Wednesday, March 18, 2009

Omnicom Passes the Buck

Last week, PDN wrote GM Stops Paying Advances for Photo Shoots, which got a number of people up in arms, and rightly so, about how Omnicom (NYSE: OMC) is, quite literally, passing the buck.

The ASMP has penned a response to this position, which they forwarded to me, and I post below, in its entirety, as it is important that you understand how companies are attempting to negotiate with you either beforehand, or afterwards in unfoavorable purchase order language that changes substantively the terms under which your initial contract was agreed to. On more than one occasion I have had to have Purchase Order language modified to be consistent with the intitial contract.

Here is what ASMP has written, and which is of value to read and contemplate:

(Continued after the Jump)

It has been brought to the attention of the American Society of Media Photographers (ASMP) that the Omnicom Group, the world’s largest advertising agency holding company, has changed its terms and conditions in an effort to limit their agency liability and in so doing transfer that liability to independent photographers and producers. Basically, by disclosing their agency status and for whom they are acting, the advertising agency is only liable to the extent that their client has specifically paid them for any amounts payable to you. Additionally, ASMP has been informed that reps are being told that there will no longer be any advances on assignments.

These new policies are most probably the result of the market and governmental pressures experienced by major corporate clients such as GM who in their effort to avoid bankruptcy are now prioritizing their financial obligations and will make payment according to those priorities. In other words, some suppliers will be waiting significantly longer to be paid depending upon the client’s priorities. That being the case, agencies do not want to be left on the hook for reimbursement of monies expended on behalf of their clients, especially where the fear of bankruptcy exists.

These terms and conditions are simply not in the best interests of photographers, producers or clients. This action, clearly taken in anticipation of increasingly difficult financial conditions is a unilateral effort to shift the burden onto those who are least prepared to bear it. Should an independent photographer of moderate means be the banker for a Fortune 100 company? By eliminating their customary role as intermediate financier, agencies are removing value from the value-added chain, and that will ultimately lead to an overall dampening effect on commerce.

Meanwhile, there is no incentive for the agencies to make photographer friendly changes to their terms and conditions as long as photographers are willing to accept the current terms. Notice of these changes should be included in your blogs and discussed on related lists and social networking sites. The issue needs to become viral and requires significant support from key photographers in order to gain traction and effect change. If it is business as usual for the agencies, then nothing will be accomplished.

ASMP would recommend that photographers include in their paperwork a statement making it clear that there will be no grant of copyright license until all related assignment invoices are paid in full. Images should be registered with the Copyright Office immediately upon completion of the shoot and prior to first publication and/or possible infringement so that in the event that legal action – a last resort – is needed, recovery of statutory damages and court costs will be possible.

In addition, the Association of Independent Commercial Producers (AICP) recommends the following:
"If an agency's internal policy insists upon these payment terms (sequential liability), the production company should:

a) Make sure the advertiser ("client") also signs this agreement. If it is a rider, the terms of payment and the full contract price should be added to the rider.

b) Be provided with the advertiser billing and contact information.

c) Copy the advertiser on all invoices.

d) Notify the advertiser of payment due as soon as terms of the contract (payment dates) are not met by the agency.”

As a possible course of action, since the agencies are shifting liability to their corporate clients, perhaps photographers should consider approaching the clients directly for advances and or other payments prior to the beginning of the assignment.

Ultimately, this is a case of the supplier beware!

Eugene Mopsik
Executive Director, ASMP

Please post your comments by clicking the link below. If you've got questions, please pose them in our Photo Business Forum Flickr Group Discussion Threads.

6 comments:

Oh what a day it is said...

Again, ASMP is late to the party.

Groups of reps and high-end shooters around the world knew about this weeks ago and formulated a response.

How many ASMP members shoot for GM compared to say APA members?

Paper tiger me thinks.

Andre Friedmann said...

ASMP performs a precious service when it reminds its members of the value of financing projects for businesses large and small. I don't much care that ASMP might not speak for those photographers who shoot for large agencies and large advertisers. I care deeply that photographers who work for businesses account for the value of financing projects for their corporate customers. Kudos to ASMP for piggybacking education onto this issue.

Anonymous said...

Frankly it all started when photographers didn't say to their clients" You know in the past I'd have to pay the lab to process the film, and the camera store that sells me film, so now I'll have to bill you for my computer that spits out your file. To me that is truly the turning point. Why should anyone be surprised at the latest from Omnicom. We are the most generous and fiducially suicidal profession, bar none.

Stephen Sherman said...

Hey, nice diss of ASMP, hardly.
I haven't seen any other people put out alerts on this.
It's a huge issue for everyone shooting advertising or not.
Are we know to bankroll big corporations on jobs and assume all liability?
It means the buyers are absolving themselves of all fiduciary repsoniblyt on projects.
"Hey we aren't actually contracting the job, our client is, if we don't get paid, too bad.
Great business model for them, terrible for us.
Don't accept deals like this because if you do, its your own fault if you don't get paid.

kirk tuck said...

Our business has been demanding credit card payment from companies like Dell and Motorola for over a decade. Take cards, charge C.O.D. Get paid.

we're not a commodity yet.

Anonymous said...

Read , http://www.aphotoeditor.com/2009/03/22/apas-stephen-best-on-omnicoms-pass-the-buck-fiasco/

to see the measured response from APA. A little bit more in depth and it seems, less reactive and more thoughtful than responses from other organizations.

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