Friday, November 27, 2015

ASMP Issues An Alert regarding Their Position on Time Inc. Contract

ASMP issued the following alert to exercise "extreme caution", which we are posting here, in it's entirety on the Time Inc (NYSE: TWX) contract:

Open letter to Time Inc. regarding one-sided independent photographer contract

ASMP has joined with the National Press Photographers Association (NPPA), the Digital Media Licensing Association (DMLA)American Photographic Artists (APA), and the Professional Photographers of America (PPA) in a letter to Time Inc. regarding our collective objections to the terms and conditions under which professional photographers are being required to operate come January 1st, 2016. Under the terms of the new contract, first detailed by Photo Business News ( here ), many of the fees and rights demands are unfair to professional photographers and will severely limit the ability of ASMP members to earn a sustainable living. The letter which ASMP co-authored with theNPPA and others can be viewed here.

ASMP continues to work both publicly and behind-the-scenes tirelessly on behalf of professional photographers. Just as it has in the past with Conde NastGetty Images, and Knight Ridder.

Founded in 1944, the Society amended it’s charter in 1949 to begin “the fight to represent magazine photographers in matters of wages and working conditions.” In 1967, ASMP issued a “Declaration of Conscience” stating that “reproduction rights and ownership belong to the photographer; that each use of a photograph must be compensated for; that limitations on a photographer’s freedom to reuse his own creations must be related to the purpose and protection of the publication and must be limited in time; and that no ASMP member or unaffiliated photographer should agree to terms inconsistent with the resolution.” A two-year battle with Time Inc. was waged, and many ASMP members jeopardized their livelihoods before this basic right was recognized by the publishing industry. The stock photography business, and the benefits photographers realize from it, is a direct result of ASMP’s stand.

Just as in 1967, when ASMP engaged directly with Time Magazine, and served the interests of not just ASMP members, but all photographers, ASMP continues to work hard to foster good and fair working conditions for photographers in all of Time Inc.’s publications. You can read more about the founding of ASMP and the efforts on behalf of photographers here.

ASMP Executive Director Tom Kennedy states:
“I believe photographers are willing to work with Time Inc. to enable a new management system that would enable better tracking of assignments and to foster a consistent assignment approach across its properties. But it is essential that such an agreement not be done on the basis of an effort to unilaterally impose draconian contract terms that do not take into account the needs of photographers in their employment. I think it is far better to enter into discussions with photographers to produce a fair and mutually beneficial contract solution that also addresses Time Inc. business needs.”

ASMP urges any photographer considering signing this contract to proceed with extreme caution.
Follow updates on Time Inc. independent photographer contract on the current ASMP News page.
If you have any questions, please feel free to ask.

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Saturday, November 14, 2015

EyeEm - The Joke Is On Us

The sad joke amongst photographers is how many clients seem to think "will work for photo credit" is fair and reasonable; and the varied responses include "my landlord won't take photo credit for my rent" and "I can't eat a photo credit". Unfortunately, EyeEm is capitalizing and compounding on the joke "there's a sucker born every minute" because many of those suckers are talking themselves into shooting for credit.

That's right.

There are several over-arching concerns any professional photographer should have with the EyeEm business model. David Robin, photographer and advocacy lead for the American Photographic Artists (APA) trade association , has outlined several problems. Among them -

  1. EyeEm's pricing model undercuts the established market and extremely undervalues and commodifies professional photography. EyeEm's compensation rate to photographers for stock imagery with unlimited rights in perpetuity is as low as $10 ($5 if split with a third party). Even more egregious, EyeEm has dredged the bottom and doubled down on their exploitation model by only offering a credit line as compensation for photographer-funded spec work with unlimited rights in perpetuity for use by Fortune 500 corporations. Clearly their pricing sets a dangerous precedent that, if it supplants established pricing models, will in the end deprive pros from making a viable living. 
  2. The fact that EyeEm is based in Germany with no established legal entity in the U.S. should be a concern for any U.S.-based photographer. The cost and logistics of a U.S. citizen pursuing any legal recourse against a German based company for any breach or cause would be extremely prohibitive. There are many examples of companies based overseas that have been guilty of a breach of contract and/or illegal activity that went un-pursued leaving victims with limited to no recourse. 
  3. EyeEm has inappropriately portrayed their business model as a benign social media site rather than the for-profit stock photo and spec-assignment agency they are. 
  4. EyeEm has inappropriately lifted many of their contractual stipulations from social media TOS agreements. This deception is financially convenient for EyeEm, their investors and image buyers, but devastating for photographers and image creators. 
Here is an outline of the concerns with EyeEm's Terms of Service and Third Party Distribution Agreement. Here is the delineation of the most troubling stipulations in these documents:

  • Clause 5.2 Undermines the creators copyright (and future value of their work) by allowing EyeEm to have the unlimited royalty free ability to sub-license the User's work worldwide in perpetuity to any and all unnamed third parties without express approval nor compensation to the creator. 
  • Clause 5.2.3 Undermines the creators' copyright (and future value of their work) by allowing EyeEm to use the work for any and all advertising for EyeEm and any unknown affiliates in perpetuity without express approval nor compensation to the creator. This clause goes on to allow EyeEm to modify or change in any way they see fit the creators' images without express approval. Even if that modification might expose the creator to undue legal and financial ramifications caused by infringement, privacy violations, defamation etc. not of the creators' making. 
  • Clause 5.3 This inequitable clause allows EyeEm to post or use a creators' images without proper copyright notice or identifying the creator in any way. In this way EyeEm potentially undermines the creators' ability to prove ownership if infringement should occur. This is especially troublesome as it sets up a claim of Fair Use by an infringer under the Orphan Works carve out. 
  • Clause 7.2 EyeEm forces creators to take full legal and financial responsibly for their content even if that content might have been altered and / or modified without their approval by EyeEm (see 5.2.3) and in so doing exposed the creator to potential infringement, privacy violations, defamation etc. without their knowledge nor approval. 
  • Clause 8.1 This extreme indemnification clause places an undo financial and legal burden on creators to protect EyeEm, a wealthy global corporation and any and all third parties they associate with, against any and all damages or lawsuits arising from events that the creator may have no control over including defamation, infringement, privacy violations etc. In addition this section fails to provide any reciprocal indemnification for the photographer by EyeEm and it's affiliates. 
  • Clause 9.2 This places the undue burden to ensure the "legality of any Content" on the creator even if EyeEm or it's affiliates should alter that Content without the creators' knowledge nor consent and by so doing expose the creator to legal ramifications not of their making. 
  • Clauses 9.5 - 9.6 These clauses expressly release EyeEm and its affiliates from having to pay for any and all legal or financial damages if EyeEm or it's affiliates should alter content without the creators' knowledge nor consent and by so doing expose the creator to legal ramifications not of their making. 
  • Clause 10 Allows EyeEm to change this signed and executed agreement at any time and for any reason at their sole discretion without being obligated to directly notify creators via email in advance. A legal and binding agreement such as a TOS is not changeable under the law unless all parties proactively agree to the changes. Short of that, the accepted and ethical way for EyeEm to go about changing the terms of the TOS is to send an email to each and every member with an appropriate amount of lead-time to either accept or reject the changes, as banks have done for decades. 
There are also several critical omissions from their TOS that are standard and required to ensure all parties are protected:

  1. EyeEm has purposely omitted any stipulations that outline their responsibility to collect and hold funds in a fiduciary capacity and further fails to stipulate that these funds are being collected on behalf of the creator and are not the property of EyeEm. This clause is standard in any agreement between an entity or person collecting funds on another's behalf. 
  2. EyeEm has failed to delineate the method and timeline for the distribution of monies being collected and held on the creators' behalf and have failed to provide remedies should EyeEm default on their required duties in this regard. 
  3. EyeEm seems to purposely fail to delineate the prevailing law, venue and method for resolving disputes with creators. While deceptive and non-standard for American based companies, this glaring omission seems to be a common tactic used by overseas corporations doing business with U.S.-based photographers by unnecessarily withholding this critical information from the creator, EyeEm anticipates that U.S.-based creators won't realize the extreme cost and prohibitive logistics of bringing a case against EyeEm for breach, in German courts. If EyeEm wanted to be truly transparent and supportive of U.S.-based photographers, they would create a legal entity in the US to facilitate the fair resolution of disputes. At the very least EyeEm should state the venue, prevailing law and method for reparations in their TOS. 
In terms of their third party Distribution Agreement, there are several areas in the Agreement that appear purposely opaque (and/ or omitted) which hold a potential for the photographer to be unwittingly exploited. The key areas of concern are:

  1. EyeEm fails to list the third parties the creator is agreeing to have their images sold through. 
  2. EyeEm fails to provide the unnamed third party's terms and conditions the creator is expected to adhere to. 
  3. EyeEm fails to acknowledge that they have partnered with Getty Images as a third party and does not delineate the onerous terms of the Getty Images in the Agreement though they require the creator to adhere to them. 
  4. EyeEm fails to outline how the funds will be split between the third parties and the creator. 
  5. EyeEm fails to delineate the method and timeline for the distribution of monies being collected and held on the creators' behalf and have failed to provide remedies should EyeEm and / or the third party defaults on their required duties in this regard. 
So, how does EyeEm do this? They entice you with "missions" you don't get paid to complete. Here's one for Mercedes Benz:
Your Mission: The sheer beauty of nature, an incredibly stylish couple or perhaps some breath-taking architecture… this mission is all about finding the elegance all around us. If elegance is the quality of being graceful and stylish in appearance or manner, what images convey this? Show us to take part in this mission.
Your Reward: The winning five images will be featured across Mercedes Benz social media platforms, which have a cumulative reach of over 17.5 million people. The top images will also be featured on the EyeEm blog as part of an image collection.
Then there's one for Motorola, where they pitch it as:
What’s super cool about these missions is that your photo could end up as a featured wallpaper on one of Motorola’s phones. Motorola are putting together a range of images to be featured as wallpapers on their devices, and are looking for your colorful photos to be included!
In the end the EyeEm business model is representative of the pervasive devaluation of professional photography and a race to the bottom to see which entity can charge the least for photographs while covering their risk on the backs of the ones they rely on for their product. Without the proactive participation of pro photographers, however, this practice could not succeed.

