supply

clients with a good selection of images, may be indicative of how well they

will sell the photographer's work in the digital future.

Photographers looking for an agency may want to pick one that appears to have

their act together in terms of on-line selling.

The number of images an agency shows in any category gives an indication of

the importance they believe their clients place on that subject matter.

Photographers ask. "What's selling?" Looking at the images these agencies show

in these categories should give a good indication.

By careful examination of the subject matter an agency chooses to emphasize on its

site, a photographer may get some insight into the marketing philosophy of the agency. For

example TSI shows no images keyworded "Banking", but 546

keyworded "Bizarre".

In most cases, the agency's inhouse researchers are using this database for

their initial selection of images. If your images do not come up in a search

what is the chance that they will ever be shown to clients?

When planning a shoot in one of these categories you can see if what you

planned to do has already been done by someone else, or if your idea is a new

and better way to illustrate the concept. There is always demand for new and

updated illustrations of classic concepts.

If you are going to be involved in keywording your own images the

approaches these agencies take can offer some helpful hints. On both the

TSI and PhotoDisc sites when you upload a preview image you can see all the keywords

attached to that image.

November 1998 Selling Stock

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