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AP-Corbis deal
Doug Pizac, Photographer
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Sandy | UT | USA | Posted: 1:58 PM on 08.23.11 |
->> Here's the link to a Poynter/Romenesko story about AP Images and Corbis becoming partners. Each will be able to license each other's images.
http://www.poynter.org/latest-news/romenesko/143669/ap-corbis-announce-cros.../
From the contributing photographer's standpoint, this could mean a big drop in royalties.
For example, if you have a 50-50 split deal with Corbis and AP does the licensing, the photographer's share is going to be dramatically reduced because of the trickle down. For example, let's say AP sells your Corbis represented photo for $100. Corbis and AP split the fee equally. You then get half of what Corbis gets which is $25 instead of $50. And that's if you're contract earns you 50% of sales.
On the reverse, if Corbis takes your AP represented image and puts it in a royalty-free package, then your dollar for dollar split with AP will be reduced to pennies because of the RF deal/marketing.
These examples are speculative and could be different depending on the agreement between the former arch rivals. However, based on various "standard" contracts I've seen that have the photographer on the short end of any money-making deal, I would be greatly surprised if the above scenarios are not the case.
AP's president describes the cross-distribution deal as providing "a perfect marriage of choice for our customers" while the Corbis CEO describes it as this "marks another major milestone in our company’s commitment to providing customers with the most compelling and differentiated content offering in the market today."
Notice how there is NO mention on how this deal is going to benefit the photographers who create the content they are licensing? |
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Brad Mangin, Photographer
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Pleasanton | CA | USA | Posted: 2:35 PM on 08.23.11 |
->> "Could" mean a drop in royalties?
This has been a race to the bottom for years, the only thing that has changed is the speed is getting faster and the race will be over soon with no winners.
The corporations are so desperate. The photographers are not so smart. Hold your ground. Don't sign those contracts. Keep your copyright and maintain your own archive- otherwise you better marry rich or get a job at In-N-Out. |
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Michael Granse, Photographer
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Urbana | IL | USA | Posted: 5:34 PM on 08.23.11 |
->> With Sports Illustrated's $50 per photograph regardless of placement or size arrangement with AP, this means that a Corbis photograph licensed by Sports Illustrated through AP would result in AP and Corbis splitting the $50 and then then Corbis would split their $25 with the photographer who would net $12.50.
I have had a few moments to think about this, and I have decided that I do not like it. |
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Caleb Raney, Photographer, Assistant
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Shawnee | OK | USA | Posted: 6:02 PM on 08.23.11 |
| ->> Just what I needed, an excuse to drink whisky on a Tuesday. |
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Chuck Liddy, Photographer
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Durham | NC | USA | Posted: 7:41 PM on 08.23.11 |
->> $12.50? who cares you GOT your photo in Sports Illustrated.
(insert gagging noise here) |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 7:45 PM on 08.23.11 |
->> I'm not sure that the presumption that AP and Corbis split the fee prior to the photographer's cut is determined is correct.
Take Doug's example - A Corbis shooter's image licenses for $100. AP/Corbis split the fee - but only Corbis has to share with the shooter. So AP gets $50, Corbis $25 and the photographer $25. It doesn't make sense that the agency representing the photographer, who has the greatest overhead associated with managing the relationship with that person ends us with less money than the other agency.
I think it much more likely that the shooter continues to receive their percentage of the gross sale and AP/Corbis split the residual. So if the shooter has a 50% rate, they continue to receive $50 while AP and Corbis split the other $50 (and likely not equally).
This would particularly be true if the agreement is such that AP is a subcontractor or agent for Corbis and vice versa. |
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Doug Pizac, Photographer
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Sandy | UT | USA | Posted: 10:41 PM on 08.23.11 |
->> Brad...
I said "could" to satisfy the remote possibility (snowball's chance in heck) that the photographers would be taken care of.
Mark...
While your scenario of the photographer getting 50% of the gross is noble, that's not the case in the contracts I've seen. A 50-50 split is based on what the picture agency earns on any sales/licensing. If AP makes the deal on behalf of Corbis whereupon AP's agreement with Corbis is to receive half, Corbis "earned" half of the gross fee of which your share comes from that -- which equates to 50% of Corbis' cut which is actually only 25% of the gross sale.
