AP Freelance Claims Rights

56

January 10, 1997

The quiet battle between Associated Press and their freelance photographers is
worth watching for the industry precedents it is likely to set.

In May 1996, after decades of no clear working agreement with non-staffers, AP
asked all freelance photographers working for them to sign contracts assigning
to AP, "all rights, including the copyright in every image made, or that will be
made, by Photographer while on an AP assignment." No additional compensation
was offered.

Predictably, the photographers rebelled and began organizing to fight
acceptance of this contract. They formed the National Association of Freelance
Photographers (NAFP), to educate freelancers on issues of concern. While it has
"association" in its name, Paul Hurschmann said it is "not now, nor has it ever
considered being a trade association, or union. The NAFP is a non-profit,
educational collective formed to educate photographers and the buyers of
photography regarding copyright protection and other business matters of
interest to freelance photographers."

Shortly after its introduction AP withdrew the contract due to heavy criticism,
not only from the photographers who work for AP, but from other editorial
photographers and associations like ASMP and NPPA. They promised to review the
document and present a new version later.

The contract, "merely put in writing the verbal understanding AP has had with
its stringers for years," said Vin Alabiso, AP Vice President and Director of
Newsphotos Worldwide. Obviously, current stringers do not agree that there has
been such an understanding.

In September there were rumors that AP would re-issue the original contract
with no changes. That never happened and Vin Alabiso said at the time that AP
had no such plans.He also said that AP "takes (photographers') concerns very
seriously." In December Alabiso said he had "no idea" when a new contract might
be presented and indicated that "we're getting our facts together and working
through it."

Eight months after the contract first appeared the photographers are
justifiably concerned that the situation will remain in limbo indefinitely, and
that a new contract will never be presented.

On the other hand, it seems that after having presented a written contract that
was rejected by its stringers, AP is in a weak legal position with regard to any
future attempt to claim that they have a "verbal understanding" with the
stringers. Alabiso refused comment on this point.

Use of Freelancers Compared with Staff

AP has about 75 photographers on staff in the U.S. and according to Paul
Hurschmann of NAFP they use over 300 freelancers in the U.S. on a fairly regular
basis. Alabiso confirmed the number of staffers, but refused to estimate the
number of freelancers used.
Most freelancers earn $75 per assignment. An Assignment may last a couple
hours or be a twelve hour day. In some cases they get $90 for a minimum of four
hours. Film and transportation costs are supplied. Some photographers have
worked for these rates for 10 or 15 years. On an annual basis that is
equivalent to about $18,000.
On the other hand, the minimum salary for a wire service guild photographer
with 5 years experience is $42,000 per year, or $168 per day.

In most other situations freelancers get more on an hourly basis than staffers
for several reasons:

• Freelancers have the additional costs of owning their own equipment and
  operating their business.
  
• They are paid only when needed with no guarantee of regular employment.
  
• They do not receive the normal employment benefits of health care, paid
  vacations and workman's comp.
  

Some photographers do freelance work at these low rates in the hopes of getting
staff positions when they become available. In fact, AP usually looks to
photographers who are staffers with member newspapers when they have openings,
rather than offer freelancers full-time positions. However, there have been a
few instances recently indicating that this policy might be changing.

Are Freelancers Important To AP?

A key question is how important are freelancers to the smooth functioning of
AP's operations. Certainly, given the pay scale, AP doesn't place much
importance on the services these "stringers" provide. On the other hand given
that AP uses four times as many freelancers as staffers it would be easy to see
how a lot of the more famous wire pictures might have been produced by
freelancers.

Some AP freelancers estimate that well over 50% of the major breaking news
images used over and over in publications around the world are produced by
freelancers. Vin Alabiso refused to comment on this point.

If we consider how a wire service operates it is easy to see how the
photographers' estimate might be right.

At AP staffers often end up serving in administrative capacities rather than
being the prime shooter at an event. Also, many of the most important pictures
come from unplanned breaking news events. Often it is a freelancer, located
where nothing was expected to happen, who gets the early shots. The staffers
are assigned to the breaking news event once the freelancer has established a
foothold.
At the World Trade Center bombing freelancers Joe Tabacca and Alex Brandon
provided the bulk of the coverage during the first day, while staffer Marty
Lederhandler shot a half roll and took all the film back to the office.
Staffers took over the coverage the next morning, but were assisted by several
freelancers. Tabacca's image of two NYPD officers assisting a woman of color
from the smoky building became the "icon image" from the bombing, ending up on
the cover of Newsweek and plastered all over publications throughout the
world.

