Consider three events that recently happened within the world of photography and ask yourself “how are they connected?” Last fall, Time Inc. caught the industry off guard by presenting a “sign it or else” contract to their stable of shooters; an agreement that ignored established freelance copyright laws by denying providers the right to control the use of their images (and therefore profit from them) outside of the standard interior, cover or webpage formats. Then there is Glendale Community College student Gage Skidmore who simply gives his images away to wire services, news sites and political campaigns. Most recently, one of his images appeared on the homepage of presidential candidate Donald Trump. And the self-made billionaire didn’t spend a dime on it. Skidmore licensed his image for free. All he asked for in exchange was… a photo credit.
Finally, we have Corbis Images. A prominent player within the image licensing industry since 1990, Corbis finally threw in the towel by selling off the company’s key collections to China’s Unity Glory International (a moniker that invokes the image of an evangelical super PAC). And in what could best be described as a moment of epic irony, Corbis’ key competitor Getty Images will now handle the licensing of those collections within North America. Not to kick a man while he’s down, Getty CEO Jonathan Klein posted this insensitive tweet:
Setting aside Klein’s lack of empathy for those employees who may soon be out of a job, the situation with Corbis, the Time Inc. contract and Creative Commons poster child Gage Skidmore suggest a larger picture that is the state of the photo industry today. And it comes down to this: what happened to Corbis? How does this reflect on the industry in general? And why should any professional photographer care?
“When the Editorial side of things went downhill it affected not just Corbis’ bottom line but the entire image licensing industry as well.”
Full disclosure: I used to work for Corbis. I started off as an Account Executive and left the company as a Senior Account Manager. Those labels mean nothing to any one who has worked from stock photo house to stock photo house as an Account Manager for Getty may not be the same thing as an Account Manager for Shutterstock. Simply, I worked in sales. Or more specifically, I was an agent who represented all the images, videos and motion graphics clips collected by Corbis. My specialty, however, was editorial. That is, I would license the use of our imagery to print media, book publishers and news and entertainment websites.
The target client could be broken down into two types: Advertising and Editorial. When the Editorial side of things went downhill it affected not just Corbis’ bottom line but the entire image licensing industry as well. But seeing as there is more to the story than just the hemorrhaging of print media, allow me to provide some context – a background if you will – on Corbis Images and image licensing in general.
Microsoft tycoon Bill Gates created Corbis in 1989. Initially set up to develop technology that could digitally display art in the privacy of your own home, Corbis eventually grew into one of the largest image providers in the world. Taking its name from a Latin term meaning “woven basket,” Gates wanted customers to view Corbis as the place that provided anything you would need: art, photography of all kinds and historical imagery. Just dip into the basket and pull it out. And we’ll work out a fee.
The road to Corbis’ success was not fraught without controversy. Taking on (as in buying out) a news service like Sygma resulted in conflict among the French photographers and French copyright/freelance employment laws. Critics cried foul over the perceived commercialization of The Bettmann Archive – quite possibly the largest collection of historical photographs ever acquired – only to cry even fouler? More foul? Over Corbis’ insistence to store an untapped percentage of said archive in an underground bunker in Pennsylvania. While some of these public misgivings were unfair (Iron Mountain, the aforementioned bunker, was born out of necessity and not out of corporate greed or lack of sensitivity to “historical importance.” Only a small percentage of the images had been fully digitized whereas the rest were quickly deteriorating and needed to be placed in a climate controlled environment for preservation), a lot of those misgivings, unfortunately, weren’t. Compounding the issue, Corbis has never made a profit during the twenty-seven-year history of its existence.
Yes, a lot could be made of how Corbis’ woes were due more to a lack of proper leadership and how Gates continually kept the company afloat anyway much like a wealthy parent would a trust fund child. In his blog Thoughts of a Bohemian, photo industry pundit Paul Melcher has constantly reminded us of this fact and, not to be undaunted, recently offered this observation, “Since its inception, Corbis has been plagued by a series of incompetent managers who have instituted and maintain a company culture detrimental to its blossoming.” While I would agree with some of Melcher’s sentiments, some could be chalked up to sour grapes as well since most of these complaints could be applied to any stock photography agency still in business to this day. Yet to truly understand what happened to a company like Corbis, one has to examine contributing factors that existed outside of the usual corporate politics. But to understand that, one has to answer this question first: what is image licensing?
“During the heyday of photo agencies, you could offer either a rights managed image to a potential buyer or something that is deemed ‘royalty free.'”
