Why Photographers Need Stock Agencies

being prepared to respond quickly to the customer's need whenever they call.

The epitome is an on-line system that allows the customer to call at midnight

on Sunday evening, search the database, determine the price and download an

image for their next project in a few minutes.

While 24-hour-a-day, 7-day-a-week service is the new buzzword, immediate

response during normal business hours seems to be satisfactory for 98% of the

buyers.

At the other end of the spectrum is the photographer who tries to handle

sales himself. It never fails that clients call when the photographer is out

shooting. They never call when he is in the office between jobs, or, if he

happens to be in the office to take the call, he is so busy with other work

that he doesn't have time to pull the images the client needs. It never

fails that the biggest stock requests always come on the busiest assignment

day of the month.

The important thing for the photographer to recognize is that the degree of

service offered clients varies from agency to agency. Most agencies are

constantly trying to upgrade their level of service.

Nevertheless, it is important when choosing an agency to have some

understanding of the level of service provided, and how that compares with

the competition.

image out by Federal Express for next morning delivery.

important to carefully define terms with the client before delivering images.

The existence of royalty free is causing many clients to believe that any

time they pay a fee, no matter how small, they have unlimited rights to use

that image forever. Those who are licensing specific usage rights need to

get that understanding in writing before they ship images to clients..

With fax machines this is relatively easy. You get the client to sign off on

the terms before you make the delivery. In spite of its ease, many agencies

don't take this crucial step.

what images exist, is the major job of an agency. When mailing a marketing

promotion, whether postcard of print catalog, there are economies-of-scale.

Large agencies or large groups of photographers can reach more potential

buyers for a lower unit cost per buyer reached than small agencies or

individual photographers.

An agency that can distribute over 100,000 catalogs on a regular basis, or

has a well known on-line site will probably generate many more sales than the

individual working on his own and trying to make clients aware of his

existence.

Customers like to be able to go to one or two sources rather than having to

search out hundreds of different sources for what they need.

Large agencies have their own print catalog, their own on-line service and

their own CD's. Smaller or more specialized agencies can offer the customers

one-stop-shopping by participating in products like the Stock Workbook Disc

that contains work from approximately 40 stock agencies. Photo buyers know

that by going to this one product they can see the best work of 40 agencies

rather than having to go to each agency separately.

Another part of marketing is identifying potential users and keeping them

informed of new offerings. This can be a very time consuming and costly

process. Potential buyers move often, so mailing lists need to be updated

constantly.

Most agencies are testing new systems to try to get a market advantage. With

anything that is untried there is always a risk. Some new ideas won't work.

Assessing when a marketing system is outmoded is as important as adopting new

systems. Some believe that print catalogs will be replaced by on-line

catalogs in the near future. On the other hand, PhotoDisc, one of the most

successful digital marketing organizations, relies 100% on digital delivery

and spends as much, or more, on printed marketing materials than most major

stock agencies licensing rights to film.

As a photographer you need to be aware of the various marketing options

employed and determine whether this type of marketing is likely to aid in the

sale of your work.

The industry is in a transition and methods of marketing may change

dramatically in the next few years. Photographers need to test a variety of

options and stay flexible until it is clear which marketing systems will

dominate in the future.

the agency's editing philosophy. You may get a better sense of this by

talking to some of their photographers and getting their perspective on the

editing process, rather than relying totally on the statements from agency

management.

In most cases the philosophy stays the same for rather long periods of time

(years), but in the past year or so we have seen some rather dramatic shifts

at some of the major agencies. These shifts have caught many of the

experienced photographers working with these agencies off guard and has

dramatically changed their ability to earn income from that agency.

You need to understand if they are taking images for catalogs only, or if

they are putting images in the general file. If images go in the general

file, what percentage of sales of the agency are made from the general file.

If the agency is distributing images overseas, is it the same images that are

selected for the U.S. market, or do they select differently? If they select

differently, do they only distribute catalog images overseas, or do they

send dupes of non-catalog images?

It is also important to understand how tightly the agency expects the

photographer to edit.

potential for tracking a great deal of useful information that can aid

photographers in their decisions as to what to shoot. The greater the number

of images a seller licenses a month the better idea the seller should have of

what customers want to buy. Those with lots of information should be able to

give the photographer good guidance as to what to shoot, but to be useful

that information must be stored, analyzed and disseminated.

