Saturday, August 1, 2009

ThinkTank Multimedia Bags - First Look

ThinkTank has introduced a new line of Multimedia bags, and we had a chance to put them through their paces. We really like them - here's a look:

(Comments, if any, after the Jump)

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Thursday, July 30, 2009

Getty's Got Game - (A Perfect One)

Regular readers of this blog will note that more often than not we take Getty to task for their actions, and how detrimental they can be to the business of photography. Yet, when Getty gets it right, credit must be paid where credit is due. Enter the players: Getty, Ron Vesely, MLB Photos, and Sports Illustrated, all focused on one thing - Mark Buehrle. The date? July 23rd, 2009.

Buehrle sets the stage, pitching a perfect game for the Chicago White Sox, beating the Tampa Bay Rays, 5-0. Since I am not a sports enthusiast, let's move on to the matter at hand - the business of the photographs that captured that historic event.

Ron Vesely, an immensely talented photographer who understands quite clearly that being a photographer means being in business, is no patsy to all the "we have to own all rights exclusively..." rights grabs made by some. Vesely keeps copyright to his images, and that's a smart businessman.

(Continued after the Jump)
When Vesely captured what he probably knew to be "the shot" that illustrated the perfect game, getting those images out became priority number 1. Ron, you see, has his work on the Getty site, as well as having relationships with MLB photos. A cursory review of the Getty Images sporting collection shows that Ron has chops.

As prospective clients scrambled for images, surprisingly, the only magazine that had that image was Sports Illustrated, yet SI did not have photographers at that game. Thus, they were going to Getty after-the-fact for a stock image. Since it's nowhere else editorially, it is reasonable to conclude that SI paid a premium for exclusive access to the image for a period of time that would preclude their competition from having the same image.

Here's where the interesting part comes in. An image from the same game by Ron is is in this Gatorade ad (at left) - IN the same issue. It's also appeared elsewhere. For example, a colleague of mine mentioned that it was also a full page ad in the Chicago Tribune. (see other images from the take here).

So, let's see - microstock cover on Time Magazine for $30 (The Real 'New Frugality' - Time Style, 7/25/09), or several thousand dollars for the exclusive on the SI cover as well as a ton of money for the Gatorade ad, which could only have been had via Getty, since Getty is the exclusive licensor of images of MLB for commercial use. Getty wins, Vesely wins, MLB Photos wins, SI wins, and Buehrle - he no doubt won as well.

It is imperative that you recognize the value of your images, and not let them go for pennies on the dollar. Vesely likely has several house payments covered thanks to this, whereas $30 wouldn't have covered parking and a hot dog at the stadium that day. Well done Ron, Well done Getty.

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The Tax Man Cometh - Microstock Edition

You can always spot the least liked person just off stage at every presentation of lottery winnings. They are the people who are not outwardly smiling, likely wearing a dark suit, and carrying a briefcase of some sort. This is the IRS agent, cooly waiting to advise you of the taxes you now owe, and you owe them now. (IRS regulations here). Your 25% or so goes straight to the tax man. So, that $100k oversized check? Actually not cashable. The real check will be just $75k, since the lottery payor has to withhold those winnings. Why? Because many lottery winners squander all their winnings, and then when it came time to pay the taxes, they had no money.

For some time, I have been trying to get into the heads of microstock photographers that they are running a business, whether they think they are, or not. No more 1040EZ forms, you must report that money you got when it was reported and you got a 1099. A rude awakening comes for the microstock photographer who sold 2,000 five-dollar-downloads, and collected their 20%, or $2,000. You'd think that was a sweet deal, until you had to pay half of it to the government, leaving you with $1,000. But, well, it seems that maybe more than a few micro-stockers are not paying their taxes properly, perhaps? Foreigners, who have been getting the full payments are - gosh, the shock! - not paying taxes on the income?

(Continued after the Jump)

According to the IRS website (here), "U.S. source income paid to foreign individuals amounts to $140 billion each year. Most types of U.S. source income paid to a foreign person are subject to a withholding tax of 30%." Here's the big kicker - "The person making the payment is considered to be the withholding agent. You are a withholding agent if you are a U.S.or foreign person that has control of any item of income of a foreign person that is subject to withholding....As a withholding agent, the payer is personally liable for any tax required to be withheld, independent of the tax liability of the foreign person to whom the payment is made."


This is likely to mean that if there are several thousand micro-stockers who are foreigners and have recieved payments and - (again) gosh the shock! - not paid their taxes, the microstock company could be liable for that tax. Uh oh. The IRS stipulates "The penalty for not filing Forms 1042-S and1042 when due (including extensions) is usually 5% of the unpaid tax for each month or part of a month the return is late, but not more than 25% of the unpaid tax. Additional penalties apply for failure to provide complete and correct information or if you fail to provide a complete and correct statement to each recipient. The maximum penalty is $100,000 per year."

I guess maybe a few microstock agencies will be looking at a few $100k bills for the past few years, perhaps?

According to Microstock Diaries (here), "Shutterstock have announced that they’ll be withholding 30% tax for non-US contributors in order to comply with US tax laws."

Microstock Diaries characterizes contributor reactions by saying "Affected contributors are understandably upset." Then they outline several of the complaints (followed by our answers):

Q: taxes haven’t been withheld before, so why are Shutterstock starting now?

PBN&F Answer: Because it's the law, and they were not in compliance with the law, which will cost them a lot of money.

Q: other agencies don’t do this, so why is Shutterstock doing it?

PBN&F Answer: Because other agencies are making the same mistake, and just like everyone is now charging for a paper airline ticket, and checked baggage, the rest of the microstock agencies will fall in line.

Q: why do I have to pay tax to the US government when I have nothing do to with them?

PBN&F Answer: Because your assets earned money on US soil, among other reasons.

Q: why do I have to give personal information to the US government?

PBN&F Answer: Because a US company is paying you money, among other reasons.

Q: can’t Shutterstock pay for this themselves and not penalize foreign contributors?

PBN&F Answer: Because this is the tax on YOUR portion of the income, that YOU owe! Shutterstock will be paying their own taxes on their profits as well. You are not being penalized - you are paying what you owe, fair and square.

Microstock diaries then takes a slight (albeit deserving) swipe at the contributors, when they say "The demonstrated gaps in understanding of international business in these complaints extended to misdirecting blame and anger toward Shutterstock." And here, they are right. Shutterstock is not doing anything wrong here - in point-of-fact, they WERE doing something wrong in not withholding, and now they are getting in compliance.

Many members are apparently deleting their portfolios from Shutterstock. Good. A few thousand less images there means fewer $30 Time Magazine covers.

Microstock Diaries characterizes contributors thusly - "Most microstock contributors are in business so they’re used to doing things like filling out forms and paying taxes. However, a not-so-small number of contributors, it seems, are not so comfortable with this change."

I believe that if you look at the number of microstock contributors who actually earn a full-time living off of microstock versus those that just get their kicks from seeing their images in print and whose income cannot support them full-time, you would find that the vast majority of them are running their businesses very poorly - essentially at a net loss.

Oh, and one more thing - you can run your business at a loss, but not forever.

The IRS, (here), states:
An activity is presumed carried on for profit if it makes a profit in at least three of the last five tax years, including the current year (or at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses).

If your activity is not carried on for profit, allowable deductions cannot exceed the gross receipts for the activity.
Welcome to the real world my fellow photographers.

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