The one thing to keep in mind is WHO wrote the representation contract. Not the photographer. And as such, who do you think the benefactor of any revenue sourcing is going to be? Not the photographer. The fact that the news story only talks about Corbis, AP and how great this collaboration will be for their clients -- with not a single mention about how great this is for photographers -- tells it all.
The business model of commercial photo agences is the opposite of standard representation contracts with real estate agents and attorneys. When you sell your house, the agent takes a 6% commission whereupon he/she splits that commission with other agents involved. When you sue someone where your attorney gets half of the award, the lawyer splits his/her share with other attorneys your lawyer brings in to help. In both instances, the client (you) keeps the majority of the revenue (94% of the house sale and 50% of the lawsuit) regardless of how many representatives are involved.
With picture agencies, the photographer's image is nothing more than a commodity where the sharing of any revenue sourcing benefits the distribution process, not the shooter. All splits are done by the agencies involved off the top and whatever is left over goes to the photographer.
Thus, the reasoning of others to market one's own photography. |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 10:51 PM on 08.23.11 |
->> I'm just not seeing the subordinate agency making twice the fee of the representing agency.
Also, if the agreement indicates that the photographer receives XX% of sales made by the agency or their agents/subcontractors etc., and if the AP/Corbis deal is in the form of an agency agreement (and I'm hard pressed seeing how it could not be interpreted as such), seems to me that there is a cause of action if the photographer is not getting their contracted percentage of the sale. It's not about being noble, it's about complying with the terms of the contract. |
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Jim Colburn, Photographer, Photo Editor
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Omaha | NE | USA | Posted: 11:36 PM on 08.23.11 |
->> "I'm just not seeing the subordinate agency making twice the fee of the representing agency"
It's been happening for decades. In the photo agency world if a European sub-agent sold a photo for $200 they took $100 and passed on the rest. The US agency took their cut of the $100 and sent the photographer the remaining $50. |
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David G. McIntyre, Photographer
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Beijing | . | CHINA | Posted: 11:37 PM on 08.23.11 |
| ->> Simply put: Publications are getting a lot more than they are paying for. A credit doesn't pay the mortgage, a check does! |
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Jim Colburn, Photographer, Photo Editor
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Omaha | NE | USA | Posted: 1:13 PM on 08.24.11 |
->> An American Sygma shooter once told me (this is in the 80s) that a photo he'd shot in the Bahamas sold to an American publication netted him only 33% of the sale instead of his normal 50% because, as Sygma told him, since it was shot outside the US it was charged to Sygma in Paris who took their cut before passing on the remainder to Sygma NY who took their cut, leaving him with a third.
If he'd taken the same shot 200 miles or so northwest in Miami he'd have gotten 50%.
The photo sold for something in the $10,000 range so 17% would have been serious money. |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 4:31 PM on 08.24.11 |
->> Jim/Doug
I would have to assume then that the deals between these agencies are structured as agency one licensing to agency two who then relicenses to the end consumer and not as agency two acting as agent for agency one. |
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Bradly J. Boner, Photographer, Photo Editor
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Jackson | WY | USA | Posted: 5:34 PM on 08.24.11 |
| ->> Looks like this is yet another reason to submit as little as possible to AP... |
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Doug Pizac, Photographer
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Sandy | UT | USA | Posted: 6:41 PM on 08.24.11 |
->> Mark...
Yes and no on both scenarios.
One agency isn't licensing to the next; the second agency is acting on behalf of the first. And for doing so the second agency gets half the licensing/sale fee. All the first agency does is collect its share which is split with the photographer for doing nothing more than opening its archive to the other agency plus some accounting paperwork.
The problem is that the photographer is the recipient of whatever the second agency agrees to with the end user client. And even though it is the photographer who is creating the marketable content, he/she has no say in the pricing structure. In essence, the business model is the opposite of normal manufacturing practices. This is why the photography market has become more commodity based versus manufacturing based.
In a manufacturing business model, a company produces widgets and prices them to cover its costs and produce a little profit -- say $25 apiece. The widgets are then sent to a wholesaler who marks up the price 2x and sells them to a retailer who marks them up another 2x for sale to the customer. A $25 widget becomes $50 wholesale and $100 retail. With this model, each entity in the chain makes a profit. And most importantly, if there is any discounting, that money loss comes out of the retailer's share, not the manufacturer's.