(Comments, if any, after the Jump)

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Wednesday, November 11, 2015

Equality for None, Time Inc Lowers the Hammer on Creatives

On November 6, Photo Business News reported and provided commentary on the new Time Inc (NYSE: TWXcontract which they unceremoniously presented to their contributors (Times' Failed Attempt At Fairness and Equity, 11/6/15). On November 10, Time Inc contacted Photo Business News and provided the following statement in response to the article:
"We have equalized our photography rights and rates across our 23+ brands. This is an industry standard. Our new contract is fair and equitable. A huge number of photographers have already signed the new agreement."

Let's break down the statement:

"equalized our photography rights and rates across our 23+ brands"

  • so work done for the smallest circulation publication of the 23+ brands gets paid at the rate of the flagship publication.  Time no longer thinks that circulation should be a factor in usage, apparently. This does not square with the fact that their advertising rates are absolutely affected by circulation.
  • The demand for copyright to your work (in their requirement of a work-made-for-hire clause) on all video content is a massive rights grab that is completely unnecessary, and certainly not a factor in what they are paying.

"This is an industry standard. "

  • Simply saying it's a standard does not make it so. Time actually has a leadership role to play here in providing a living pay scale, and this is not it. 

"Our new contract is fair and equitable. "

  • Again, saying it's fair and equitable does not make it so. The rights demands are unreasonable, and as outlined in the previous article, the actual passage of time shows that equity is definitely not a part of the equation in determining fair rates and terms. 

"A huge number of photographers have already signed the new agreement."

  • Saying a variation of "everyone else is doing it so you should too" doesn't make it right, reasonable, or fair. In fact, I've heard from more than one photographer who has signed it and when asked further, said "I didn't even read it, I do like one shoot a year for them..." - not smart business, in that case. Growing up in the San Francisco Bay Area, the common refrain when I tried the "everyone else is doing it" excuse with my mother, was always responded to with "well, if everyone else was jumping off the Golden Gate Bridge, would you?
  • Not everyone is going to sign it. We are aware of a number of photographers who have stated they will not.
  • When you are a contract photographer and committed 100 days a year under that contract, you have a significant amount of sway over someone because they are essentially beholden to Time Inc for 50% of their income, and with 60 days, not likely to be replaced in that period of time. You can be sure though, that more of them will be disgruntled and otherwise feeling taken advantage of. This will reveal itself in their commitment, no doubt.  Many photographers use 100 days of work per year as basis for calculating all their costs, so for many, this represents their entire client base, which is reasonable when you factor in that there is prep time and travel time as well. 
  • Thus, this is akin to going to an employee and substantially and materially changing the terms of their employment. Except here, Time Inc can (and has) terminated all contracts effective 12/31/15 and is requiring this contract be the new terms under which they will work.

Sign this contract at your own peril. It will not work out well for you in the long run. You will be, effectively, jumping off a bridge without a safety net, and, rest-assured, the next contract they demand you sign will be even worse. History has not shown contracts to get better over time. This TIME is no different.
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Friday, November 6, 2015

Times' Failed Attempt At Fairness and Equity

On November 2nd, Norm Pearlstine (LinkedIn) penned a missive to "Photographers Who Work with Time Inc." where he harkened back to the roaring 20's and the origins of Time and Life magazines (NYSE: TWX), and mentioned the "power of iconic photography" and suggested that "our commitment to original photography is as true today as ever", yet what Norm fails to recognize, in the new Time contract he's proffering, detailed and analyzed below, is that  Time has NOT factored in any kind of cost-of-living into what Time is paying their photographers, and is trampling on the rights of photographers like a 20's flapper stomping on the dance floor.

Perhaps they should remember that it's the talents of these photographers to create striking visuals that boost single-copy sales, and the talents of writers, reporters, and photographers, to create compelling content that readers will want to consume. This contract fails at facilitating a living wage.

First, check out this Bureau of Labor Statistics calculator (here) and you'll see that to have the same buying power in 2015 as $1.00 in 1925, you'd need $13.60. So, has Time increased their assignment rates 13X since then?

Let's start with 1980 rates.

Going back to 1980, and adjusting for inflation their rates should be over $1,000 for what used to be a $350 assignment back in 1980. Exhibit A in the contract shows a 2015 rate of $650. That means, that what you were earning at $350 in 1980 only gives you $191 in buying power today. We wrote about this extensively in December of 2014 - The Pathetic and Paltry Time Magazine Assignment Rate & Rights Grabs (12/31/14). I would love to find out what Time paid as an assignment in 1925 and plug it into the same calculator, because if they paid even $100.00 for an assignment in 1925 the same assignment would be $1,359 today. So, to reverse the equation, $650 in 2015 means that an assignment rate of $225 in 1980 was fair, and just shy of $48 an assignment in 1925. In neither case was it fair, and in 1980 they paid much more than that.

But I digress.

Pearlstine's missive uses several softening touches to what is a really really horrible contract. He even says "Some photographers have already signed a cross-brand agreement" as if to say "others don't have a problem with it so you shouldn't either. " An attached letter by Jeniqua Moore, Time's Associate Director, Digital Asset Contracts and Rights Management, requires you to agree to what's written or "No new assignments will be made to you after January 1, 2016 unless you confirm your agreement to the attached new Time Inc. commissioned photography agreement by signing the agreement." They also include a notice of termination, writing:
"On behalf of Time Inc. and each Time Inc. division, affiliate, subsidiary, brand, and publication, this letter constitutes notice of termination of each Prior Agreement, effective as of January 1, 2016. All rights to photography you created under previous agreements between you and Time Inc., or any Time Inc. division, affiliate, subsidiary, brand, or publication, will continue to be governed by those agreements."
So, what does the new contract dictate?

(Continued after the Jump)
Let's look at the contract and break it down:
This agreement (“Agreement”) is made and entered into as of January 1, 2016 (the “Effective Date”), by and between Time Inc., including its affiliates, subsidiaries, and divisions (each, a “Publisher Brand”), including editorial publications published, managed and/or operated by Time Inc. for third parties (unless such publications send you a separate agreement), and __________________ ("you"). Collectively, Time Inc. and Publisher Brands are referred to in this Agreement as “Publisher.” This Agreement governs the rights and obligations of Publisher and you with respect to Photographs and Videos you create in connection with each Assignment (as defined in Section 1) after the Effective Date of the Agreement, but not any photographs, videos, or other content you created or submitted to Time Inc. or any of its affiliates, divisions, or subsidiaries under any prior agreements. Rights granted by you are specified in Sections 3 and 4 and payments to be made to you are described in Section 6. Your performance of any Assignment or submission of any Photographs and Videos constitutes your acceptance of this Agreement.  

The above is standard boilerplate. Nothing wrong with that.Keep in mind here, all video you produce, and make no mistake about it, all smart phone photos you produce, are also governed by this agreement. Just because you used your professional cameras for much of the assignment, if you are using a different camera that happens to be a smart phone too, all the content you shoot with that device is also governed by this agreement.

1. Assignments. This Agreement will commence on the Effective Date and will continue unless and until terminated as provided in Section 16 (the “Term”). Each Publisher Brand based in the United States (an "Assigning Brand") may engage you from time to time during the Term to create for, and deliver to, the Assigning Brand: (i) photographs, including outtakes if requested, suitable for the Assigning Brand (each, a "Photograph") and, if also requested and agreed, (ii) video, motion pictures, and audiovisual works, including outtakes, suitable for the Assigning Brand (each, a “Video”). The Assigning Brand will communicate to you, before the applicable shoot, in an email or other writing, the Photograph/Video subject(s), due date, photo shoot expense budget, and other information relating to the particular project (the “Assignment”). Publisher Brands retain sole discretion over whether and when to use, and authorize the use of, the Photographs and Videos.

