The silence of the see*

February 29, 2008 by pmelcher.

Hear that silence ? It is the industry without Getty Images quarterly report. No more pseudo analysis by wannabee traders, no more speculations, no more elaborate calculations that result in insane conclusions. It’s the peaceful sound of the industry looking at pictures again, and not crushing numbers anymore.

It’s the silence of the eyes, where photography speaks for itself, finally freed from its numerical chains. It is the reassuring silence of professional eyes looking at content, rather than excel spreadsheets. Ten years of brutal despotism by numbers finally over. Getty becoming private is the best turn this industry could have wished for. Not because it will affect the market in a positive way, although it might, but mostly because it will force people to analyze the content rather than the shell.

Those nasty little RPI’s ( Return Per Image) or % of image sold multiplied or not by some abject variable will quietly return to the boardroom, behind close doors. And images, hopefully, will start to speak again. Lonely Jupiter will be playing the game solo with no one to be compared too.

Sure we will continue to have numbers thrown at us, either from Alamy or from a Gary Shenk, somewhere from deep inside Second Life. Certainly, A21 will certainly continue to announce with great pride new loans in order to keep their amusing little stock afloat on its own kindergarten stock market. But that will certainly not make the industry tremble and sleepless.

The Lion will be seemingly asleep and hopefully no one will try to take over its roaring sessions. Hopefully, the debates, arguments, analysis, theories, projections will be about content, quality, originality and photography rather than volume, quantity, profitability, accounting and market share.

They will be a real debate, and concern, that Getty Images has great photography and surpasses a lot of its peers by hosting talented photographers, regardless of how many image they sold. Maybe it will push the competition to rethink its content rather than their balance sheet. Maybe we will start seeing less greenish imagery or flashed pale individuals in front of white walls.

Come to think of it, the argumentation might even become about who has the best images rather than who has the most. It could even be that people start classifying photo agencies by the value ( artistic) rather than the amount of images sold . Could very well be that this new found silence might distract us from thinking that making a gazillion billion dollars might not be an end in itself. And that, maybe, just maybe, there is pleasure in creating and selling great images.

Wasn’t this the reason we all started in this business ?

*(not a spelling mistake but rather a play on words)

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Posted in Search, Jupiter, technology, photojournalism, finance, corbis, editorial, transaction, getty | Print | 1 Comment »

It’s all cyclical, its evolved over 100 years

February 28, 2008 by pmelcher.

“my first (and probably my last, unless you tell me it is a good idea) guest post :”

How did it start?Was it the 1890’s ?Photographers took pictures, pushed the edge of the envelope but could not do everything, they needed agents.In the meantime copyright came along to try and stop the exploitation of artists, there where always those with money willing to exploit the talents of an impoverished artist.Come the 1950’sAgents came along and entered into a partnership with the photographers, 50/50 or whatever, photographers owned the copyright, agents sold and kept the collections in hard chemical form, their business grew in the center of cities, large amounts of real estate holding pictures.

Pictures where sold for 1st rights, 2nd rights, 3rd rights and so on, the sellers had a firm grip on the marketplace.

Photographers if they where good made money in editorial, rights managed, it was a financial meritocracy, the best made the most. Art and creativity was king.

Agencies like Sygma, Sipa, Magnum, Rex, and stock agencies like Tony Stone all flourished, not by employing photographers but entering into partnerships with photographers.

20 years went buy and they became big business.

It’s the 1990’s along came digital, Getty and Corbis.

Digital, binary code was an astonishing revolution allowing millions of images to be stored in a box the size of a car instead of a 10 story building, on top of that images could be sent thousands on miles in a few seconds and reconstructed to the original quality thanks to jpeg compression, opportunity was knocking and along came the bankers and big business.

Getty and Corbis knew with a few million spent wisely they could dominate the industry, they started their acquisitions

Most of the agencies sold out but this was the first knife in the back for the photographers, the content creators, whilst an agency owner pocketed the $ 20 million from Corbis the photographer got nothing and in Sygmas case an assumption by Corbis that they owned the archive!!! I think the lawsuits are still continuing. What did I last hear Microsoft has $ 40 billion dollars in cash, what chance does a poor photographer stand?

