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:

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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

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Tuesday, March 17, 2009

When Do The Musicians Abandon Ship?

The scene from the movie Titanic where the musicians continue to play (info here) as the ship is sinking, is, to me, evidence of the musicians' head-in-the-sand (pardon the soon-to-be-pun) mentality they exhibited.

Just as the water breached the hull, filling decks, trapping passengers unaware, so too, is the sinking hulk of Getty Images doomed to sink into the history books as the largest photo agency in the world, sunk by the iceberg microstock.

The ship that is Getty Images has essentially broken in two. There's the bow of the ship, represented by their Rights Managed Stock, a consolidation of countless other agencies' rights-managed collections. This was the most prominent of the business, yet when the microstock iceberg slashed its' hull, the stern, made up of iStockphoto and JupiterImages, became the dividing point within the company. Now, this ship has ceased forward motion, and life preservers are being handed out to the hundreds of employees who, over the last year or so, have departed.

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Just as this article notes about Captain Smith, "His legendary skills of leadership seem to have left him, he was curiously indecisive and unusually cautious", so too "Captain Klein" seems to have taken a 'everything will be a-okay' approach, when he wrote yesterday "We must take decisive steps to ensure we emerge from this recession strong and able to best preserve the success of Getty Images" in his missive to the "engine-room" and "crew" of the R.M.S. Getty (in this case, R.M.S. stands for "Rights Managed Stock").

The paying customers are fleeing, or headed to the stern, for a better opportunity to survive. But how will they? Getty's customers have suckled at the teet of free and cheap for so long, that a budget for a piece that used to be $5,000, and would bring in a handsome profit to Getty and the contributing photographer, has, over the past few years, been slashed to costs of $100 or less. It's like the smack dealer who offers free or cheap samples, gets the addict hooked, then raises rates. Whomever is the Robert Ballard of Getty Images will have to salvage the visual riches of Getty's rights managed collections, and let the steerage visuals sell for fractions of a cent, and then Gettys' Ballard will have to figure out how to raise the rates on clients who have built their budgets based upon deflated budgets. Yet, raising rates on a free-and-cheap clientele will likely proove harder than the actual raising of the Titanic.

Just as the radio callsign of the Titanic was MGY, the stock ticker for Getty was GYI. Just as the route for the Titanic, built in the Harland and Wolff shipyard, was the U.K. to New York City, "Captain Klein's" business dealings took him from Hambros Bank Limited in the U.K., to now being in New York. Almost 100 years ago to the day, The Flickr Collection debuts on on March 11, 2009, construction of the Titanic began on March 31, 1909 (info here). Funded by J.P. Morgan, the founder of the same company that reported "JPMorgan Chase on Wednesday ratcheted up its expectations for losses", back in November (here) as "Captain Klein" tried to suggest they were doing the right thing "We have tried very hard to avoid lay offs during the continued turmoil in the world’s economy. However, it is now clear that we have no alternative." While these comparisons take a humorous tact, they do point to the notion that sometimes when you build it too big, and get a notion in your head of "unsinkable", that troubling mindset could well apply to Captains Smith and Klein with relatively little humor and a great deal of criticism of the course both have charted.

If you are still employed at Getty Images, you are those musicians. You know your ship is sinking. Telling your clients that everything is just swell and not to worry, is like band leader Wallace Hartley striking up the next upbeat ragtime tune as the deck listed 40 degrees to port, and as the IT people continue to stoke the steam-powered engine of the Titanic turned Getty. With the job market bleak, and 8% unemployment figures, I don't blame you for going down with the ship, and collecting every last paycheck before you're deemed redundant, but I do hope you have found your place amongst the last life boat passengers, have your rolodex in place to depart under escort by a rent-a-cop guard. Don't leave any ramen in your desk drawer, you may need it as you wait out the downturn.

If you know your company is going down, don't lie. Lying is what gets people in trouble, as in, false representations to clients. If you learn that your company is closing down in a specific period of time, it is likely unlawful to collect fees for a license that you know extends beyond that date, so be sure to check with your own attorney for the best legal advice on this, but know that lying is what gets people in trouble as people are looking at people to point fingers at, and lay the blame on.

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Monday, March 16, 2009

"5 percent of our workforce, will be asked to leave Getty Images"

In an internal e-mail being sent out, Getty Images has announced "Today we are announcing that approximately 110 employees globally, which is roughly 5 percent of our workforce, will be asked to leave Getty Images".

We recently wrote about planned departures because of the Getty aquisition of JupiterImages (Boo Hoo, and Buh-Bye, 3/5/09) but the announcements' wording is interesting to parse.

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"Asked to leave"? Is that a polite way of saying they're being laid off? Or, is it that Getty is asking for people to volunteer to leave, and if so, are they offering packages for that voluntary departure? If I were a Getty employee, I would surely be posing the "what's in it for me if I volunteer to leave" question, and if you are being laid off, be sure to go and file for unemployment.

Make no mistake about this - this trend will continue.

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Sunday, March 15, 2009

REMINDER: NPPA's Northern Short Course THIS WEEK! (DC/Virginia area)

Where else can you sit in a classroom of 50 or so people and learn from Julianne Kost? These days, nowhere. Talks at big national conferences put her on stage with 500+ seats, and good luck getting a question in with that size crowd. Oh, and she's talking TWICE - once about Lightroom (info here), and once about Photoshop (info here).

How about learning about the integration of stills and audio (info here)? Learning Final Cut Pro from a still photographers' standpoint? (Intro info here, advanced info here). Getting work from NGO's (here), How about SEO and web marketing?

How about listening as Stephen Crowley, a Pulitzer Prize winner talks about his work? Or Jason Reed from Reuters? How about Gail Fisher, senior editor at National Geographic, talking about what working for the yellow box is like?

If you're so inclined, I too will be speaking twice - same program - Thursday morning, and Friday afternoon, (info here) as well as moderating a panel discussion (more here) on being laid-off or having taken a buyout, and surviving in the freelance world Friday around 1.

The schedule of programs is here. You can learn more about the NSC here, and with online registration now closed, walk-in registrations are now how you'll need to get signed up, beginning this Thursday morning.

(Comments, if any, after the Jump)

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.

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