Now it starts to get murky. "Assigning Brand" isn't defined.  It may be obvious where they are saying related brands could be for Time and Time for Kids, or People and People en Espagnol,  but what about Golf Magazine and Money and Fortune? Consequently you really don't know what rights you are assigning away to whom, or from whom you can expect to receive reuse payments under the "Affiliated Brands" schedule.Throughout this contract, video is referred to, and it should be noted that these could be full on productions requiring an entirely separate crew, or a simpler behind-the-scenes video of the shoot. Make certain you're estimating a completely different fee set for also being the producer of those videos.

2. Delivery. You shall deliver to the Assigning Brand all Photographs and Videos created pursuant to each Assignment, as specified in the Assignment or otherwise requested by the Assigning Brand editor, whether in the form of original transparencies, negatives, contact prints, high resolution, low resolution, digital media, video, audio-visual, computer generated work, or any other format now known or hereafter developed, no later than the due date set forth in the applicable Assignment, time being of the essence, or after such due date if requested at any time by the Assigning Brand.

This requires you to deliver all your raw files (stills and video) on request. Be sure to allocate extra DAYS for the FTP time on this.

3. Rights Granted. You reserve and retain all rights in and to the Photographs (excluding the Idea House Assignments, as defined in Section 4) that are not specifically granted to Publisher under this Agreement, including ownership of the copyright. You hereby license to Publisher, the Rights (as defined below) to each Photograph created pursuant to an Assignment (excluding the Idea House Assignments), exclusively to the extent specified in Section 5 (Embargo). “Rights” means, collectively, the Assigning Brand Use & Reuse Rights, the Affiliated Brand Use & Reuse Rights, the Syndication Rights for Sports Illustrated, and the Time Inc. Photo & Food Studio Rights, each as defined below, each and all including the rights to reproduce, distribute, publish, publicly perform, display, download, transmit, and store the Photographs, and authorize and license the exercise of such rights to and by third parties, each and all throughout the world, in perpetuity, in any and all media, formats and methods of transmission now known or hereafter developed.
(a) “Assigning Brand Use & Reuse Rights” means the following rights:
(i) The rights to use and reuse, and authorize and license the use and reuse of, the Photographs in and in connection with any and all publications, products, content, and services now existing or hereafter created and displaying or exhibiting the name, trademark, or logo of the Assigning Brand, including the same or a related brand or title (for example, TIME and TIME for Kids, TIME-branded books and bookazines, and any TIME foreign editionspublished by Publisher) (each, the “Assigning Brand Product”), including in connection with the sale, licensing, and distribution of Assigning Brand Products to and by Affiliated Brands and third parties;
(ii) the rights to use and reuse the Photographs in connection with the marketing and promotion of the Assigning Brand or any Assigning Brand Product (including any distributor or licensee of such Assigning Brand Product); 
(iii) and, without limiting the generality of the foregoing, includes the “Cover Use & Reuse Rights,” defined as the rights: (A) to use a Photograph on the cover of any magazine published by the Assigning Brand (the “Cover”) and (B) to use and reuse, and authorize and license third parties to use and reuse, at any time for any purpose, a Photograph in the context of any Cover; 
(iv) and, without limiting the generality of the foregoing, includes the “Foreign Licensed Edition Rights,” defined as the rights, during the Embargo/Exclusivity Period, to sublicense the Photographs for use in a magazine outside the United States published under a license to a third party from the Assigning Brand (a “Foreign Licensed Edition”); 
(v) “Editing Rights” (meaning the rights to crop and re-crop, size, resize and otherwise modify the Photographs in any ways that an Assigning Brand deems appropriate in connection with the exercise by Assigning Brand or any authorized third party of any of the Rights); and 
(vi) “Crediting Rights” (meaning the non-exclusive rights, in connection with the exercise of the Rights, to use your name, likeness and/or biographical information in order to credit you as the creator of the Photograph). Each Assigning Brand and authorized third party will have the right to credit you in connection with the exercise of the
Rights in accordance with its respective customary practices.
(b) “Affiliated Brand Use & Reuse Rights” means the rights for any and all Publisher Brands except the Assigning Brand (the “Affiliated Brands”), to exercise the Assigning Brand Use & Reuse Rights as if each such Affiliated Brand were the Assigning Brand. 
(c) “Syndication Rights” means the rights for the Assigning Brand, only if the Assigning Brand is Sports Illustrated, to sublicense to third parties the exclusive right to license the Photographs directly and through sub-agents, including Getty Images, for editorial and commercial use by third parties. 
(d) “Time Inc. Photo & Food Studio Rights” means the rights for Publisher to use and reuse, and authorize and license the use and reuse of, for any purpose, Photographs created by you in the Time Inc. Photo Studio, the Time Inc. Food Studios, The Drive studio, or any other studio operated by Time Inc. or on premises owned or leased by Time Inc. (individually and collectively, the “Time Inc. Photo & Food Studios”) and commissioned in Assignments by the applicable Time Inc. Photo & Food Studios (and not another Assigning Brand) (the “Time Inc. Photo & Food Studio Photographs”); and Editing Rights and Crediting Rights for the Time Inc. Photo & Food Studio Photographs.

It's sad that they try to say "You reserve and retain all rights in and to the Photographs...that are not specifically granted to Publisher" but then effectively take all the rights, leaving little to nothing for you to "reserve and retain." Typical trick. Don't fall for it. Additionally, there are no additional fees for space payments (except cover/cover insets) for Assigning Brand assignments outlined in the rate card, Exhibit A. Therefore presumedly there will be no space rates paid for any usage (except a cover) whether on first use or for any future use.

Further, when they write “You hereby license to publisher the Rights to…authorize and license the exercise of such rights to third parties”that Time Inc. can relicense the images to third parties.  Thus, you begin to be competing on re-licensing with Time.  Additionally, Section 3 (a)(i) grants the following usage rights to the Assigning brand AND “related brand or title” without further compensation:

Foreign editions
Books bearing the Assigning brand’s logo (i.e. Sports Illustrated books)

So you've lost re-use there.

 Section 3(b): “Affiliated Brand Use & Reuse Rights” means the rights for any and all Publisher Brands except the Assigning Brand (the “Affiliated Brands”), to exercise the Assigning Brand Use & Reuse Rights as if each such Affiliated Brand were the Assigning Brand
This mean that Affiliated brands (i.e. other Time Inc brands/titles that are not under the umbrella of the assigning brand) can use images created on an assignment as if they were assignments from them and thus this would seem to be at odds with 6(a)(iv) which stipulates that some kind of payment will be made for such new use by affiliated brands.

4. Videos & Idea House Projects. With respect to any and all “Idea House Assignments” (defined as Photographs or Videos taken of or in connection with an Idea House project in connection with any Assigning Brand), and any and all Videos (as defined in Section 1), created by you in connection with any Assignment for Photographs, you hereby acknowledge that each Idea House Assignment or Video you create will be the sole and exclusive property of the Assigning Brand as a “work made for hire” within the meaning of the United States copyright laws, unless this would render you an employee of Publisher for purposes of an applicable unemployment insurance or workers’ compensation law, in which case each Idea House Assignment or Video will not constitute a work made for hire. If for this or any other reason each Idea House Assignment or Video does not constitute a work made for hire, you hereby transfer and assign all right and title, including copyright, in and to each Idea House Assignment or Video to the Assigning Brand. You also grant Crediting Rights to the Idea House Assignments and Videos to the Assigning Brand.

ANY video you shoot while on a Time Inc. assignment is a work made for hire.

ANY photographs you shoot when on an “Idea House Assignment” are works made for hire.

This clause should be struck. Why does Time/et al need a WMFH? They don't.

5. Embargo. “Embargo/Exclusivity Period” means, with respect to Rights granted in Section 3 to Photographs, the period beginning on the date of the Assignment and ending on a date that is 90 days after the date of first publication by the Assigning Brand in the United States of any one or more of the Photographs created under the Assignment, or 180 days for Time Inc. Photo & Food Studio Photographs, or any longer period of time specified in any Assignment. Unless and to the extent you have the prior written authorization of the Assigning Brand, as applicable, you will not exercise, or grant to any third party for exercise, during the Embargo/Exclusivity Period, any rights throughout the world in any and all media, formats and methods of transmission now known or hereafter developed (including any of the Rights), with respect to any Photographs in the Assignment.
Cover Photos & Videos. Unless and to the extent you have the prior written authorization of the Assigning Brand in each instance, you will not at any time (i.e., during or after the Embargo/Exclusivity Period and the Term) use, or authorize the use of, in any media, any Photograph that appeared as the primary photograph on a Cover (a “Cover Photograph”), any Idea House Assignment, and any Video, except for permitted Self-Promotional Use described below for such Cover Photograph or Video. Self-Promotional Use. After a 90-day Embargo/Exclusivity Period, without prior written authorization from the Assigning Brand, you may use and reuse Cover Photographs or Videos created by you solely to promote you and your work, if you clear any and all third-party rights that are required by applicable law and you do not receive any payment or other
consideration directly attributable to such Self-Promotional Use.