Getty, owned by bankers saw an opportunity for consolidation and cost saving, they also thought “ Art” could be created on a 9-5 hour day, a salary and no incentive. They went ahead and spent $ 500,000 million dollars acquiring photo agencies.

Bill Gates, he initially just wanted art on his walls digitally, constantly changing to fit his mood, this was when big screen plasmas cost $ 30,000

These where tough times for artists, creative photographers who ideas where stolen, their percentages crushed, financial ruin approaching.

The agencies new owners drove hard bargains and percentages to the photographers, if you did not sign, get lost, plenty to fill the departing artists shoes, plenty of styles to copy.

A typical business model bulk sold content on monthly deals, sending thousands of pictures a day to clients, 1st rights, 2nd rights, 3rd rights became a thing of the past, your pictures where likely to be bundled at a $ 100,000 deal a month for 200,000 images used, you do the math !

By 2000 the creative photographer had been destroyed, art had become sterile, its becoming obvious bankers are not good for art!!!

Mix with this through the late 90’s early 2000 the growth of Google, a search engine with a bland front end. What the hell was this and it was free!!!

By 2004 we knew what Google was, an advertising agency who had managed to optimize the Internet and its revenue through click through revenues and who was being screwed the most in this, as if in a double whammy, creative photographers and newspapers, in fact anyone who published!!!

Those bulk all you can eat deals really paid of for Google with free rights in perpetuity as they displayed the web pages of most of the publications in the World, blatantly using fantastic images for free to drive click through revenue to their advertisers. The poor old content creator ( photographer) got nothing

Catching onto what was happening the media industry jumped on the Google band wagon and followed Getty’s lead and obtained pictures under tough contracts ,  New York Times, Tribune Group, Associated Newspaper, News International and almost every publishing group in the World started their own web sites, using pictures for peanuts whilst lamenting, “ We are loosing Money” they continued to make money off pictures through CPMs, “ accidentally” using pictures without paying  or sometimes purchased for ridiculously low fees.

Then came the blogs who where inspired by Googles claim to free usage under the The Digital Millennium Copyright Act of 1998 and other internet users of pictures, all claiming they where making no money, whilst the poor old photographer where having to spend money to apparently make nothing
Then came blogs and other internet users of pictures, all claiming they where making no money, whilst the poor old photographer where having to spend money to apparently make nothing.

In 2007 the World implodes, what happened to the American Dream ?

In 2008 when Getty Images sells for $ 2.4 billion with a failing business model they still do not understand what they did and their errors. Quite simply they where conducting business using digital with analog business models, they distributed full resolution digital images on a daily basis to hundreds of users, millions of asset files that could be stolen and used by everyone for free, whilst those users made millions on click through advertising revenue in perpetuity.

It all seemed hopeless and then along came GumGum, and they have suggested a solution that could get the creators back in financial control of their lives and the industry back on a firm foothold.

For in the end it’s the creators of new art that drives the marketplace but the industry must change the way it markets images in this maturing digital age. The artists have to be paid and then the flow of great marketable images will continue and big business through shared revenue will make even more money and survive.

And I suspect Bill Gates will still be rich!!!!

Paul Harris

Pacific Coast News
Celebrity Home Photos
Pacific Coast News Video
United States Head Office
BWP Media USA Incorporated

Posted in Midstock, license, multimedia, Search, newspaper, copyright, idee, Pacific coast news, gumgum, technology, magazine, keyword, google, editorial, law, news, corbis, finance, PACA, web 2.0, photojournalism, wire service, CEPIC, getty | Print | No Comments »

The root canal

February 25, 2008 by pmelcher.

Don’t take me wrong. I am a big fan of the Pictures of the Year International. They always have a great jury, a great taste and amazing photographers that, for the most part, I had never heard of before. Well, one cannot read all the newspaper of America everyday.

It is a great vehicle for local photographers to be known worldwide but : Their website is the worst I have ever seen. It looks like it was created by a 14 year as a school project on HTML . It is soooooooo painful to navigate and understand what you are looking at, it is worse than a root canal.

For example, I am looking at the Second Place in Science/ Natural History Story . A great story on Whale hunting in Indonesia. A job extremely well done, with a the right combination of the grabbing images and informative one. Hardly any need for captions. Twelve images that sums it up perfectly. I look for the photographer’s name. None. no where.

story here

I change browser thinking maybe it my fault. Still nothing. I look at other prize recipient. Nothing. No photographers name . Aaaaargh. Not only it took me two hours to navigate but I didn’t even found what I was looking for.