Many agencies have such information but currently don't communicate it well

to their photographers. The photographer wants to look for an agency that

will not only collect the information, but communicate it.

photographers want to sell what they like to shoot, rather than shoot what

the clients want to buy. This can be very dangerous in a saturated market

like we have today. Many agencies have excellent systems where editors and

art directors work closely with photographers, even attending shoots, and

guide their production.

On the other hand, certain agencies may have a shortage in certain subject

areas and be able to market a photographers work better than the agency that

is known to have a good selection of that kind of material.

client when needed.

of usages the better idea they will have of what clients are willing to pay.

In addition, some people are naturally better negotiators than others.

This is particularly true when it comes to complex advertising sales where

the picture will be used in ads placed in many magazines and collateral uses

as well. The big agencies to get more opportunities to negotiate high

dollar sales. I know of one photographer whose agency recently licensed

rights to one of his images for $26,000 for one year use and $7,500 per year

for three years to another of his images -- all in a one month period. (The

photographer will receive 50% of these figures.) Big agencies that make

frequent sales of this type know the value of a large advertising usage and

have the courage to ask for decent prices.

Advertising agencies tend to like to deal with the major agencies for this

type of sale because they know they can trust the agency's rights control

system. They do not have the same confidence when dealing with small

agencies or individual photographers.

On the other hand, there are times when the same agencies will seek volume

over price. They may offer bulk deals and attempt to maintain customer

loyalty by always matching a lower price from a competitor. Once the

customer learns that an agency is willing to do this it becomes relatively

easy for the customer to drive down the price on future sales.

While agencies may occasionally get higher fees than the photographer would

be willing to ask, we have seen many cases where photographers ask for, and

get, more than the agency. In pricing unique images, photographers tend to

hold out for better prices, and lose the sale if the offer isn't good enough.

Seldom will the agency get double what the photographer would ask,

off-setting the 50% commission paid the agent, but very few photographers are

able to reach as many clients or make as many sales as an agent.

Weighing the price vs. volume issue is almost impossible to do in advance of

actual experience with a specific agency. Nevertheless, photographers should

watch this closely and recognize that it is a potential benefit offered by an

agent.

specific as possible when determining usage. First, a client's initial

description of the usage is often not totally accurate. If you base the

price on that initial description you may be selling the image for less than

you could have received. It is important to get as detailed an understanding

as possible of the actual usage. People whose full time job is to negotiate

sales tend to do this better than photographers.

Second, you need to determine if this is a sale you are really comfortable in

making. Does the photographer want to sell to anyone, no matter what the

usage, or are certain buyers unacceptable to the photographer or models. Is

a model or property release needed for this use and is the one available

adequate.

We gave some examples in our story on PhotoDisc that illustrate this point.

David Falconer took a cheek to cheek photo of friends of his at their 50th

wedding anniversary. He placed the image on a PhotoDisc CD-ROM which does no

checking of its users.

Whitaker Wellness Institute purchased a copy of the disc and used the image

in a brochure to market vitamins and other products entitled "Healing

Miracles". The wife was given a fictitious name and a quote that said, "I

was saved from a $300,000 heart transplant by using...."

Friends of the wedding couple received the brochure, recognized the couple

and started making jokes about the heart transplant and other "healing

miracles". The couple was upset and humiliated by this use.

In another brochure Whitaker used a Falconer photo of a young couple kissing

at sunset on a Hawaii beach under the title "Dr. Whitaker's Uncensored

Secrets to Sizzling Sex at Any Age..."

At Stock Connection a few months ago, a bank in Southern California wanted to

use one of our close-ups of a elderly couple for their brochure. They found

the image on the Stock Workbook disc. However, they had to come to us to

license rights and get film.

The copy they intended to use under this picture was, "My husband was laid

off from the aerospace industry and we were about to lose our home. XXX bank

gave us the loan we needed."

The couple had signed a model release, but they were also friends of the

photographer, and certainly hadn't anticipated their photo being used in

connection with something that implied this type of false personal testimony

and endorsement. The photographer was contacted and together we decided to

refuse to make the sale. When a selling agent is talking directly to the

client refusing to do business remains an option.