Using this language, if an assignment is never published, photographs will be embargoed forever and cannot be used for any other purpose.  Many photographers accept an assignment knowing there will be re-use revenue down the line. Further, you cannot use any images on your personal website, Twitter, Instagram, Facebook, or any other social media, promotional materials during the embargo/exclusivity period. See above about unpublished images. This also section makes mention only of the use of cover photographs after the 90-day embargo period without prior written authorization. It makes no mention of the possibility of using any other images generated on assignment for such purpose. Why the omission? Further, an image made with, say, a smart phone could be deemed to be a part of the assignment, so a photographer who instragramed out a photo would be in breach of this clause. So, for example, those photographers on the campaign trail in 2015/2016 had better have expressed written permission to be tweeting, instragramming, and facebooking photos from the assignment.

6. Fees & Expenses.
(a) In connection with each Assignment, provided you have complied fully with your obligations hereunder and pursuant to the Assignment, you will be entitled to receive the following payments, each as specified in the Assignment Photo Use & Reuse Rate Card attached to and made a part of this Agreement as Exhibit A (the “Rate Card”), in consideration for the grant or exercise of the applicable Rights:
(i) payment at the Assignment Day Rate by the Assigning Brand for each day of an Assignment (excluding any Idea House Assignments, which are addressed in Section 6 (a) (vi));
(ii) only if an Assigning Brand first exercises the Cover Use & Reuse Rights on a print magazine cover for each Photograph in an Assignment, a one-time per Photograph Cover Fee (or Cover Inset Fee), as applicable (excluding any Time Inc. Photo & Food Studio Photographs and Idea House Assignments);
(iii) only if Foreign Licensed Edition Rights are exercised for foreign licensed editions of Assigning Brands specified in the Rate Card, and excluding any Time Inc. Photo & Food Studio Photographs and Idea House Assignments, an additional Foreign Licensed Magazine Edition Fee;
(iv) only if any Affiliated Brand first publishes any Photograph in a new context (without the Assigning Brand name, trademark, or logo and with the Affiliated Brand name, trademark, or logo) (excluding Time Inc. Photo & Food Studio Photographs and Idea House Assignments), an Affiliated Brand Fee (a one-time per Photograph Cover Fee (or Cover Inset Fee), if applicable, for first use of a Photograph on a print Magazine, print book, or print bookazine; another Affiliated Brand Reuse Fee; or, if applicable, a Foreign Licensed Magazine Edition Fee) (new payments will  not be made for any republications of the same Photograph in the same context, to promote an earlier publication
of the same Photograph in the same context, or if previously published as part of the same Cover);
It's unreasonable for this to apply to only a cover or cover inset fee.
(v) only if Syndication Rights for Sports Illustrated are exercised with respect to a Photograph, a Syndication Fee;
(vi) only if an Idea House Assignment fee or a Video fee is negotiated and agreed, an Idea House Assignment Fee or a Video Fee.
(b) All payments will be made to you in accordance with Publisher’s standard payment practices after delivery and acceptance of the Photographs and Videos and receipt of tax, expense, independent contractor verification, and any other documentation as reasonably required by Publisher. Publisher reserves the right to change the Rate Card at any time upon written notice to you for Assignments made thirty (30) days or more after any such Rate Card change notice. You will be solely responsible to pay your business expenses, except that Assigning Brand will reimburse you for, or pay,
expenses (e.g., film, travel, lodging, meals) that are pre-approved in writing (e.g., by email) and any other reasonable unforeseen expenses if subsequently approved in writing (e.g., by email), provided that all such expenses are necessarily incurred directly in the course of carrying out each Assignment and after your submission of a written expense report with receipts. Each Assigning Brand may provide you with an Assignment budget and Assigning Brand photo shoot expense caps. You shall send an electronic invoice to the Assigning Brand via the Coupa Supplier Network
(CSN) (or any other system designated by Time Inc.) for payment following completion of the Assignment. Submission of the invoice requires enrollment in the CSN (or any other system designated by Time Inc.). Payment by Assigning Brand is due net sixty (60) days of receipt of the invoice unless early payment discount terms are selected during invoice submission within the CSN (or any other system designated by Time Inc.). For further information regarding the CSN,
you may email or the Coupa Supplier Help Desk at

As it relates to "1. All payments will be made only “after delivery and acceptance” of the photographs", In other words, if the photographs are rejected as insufficient or lacking (a purely subjective exercise), or if a story gets cancelled and the images are no longer needed before photographer has a chance to deliver them, Time Inc, is under no obligation to pay the photographer’s invoice.

As it relates to "2.) All expenses must be pre-approved in writing. " There is NO way this is feasible. General expenses can be, but "all". Not a chance.

As it relates to "3). “Payment by assigning brand is due net 60 days of receipt of invoice unless early discount payment terms are selected during invoice submission.” 

Currently under the Coupa system (CNS), the options are for either a net 25 day net payment or a .5% discount on a net 10 day payment. Why the change to net 60? This isn't fair given that every other expense a photographer has is a 30 day expense. This contract calls for photographers to carry interest expenses on credit card charges, for example, until the next billing cycle.

7. Photo/Video Subjects. As between you and Publisher, Publisher will be responsible for clearing all rights and permissions (excluding copyright) required by any other people or entities (e.g., Photo/Video Subjects, sports leagues or conferences) for Publisher’s exercise of any of the Rights granted by you to Publisher, provided that you have fully informed the Assigning Brand in writing of any requested or asserted restrictions as specified in Section 7 (a).

(a) without prior express written approval of an Assigning Brand photo editor (email is sufficient), you will not agree to any restrictions limiting the ability of Publisher to exercise any of the Rights (including any limitation on the ability of the Assigning Brand or any Affiliated Brand to use, reuse, or license any Photograph or Video) that may be requested or asserted by any person depicted or identified in any Photograph or Video or whose voice is heard in any Video (each a
“Photo/Video Subject”), any employer, agent, manager or representative of any such Photo/Video Subject (“Photo/Video Subject Representatives”), any sports leagues or conferences, or any other person or entity. You will inform the Assigning Brand Photo Editor in writing (email is sufficient) of any such request or demand.

(b) Notwithstanding Section 7 (a), upon request of the Assigning Brand Photo Editor, you will request from all Photo/Video Subjects, owners of locations pictured in the Photographs and Videos, and any other third parties, releases in a form supplied or approved by the Assigning Brand, and you will provide to Assigning Brand any signed releases you receive. In addition, if you deliver any Video including any music, you will make reasonable efforts to inform the Assigning Brand Photo Editor of all relevant contact information for music rights clearance.

7b is a problem, because, for example, it then prohibits any Sports Illustrated contributor from signing any agreement to get a photographer's vest on a football sideline or other similar "sign this or you don't get access" credential authorization.  It also requires you to have what amounts to an entire "rights and clearances" team securing releases from everyone and anyone, including property owners. Oh, and if there's any music in your videos, you're responsible for clearing all that too.

8. Captions. You will give the Assigning Brand written descriptive information relating to each of the Photographs and Videos sufficient to enable the Publisher to write captions and video descriptions, and upon request and where available to you, documentation verifying the descriptive information. You agree to cooperate with Publisher and its employees, editors, researchers, agents, and legal counsel in connection with any editorial or legal review before or after publication of any of the Photographs and Videos.

This makes sense, however, you could be required to caption each and every photograph. That'll be a lot of time if you're shooting for SI and deliver 6,000 raw files from one game.

9. Representations & Warranties. With respect to each of the Photographs and Videos, you represent and warrant that:
(a) You are and will be the sole creator and owner of the Photographs and Videos, and all rights in and to the Photographs and Videos, or you will obtain from any creative contributors retained by you for each Assignment signed “work for hire” agreements assigning to you or Publisher all copyright ownership in their contributions to the Photographs and Videos; 
(b) The Photographs and Videos are and will be wholly original; will not infringe any copyright of any third party; and, as of the date of delivery to Publisher, will not have been published or distributed by you or others (except for any of the following if identified by you and with prior written approval of Publisher (e.g., by email): (i) content in the public domain or (ii) content used with permission by its owner); 
(c) You will not manipulate, digitally alter, or otherwise modify the Photographs and Videos from the original depiction, except to the extent requested or approved by the Assigning Brand in writing (e.g., by email); 
(d) You will comply with all applicable laws, rules, and regulations in performing the Assignment and creating and delivering the Photographs and Videos.

Clause 9a means that you have to get WMFH contracts from all your assistants who might trigger a remote camera for you, for example.  9b creates problems where you are proving you have all rights to the content, so music in videos, or trademarks in still photographs, while not likely to be an issue, could well be here.

10. Editorial Guidelines. You agree that you will perform the Assignment and create and prepare the Photographs and Videos in compliance with the Time Inc. Editorial Guidelines, which can be found at, and any updates by Publisher from time to time upon written notice to you.


