Random Thoughts 59

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January 22, 2003

VEER Adds Rights Managed Collections

Veer has expanded its offering with the Rights Managed collections from SolusImages
and Pete McArthur. SolusImages is highlighted in an insert in the Veer monthly
catalog announcing the relationship and the addition of high quality Rights Managed
Photography to their growing collections.

According to Arie Kopelman of Solus, "The Veer group rose to fame when they created
Eyewire a few years ago. Their extraordinary success caught Getty's eye and Eyewire
was subsequently purchased. The Eyewire team worked in the Getty environment for a
few years and was released in 2002. Immediately, this intrepid group conceived
their next brainchild, Veer. This is a digital marketing company created to 'veer'
off the beaten stock path with exceptional creative vision œ and the knowledge that
it takes extraordinary monetary resources for continuous direct marketing to get
attention in this market. SolusImages caught their eye and the rest is history.
Everyone seems to agree Veer is a world class competitor and we are highly
enthusiastic about this relationship."

Veer is the exclusive re-seller of SolusImages in the U.S. market, but
Solus will also be marketing the collection on its site as well. To see the Solus
collection on Veer go to
www.veer.com/products/photography/sip/ .

Stock Media Launches New Marketing Model

Stock Media Corporation has launched the StockMedia.net Marketing network, a new
business-to-business model for commercial content licensing with revenue sharing
and functionality that is similar in structure to that of a cooperative.

StockMedia.net is both a distribution
channel and online shopping mall where
members share centralized e-commerce functions and content. Each member can operate
under its own brand and control. Image suppliers, resellers and commercial photo
buyers can each display search results under their individual brand with links back
to their own web site.

Suppliers, such as photographers, stock photo agencies and other copyright holders,
may control pricing, region of distribution, and usage restrictions. A membership
and submission fee, as well as a monthly hosting fee of up to 10 cents per image,
is required for participation. In return, suppliers receive 90% of net revenues or
80% if choosing to defer participation fees.

Independent and corporate researchers and web sites receive 20% of licensing fees
for referring sales via web links to the network.

Resellers can enable image searches from web sites, online portfolios, ad banners
or CD catalogs. Photographer and agents who refer buyers can limit search results
to just the images of a single supplier.

Publishers, graphic artists, advertising agencies and other photo buyers can
benefit from the online usage tracking, collaborative editing areas, reduced
picture loss liability and convenient content management.

The StockMedia.net Marketing Network is powered by Stock Media 2000 software which
enables mira.com, the stock sales web site of the Creative Eye photographers
cooperative, and SolusImages.com.

U.S. Book Sales

One out of six elementary and secondary school teacher who use textbooks in their
classes say they do not have enough books for every child in their class. The
shortage is most acute in urban schools where 39% of teachers say they do not have
enough textbooks to assign homework. In some cases teachers are forced to photocopy
materials in order to have something to provide their students.

For every dollar spent on education nationwide less than a penny is spent on
textbooks, but with the critical budget shortfalls that all states are facing money
for textbooks seems to be one of the first things to be cut.

Sales of textbooks in 2000 were up 13.3% over 1999 sales. In 2001 they were up only
7.8% and it is expected that 2002 sales may actually be lower than 2001 when the
final figures are in later this year. Total revenue for educational books in 2001
according to the Association of American Publishers was $4.18 billion. Given the
critical classroom need sales will probably increase once the economy turns around
and the states have more money presuming that in the meantime teachers donœt
discover ways to more effectively use the internet as a substitute for printed
texts.

I estimate that publishers spend less than $100 million annually for the stock
photos and illustrations used in educational materials. Publishers may spend
another $100 million on assignments and in-house production. This $200 million
total figure, if accurate, represents less than 5% of the total revenue generated
from the sale of educational materials. While photos are a small part of the costs
publishers are exerting increased pressure on photo suppliers to cut usage fees.