Photographers need to recognize that the way images are used may totally

mis-represent who the people are, particularly if there is no checking or

control on the users.

education and editorial - the client often needs additional information about

the image that is not supplied on the mount. Often the agent can supply this

information from their own knowledge, but if not they serve the client and

the photographer by tracking down this information so the sale can be

completed.

before a sale is extremely important. Given the nature of our business every

agency is often making sales to people in other states with whom they have

had no previous experience. Every agency occasionally has some uses on which

they are unable to collect, but proper procedures will keep these to a

minimum.

In their recent contract, Tony Stone Images took the unprecedented step of

guaranteeing photographers that they would pay them their share of any

negotiated fee, even if TSI is unable to collect on the sale.

extremely important if we are to continue to be able to sell multi-use

rights. There must be a clear understanding with the customer as to what

rights were licensed, and exactly what the customer can legally do with the

material in his or her possession. There are an increasing number of

instances of clients claiming more rights than was understood from the verbal

discussion.

The photographer has no protection if the rights were not clearly spelled out

in writing and even then it is often difficult to collect. When digital

files are delivered this can still be handled by faxed paperwork.

systematic follow up until the invoice is paid. Many companies have policies

of not putting invoices on the payment list until they receive a follow up

call from the company that submitted the invoice.

don't develop into sales. Sometimes the price was too high, sometimes the

buyer finds a better image somewhere else and sometimes the project is

canceled. Following up on requests and determining why the sale was lost can

be very useful for future planning. Many agencies have procedures for doing

this. Few photographers have time to devote to this activity.

has been made and check on actual usage. Getting tearsheets, or tracking

on-line uses can be difficult, but we often find that in spite of our best

efforts to define the use at the negotiating stage the client actually made a

larger use than was authorized in the invoice. When this is discovered there

is an extra fee.

The ease of scanning, the difficulty in defending against misuse, and the

proliferation of the idea that all images should be "royalty free" is making

this step more and more important. Nevertheless, with careful attention to

what happens after the sale photographers can protect their rights and get

significant extra income from second uses.

of certain clients is where small specialty agencies really shine. They can

often out perform big general agencies because their researchers have a

better understanding of their specialty subject matter.

Their are all kinds of specialty subjects where this can be important

including: historical, fine art, medicine, biology, education, wildlife,

underwater, aircraft, cars, etc.

general file this can be a very time consuming process, even if the file is

well organized. It is not unusual for a complicated request from a textbook

publisher to take a day or more to research.

As clients tend to request images specifically from catalogs, this process

can become much easier because the seller will be dealing with many fewer

images and it is much easier to organize them in a simple numerical order

rather than subject categories.

A small percentage are lost and photographers need to get payment for such

losses.

not that big of a job, but if 50 of more were pulled from the general file

for client consideration, the time to replace them in the file may be

substantial. Thus, the refiling job varies with the kind of clients you are

trying to sell to.

before they are returned to the files. This is a time consuming, but

necessary, process.

images, the quality of the keywording becomes extremely important. Most

agencies handle the keywording for their photographers. Keywording is a

difficult and time-consuming skill to learn, but the more images you keyword

the better you can do it.

distribution of the photographer's work through sub-agencies and sometimes

wholly owned offices. Approximately 55% of the worldwide sales of stock

images are made outside of North America.

compliance with rules. This doesn't happen often, but the fact that it does

happen encourages buyers in general to be honest. Some agencies have

substantial collections for unauthorized uses.

Some large agencies have lawyers on staff, and most small agencies have

established an on going relationship with a lawyer to provide legal counsel.

Thus, when problems arise it is easier for them to get solid legal advice

than it is for photographer. Recognizing this fact, clients who might try to

legally intimidate the individual photographer are more reluctant to take the

same position with an agency.

Collecting through the legal process can be extremely difficult and time

consuming. Negotiation is the better course, if possible. In a recent

situation Price Costo used images of Galen Rowell and a number of other

photographers in in-store advertising without their permission. Rowell sued

for copyright infringement. As they moved toward trial there were 100

separate filings with the court, most of them multi-page, time consuming

reports to prepare. The case was finally settled out of court for an

undisclosed amount.

In the marketplace, there is a constant need to pile contract provision on

contract provision and clause upon clause to try to protect oneself, and this

often falls short in the end.