11. Loss/Damage/Limitation of Liability. You acknowledge and agree that Publisher is not liable for any loss of or damage to the Photographs at any time, except to the extent caused by Publisher’s gross negligence, in which event Publisher’s maximum total liability is $1,500 per Assignment. Publisher may retain digital images of the Photographs to exercise the Rights, and Publisher has no obligation to return disks (or any other media) or digital copies. Notwithstanding anything to the contrary expressed or implied herein, in no event will Publisher be liable for consequential, incidental, exemplary, special or punitive damages, or lost profits, even if it has been informed of their possible existence.

Normal but not fair unless there is parity for you.

12. Independent Contractor. You agree that you are an independent contractor and that you are not entitled to and will not claim any of the rights, privileges or benefits of an employee of the Publisher. You understand that you will not receive any of the rights, privileges and benefits that the Publisher extends to its employees, including, but not limited to, pension, welfare benefits, vacation, termination or severance pay or other perquisites by virtue of this Agreement or by virtue of your provision of services to the Publisher. You hereby release any and all right, claim, or interest to any
privileges or to any benefit, welfare plan or other employee plans or perquisites, including but not limited to pension, welfare benefits, vacation or termination pay, provided by, or on behalf of, the Publisher to its employees. You will be solely responsible for payment and withholding of all income, employment and other taxes.

Normal. They don't want you claiming you're an employee when you're not.

13. Confidentiality. You agree that you will keep confidential, and will not disclose (including on social media) to third parties (including other people, other entities, or the public), the subject, location, and details of each Assignment, related Assigning Brand communications and plans, and nonpublic proprietary information of Assigning Brand, Publisher, and any third parties (“Confidential Information”), unless and to the extent you have prior written approval from the Assigning Brand (e.g., by email) to disclose such Confidential Information. You may disclose Confidential
Information to your employees, agents, and subcontractors (“Photographer Agents”) only to the extent necessary to enable you to fulfill your obligations under this Agreement and for any Assignment, provided that Photographer Agents agree to keep confidential, and not to disclose to third parties, the Confidential Information. Without prior written approval of Assigning Brand (e.g., by email), you will not permit any third parties, including but not limited to Photo/Video Subject and Photo/Video Subject Representatives, to view Photographs or Videos prior to publication.

Make sure you don't shoot images with a smart phone that embeds GPS data in images you send, or you'll be disclosing the location of where you were photographing the assignment. Otherwise, this is pretty standard.

14. Assignment. Publisher will have the right to assign this Agreement and to assign, subcontract, or license any or all of its rights and obligations hereunder (including the Rights granted pursuant to Section 3 above) to any other person, firm, corporation, or entity. This Agreement will be binding upon and inure to the benefit of any firm, corporation, or entity into which Publisher or any Publisher Brand is merged, or which purchases, acquires, or becomes the successorin-interest of Publisher or any Publisher Brand. This Agreement is being entered into in reliance upon and in consideration of your unique experience, knowledge, skills, and qualifications, and therefore you will not assign this
Agreement or assign, subcontract, or license any or all of your rights or obligations hereunder without Publisher’s prior written approval (e.g., by email), which may be withheld in Publisher’s sole discretion.

This makes sense and is fair. However, keep in mind, If Time Inc sells a title or brand to a third party, all the usage rights herein are automatically transferred to the new owner. ALL OF THEM.

15. Miscellaneous. This Agreement will be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without regard to its conflicts-of-law principles that may result in the application of the law of any other State. Publisher and you acknowledge and agree that any dispute arising out of or relating to this Agreement may be brought and adjudicated only in the courts, federal or state, located in the County of New York, State of New York, and Publisher and you submit to the exclusive jurisdiction of such courts and waive any objections based upon
improper venue or inconvenient forum. Publisher and you also acknowledge and agree that neither will seek to litigate any claims against the other on a class action or representative party basis and that each shall pursue any claims solely on an individual basis.

This Agreement constitutes the complete understanding and agreement of you and Publisher with respect to Assignments to you after the Effective Date and supersedes any and all prior or contemporaneous written or oral agreements between you and any Publisher Brand with respect to such Assignments. Prior agreements between Publisher Brands and you relating to any prior assignments will continue to govern those prior assignments.

The parties agree that the language of any clause or term of this Agreement will not be construed for or against the drafter. No right or term of this Agreement or any Assignment will be deemed waived, and no breach of this Agreement or any Assignment excused, unless the waiver or consent is in writing signed by you and any Publisher Brand. Any modification or amendment to this Agreement must be made in a mutually signed agreement between you and an Assigning Brand with respect to a specified Assignment. Handwritten comments added to this Agreement will have no force or effect. Each instance of the word “including” herein will be interpreted as if it were followed by the words “without limitation” unless expressly indicated otherwise in a particular instance. All rights granted to Publisher under this Agreement are irrevocably vested (including for the full term of copyright protection everywhere in the world and any renewals thereof). Your rights and remedies in the event of any breach of this Agreement are strictly limited to the right, if any, to recover damages in an action at law, and you acknowledge that your remedy of money damages is adequate. You will not be entitled by reason of any such breach, and you will not seek, any equitable relief, whether
injunctive or otherwise, with respect to any rights in any Photograph or Video or any grant to or exercise by Publisher of any of the Rights. Electronic and facsimile signatures will have the same force and effect as original and handwritten signatures.

While Time may want the Agreement to be governed by New York law, and honestly, it does make some sense, if you're doing the assignment in another state or country, and your business is also in another state or country, this clause ensures the contract will be governed by NY law. Keep in mind, NY law is pretty favorable to the publishing industry. 

It's laughable that they would expand and arguably re-define the word "including" to also mean "without limitation".  

Also, keep in mind that "Handwritten comments added to this Agreement will have no force or effect" so don't think you can line-out and hand-notate changes, they don't count. 

16. Termination. This Agreement may be terminated by either you or Publisher for any reason or no reason, effective thirty (30) days after written notice (the “Term”). Termination of this Agreement will not terminate any grant of rights or copyright transfer made herein with respect to the Photographs and Videos that were created on Assignment while this Agreement was in effect. After any termination, Publisher retains and will continue to have the right to exercise the Rights, and the obligations of Publisher will remain in effect, with respect to the Photographs and Videos that were created on Assignment while this Agreement was in effect. Sections 3 – 7, 9, and 11-17 will survive any expiration or termination of this Agreement with respect to the Photographs and Videos that were created on Assignment while this Agreement was in effect.

The above is a standard clause.

17. Notice. All notices and other communications under this Agreement shall be: (i) in writing; (ii) delivered by email, to Time Inc. at and to you, at the email address at which you received this Agreement; and (iii) effective the first business day after the date of emailing. You and Time Inc. may provide written notice to each other of any new email address by written notice in accordance with this Section.

The above notice is required, and which also is the reason that photographers are getting a November 2 2015 notice, as it's 60 days prior to January 1, more than enough time to terminate existing contracts.


Photographer Name (printed):


Here is Exhibit A:

Exhibit A
Photo Use & Reuse Fees
Assigning Brand Use1
Assignment PhotoDay Rate Up to $650
Print Mag Cover Up to $1,000
Print Mag Cover Inset Up to $250
Affiliated Brand Reuse
Print Cover $1,000
Print Cover Inset $250
Spread $500
Full page $250
3/4 page $187.50
1/2 page $125
1/4 page $85
Spot $62.50
Digital image $25

Syndication Fee Fifty percent (50%) of the net revenue received by Sports Illustrated (SI) from the sublicense of Photographs assigned by SI (after payment of all applicable direct expenses of the sublicense, including commissions to sub-agents)

Foreign Licensed Magazine
Edition Fees (Except for People2, InStyle, and the Affluent Media Group3)

Circulation of Edition % Applicable Affiliated Brand Reuse Fee Above
Less than 50K 20%
50K to 100K 25%
100K to 200K 30%
200K to 400K 35%
Over 400K 40%
People& InStyle Foreign Licensed Magazine Edition Fees to be negotiated per Assignment

Affluent Media Group No Foreign Licensed Magazine Edition Fees

Idea House Assignment Fee To be negotiated per Idea House Foreign ssignment (no Day Rate; no separate Video Fee)

Video Fee To be negotiated per Assignment

1 All Assigning Brand Fees above are maximum fees. If reduced Assigning Brand Fees are specified in the Assignment, those reduced
Assigning Brand Fees will apply.
2 For People, the foreign licensed edition in Australia & New Zealand is Who Weekly.

3 For purposes of this agreement, Affluent Media Group includes Food & Wine and Travel + Leisure.


Here's the full page of Exhibit A in graphic form (click it to open full page):

This is a horrible contract and is unfair to photographers. There are other egregious terms, and after awhile there are so many that the entire contract needs to be re-written with fairness to both parties. It comes across as non-negotiable, and likely will not be negotiable unless a majority of photographers stand up and say no to this deal. Back in the day, the collective Editorial Photographers group ( would be stepping in and re-negotiating this contract like they did with Fortune, Business Week, and others, with much success. EP is now a part of APA, American Photographic Artists.  Perhaps the old EP can re-engage on this?