The Challenger explosion a decade ago occurred on a routine launch. AP had
freelancer Bruce Weaver cover it, along with staffer Steve Helber. Helber had
probably taken the launch film and was rushing for the darkroom when the blast
occurred. Helber got images of falling wreckage, but none matched those of
Weaver who was probably left behind to follow the launch vehicle out of sight
"just in case."

More often than not a freelancer is left in the position of "death watch" while
the staffer, if one is involved at all, supervises logistics. When the
unexpected happens the freelancer is usually the one in position to get the
shot.

The TWA Flight 800 coverage was spearheaded by two freelancers the night of the
crash, with Kevin Larkin and Adam Nadel making the first pictures the next day.
During this period staffer Ron Frehm struggled with a non-working power
book/NC2000 combination and had no film backup.

Paul Hurschmann's image of O.J. and Nicole, made when O.J. was not a major
story, became "the icon" image, appearing in Sports Illustrated, US News and
World Report and The Sporting News the first week. It has since been
republished and rebroadcast throughout the free world, and even included in some
of the attorney's books. Freelancers provided at least 50% of the coverage from
the O.J. criminal trial, including the pool coverage inside the courtroom.

Freelancer Kevin Larkin planned and directed coverage of the Rebbe Menachem
Schneerson funeral. Freelancers in Boston had all the images from the Right to
Life killings at the Planned Parenthood offices back in '92.

The bulk of the images produced during earthquakes and raging fires in
California are produced by freelancers.

It is rare for staffers to be the first on the scene (when the majority of the
major story images are made) due to the fact that, as union members, they work
on schedules and are often not called in until a freelancer has established the
magnitude of the situation and reported back to the office. Or they may not be
called in until the next day when editors at the New York picture desk review
their morning budget and see that the New York Times or USA Today have better
images than AP.

Alabiso pointed out that "the numbers [of images produced by freelancers] vary
widely on any given day."Nevertheless, the average on an annual basis would be
very interesting. If it is 5% or less, what's AP's big problem in paying
freelancers a share of the usage fees they collect from non-member publications?
If it is over 50% as the photographers claim the reuse fees might represent a
significant revenue loss for AP.

(AP freelancers are not even asking for additional payment when the more than
1100 Associated Press members worldwide who receive the photo service reuse the
images shot on AP assignments. The photographers simply want a 50/50 split of
the fees for uses by non-member publications. It is our understanding that AP's
gross annual revenue in 1996 is in the range of $500 million. This is for the
text side as well as pictures and the vast majority of this is for use by
members - AP's primary service. It is hard to imagine that annual fees for all
the photo use by non-members represents more than a few million a year.)

AP's Dilemma

AP is sitting on one of the strongest files of historical images in the world.

They see their competitors Reuters and Archive moving aggressively to market
their files of news-related images.

They see companies like Corbis and Getty Communications acquire files of
historical images in anticipation of an increased digital demand for this type
of material.

[It is not at all clear that this increased demand will actually occur, or
what form it will end up taking. Nevertheless, there is a general assumption
that it will happen. Clearly some very big players are betting a lot of money
that future demand will be significant.]

United Newspapers plc. parent of the Express Newspapers in the UK and owner of
Visual Communications Group, as well as the Chicago Tribune Company with their
equity interest in Picture Network International, are also positioned to take
advantage of an increased demand for historical images.

At the moment it is unclear whether AP has the right to market many of their
file images in these new ways. When their spring 1996 attempt to get
photographers to agree to a contract failed; AP may have been left in a more
tenuous position than when nothing had been put in writing. Previously they
could argue that they had a verbal understanding with their freelancers. Now
that seems impossible.

In the current environment AP appears to be afraid to license rights to certain
historical images (such as the Challenger shot) for fear of legal action over a
question of ownership. Thus, they may be losing possible revenue.

To boldly go after the new technology markets AP needs a contract with their
freelance photographers, or a strong court decision in their favor.

There is no certainty they could win in court, particularly since the courts
seem to be taking a hard look at the way large companies use freelancers. This
was evidenced by the Federal appeals decision against Micrsoft in October, 1995.
Given the merits of AP's arguments it would seem unlikely that they would rush
to test their position in court. On the other hand, to license rights as if
they owned the images is a little like playing Russian roulette.

