Saturday, September 18, 2010

Practice Makes Perfect

Every so often, I post over at the blog of my agent, Black Star. My most recent post is - "In Both the Craft and Business of Photography, Practice Makes Perfect".

I come across so many photographers who seem to think good things should just happen to them — and if they don’t, it’s their “bad luck.”

To that, I counter with one of my favorite sayings, by the Roman philosopher Seneca: “Luck is what happens when preparation meets opportunity.

Even the Declaration of Independence doesn’t promise you happiness. It only says you have a right to pursue happiness. That’s very different; it puts the responsibility on you to make it happen.

When it comes to your photography business, that means professional success and fulfillment are up to you.

Continue reading at Black Star Rising.

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Friday, September 17, 2010

The Power of One

One of the most hotly discussed issue among professional photographers, is "to combine, or to not combine? Whether 'tis smarter to join together fees for creative and use, or to separate them out." Here, I shall endeavor to address this issue with several concrete examples, and some insights into the issue.

Warren Buffett once said "price is what you pay, value is what you receive." This is true across every spectrum of business transaction. Is the price too high? Well, it may be for some, but no so much for another. While some may scoff at the cost of a smartphone, saying the extra data plan and phone features are just not worth it, almost every day the price of the phone and connectivity charges are a drop in the bucket compared to how having that phone keeps me connected to clients and booking jobs. Recently, I was on assignment, and booked for a shoot to photograph an auto accident that was staged and set up, because the client said they couldn't find good images of cars having an accident. To the client, it cost them tens of thousands of dollars to stage the accident, from stuntmen to actors to totaling a car. Could they have searched among the 70,000+ images on flickr (here) that turn up for the search term "car accident?" Sure, and they could have possibly gotten the image for next to nothing. However, to this client, the value of what we delivered was worth the investment of all that went into it. (And they did search Flickr,Getty, etc and did not find what they wanted - I asked.)

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Magazines value photography because it entices readers to subscribe of buy single-copies, which ensures that there are eyeballs looking at ads, which pay the bills. Advertisers buy ads and use images because almost always a well used photograph tells a story and sells a product better than any written words can. These advertisers make their investments in ads and images to sell products or services, increase their bottom line, and make a profit for the company owners, whether a private company, or one traded on the stock market. It's all business all the time, make no mistake about it.

While it used to be that breaking apart the costs to produce an image (creative fee) from the costs to use an image (usage/licensing fee) was common, more and more these fees are being put together, and not separated. Consider that the combined fee is not full compensation for the image's coming into existence, but rather, the least that the photographer will accept for the initial work and effort. On more than one occasion, I have done a stellar job or delivering far above a client's expectations, and the client (especially when they are on set) begin to see things far and away beyond what the original intent of the shoot was. Usually, I overhear a client saying to their colleague "oh my god, we could do a whole campaign around these images, instead of just the one we were planning - these visuals are great." Usually, the negotiations for the additional licensing fees for extended or expanded uses of the photography are handled after the fact, but not always.

Yesterday, we went into great depth about a license as a "window of opportunity." If the client wishes to expand their window of opportunity, then additional fees should be paid. However, if the photographer delivered as required, and then, say, the client does a focus group on the commissioned visuals, and decides to kill or scale back the project, they are not entitled to a refund. This is the client's right - to control the exploitation, or lack thereof, in the work you created. This does not mean that you can't give back money, or bill for less. If you determine that it is in your own best interests to do so, then, by all means, do so.