Total book sales in the U.S. in 2001 were over $25 billion, but sales in 2002 are
expected to be flat when results are reported about the end of February.

PictureHouse Plans March Events

PictureHouse is offering an opportunity for stock photo sellers to show their
"Spring Collections" to hundreds of picture buyers at an event in Central London on
March 18th. On the following day there will be a conference called "Web Solutions
For Image Trading" that aims to bring together some of the most effective
web-marketing solutions from around the world. This conference is aimed for senior
executives and limited to 100 delegates. If interested email
websolutions@picturehouse.org.

Getty To Represent Time Inc. Archives

Getty will take over the licensing and management of some of the TimePix archives
effective April 1, 2003 according to sources. The TimePix collection includes the
photographic archives of LIFE and TIME magazines as well as the DMI collection of
celebrity photography and news photos from Reuters (Getty already handles secondary
sales of Reuters" photos). At this time it is unclear how many images from the
TimePix collection will be made available on Gettyimages.com.

Stock Image launches Pixland

Stock Image launched the RF brand Pixland in January 2003 with 52 titles.
Additional titles are expected to be released in March. "Our goal is to establish
PIXLAND as a major European royalty free producer," says Michel Rawicki, President
of STOCK IMAGE. "PIXLAND represents a very natural evolution of our activity and
is, by its fresh and modern imagery, what I believe to be a very distinctive
product with strong sales potential."

Matrix Closes Doors

Matrix Photos has ceased operations after fifteen years as an independent picture
agency due to massive debt and a slow economy.

Barbara Sadick, director and founder of Matrix says that the days of shooting on
spec and hoping to sell images to magazines are pretty much over. Magazines are
celebrity driven and they want pictures faster and cheaper.

For additional information on this closing see

www.pdn-pix.com/news/archive/010903.html .

Who Wants Digital Files?

According to a study done by œJournalisten onlineœ in Europe 87% of picture editors
of weeklies and press agencies prefer receiving their photos as digital files
rather than film. This percentage increases to 93% of those editors who are under
30.

When it comes to monthly magazine editors 77% prefer digital delivery and 23% say
they still prefer film. The preferences depend somewhat on the industry being
covered. 90% of the journalists working on political or computer stories prefer
digital while only 66% of those working in the travel arena prefer digital to film.

Computer Efficiency???

The following just came across my desk.

At the recent (COMDEX) computer expo Bill Gates
reportedly compared the computer industry with the auto
industry and stated, "If GM had kept up with technology
like the computer industry has, we would all be driving
$25.00 cars that get 1,000 miles to the gallon".

In response to Bill's comments, General Motors issued a
press release stating: If GM had developed technology
like Microsoft, we would all be driving cars with the
following characteristics:

1. For no reason whatsoever, your car would crash twice
a day.

2. Every time they repainted the lines in the road, you
would have to buy a new car.

3. Occasionally your car would die on the freeway for no
reason. You would have to pull over to the side of the
road, close all of the windows, shut off the car,
restart it, and reopen the windows before you could
continue. For some reason you would simply accept this.

4. Occasionally, executing a maneuver such as a left
turn would cause your car to shut down and refuse to
restart, in which case you would have to reinstall the engine.

5. Macintosh would make a car that was powered by the
sun, was reliable, five times as fast and twice as easy
to drive - but would run on only five percent of the roads.

6. The oil, water temperature, and alternator warning
lights would all be replaced by a single "This Car Has
Performed An Illegal Operation" warning light.

7. The airbag system would ask "Are you sure?" before deploying.

8. Occasionally, for no reason whatsoever, your car
would lock you out and refuse to let you in until you
simultaneously lifted the door handle, turned the key
and grabbed hold of the radio antenna.

9. Every time a new car was introduced car buyers would
have to learn how to drive all over again because none
of the controls would operate in the same manner as the old car.

10.You'd have to press the "Start" button to turn the engine off.