In a commodity based model, it is the retailer/client who sets the price which results in a trickle down payment to the manufacturer of which that money may not cover the cost of producing the widget let alone show a profit. This is why so many farmers and ranchers have such a tough time -- and now photographers. Photography has become a commodity market where distributors and clients benefit (ie. the AP-Corbis news release quotes).
For example, let's say AP licenses a single Corbis image to a client for $10,000. AP shares the fee with Corbis for $5,000 each. And Corbis gives half of that ($2,500) to the photographer.
However, clients don't want to spend 10 grand per image, but are willing to pay $100 for 100 images. So AP bundles 100 photos from different Corbis photographers and produces a 100-image RF CD for $100 whereupon they sell 100 units. That's $10,000. AP and Corbis split the fee for $5,000 each. Corbis then splits its share with 100 photographers at $25 each for the 100 produced CDs. This computes down to 25 cents per image per CD.
In both cases, AP and Corbis made the same thousands of dollars. But in the second case, the photographer's share dropped from $250 to $25 per 100 units sold. Now, if there are 500 images on the CD, AP and Corbis make the same amount of money (thousands), but the photographer's share is reduced to 5 cents per CD -- far below the $25 break even/profit cost per widget.
And since there is no minimum to be paid to the photographers, there is no limit on the number of images Corbis and AP can bundle. To satisfy client demand and increase the number of unit sales, the agencies could put together DVDs with 5,000 images on them. They still make the same thousands of dollars on every 100 units, but the photographer's share is now down to a half penny royalty per DVD sold.
Do Corbis and AP care about the photographers? Why should they? Their photography "cost" of $2,500 per 100 units is constant whether there are 50 images on the CD/DVD or 5,000. Their concern is how many photos does it take to spark sales. What's the magic number of images per CD/DVD that is needed to increase the number of sales and go from a 100-unit run to a 10,000 unit run.
And with the plethora of prosumer shooters and foolish pros out there, there is a plethora of images to bundle. And if not via a CD/DVD bundle, then through a subscription based business model which earns photographers even less since there is no guarantee that your photo(s) will be picked as part of the subscription. Yet the distribution/licensing fees Corbis and AP charge will continue to bring them a constant revenue stream.
That's why the money is in distribution, not the photography that allows for the distribution to take place. |
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Doug Pizac, Photographer
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Sandy | UT | USA | Posted: 9:53 PM on 08.24.11 |
->> FYI, in my comments above I used a 50-50 split percentage as a matter of mathematical simplicity.
Another SS member wrote me separately about the numbers. The actual contracts of both AP and Reuters call for the photographers to earn only a 25% royalty -- not 50% -- and that is based on "net" proceeds with net defined as minus fees for administrative, marketing and/or other costs incurred by the agencies.
So in real world terms, take the dollar numbers I used as examples of photographer royalties and cut them in half.
I don't know what cut Corbis photographers get on sales. If anyone does, please share. US Presswire is 50% of net -- twice that of AP and Reuters; but then USPW doesn't pay day rates for the initial photography. |
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David G. McIntyre, Photographer
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Beijing | . | CHINA | Posted: 12:09 PM on 08.25.11 |
->> Photographers need to have a set amount of the gross or a minimum per image in their agreements. Then it i up to the agencies to try and get higher rates. It would also make the more sought after images command a true payout.
Overall, the economic model is becoming less and less attractive for photographers to go out and produce content. |
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Scott Miller, Photographer
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Sorrento | FL | | Posted: 8:04 AM on 08.26.11 |
->> Doug there are a few flaws in your posts.
First it depends on WHICH AP contract you are working under. The standard work for hire agreements, calls for a 25% share of sales as does Reuters. The contributor contract (ie NFL) is very different.
A couple of the agencies I deal with also have deals with other agencies to distribute work.
None of which are 50-50.
You mention US PResswire, in the beginning USPW stuff went out via ZUMA. Zuma took 15% off the top - ie a $100 sale became an $85 sale. So we spilt $85 with USPW, not $50.
Icon has deals for shared distribution as do several other smaller agencies and most work under the 85-15 split.