Feel free to email Norm at his personal email address, which I found here on his website, at and let him know how horrible he is treating those who make people want to buy and read his publications.

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Tuesday, May 26, 2015

Mary Ellen Mark, Influential Photographer, Passes away at 75

During the 2008 Festival of the Photograph, we interviewed Mary Ellen Mark as a part of a broader package on the artists presenting at the Festival. In honor of her death, below is the brief segment as a standalone video of a highly regarded photographer called by some inpirational, a humanist photographer, a photojournalist and a documentarian:

Mary Ellen Mark interview segment from the 2008 Look3 Festival of the Photograph from John Harrington on Vimeo.

During the 2008 Look3 Festival of the Photograph, we interviewed Mary Ellen Mark about her work. Here is the segment, which ran within a larger package during our festival coverage.

(Comments, if any, after the Jump)

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Friday, March 13, 2015

VIDEO: Getty Images Losing Ground in Mid-Stock Business as CEO Steps Down

With the news of Getty CEO Jonathan Klein stepping down to take on the role of Chairman (as reported here) Klein will have little to celebrate as the storied company itself celebrates 20 years in business this week.
Neither do the photographers whose work is in the Getty Images archives, and who see this announcement - where Klein is Chairman without CEO authority, effectively not much to do - as a last ditch effort to survive, so they are not celebrating either.

(Comments, if any, after the Jump)

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Sunday, March 1, 2015

Staff vs. Independent - Why Staff Photographer Jobs are Declining and What to Do About It

There has been much ado in recent years about the overall decline in the number of staff photographer positions at newspapers, yet an anecdotal observation of these same newspapers shows they are publishing the same number of photographs in print, and even more images are being consumed online.  The dire declines in circulation of a newspaper is irrelevant to the number of photos used, it's the same paper (save for the instances where there's also a reduction in page count) just fewer copies are printed. So why are staff photography jobs being slashed practically everywhere you turn?

It's simple math really.

Consider the cost of a staff photographer. Let's break it down using validatable figures:

The mean wage of a news photographer is $43,090 (US Govt DOL, here).  To outfit that photographer with two cameras, lenses, etc, is roughly $10,000 a year (updating, replacing, new, repairs, etc) and about $3k every three years for a new laptop equates to $1k a year for a computer, and a smart phone at $100/mo which allows you to transmit photos, or $1,200 a year.  It also takes approximately 151 square feet of office space per employee (see here for details) and at $23.23 per foot (see here for details), or $3,507.73 per month to provide an employee with a desk, chair, parking, shared cost of a break room,  etc, so that's $42,092.76 a year.  The average person drives about 12,000 miles a year. For a photographer, who is always driving to every assignment, that's low, but let's use that low figure. That equates (at $0.57mile, the IRS  rate) to $6,840 a year. The cost for their employee benefits works out to be 1.25 to 1.4 times the salary (see here), so on the low end, benefits and taxes cost the employer $10,772.50. For futher review, MIT has an interesting outline of costs, here). And a paid employee typically has two weeks vacation, so they work 50 weeks a year.
$  43,090.00 Base salary
$  10,000.00 Gear
$    1,000.00 Laptop and software licensing
$    1,200.00 Cell phone (not incl. office desk line)
$  42,092.76 Office space
$    6,840.00 Vehicle (or reimbursement allowance)
$  10,772.50 Benefits
As such, the average cost, per week, to have one staff photographer with gear and desk and car is 2,299.91 over 50 weeks.  Every day of a 5 day week, that's $459.98. Even if  you want to debate the cost of the office space, and say it's $0, the daily cost of the staff photographer is still $291.61. It's not $0 though, and accounting and HR don't think it's $0, so don't make an argument that you'll likely lose on this point. (FYI - for those of you in the Washington DC area, where the mean salary for photographers is $66,130, that's benefits of $16,532.50, and with DC as the most expensive place for office space, at $48.96 per square foot, that's $88,715 for your office space. As such, the total cost is $190,417.50, or $761.67 per day 5 days a week.)

It doesn't matter if it's a slow news day.  That is a hard cost for an employee whether they are shooting or not. The rights that photographer grants are work-made-for-hire. They do not own their photographs, the employer does. They pay you every day regardless of whether you're shooting, sick, on vacation, on a comp-day, preparing your entries for a contest, booking your itinerary for your next assignment, or editing your photos at your desk.

There is not a single wire service or newspaper that pays $459 (or more) for an independent photographer. In fact, there are many who pay less than the cost of renting the equipment.

The same rights that the employee grants to the outlet are being demanded - and provided - by the freelancer. This means that the outlet has just as many rights to the visuals produced as they did with their employee.

In addition, these independent photographers are available, in abundance, on an as-needed basis. Why obligate a company to paying for someone 5 days a week when you only need to pay for someone when you need them to actually produce?

What can those in the industry do?
(Continued after the Jump)

What's a Photo Editor to Do?

Photo Editors want the ability to produce excellent results for their newspaper, on a consistent basis. The viewing public, in a landmark survey conducted recently by the NPPA bears out the importance of professionally produced images (more here). The churn in the independent photographer causes the photo editor to spend an inordinate amount of time constantly finding new photographers as others fail and drop out of the profession. The constant learning curve for these new photographers means lost time and dropped balls when it comes to working with them for the company.

A Photo Editor can be certain that a combined review of costs of an employee by both the HR department and the Accounting Department will result in the comparison of the employee versus independent costs of producing visual content.

A Simple analysis shows that if an as-needed photographer costs $250, and an always obligated employee photographer costs $459, why would the employer pay the higher rate? This does not take a rocket scientist to figure out. The Harvard Business Review (here) references that, without severance, it's near impossible to cut costs by 30%. The shift from $459 to $250 is a 54% cost savings, even considering you had an independent photographer working every day. That number can significantly increase if they are only working as-needed, not every day. (For those in DC, that's a 77% cost savings at $250 when the per-day employee cost is $761.)

As difficult as it sounds, one of the administrative obligations of a Photo Editor (or at the very least, the Director of Photography), should be to know the total cost of their department, factor in the value of each producing staff photographer every day, and then pay the independent photographers a rate that is at least equal to the cost to the company of the employee, if not more.

Yes, it's clear that this is not as easy as it sounds. However, if you want a department that will continue to exist, This is necessary. That also means if you value your own job, you should be doing this, or, you may lose your own job. If  you doubt the veracity of this concept, look no further than what happened at The Washington Times (here), and the Chicago Sun Times (here), among many others. Next, ask yourself, at the figures above, would any independent photographer be "living the high life"? They need benefits just like you have. They need an office space just like you have.

In order to preserve the ability to produce great content for your outlet, knowing the cost to your company of an employee allows you to ensure that you are doing the best service to the company.  Cost-cutting is not always what's in the best interests of your company, and when you cut too much, quality suffers. In the current environment, cuts have been so extreme, that quality has suffered.

Your department often sets the rate they will pay. Set one that ensures the quality and consistency of your outlet, not to mention survivability. As a side benefit, the photographic community will be better off as well.

What's a Staff Photographer to Do?

A staff photographer who knows what their job costs the company they are working for should look at an independent photographer working for less than that figure, as similar to a "scab". What's a "scab?" (see here) Simply put, it's someone who is putting the job of the employee (almost always a union employee) at risk during a strike, where the employees are fighting for their jobs and fair pay.  An independent photographer who works for less than half of what it costs your employer for you to do your job is, quite simply, putting your job at risk. Anyone who tries to tell you otherwise is lying. Countless other photo departments can prove this point. Just ask around. There are many out-of-work former staff photographers  who can validate this point.

Staff photographers should encourage independent photographers to demand a reasonable pay. They should educate their Photo Editors and Directors of Photography about what the independent photographer must do to pay their bills.  They should not facilitate photographers who are cheaper than them in getting work, it's cutting their own throat, with a very slow bleed-out.

What's an Independent Photographer to Do?

First, any independent photographer should know what it costs for them to be in business for a day. An easy calculator to figure this out is provided by the National Press Photographers Association - here - and once you know that figure, you should stick to it and not charge less. In addition, when a photo editor asks you to do a job that requires special equipment (a telephoto lens, satellite phone, remote cameras, and so on) you should be billing a rental charge for the extra equipment. Make sure you are clear that you can bill for mileage associated with the assignment, and then do so. Ask for a production day to be added to your assignments for booking travel, doing research, scouting, and so on. Ensure that you can bill for parking and other expenses - don't eat them - and then bill for them. In the end, the higher your final bill the easier it will be for the client to justify their own staff, and yet you will also be making more money - because you won't be "eating" the costs for things associated with the shoot that the client should be paying for.

In addition, independent photographers should be helping those coming into the profession to understand all that is involved in the costs of being in business. Just because a newly minted photographer fresh out of school has a camera mom and dad bought them as a graduation present doesn't mean they shouldn't be factoring in the cost to replace that equipment when it breaks in a year. Just because they remain under mom and dad's insurance for a few more years doesn't mean they shouldn't be factoring in the costs of health insurance and savings for when they have their own policies.