Can someone please help these guys design a site ? Anyone ?

Posted in multimedia, license, magazine, technology, Search, newspaper, editorial, photojournalism, web 2.0, keyword, news | Print | No Comments »

The buyer gets bought ( * with an after thought)

February 25, 2008 by pmelcher.

According to a press release of this morning, Getty Image board has agreed to be bought by San Fransisco based private equity firm Hellman and Friedman LLC for $2.4 Billion dollars. That is more than the estimated total size of the stock photo industry as per Getty Image itself . They had, as many others, evaluated it at $2 billion a year.

Shareholders will receive a mere $34 per share and better take it. H&F has investments in DoubleClick, currently being acquired by Google for $3.1 Billion.

Was the previously announced failed purchase of $1.6 billion a ploy to make this one look really appealing ?Probably.

What does this mean to the rest of us ? It wildly depends if the management team stays or not. There is a good chance they will and take the company private. They might abandon their editorial division as it has become overly pricey and bloated with its recent acquisition of Mediavast and it rising cost of operation, especially in international news. They also might divert a lot of resources towards other revenue streams than photography.

What will be very interesting to watch is whether all the contracts and deals Getty has made over the years with Leagues and others will survive. Usually, agreements do not survive an acquisition, thus forcing parties to renegotiate under new terms. In the line are agreements with the Olympics, Soccer leagues, NBA, AFP and many more.

But its only Monday, so we have all week to think about it.

* => Ok, week’s over. Here is our after thought : On August 2, 2007 , Getty Images, Inc. Issues Q3 2007 Outlook Below Analysts’ Estimates. Immediately th stock takes a plunge from which it will never recover. Immediately soon after, master wizard Johnathan Klein moves to New York. These “warning” as issued by the management. What if Getty management had sunk the stock on purpose in order to perform a cheaper management buy out and get itself rid of annoying investors? After all, it was obvious by summer 2007 that the stock would never reach its legendary $90 or more.

And the current $34 a share is much cheaper that the $50 plus it was just a little more than 6 month ago.

With this disguised management buy out, the executive team is now free to pursue long term projects without any scrutiny from neither the public nor the competition.

Very “conspiracy theory”, indeed .

Posted in photojournalism, google, technology, finance, transaction, news, editorial, getty | Print | No Comments »

It wasn’t Getty

February 22, 2008 by pmelcher.

It was bad management. It wasn’t Getty, or microstock, or the so called recession. Just plain bad management. I remember LFI ( London Features International ) USA when it had their offices in a small but cozy space in the Meat Market, when the Meat Market was still selling meat and not fancy, overpriced clothes, as it does now. In the 1990’s it was part of a small but effective group of photo agencies, that included Retna and LGI who where then battling with giants such as Sygma and Celebrity Photos. Sygma had incredible content and Celebrity Photos were sending buckets of slides to magazines via Fed ex. Globe Photos was also a threat then, with their “under the belt” pricing.

Times changed. LGI got bought by Corbis, Retna, managed to remain independent until recently, when it got split up and bought by two different companies. Sygma also got sold to Corbis, while Globe photo is now only a shadow of itself and Celebrity Photo doesn’t know on what tempo to dance.

LFI USA remained independent and with an incredible music collection, managed to grow, opening one of the first website. Under the great and regretted Steven Mazzara, LFI moved offices on the same block as Magnum currently is. Bigger office, bigger staff. It, however, never reached 15 staffers, as a PDN article wrongly wrote. Alas, the owners didn’t follow. Times were hard for the guys in New York to try to compete with the newer agencies, running at full digital speed. Bogged down by a huge print and slide archive, the transition was a very painful process, as the London office refused to invest properly. Saving money was the motto. People were paid poorly, the equipment was barely adequate. A combination of too little, too late.

There was great photographers: Kevin Mazur, Nic Elgar, Ron Woolfson, Dennis VanTine, George DeSota, Gregg Deguire and many more. But as the management refused to innovate, they all left, one after the other. Kevin joined Wireimage along with Gregg, while Nic and George went to ImageDirect. One of the many reasons was that LFI in England decided to sell prints of celebrities to consumers while not paying any commission to its photographers. After a lot of internal battles, it was finally shut down.

