Falling down the stairs

November 26, 2007 by pmelcher.

I now have the proof that photo agencies are their own worst enemies.

A very succesful consumer magazine has send a blast email to its photo providers to announce a reduction in its licensing fees.

In Touch magazine, a Bauer publishing-owned celebrity magazine , who has a paid circulation of between 750,000 to over 1 million copies a week, and according to a press release from 2006, “In Touch Weekly’s circulation is at an all-time high of 1.1 million and the title has the fifth highest newsstand sales among consumer magazines. In Touch Weekly also posted a 35% increase in advertiser demand over last year and was recently named to Advertising Age’s “A” List”, has decided to reduced its page rates dramatically.

In a continuing effort to reduce costs against a very aggressive competition ( People Mag, US weekly, Star, Entertainment Weekly, Celebrity Lifestyle, National Enquirer , etc ) it has started to ask for bargain images. In an email send to their regular contributors, InTouch lists the new pricing versus the old, and a list of agencies who have already agreed to the change. The Motto is always the same. If you do not accept our new pricing we will no longer use your images since we have all these other agencies who have already accepted. Its peer pressure.

Just as a reference, I took the full page rate, that used to be $500 and now is reduced to $300 (That is almost a 50% cut) and checked the rates proposed by others, not on the list. I thus went to different website, selected a random red carpet celebrity photo of the type used by InTouch and used the online price calculator. I agree, yes, very unscientific.

From Getty Images, with no Electronic rights, I got : $ 475.00 USD

(disclamer: Getty might be licensing images to InTouch via their subscription model which is flat yearly fee for “all you can eat” images. It would probably put the price of one image to sub $100. )

From Corbis, I got ” An unexpected error has occurred. ” Corbis screenshot

From Alamy, It was US $ 535.00

From the new Photoshelter collection: USD $ 735

From Shutterstock ( yes, they have some celebrity red carpet, albeit, not very good): $199 (if you subscribe for a month)

Other microstocks did not appear to be in that space.

So what is the lesson here ?

-Photo agencies that have agreed to the price cut had no business reasons to do so.

-They will obviously not see an increase in usage to compensate for the lost of revenue.

-They have applied the “copy and save” strategy. Copy my neighbors and save what I have by any means possible.

-They are shooting themselves in the foot with a Bazooka.

- This list and pricing will now be shared with all other competing magazine who will feel obligated to institute the same rates.

- I doubt that they these agencies have consulted with their photographers regarding these rates thus passing the “savings” to those in the field.

- These prices have no chances of going back up. A variation of Newton’s law apply here. What goes down goes further down, not up.

Because I respect these agencies’ right to do business, I will not publish the list publicly. Here is, however, the InTouch new rates as they have appeared on the blast email:
THE NEW RATES FOR THESE AGENCIES ARE:

FULL 400
¾ 300
½ 150
1/3 100
¼ 75 (Agency A 100)
SPOT 50

OLD RATES:

COVER 1250
CV INSET 375
FULL 500
¾ 400
½ 350
1/3 250
¼ 175
UNDER ¼ 150
SM SPOT 75

As a conclusion, I would like to add that this pricing pressure has not been brought forth by microstock, as they do not offer the same type of content. This is the result of too much similar offering of the same type of material by agencies who believe that quantity will somehow compensate for quality. It is something I wrote about earlier in a post called the big depression of 2007. It is also not limited to celebrity editorial and we should soon see the same downward slip replicated very quickly everywhere.

Posted in finance, license, celebrity, transaction, editorial, getty, corbis, Microstock | Print | No Comments »