Here's a case where keeping the fees together made a huge difference. This is a real example, but I'll change the industry/client for the sake of the example.
The problem is taxes. The government is trying to impose taxes on a variety of snacks - chips, cakes, and cookies. Enter the American Snack Foods Association. I get hired to photograph all the snacks (which means that while my client is the ASFA, the end client is Frito Lay, Enteman's, Hostess, General Mills, Altria, and so on. You get the picture - a lot of people who usually compete, having to work together on an issue) together. We do, and we get sign off from ASFA. The bill - $10k for the creative and usage, combined. I do this job on a Friday. Sunday, I get a call - one of the Frito-Lay bags is the old branding, and we need to re-shoot on Monday. No problem. We send another contract for $10k. We get on set, ready to go, crew at the ready, computers and lighting ready. The client doesn't even turn up to the shoot, and scrubs the shot. No problem. Send a bill for $10k. We are told Monday afternoon we are to finally shoot Tuesday. Send another contract for $10k. We do the shot, and the client again signs off on the job, and this time, they mean it. Total bill? $30k. Paid in a week. This client is an ongoing and repeat client for me. If I had separated out creative and usage fees, it may have been more challenging to argue that they still needed to pay those fees.
When putting together estimates, keeping fees together, wherever possible, ensures a greater amount of revenue for your business, and thus, has a significant impact on your bottom line.

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Thursday, September 16, 2010

Licensing - A 'Window of Opportunity'

Consider the license to a photograph a window of opportunity. For example, an image shot at a political rally this past weekend has, first, a window of a day as a news photograph for the daily newspapers. After that, the window of opportunity to generate revenue from this consumer of images closes significantly. For a news-weekly, the window is a week or so. For a monthly magazine, it's about 30 days. Following that, the window of opportunity for the use of most images from that rally have a window that closes significantly on election day - November 3rd. Then, it becomes a historical image, as fresh images will be needed for the political needs 2 years from now. As you license an image you close windows, and others cannot open. For example - if a photograph is licensed by the democrats for ads critical of the political rally, then that image is almost assuredly not going to be licensed by the republicans for ads in support of the issue. Other windows of opportunity abound.

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The broadest example of a window of opportunity is the term under which you control copyright. The term is life of the author plus 75 years (see here) . So, in the US, life expectancy is 78 years (source here), and assuming you start shooting professionally at 23, right out of college, your first images have a protected duration of 55 years + 75 years, or 130 years. The images you shoot at age 65 have a protected duration of 13 years + 75 years, or 88 years. So, you have a window of opportunity to exploit the value of your images for between 88 and 130 years, provided you live to the average age of 78. So, if you grant to a client a 10 year exclusive use of your photography, the window of opportunity for others to have exclusive use of the image (and you to generate revenue) is narrower after the first use expires.

A more narrow example of a window of opportunity applies when it comes to fashions and technology. For example, (cell phones - Game Changing Cell Phones Of The Last 30 Years) if you had shot a "generic" image of a business man using a Motorola flip phone back in 2003, as the Palm, iPhone, and others came out, that image looked dated, and has very few uses to illustrate a business man on a phone. So too, images that show CRT televisions and computer monitors - everything is flatscreens these days. So, for that flip-phone photo, your window of opportunity was about 4 years, before it "aged" out of the market.

When I license a window of opportunity to a client, I have no way of controlling the exercising of the rights I granted, beyond defining the maximum extent of the use. If I license an image to a client to produce 100,000 printed brochures for the next 6 months, I cannot force them to actually print them, for example.

When, for example, I rent a car, I am renting a window of opportunity to exploit my exclusive use of that car. I may opt to rent it and sleep in it overnight because it's cheaper than a hotel room, or I may decide to drive it for 24 hours straight, stopping only for gas. Just because I didn't exploit it the entire time as a car in the first scenario, I am not entitled to any pro-rated refund. Nor would I be if I just drove it for 4 hours and returned it. While it used to be that U-Haul treated their moving vans this way in the "24 hour period" approach, they found that they could narrow their windows to overnights, and even shorter periods of time, and still make money. If, however, you did rent a moving van for 24 hours, you would not have to pay more to the moving company if you moved yourself and two friends than if you just moved yourself. It was your prerogative to exploit your rental and the extent to which you did that is up to you.

So too software. Everyone pays, say, $200 for a Photoshop upgrade. However, some people use that software three times a week, others 8 hours a day 7 days a week. You are entitled to use it 24 hours a day 7 days a week on one desktop and one laptop (see here) provided you are only using one machine at a time. Are you entitled to a discount if you're only using it a few days a week for a few hours a day? Nope. Adobe does not control your exploiting of the window of opportunity, only you do.