A rising tide raises all ships.  The field of photography is not made up of people with yachts, vacation homes, and new cars every few years. Helping photographers so they can have a retirement, afford a family, and pay their bills, and avoid living down to the "starving artist" lifestyle, means that everyone wins.

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Thursday, February 26, 2015

Getty Images’ Downward Spiral Approaches Judgment Day

A catastrophe of cataclysmic proportions for Getty Images (a subsidiary of the Carlyle Group, NASDAQ: CG) is on the horizon. Below are some historical insights, and a break down of the latest Bloomberg reports on Getty. First though, here’s a very simple comparison that will illustrate the state of Getty’s bank accounts and loans:
If you owe so much money to others that you can’t even afford to pay the interest accrued on the loan, and there are no promises of large cash influxes in the near future, no one will loan you the money to pay your monthly interest expense, let alone pay down the principal you owe.
Simpler? ok try this:
Assume you have a $30,000 credit card debt. The interest rate is 17%, so  you are required to pay $418.89 a month – just in interest. In this example, using the numbers/income that apply to Getty’s situation, you would only have $52.36 of your income you can use to pay down your debt, thus you have NO WAY of paying off a mounting debt when your monthly increase in debt is 8 times what you have to pay down the debt. 
I can’t make it more simple than that.

If any banker looked at your situation above, there is no way they would loan you more money, it would be highly irresponsible – even predatory lenders wouldn’t touch the above situation. As such, Getty is doomed.

(Continued after the Jump)

Sources with knowledge of the situation revealed that mid-level financers were recently asked to come to New York City by Getty to discuss additional funding. Their take-away was that they were unimpressed.  Getty, no doubt at the behest of their parent company, the Carlysle Group, is trying to stem the blood-letting. There will be no silk purses from this sow's ear.

More and more, Getty is not producing the content they once were, and they are relying on their platform as a distribution of other third-party content producers, such as Getty licensing the content from The Washington Post, The New York Times, or Sports Illustrated.  Getty does have a few pockets of staff photographers in some areas, and those photographers are constantly producing, and in the short term, will continue to do so. And yes, Getty is very publically present at major sporting and entertainment events (largely because they are contracted to do so by those organizations),  but beyond that, their content production has significantly diminished – they are much more curatorial than being an original content-producer. Stories from inside Getty reveal that cost-cutting and restrictions on spending have never been tighter.

Case in point – Getty staff photographers used to find themselves in various “tiers” that categorized their tenure and caliber, and as such, their salary. These tiers have effectively been done away with for cost-saving purposes. Another example centers around Getty staff photographers, who were able to generate additional revenue from the content they produced by earning a percentage of the licensing of those images. That has been reduced to a 12-month rolling window only. The next step will be to do away with it completely.

It has been suggested that the impending demise of Getty Images may be bad for news photographers, and I’m not sure that that bears out in the light of day. The news isn’t going away. News photographers should tell their stories and they can use a platform like Newscom or Getty. One solution would be for Getty to open their platform beyond the big players – NYT/SI – and take a nominal percentage. It seems that if a photographer with content on their own Photoshelter archives could feed their images through Getty and convey to Getty a 10% royalty on those individual licensing fees, Getty could generate revenue, however these photographers would have to opt-out of the all-you-can-use subscription models, because the sad joke amongst all photographers who license their work within these models is where the sales reports show the $1.51 and $0.49 licensing fees. Frankly, Getty has been a massively negative contributory influence on news photographers and their ability to survive and thrive, and Getty has in turn licensed that content for less than it costs to produce to news outlets. One need only look at the demise of Sports Illustrated's team of photographers - Getty photographers are, more and more, filling those pages, and the magazine decided they could dump their staffers. I wouldn't say that Getty is the only reason SI made this move, but it certainly was contributory. Frankly, a reduction in news coverage by Getty either because of belt-tightening and fewer assignments, or their demise will force a re-set by those who have come to rely on Getty for images. In fact, it not only may mean a few more staff photography positions, it also certainly will mean more freelance work for individual papers, and, perhaps, even another editor or two hired to assign and manage those incoming images. What is bad for news photographers has been a situation where Getty has been able to convince someone to shoot an assignment for less than it would cost to rent the equipment and hand the equipment to a monkey. Zero value has been placed on the valuable contributions of the actual photographer. That will change once Getty is gone.

A look Back

How did Getty arrive at this spot? Getty Images first hit the stock market during an IPO on July 2, 1996 on the NASDAQ before moving to the NYSE on November 5, 2002. Much of the public scrutiny on Getty diminished when, after a disasterous turn in the stock market under what was then the ticker GYI, and it seemed, for the Getty family to help defend the impending failure of a scion of the famed Getty family, Mark Getty,  one of the many private equity funds they have a relationship with, Hellman & Friedman, in 2008 took the company off the stock market and private, where no one had to see the further decline, and where, according to a March 2012 article on private equity citing Moody’s (here) notes that “certain Getty family members” were also shareholders.  While the taking private of Getty was reported as a a 2.4B transaction, H&F only “invested up to $941.3 million equity in Getty as part of the buyout, according toSEC filings.”  a pair of dividends in 2010 and 2012 effectively allowed H&F to make back most of their investment. Enter the Carlysle Group.

In September of 2012, Moody’s reports on their review of $2.6B in debt that, according to the Moody’s report hereThe new debt instruments are being issued to fund the acquisition of the parent of Getty Images by an affiliate of The Carlyle Group.” Moody’s  goes further, “The downgrades reflect the increased amount of funded debt and related interest expense resulting in higher debt-to-EBITDA leverage and weaker coverage ratios.” Carlyle bought Getty for $3.3B in 2012.

Ok, so what is “EBITDA” and why should you care? Well, according to Investopedia (here) that alphabet soup is a fancy way of saying “revenue minus expenses”, and the expenses is where that alphabet soup comes from. Earnings Before Interest Taxes Depreciation and Amortization. EBITDA. Investopedia indicates (here):
"EBITDA is essentially net income with interest, taxes, depreciation, and amortization added back to it, and can be used to analyze and compare profitability between companies and industries because it eliminates the effects of financing and accounting decisions."
Now, let’s take a look at an article by Forbes (here) where they note, “In reality, EBITDA is akin to a blender, into which go normal financial statements and out of which comes a number that always seems to make the subject company look better than it did when the numbers went into said blender.”  That said, if everyone is using the same “lie” then even though it’s an erroneous yardstick, it’s the same erroneous yardstick for everyone.

Now, coming back to the September 2012 report, one of the really interesting things (if you like to read the fine print, that is) is that they provide the rationale behind their actions, and in this case, they are explaining why they downgraded the Getty debt. But let me reiterate one point from above – about GETTY debt - “The new debt instruments are being issued to fund the acquisition of the parent of Getty Images by an affiliate of The Carlyle Group.” Does that make sense? Carlyle is using loans they are getting to buy Getty, and then making Getty responsible for paying the loan back.

It’s perfectly normal to loan someone more money than they earn in a year. A person who earns $40,000 a year can have no more than 28% of their gross income each month usable for their mortgage. That means a house payment of no more than $933 on a maximum home price of $184,204.  (more here ) and (here).  The assumption is that that person will continue to earn that much, if not more, and remain employed. When a company is in an environment when their product sales figures are on the decline, that becomes a problem.

In Getty’s instance, in 2012, Moody’s noted a 6.7 debt to EBITDA ratio, in an environment where a 3 is reasonable. Moody’s cites “revenue is expected to be flat in FY2012 compared to the prior year… Muted revenue growth for continuing operations reflects the decline in traditional premium stills business being offset largely by growth in the midstock business…
A year later, in September of 2013 Moody’s was back, warning Getty of an impending downgrade on the value of their debt. They note here citing “weak performance within the midstock imagery segment” and a bump up from 6.7 to 7.1 in their ratio, and they began taking a serious look at “..Getty Images' operations, particularly our view of management's ability to stabilize revenue and cash flow in the midstock imagery segment despite economic weakness in Europe and heightened competition.

In December 2014, Three months ago, 15 months after the last report, Getty in fact, gets downgraded from stable to negative (see here) where they become what’s called “B3” on $2.5B of debt. What does that mean? “B” is defined as “Obligations rated B are considered speculative and are subject to high credit risk” but it gets worse. Moody’s notes “Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. So, they are already in  the “junk” category. Their rationale refers to “reduced free cash flow-to-debt” into about 2017.  They again refer to “persistent revenue declines in the Midstock segment since the second half of 2012 compounded by increased operating expenses from stepped up investments in personnel, marketing, and technology largely aimed at positioning the Midstock segment to be more competitive. The operating performance of Getty Images is well below its plan presented in the October 2012 buyout which underestimated the impact of aggressive competition in Midstock.” Yet, the market doesn’t seem to be the problem, it seems to be Getty that is the problem, when they note “to the track record of competitors, including Shutterstock (publicly traded) and Fotolia, to grow their stock photo revenue by high double digit percentages.” They report that “Management confirms that excess cash will be used primarily to reduce debt balances with acquisitions being put on hold. (Below is a breakdown of the various ratings nomenclatures from Moody's. More on Moody’s “ratings” system here ).