If you want to sell an image, you have many options in terms of how to do so. During the heyday of photo agencies, you could offer either a rights managed image to a potential buyer or something that is deemed “royalty free.” The rights managed image would be “licensed” for a set fee that would limit the use and geography of where it could be used. For example, for a negotiated fee an advertising company would “rent” a spectacular image for print ads to be distributed within North America only. Should the advertiser want to increase its usage – put it on billboards or have it appear in television ads, for example – you would renegotiate the deal (and raise the fee) and thus create a new license.
The polar opposite of this would be the royalty free image. For a set price, a royalty-free license would entitle you to use the image, however, whenever and wherever you want. Once you pay for it, you can do as you please without ever having to pay that fee ever again.
There are of course exceptions to the rule but this is the basic breakdown. From the 1990s through the early naughts, rights managed and royalty free content somewhat co-existed in harmony without risking cannibalization of either side. Although at one time royalty free was a perceived threat to the established economy of rights managed images. As in: why should I shell out so much for that image when, for a one time fee (and for considerably less, I might add), I could go for the royalty free option? Well the difference rested in the quality of that image and the potential overuse associated with royalty free. If you are selecting the best image that reflects your brand, not only do you want to go with something that isn’t being used anywhere else but you want to ensure it isn’t being used anywhere else. And that’s the risk you take when purchasing a royalty free image. Having said that, the early business models would command exorbitant fees with or without exclusivity deals. Even with royalty free the least you’d spend is something in the $200 – $300 range for a single image.
But then the economy happened. And then there was the Internet and the concurrent digitization of product. And that changed everything.
“You thought royalty-free was too expensive? Say hello to microstock.”
Enough has been discussed when it comes to how the recent recession affected companies all over the place. If clients’ budgets are slashed because of this, so too are the amount of funds available to spend on imagery. But it was the accessibility of the internet and the ambiguity of cyber copyright laws that brought about a new licensing model. Not to mention, the rise of the online photographer. You thought royalty-free was too expensive? Say hello to microstock.
It all started with Flickr, a one time, image dominant social network since overshadowed by Instagram and Snapchat. A resourceful art buyer would scroll through numerous accounts featuring amateur photography that was “good enough,” sometimes even better than what could be licensed through the more professional outlets. Such an art buyer would then approach the creator of a specific image – normally a person who was not a professional nor savvy in creative rights and the business thereof – and offer this enticement:
“We’d like to buy your image for $500. In return, your image will be seen on every billboard across the country. We’ll make you famous.”
How do you compete with that? And how do you stop the large population of uneducated, non-pro photographers from devaluing imagery by simply saying “yes” to a deal like the one mentioned above? To capitalize on this, companies like iStockphoto, Dreamstime and Shutterstock began to litter the landscape. And looking back, the appeal of microstock was easy to empathize with. Unlike royalty free – where for a one-time fee you can use a single image however you want – with microstock you purchase up to ten, sometimes fifty, sometimes one hundred images for a fee that is less than that of royalty free!
Almost overnight the industry went from “how much can I get for this single use image” to “how many images can I sell for a minimum price?”
Now think about this for second and ask how that affects you, a photographer or any professional working in the industry. Unless you don’t want a middle-man, you need to hire someone to represent your product. So they’re entitled to take a cut from the sale of your image. That cut then needs to be divvied up among employees including the Account Executives who are not only salaried but also make a commission off those sales. Now imagine how much money could’ve been made off a single image?
The advent of social media gave way to image platforms like Flickr. And thus, a new pool of talent was born for the thrifty purchaser to pull from.
In other words, an entire year’s worth of salaries, commissions, and percentages given to content creators could feasibly be sustained by the licensing of maybe a dozen rights managed images. What with the new economy and the dominant popularity of microstock and creative commons licensing, you now have to offer an access to bulk in order stay in the black. And for much, much less than before. It should come as no surprise that the early adopters of selling microstock either got purchased by companies like Getty Images or outright disappeared. But microstock has become the prominent licensing method of the day.
And it’s not like Corbis refused to jump on that bandwagon. They tried by scooping up Veer and SnapVillage in 2007. However, they also had to contend with the shrinking of the editorial market as well.
“Because print media would require a number of images per month (or week depending on the title), fees took into consideration the amount of images being used. Therefore, editorial rates were much less expensive than Advertising rates.”
The big difference between Editorial and Advertising rested in the fees and nature of the usage. “Advertising” was viewed as promotion, ergo it demanded a higher fee. “Editorial” was viewed as informative and thus, fees were negotiated based on the size of the image published on a page, whether it would appear on the cover or inside and by the print run or circulation of a magazine or book. In the case of the big publishing houses like Simon & Schuster or Random House, additional tiers would be applied depending on whether that print run would continue outside of the United States. Because print media would require a number of images per month (or week depending on the title), fees took into consideration the amount of images being used. Therefore, editorial rates were much less expensive than Advertising rates.