Same goes for music. If you download a song from iTunes, you have a personal use license. You can listen to the song 24 hours a day, forever, or you can listen to it once a week, in your normal music rotation. The cost to do so is the same, regardless of the extent of your exploiting of the license. However, if you want to use it beyond your personal use license (i.e. selling your services as a DJ, as background music in your restaurant, in a commercial selling your products, etc), the costs increase because your use increases and your benefit increases, so, too, does the creative talent behind the music need to benefit.

When it comes to photography, your ability to leverage the narrow window of opportunity during which your images have value will be a cornerstone of the extent of your income as a photographer.

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Tuesday, September 14, 2010

iStockPhoto - Wait! It's About the Money?!?

For a number of years now, I've been hearing the iStock-a-razzi congratulating themselves with atta-boys and high-fives when they see things like their images used on the covers of places like Time Magazine (here), and for all manner of uses that should have garnered thousands of dollars in stock licensing fees, but instead garnered less than subway fare for a day. "It's all about seeing my photos in print..." or the otherwise celebratory "wow, they used your photo for their album cover..." back-slaps. They, with bright eyes and bushy tails were like a doe in the headlights as the oncoming frieght train of reality came towards them, and they just seemed to think "oh, look, pretty light". In fact, people were bemoaning those who actually cared about the money.

Enter reality.

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As Getty Images CEO Jonathan Klein can afford to drop $10,000,000 on his New York City Park Avenue spread back in March (Real Estate Mack Daddy Sells 760 Park Spread to Getty Images Chief for $10 M., 3/11/10), he, and his subordinate company, iStockphoto can't seem to keep paying the contributors who supposedly didn't care about money (until they did) the same amount.

Jeremy Nicholl, here, has done a great job of highlighting the hypocracy of iStockphoto, from within, as a contributor (apparently, not! Sorry for the mistake!).

Nicholls cites an August 9, 2010 company missive, which reports:
“Since roughly 2005 we’ve been aware of a basic problem with how our business works. As the company grows, the overall percentage we pay out to contributing artists increases. As a business model, it’s simply unsustainable.”
Really? REALLY?!?! I mean, come on, I've been writing about how just how unsustainable the iStockphoto business model has been since like 2006. SERIOUSLY? SERIOUSLY!?!?! I was strung up by all the iStockers who wrote me and commented here on the blog about just how this wasn't about money, and how I was off base. I mean, saying "I told you so" just seems so inadequate to the facts as they were, and still are. Just now they're admitting these things? Hmm, or was it that they were lying? in January of 2008, iStockphoto stated:
“That our revenue and payouts have eclipsed those of many traditional stock photography companies confirms that microstock is a viable and profitable business model for contributors and clients.”
Oh when it comes to judgement day, these boys will be on the fast track to a burning caldron of boiling sweat from the toiling of the contributors who have given of their creative genius. But, will these creatives be able to find their way out of a canopy tent? I mean, when God was passing out business sense these dimwits must have thought he said "brightness scents" and said "what? Smart people can't smell..." and took a pass.

Wake up and smell the free coffee down at your local shelter after you check your pockets to make sure your twice-chewed bubble gum is still in the used wrapper as you roll off your free cot, and see that your change from the night's pan-handling becomes more of an income than licensing photography - there will be droves and droves of people behind you - the Flickr-ites - that will swarm to iStockphoto like moths to a flame. You've already been burnt, now it's their turn.

The COO, in this missive - Where we go from here - writes, in part: "I want you to know that I would tender my resignation at iStock before I had to do something I couldn't stand behind." Ok. I'm waiting. Please be sure to send me a copy. I've set up my inbox with a rule for an email from you to play "Ding Dong The Witch is Dead" when it comes in. I can't wait. Jonathan Klein will still be trying to convince you of his altered reality, as his minions call out "pay no attention to the man behind the curtain..." Guess what? There are a lot of "Toto" dogs on Park Avenue, and one of which can nip at his heels in real life, and the Wizard of Oz was just a fantasy, but these are the lives of real people that iStockphoto and, in turn, Getty, is screwing up.