The above explains why the mid-level financiers who recently paid Getty a visit were unimpressed. They saw the writing on the wall.

Present Day
In the last few days, a flurry of discussion has centered around A Bloomberg News report, Getty Images Is Running Tight on Cash (here) and a follow up, Getty Images’ Outlook Blurs as Photo Rivalry Triggers Price War ( here ) which lead to revelations about the dire circumstances at Getty. Let’s take a closer look at what was reported.

While Moody’s dire reporting was coming out, Getty was finishing 2014 “burned through a third of its cash in the last three months of 2014 as declining earnings limit the Carlyle Group LP-controlled photo archiver’s ability to invest and curb its access to credit…” and as a result, they only have $27 million left. Their February 23rd disclosure, according to Bloomberg shows a further decline of 7% for EBITDA, making things even worse. 
Under the terms of  their previous loans, because their EBITDA is greater than 6 (remember, it’s 8, and normal companies are around a 3) they can’t even get a loan.  Further, as Bloomberg reports, they do have a $150 million credit line, but can only take $30 million of it because they are already over-extended.  If they accessed more, they would be in violation of their other loan contracts.

Looking back for a moment, In the 2012 Moody’s report, they noted “…barriers to entry are lower for the price sensitive segments. Increased demand for the company's lower priced imagery products historically offset weakness in the traditional segment; however, there are risks related to the potential for increased competition, especially in the lower end stock imagery segment.” Moody’s went on to provide what was a harbinger of things to come, when they noted “…our expectation that demand for Getty Images' lower priced imagery products and for its new services will largely offset mature demand for the company's premium imagery business. 

Getty now either has wholey-owned content of images they represent of approximately 170,000,000 images. Sources with knowledge of how valuators determined the value of that library-as-an-asset, each image is valued at $0.15 per image. That means the total valuation of their image library, were it to be sold off now, is $25,500,000 (that’s 25.5 million).  How many of those are they relying on in the mid-stock segment? According to Getty, they have just 8 million images that are unique. That means the unique value of their mid-stock image library is just $1.2 million. Even if the figures are much higher, the reality is that blood is in the water as Getty competitors, with no debt seek to topple Getty that is bleeding out. Both Shutterstock and Fotolia are leading competitors in that arena, and a price war, according to Bloomberg, is now underway. In an era where Getty must increase revenue, the concept of “selling for less and making it up on volume…” is just not going to work.

It did not help that last year Getty made tens of millions of their images available for free online (reported here - Monetizing Getty's 35M Image Archive via FREE Editorial Uses, (here) but the idea was to forgo what was just a few cents to a dollar in exchange for what was to be a critical mass of images providing viewer tracking data that Getty could then leverage to marketers and advertisers and be able to project revenues into the future. That didn’t work out so well.

The Bloomberg article closes with a very foreboding message, noting a Moody’s analyst who states that Getty has “two competitors who are relatively debt free who can invest”, and warns “If things don’t improve, there’s potential we’d lower the rating.”

Here’s a hint – they won’t improve.

The Future

Getty has made it clear in disclosures to Moody’s that they are not going to be acquiring other companies. Even if they wanted to, they don’t have any assets to do so. There is a strong distaste amongst contributors about the constant decline in the contributors’ share of licensing revenues, so a short-term shift further of even worse percentages would create a long term problem from which Getty would never recover.

Getty could utilize their platform that is already ingrained into the desktops and web-browser bookmarks of publishing entities around the world, and serve as a content platform only. Yet, companies like HBO, which started as a re-seller of movies moved successfully into producing content, and more recently, Netflix did the same thing, again, producing content. Getty is clearly moving away from that model.

Getty has a number of properties within the corporate umbrella that could be salable assets. They license video, audio/music, and microstock sites iStockphoto and Thinkstock. They also have valuable contracts with a number of sports leagues that could be sold to competitors. One contract that first started with WireImage was the NFL contract, which was largely the reason that Getty acquired WireImage) which now is in the hands of the Associated Press after a 2009 vap-getty-cred-300x179.pngendor change. Contracts with the NBA, NHL, and MLB all could be picked up by AP, Reuters, Corbis, or another provider. MLB extended their contract with Getty in September of 2013. Getty also has intellectual property of PicScout – the largest commercial image-recognition platform for locating and identifying unauthorized uses of photographs.  It was acquired in 2011 by Getty and remains operational as a separate entity under the Getty umbrella.

Each of these sub-entities could be spun-off or sold-off in a breakup of Getty. Under a bankruptcy scenario, these assets would all be sold off, but with no clear entities strongly interested in the assets, they would be for pennies on the dollar. The limited Getty staff photographers would be looking at the other wire-services for employment, because most if not all of them are highly talented. As for images, at 15-cents an image, those 8 million unique images would, as noted before, be valued at just a $1M or so. Where they will get anywhere close to the $2B+ they owe will be an exercise that involves a lot of smoke, mirrors, and a dance I’ve never seen before.

RELATED - Getty Stories on Photo Business News to Present:

UPDATED: Getty Infringement, 2/24/07When Your Agent is Not Your Friend, 6/14/07About the only good 'Short'-sighted Idea I can find, 7/8/07I told you so? No, not really. (Well, maybe, sort of), 8/4/07Getty Site - Site Down as Stock Is Down?, 8/24/07The 'Virus' is Spreading, 8/29/07JDK's World, 8/29/07UPDATED: GYI - The Downward Full Court Press Continues,  9/6/07Getty's Self-Immolation, 9/12/07UPDATED: Getty (GYI) Hit New 52 Week low, 9/18/07GYI's JDK: "our core stock photography business has stopped growing, in fact, it's declining.", 9/20/07Three Free Men - Getty Images on Lockdown, 9/21/07Photographer's Choice Chance, 9/23/07It's The Witching Hour - Are You Ready?,  10/30/07The Numbers Speak for Themselves - GYI down 30%, 11/1/07Getty Images (GYI) In Decline Again, 1/6/08BREAKING: Getty Images (GYI) Hits 52-Week Low (again), 1/7/08UPDATED: Karma's a (rhymes with witch), 1/8/08Getty, The Stock Market, and Warren Buffett, 1/15/08There's a sucker born every minute - Getty Images For Sale!, 1/21/08JDK - Getty Images' CEO and KKR's Track Record - History Repeats Itself?, 1/22/08Ho Humm. One More Q in Loser-ville for Getty, 2/1/08Getty Images - Down For The Count, 2/11/08Let The Exodus Begin (resume?) While PhotoShelter Picks Up More Talent, 2/12/08Getty Images - A New Beginning?, 2/26/08Getty Images - Moving Forward, 3/19/08Fool's Gold - Getty Images' Future, 4/1/08SI Pictures Boards A Sinking Ship, 4/2/08Assignment vs. Stock - Is Stock Risky?, 5/19/08The Curious Case of Getty and Flickr, 7/11/08The Road To Hell Is Paved With Good Intentions: Getty Images Buys JupiterImages, 10/24/08Micelotta out At Getty?, 2/1/09Getty Flushes Scoopt, 2/3/09Boo Hoo, and Buh-Bye, 3/5/09Getty Images And Paparazzi Pictures, 3/9/09"5 percent of our workforce, will be asked to leave Getty Images", 3/16/09When Do The Musicians Abandon Ship?, 3/17/09Livingstone Out At Getty Images, 3/24/09Getty Makes More Cuts, 3/26/09The Associated Press and the NFL, 4/15/09Getty's Got Game - (A Perfect One), 7/30/09Pushing Pixels: $5 Idiocy, 8/7/09Enter The Efficiency Experts, 8/17/09Getty Images Splitting Sales With Celebrity Subjects on the "DL", 8/30/09Ten Questions for Frank Micelotta, 9/11/09Getty Images - Business Fantasy Update, 10/10/09Tick...Tick...Tick...Getty Images Cuts More Staff, 10/21/09Getty Images and Bloomberg - Futurescape, 11/5/09NFL and the Wayward Getty Images, 4/9/09Getty Images CEO Jonathan Klein - Delusional, Deceptive, or a Liar?, 2/26/10Who Gets Paid What? Getty & Corbis Edition, 4/9/10Getty Images and the Incredibly Shrinking Usage Fee, 5/13/10Getty and Flickr's New Relationship, 6/18/10Stock Loss: Stupid is, as Stupid Does, 2/24/11PicScout Acquired by Getty Images, 5/23/11Getty Images: (Not) Looking for Cash in All The Wrong (Right) Places, 3/23/12Getty Images Returning to the Stock Market with an IPO?, 5/22/12Deception? Getty Images & The Pinterest Deal, 12/13/13Monetizing Getty's 35M Image Archive via FREE Editorial Uses, 3/7/14Getty's Flickr Agreement Ends Like Titanic, 3/11/14

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