The ultimate goal was to lock larger media corporations into yearly, sometimes two-year contracts committing to a minimum use of imagery (or if you rather, a minimum spend). The trade off would be a guaranteed, lower rate per image for the duration of that contract. Should they fail to make that minimum spend, a clause was put in place to penalize said company by having them pay the agency the remainder of what was due. Should they make the agreement and then some, that company would be rewarded with a new contract and possibly a slight decrease in the previously established rates or an increase in the minimum spend.
These “minimum agreements” were the bread and butter of most popular photo agencies. If you failed to meet your quota in licensing images to the advertising market at least you can rely on the income generated from those editorial contracts. Yet the economic recession and digitization of product provided the first nail in the coffin thus affecting the relationship between photo agencies and the editorial markets. While the recession didn’t help, the short-sightedness and lack of understanding of digital media plus the rising popularity of the internet confounded publishers. Instead of immediately imposing subscription models to their web components, publishers offered those services for free. So why pay for the print version of the New York Times when you can read it online for nothing.
The World Wide Web also jumpstarted a whole new economy consisting of contributors working for far less. Today, a freelance writer may draft up to ten articles a week for a Mashable or Upworthy at only $50 a piece. The burden of expenses like travel, photography gear, food on the job, etc., rarely falls on the publisher these days. And again, it’s become a game of bulk rather than quality of content. Content needs to be plentiful, consistent, maintain more views, hits and “likes.”
“But why have other companies succeeded where Corbis has failed? Well, truth be told very few photo agencies are “succeeding” in the way they used to back in the mid to early naughts. Last year, even Getty reported a loss of 17%.”
Having been on the frontlines as a first-hand witness to this change, I saw how publishers began doubling back and insisting they commit for less. Then “minimum agreements” became nothing more than price sheets with no guarantee of yearly spend. Eventually, the department that specialized in licensing to the editorial market was eliminated altogether. At the same time, circulations were decreasing while more efforts were put into the digital versions of their products. And to save even further, more and more of our clients were going to microstock.
While Paul Melcher has provided considerable insight he does get one thing wrong in his most recent blog. “Corbis was not an editorial powerhouse,“ he says. “It tried, it failed, many times. Their only holding that was and is successfulin the editorial market is their recent acquisition, Splash.” First off, Outline was their first exposure to the celebrity market and for awhile that was fairly successful thanks in large part to its having been identified as “premium content.” That is, any image that belonged to the Outline collection would have to command no less than a minimum fee for any kind of usage including editorial.
Secondly, Corbis never really wanted to be an “editorial powerhouse.” I recall discussions as to whether we would get into the newswire business having represented UPI, Sigma along with brief arrangements with the Associated Press but they never went anywhere (largely because the infrastructure wasn’t in place to support something like that). I also remember when Corbis allowed their arrangement with Reuters to lapse (most likely because it wasn’t profitable enough or wasn’t worth fighting for). “Editorial” can be broken down into many categories and for a while the most consistent breadwinner involved sales generated through the editorial marketplace. However, that does not mean that all images sold could be construed as “editorial.” Is historical imagery considered editorial for some? If so, the Bettman Archive was pretty popular. As was Outline.
The reason Corbis eventually struggled with the editorial market is for the same reason as everyone else unless you are one of the rare, go-to news wire services in town. Or you’re Getty, which is, you know, the company that’s too big to fail (well, maybe not. More on that later). Simply, the economy, the digitization of product, the shortsightedness of the popularization of the internet, ad nauseam, and blah-blah-blah, contributed to the problem here.
But why have other companies succeeded where Corbis failed? Well, truth be told very few photo agencies are “succeeding” in the way they used to back in the mid to early naughts. Last year, even Getty reported a loss of 17%. And Unity Glory International parent company Visual China Group has not seen a significant increase in stock value since the purchase of Corbis’ collections. In 2007, the top stock agencies were Getty, Corbis, Masterfile and maybe Alamy. Today the list is dominated by microstock agencies like Shutterstock and Dreamstime and rf agencies like Adobe Stock. For most of them, interpersonal business relationships have given way to online transactions.
And, yes, poor management is a factor in Corbis’ downfall. I won’t even get into issues like why would a company plant its headquarters in a place far removed from the media capitals of North America and beyond? Or point out its frustrating propensity for not providing the proper collateral that could’ve targeted specific markets within the advertising and editorial industries. Or how they lost interest in image/footage licensing altogether and decided to put all of their unhatched chicks into the “branded entertainment” egg carton. However, it is the other mitigating factors every professional should be paying close attention to. The current state of things is symptomatic of the same trend that results in a Time Inc. contract demanding more flexibility for less and a Gage Skidmore giving everything away for nothing at all. It seems that the photo industry’s basket – and image licensing in general – is permanently unwoven.
