Best Business Practices for Photographers [226]
Times have changed. During the analog days, the common split for licensing fees was 50 percent, although if you had leverage, you could negotiate a 60/40 split in your favor. Although I considered the agency share to be high, there was little I could do beyond accepting it. Today and for the last five-plus years, online digital archives have become the norm. By some estimates, less than three percent of images licensed in the last year involved the handling of original film. Most (save for the unique or larger revenue) licenses are handled 100-percent electronically, with no person actually doing the legwork that created overhead costs. Servers in secure facilities house these images and generate revenue. Even so, agents have kept their percentages as high as when they had all that human overhead cost to contend with.
As analog agencies went out of business or were acquired by larger agencies, photographers seem to have forgotten that without them, the acquiring corporation was simply buying empty filing cabinets. As such, the photographers signed "under new ownership" contracts that waived the new companies' liability against lost images. In some cases, the "agents" whose responsibility it was to look out for the photographers' best interests were doing just the opposite.
Only in rare circumstances are these agents looking out for the interests of the photographers they are charged to represent. Quoting from the 2000 Annual Report of Getty Images:
Our business model transfers seamlessly to the Web. Due to the nature of our product, our customers are able to search for the imagery they need, determine pricing, complete their purchase and have the product delivered—anywhere over the Internet. We don't need to acquire inventory, we don't need to maintain expensive warehouse space and we don't need to depend on a shipping service to deliver our product …. Getty Images reaps the promise of the Internet because our product cycle is completely digital—from the first customer inquiry to the final payment—enabling a pure e-commerce process …. For both Getty Images and our customers, it means increased productivity and lower costs.
Further, and in successive years, Getty on one hand points to their major expense as being royalty payments to photographers, and a few sentences later, they talk about working diligently to reduce their major expenses to increase margins and profits for the shareholders. Can you blame them? Although there is nothing wrong from a business sense with taking this approach, they are truly no longer looking out for the best interests of their photographers; instead, the bottom line is for shareholders. Further, they are not the only "agent" looking to do this; it's just that as the largest publicly traded company, they make a lot of public statements that bring this to light.
So how exactly are the large photo agencies looking to reduce the royalty payments they make to photographers? Well, if they have images of scenic vistas of cities around the world that were taken by photographers who provided those images to their agents, and then their agents were acquired by the larger agencies, those images—which are often very similar (for example, shots of the US Capitol with a blue-sky background during spring)—are being licensed by them, and they are paying a 50-percent royalty on that. Why not hire photographers as employees in each of these cities, and when they are not completing assignments, they can be instructed to shoot scenics of their locality's most popular "postcard-type" destinations. In fact, by using aggregated data to show which subjects are selling best in each city, they could provide a prioritized list of subjects. When those images come in, because each image licensed from that group would not have the obligation of a royalty at all, 100 percent of each license would be returned to the "agency."
Armed with metrics that show 90 percent of photo buyers don't click