Structuring A Deal

AP will probably find it very difficult to offer the photographers a new
contract if the amount they have to give them in terms of a percent of existing
sales is greater than they can reasonably expect to make through increased
volume. A reduction in revenue without a corresponding reduction in expenses
would require member papers to pay a larger assessment to cover the costs of the
services provided by AP.

Even deciding the percentage of sales to offer photographers is a complex issue
for AP. 50% of sales to U.S. publications, not members of AP, might seem
reasonable. But certainly a high percentage of the potential demand for stock
images from AP's files is likely to come from foreign publications. When it
comes to foreign sales it is common for U.S. photographers dealing through a
primary agency in the U.S. to receive 30% or less of the actual gross sale price
in the foreign country.

Then AP has to consider the potential of that new business -- the online sale
of images. Corbis has a deal that allows them to pay photographers only 3.5% of
gross sales (after most expenses are deducted) for "personal" use of images
delivered by Remote Access Technology. No one quite knows what this means, thus
leaving a lot of room for interpretation when this type of use actually
develops.
If there is market growth anywhere, it seems likely that it may be in the area
of personal use. But how long, if ever, will it take such a market to develop?
If it does materialize, and the image creators get Corbis percentages, it is
entirely possible they may end up with zip for the rights to use their work.
But, if AP has to give up a percentage of other sales now in order to lock in
the right to sell in the new technology area, it could be years before those new
sales make up for current losses.

Without a settlement, AP has a continuing labor problem that could get worst.
Cheap freelance labor is a key element in supplying the necessary daily photo
coverage. Almost any alternative is likely to cost significantly more money.
The question may not be how to maintain the status quo, but how to continue
providing the basic service with the least additional cost. Paying
photographers a percentage of certain uses may turn out to be the cheapest
alternative.

Photographer Dilemma

The photographers showed some backbone in refusing to sign the proposed
contract, but they are a long way from being ready to push AP to come up with a
better proposal. They seem very reluctant to take an aggressive position.

They do not want to form a union even though it must be clear to them that the
AP staff photographers have benefitted in terms of higher salaries and better
working conditions because of their union.

They do not even seem to want to claim membership in an association for fear
that AP will stop using association members. Currently, there are no dues to be
members of NAFP. Members simply have included their names on a list to receive
information with no responsibility beyond that.

The photographers want someone to solve their problem for them, but are
reluctant to take any risks of losing their present position. This makes it
easier for AP to delay the offer of a revised contract, indefinitely.

The photographers have a strong legal position, but it probably does them
little good if they cannot take a unified stand that has some affect on AP's
ability to deliver their service. Individuals will be played off one against
another. On the other hand if a majority of the freelancers were to "go on
vacation" at the same time AP could be faced with significant staffing problems.

Without some dramatic gesture, the photographers have simply got to hope and
trust that AP will somehow come to the realization that they can actually earn
more money by giving the photographers a percentage of the fees collected for
stock uses so they can expand into new areas. The alternative seems to be to
stick to their basic business and forget about the potential stock value to
their file.

In reviewing all the facts there is a possibility that AP might come to that
conclusion, but it will require a visionary management.

It is also interesting to note that the photographers have focused all their
efforts on retaining the secondary rights to their images, rather than trying to
get an extra $5 or $10 for every job they shoot.

Only AP has the statistics that would prove which would be most
beneficial, but I believe it is entirely possible that most of the AP
freelancers would be better off with a little more from every shoot, than in
getting a percentage of the fees charged for the stock use of images.

How Events Will Affect Non-AP Photographers

1- Any recognition that freelance photographers shooting for AP own copyright
to their images would have a powerful impact in strengthening the claims of all
other copyright holders.

2- If AP agrees to supply some compensation for reuse it could establish an
important precedent for all photographers dealing with other magazines and
newspapers.

3- An agreement relating to electronic rights could make it more difficult for
publications that are trying to grab secondary electronic rights from
freelancers.

4- An AP precedent might also help photographers working for other news
agencies.

5- If AP begins paying photographers a percentage of the fees collected for
non-member use, AP will have a greater incentive to raise rates so they can
still make a profit from their share of sales. This should benefit all
photographers as they try to negotiate fair rates with the same users.

6- Having gone this far, if the photographers get nothing it weakens the
position of every freelance photographer working in the editorial marketplace.
Working conditions are already at a desperate level for 98% of all freelancers
doing editorial work. If after all is said and done freelancers are expected to
work harder for less pay it should be a strong indicator to anyone considering
editorial photography as a career, to look somewhere else.

See related AP story.