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Monday, September 13, 2010

A Copyright Ruling That Could Affect Photographers

In a 3-0 decision by the 9th U.S. Circuit Court of Appeals on Friday, the court said that companies that make and sell software can use shrink-wrap, or in the case of online downloads - click-to-continue licenses to preclude "owners" from the re-sale of the license.

The ruling seems to be the first ruling by an appellate court that specifically focuses on the sale (i.e. the sale of a license) to a party beyond the original purchaser, and the terms of that sale affecting the ability to re-sell it later.

How can this be, you might ask? Well, back in 1909, the "First Sale Doctrine" allowed the owner of a legitimate copy of a copyrighted work to sell/transfer ownership of that particular copy without the authorization of the copyright holder. The court ruled "The first sale doctrine does not apply to a person who possesses a copy of the copyrighted work without owning it, such as a licensee..." This has the potential of having a substantial impact on photographers' licensing and contracts.


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As it stands, if you have, say, a photographer's book, you own that physical book, and you can tear out the pages, frame them, and then re-sell each of those framed "prints" without the photographers permission (generally speaking.) There has been some controversy in the past about this. This, however, would be a case where you possessed a physical copy of the work, and the first sale doctrine would apply in most instances.

In the past, I have purchased software from bankrupt companies, and had the licenses transferred to me. Having the bankruptcy executor sign a document stating that they represent the bankrupt company worked, and in cases where, say, I wanted to sell a piece of my software to a colleague, I would execute an agreement to that effect. For example, Adobe has guidelines and policies as it regards a transfer, and the documents they require - here.

However, if you posses a license to the work, according to this new ruling, you could not transfer it without something in writing. This certainly can affect contracts. For example, in my contracts for advertising/commercial work, I have this language:
This Agreement shall not be assignable or transferrable without the prior written consent of Licensor and provided that the assignee or transferee agrees in writing to be bound by all of the terms, conditions, and obligations of this Agreement.
This is an important clause. Because, if your images are contained on a client's hard drives, no doubt, the language in the sale of the company as it pertains to intellectual property likely reads something like this:
Company X hereby transfers all right, title, and interest to all trademarks, patents, copyrights, without restriction...."
Thus, the aquiring company could wrongly believe they own copyright to the photography that is yours, on their hard drives. As such, the clause in my contracts is critical to protect me.

The software company that was a party to the lawsuit, Autodesk, had a significant number of restrictions on the sale or transfer - they hard to provide written consent, and further, under no circumstances could the license be transferred outside the Western Hemisphere.

While the company who lost in this case has vowed to appeal, the 9th circuit had overruled a lower court who ruled that the when a purchaser is allowed to keep the work they purchased as the original purchaser, they have the right to re-sell it at their discretion. The American Library Associiation and eBay took a position counter to the ruling of the court, arguing that other copyright holders (among them, photographers, book authors, etc) could follow suit. The court acknowledged as much, but left legislative solutions to that, noting the government should modify copyright law "if it deems these or other policy considerations to require a different approach." With Congress introducing bills to protect fashion designs (as reported here and here in the Washington Post) which are currently not protected by copyright at all, it seems that copyright laws may be in for a substantial revision in the near future.

You can read the courts opinion here (as a PDF).

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Sunday, September 12, 2010

ThinkTank Cases - A Review

We use a lot of different professional tools to deliver images to our clients, and among them are the ThinkTank line of rolling cases, both for air travel and for local location work. Over 5,000 of you watched our WHAT WE USE - Cases video where we showcase a number of cases, including our ThinkTank solutions. Over 115,000 of you watched our WHAT WE USE - Canon video where we use the ThinkTank Airport Security case, as well as over 102,000 of you watched our WHAT WE USE - Nikon video where we showcase our use of another ThinkTank Airport Security case. Just over a year ago, we did a review here at Photo Business News - ThinkTank Multimedia Bags - First Look. So, below (or at this link here for you RSS readers) is our latest in the line of ThinkTank reviews - where we discuss the Airport Security, Airport International, and newest - Logistics Manager, rolling cases. Enjoy!

If you'd like to pick up one of the cases, check these links:

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