Most contracts of shared distribution work that way. And if memory serves me right, many of the current deals in place with the European agencies are that way with USPW as well.
So USPW is no different than any others when it comes to sharing and splitting the take with another agency. |
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Doug Pizac, Photographer
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Sandy | UT | USA | Posted: 10:29 AM on 08.26.11 |
->> Scott...
As I said two posts ahead of yours, my use of a 50-50 split was used for mathematical simplicity to easily illustrate how fast photographer royalties can drop when there are other agencies higher up in the food chain taking their piece of the money pie first. The 75-25 split of AP and Reuters was meant to illustrate what the real world is in this particular instance. There is no uniform contract between agencies, nor do agencies have uniform contracts within themselves.
And my saying the 50-50 split with USPW is "net" takes into account Zuma's off the top cut along with others who act as a secondary agent.
FYI, as to your "none of which are 50-50" I was contacted offline by a SS member who just signed with an agency where the split if supposidely 50-50 of the gross. So if there is another agency acting as a sub-contractor, the two agencies split the 50% share -- the way attorneys and real estate agents do.
The purpose of my statements wasn't to compare/contrast the percentage splits of agency vs. agency -- that would be like getting into a Nikon vs Canon debate -- but to generically explain how splits work in theory in the photo agency business in comparison to other more mainstream business models. |
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Scott Miller, Photographer
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Sorrento | FL | | Posted: 3:40 PM on 08.26.11 |
->> Doug,
Sorry I missed the "was for simplicity" part... was a little red eyed this morning.
As for the rest, I've said for 20+ years, read the contract. Back in the day with SIPA and then with Picture Group it was a handshake for me and that was good enough.
Today there are agents and sub agents and sub-sub agents, so yes in the end a $100 sale can end up being $60 before one realizes.
As for the new AP-Corbis deal - look at it in this sense: it's more avenues that maybe weren't there before.
Yes I have been in this business for a long, long time, so I do remember the good old days of shipping film around the globe to clients, those days are gone and the routes to those clients in getting smaller and smaller. So if this deal opens up more avenues for sales, so be it.
USPW did the same thing (opened new avenues) when they partnered with the several Eruo agencies and with Reuters for distribution deals.
CAL Sport Media, ICON, South Creek, AFP all have those deals as well and at one time (not sure if they still do) so did EPA. |
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Doug Pizac, Photographer
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Sandy | UT | USA | Posted: 10:17 PM on 08.26.11 |
->> Scott...
Fully agree that new avenues are needed and will continue. The problem is that as more avenues are created, the more lanes there are dividing the revenue streams. And with more and more agency partnerships taking the first bites out of the money pie, the photographers who are creating the marketable content are getting closer to the edge of becoming road kill. To prosper, photographers need to get back into the drivers seat or at least be the navigator in some capacity. Just going along for the ride will have you dropped off at the poor house. |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 11:15 PM on 08.26.11 |
->> Doug -
What odds would you place on the success of a photographer's cooperative to do exactly that? An agency owned by the contributors themselves. |
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Mark Peters, Photographer
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Highland | IL | USA | Posted: 11:33 PM on 08.26.11 |
| ->> Just to clarify - I do know of VII - but I guess I'm asking about something more on the scale of those agencies mentioned throughout this thread. |
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Doug Pizac, Photographer
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Sandy | UT | USA | Posted: 1:39 AM on 08.27.11 |
->> Mark...
It can happen, and has -- and not just in photography, but in the motion picture and recording industries too.
Allsport was started in 1968 by Tony Duffy whereupon great sports shooters climbed on board in the '70s and '80s. It was a photographer oriented agency run by great people. I knew many of them and worked with several along the sidelines of events. It was sports photography heaven. Then it was sold to Getty in 1998. WireImage was also headed by photo people. It is now owned by Getty too.
If you look up the big agency names on Wikipedia you'll see how they grew their image databases by acquiring smaller agencies -- many of which where created by photographer cooperatives.
In response to the strangle-hold the Hollywood movie studio system had on actors, D. W. Griffith, Charlie Chaplin, Mary Pickford and Douglas Fairbanks created United Artists. UA was formed so they could better control their work and future. And the Beatles formed Apple.