One thing that agencies can usually do better than photographers because they

have the manpower and more incentive is keep up with industry developments

and changes that need to be built into the paperwork and processes. One of

the ways they do this is through participation in trade associations.

Some photographers believe that stock agencies should provide all these

services for 50% of the fees collected. Increasingly, agencies are saying,

"we can't make a reasonable profit if we only get 50% of the fee. Thus, if

you want to work with us we have to get a larger cut."

Photographers will have to decide, with all the costs they already have,

whether it is worthwhile to continue to produce and attempt to market stock

images with these added marketing costs. Their production costs already

include: cameras, film, developing, mounting, scanning (sometimes),

captioning, transportation, shipping, computer manipulation, responsibility

for model releases, litigation expenses, increased editing duties, risk of

loss of transparencies, insurance, office, office equipment and staff

support.

Sometimes it seems that the photographer is paying for everything and the

agency is paying for nothing. But, the photographer will somehow have to

cover the costs of the above services if he chooses to market and sell

directly to the clients. The real question is what is a fair fee, or a fair

percentage for providing these services.

Foreign Agents

So maybe there is value in having a U.S. agency, but as digital selling

becomes more common can't that agency handle foreign sales without the

necessity of getting a foreign sub-agent involved in those overseas sales?

I believe foreign sub-agents will still be needed and legitimately entitled

to a share of the usage fee for the following reasons:

foreign agent provides is being someone the client can talk to in their own

language and their own time zone. Regardless of the degree of digital

automation there will always be some need for human to human contact.

currently controls the market lists in their country. They will be the ones

to either encourage or discourage the use of various on-line services. If

they are cut out of the loop they will naturally discourage on-line usage.

Particularly during the early adoption phase of on-line usage there will need

to be client education. The foreign agent can facilitate that education.

advantage, someone will be needed who can speak the local language and who

understands local trade customs. In a negotiated deal it is important to

have an understanding of the going rates in the local environment.

time of the sale (unlikely) someone will need to collect funds in the local

currency and arrange for transfer to the seller. Collections in the stock

photo industry are difficult in the best of times. They become virtually

impossible if there is not someone local who speaks the language to follow

up. The goal is not to get images used. The goal is to get paid for the use

of images.

Without such monitoring, or its threat, there will be a great temptation to

make uses beyond those licensed. In some cases legal action will be

necessary and that is only practical if brought in the country where the

infringement took place.

everything is supplied in a format that can be used and in a timely manner.

users may need guidance and support in order to learn to use on-line search

systems efficiently.

bi-lingual and understand the photo research process to do preliminary

research for them and forward a tightly edited selection.

competitors from using an image during the duration of their license.

Clients are willing to pay large fees for such restricted use, but this will

need to be negotiated and carefully monitored.

countries laws vary as to when releases are needed to publish pictures of

public buildings or private homes. Going by U.S. law because you produced

the picture in the U.S. or are selling the picture from the U.S. may get you

into trouble. Various professional organizations are trying to find ways to

identify divergent rules and harmonize the rules internationally.

local laws and customs that regulate the industry in their country.

Copyright laws are different.

data about client needs that was never before available. This data is

useless unless analyzed. Proper analysis and dissemination of the

information can enable photographers to do a better job of producing images

that will be needed in the future and lead to less wasted effort of producing

redundant imagery.

The duties of the foreign stock agent may change. In a few years many may no

longer maintain large files of images. They won't have to worry about

getting transparencies back and re-filing them, but they will need to find

ways to be sure that the client doesn't make unauthorized uses of the digital

files that have been delivered. This should result in staffing changes, but

there will continue to be a need for foreign agents.

My estimate is that 55% of the market is outside the U.S. Many of these

sales are for images produced within the U.S. Some U.S. photographers make

as much as 70% of their gross income from sales outside the U.S. Do not

avoid the foreign market.

Typically, the photographer gets 25% to 30% of such sales, if their U.S.

agency is handling the distribution through a foreign sub-agent. The actual

return can be even less if catalog costs and dupe costs are taken into

consideration.

The reverse will be true for European, Asian and South American photographers

who want to sell in the U.S. Their local agencies will become the primary

agency that handles the scanning, keywording and other preparation of the

image for the digital database. The U.S. agency will provide the negotiating

and collecting services of a sub-agency and remit monies to the foreign

agency.