The differences between then and now with pictures is content and distribution. Up until this past decade, professional quality imagery for the most part was done by professionals who were highly skilled and could make the most from the expensive cost of film, processing, etc. But with the advent of digital cameras and the plethora of prosumer photographers, the amount of available content has exploded -- especially with the general lowering of quality expectations and needs. One doesn't require a 20-meg super sharp well lit image to run on a web page that is only going to last a short time. Plus with the Internet's continously being updated, the attention span of viewers has greatly diminished nor do they want to wait for the next day's paper -- that industry's problem. Speed is more important than quality many times. Whoever can be first grabs the viewership whereupon more accurate reporting ensues to keep their attention.
And with the Internet's ease of distribution, that has led to the formation of all the worldwide partnerships and mega-agencies where enormous databases of imagery can be accessed by merely logging on. Plus there are those who are willing to work for free which have given rise to the mega-bucks creation of the HuffPost-AOL deal.
Competing on a level playing field is one thing. But how do you survive when others are giving away similar work at greatly reduced prices or for free? And even if it isn't as good as your work, being free is a tremendous temptation and justification for lowering one's standards to the "good enough" level.
Then you have websites like Facebook, Twitter, MySpace, TwitPics, etc. whose existance is based on free sharing by the masses. Content has zero value. If it did, it would be licensed. Distribution and its associated advertising linkage is their business model that generates their revenue/worth. And this brings us back to agency partnerships who profit by taking their percentages off the top of the sales revenue stream thereby leaving the photographers who created the content downstream with whatever floats their way. The stream is in distribution, not content creation. That's why photographer royalties are only 25% of the net in some contracts.
Yes, a photographer oriented agency can be done. But you're going to be paddling upstream without a paddle against the agencies who want to protect their profitable distribution structure. To be fair, from a business standpoint you would defend your money making efforts the same way from those who would want a bigger piece of your yummy money pie. So we can't fault the likes of AP, Reuters, Corbis, Getty and the others. They are conducting business in their best interests. That's called capitalism.
The alternative however is to build your own reputation, client base, etc. and do your own marketing via Photoshelter, SmugMug and other sites that have geared themselves to photographers wanting to control their work and future like the UA founders did over 90 years ago. Beyond that is to create a niche group like VII.
But don't waste time trying to get the big agencies to switch their minds and give photographers better deals unless you can offer something that others can't. Doing so would mean less money for them -- and that's not why they are in business; and neither are we. |
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Sam Morris, Photographer
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Henderson (Las Vegas) | NV | USA | Posted: 4:03 AM on 08.27.11 |
| ->> Photo school students should be able to get three credits be memorizing Doug's post immediately above. |
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Scott Miller, Photographer
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Sorrento | FL | | Posted: 11:58 AM on 08.27.11 |
| ->> VII is also in a distribution deal with Corbis AFTER having one with AP. |
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Scott Miller, Photographer
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Sorrento | FL | | Posted: 11:18 PM on 09.06.11 |
| ->> So now that Gannett apparently has purchased US Presswire... wonder how that changes things .... |
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Stew Milne, Photographer
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Providence | RI | USA | Posted: 11:36 PM on 09.06.11 |
| ->> On a similar note: When did Cal Sports Media and AP partner up? Ap Images is hosting Cal Sports Media pix on their website. |
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Michael Granse, Photographer
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Urbana | IL | USA | Posted: 2:42 AM on 09.07.11 |
| ->> There are so many hosts hosting hosts that the guests are having difficulty figuring out whose party they are attending. |
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Doug Pizac, Photographer
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Sandy | UT | USA | Posted: 8:57 AM on 09.07.11 |
| ->> For anyone who has a contract with Cal Sports Media, does the agency's deal with AP Images equate to a reduction of your royalties? For example, if you have a 50-50 split deal would you get just 25% if AP images makes the sale? (AP and Cal split the gross sale and you split the 50% with Cal.) And were anyone of you told about the partnership when it happened and the financial implications of such? |
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Jack Kurtz, Photographer
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Phoenix | AZ | United States | Posted: 9:13 AM on 09.07.11 |
| ->> Scott, Where did you hear about the US Presswire-Gannett deal? thanks |
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Alex Menendez, Photographer
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