It is not by lack of trying: Many times LFI tried to sell itself. But the price was ridiculously too high. $35 Million, some say.The staff in New York bravely fought against the competition with incredibly poor resources and way below average compensation. As photographers left, so did the staff. Hard to run a place when your boss says there is no money and allegedly comes from England on Concorde or via the Queen Elisabeth.

Neither Wireimage, nor Getty invented low, discount pricing. It has always been around. Red carpet is a numbers and speed game, it is hardly based on quality. Refusing that the US office send images directly to agents across the world, but rather through the London office, made most material completely obsolete by the time they reach their final destination. Not letting the US office post images on the website directly was also a huge mistake.

But all and all, thanks to an extremely dedicated staff and photographers, it worked. Today, it has been stopped. The owners are  older, tired and are pulling out of the huge USA market. To add insult to injury, as I am writing, all of the photographers have been asked to personally pull out all their images before the final shut down. If not, all will be thrown in the trash. What a way to end a relationship !! Thank you and goodbye. Please pick up your trash on your way out.

For photographers based in New York, the task, while painful, is still accessible. But those living in Miami or LA, what are they supposed to do ? Fly in to New York to rescue their images ? There has been no offers from the LFI management to help. Rather, it has been only threats.

It is a sad ending to what could have been a success story. Because of personal greed, selfishness, acute ego and extremely poor management.

To those who gave their heart, time and passion to LFI USA, the photo industry salutes you. To the photographers who continuously believed in LFI usa and its staff, thank you. You can all proudly move on with your life with the twinkle of success in your eyes. It wasn’t you, it wasn’t Getty, no the recession or the weather. It was, it is, the owners who failed. Not you.

Posted in celebrity, magazine, newspaper, editorial, getty, corbis, Microstock | Print | 1 Comment »

A little insight

February 21, 2008 by pmelcher.

For those who always to know more about Mediastorm and couldn’t quite say it, blog rocketboom.com offers a small two part video you could watch here.

or part one here:

and part 2 here :
If that format doesn’t work for you, you can view more option here

Posted in mediastorm, multimedia, photojournalism, editorial, news | Print | No Comments »

Look ! I have a banana in my ear

February 20, 2008 by pmelcher.

London, UK, Feb. 20, 2008. Designers, advertising creatives, web designers and editorial picture editors can now get top quality images to bring their creative work to life for ‘whatever they want to pay’ through innovative new UK-based online stock image library www.moodboard.com

Moodboard, the company with the cool website that invented the 20% , 10 year, world exclusive representation for pro photographers is revolutionizing, yet again, the photo industry. In a typical, “mm, what can I do that no else had done before so maybe we can sell some images” moment, they just launched a “price your own image” scheme.

Copying a move by the music industry, the band Radiohead put their album online and asked people to pay whatever price they wanted, Moodboard goes full speed into the same path. Difference is, Radiohead has a following of dedicated fans, Moodboard, has not.

But what the hell, if you can’t compete with microstock, why not throw everything to the wind and see if something, if anything, will fly. In these complicated times, where the industry is redefining itself, it is certainly not a surprising move. After all, if you cannot compete with the quality of your images, why not compete with the price ? Since no one from the outside can monitor what people are paying, you can bloody hell say what you want. Soon, mark my words, you will have another press release claiming that someone decided to pay $10,000 for an image on Moodboard Unleashed dot com.

It is the kind of event that will remain in history as “what where they thinking?”.

When will this industry finally understand that it is not only the price that has made the microstock successful, but the content. A guy designing a website for a dentist can actually find an image of a toothbrush. If you have the right content, people will come and purchase images, mr Moodboard. No need to beg and ask for charity : ” here, take one of our images and please give what you can so we can have some supper tonight”. It is basic economics.

Regardless, it is one for the books and a very interesting experiment. Even with a wholly owned photo shoot, it will take a while to get the investment back. Why not give these images to 4 of 5 micro/midstock agency, instead of blocking a whole server for this ? Surely, my dear, they cannot believe they will make more income with this ?

Or is it just a simple, basic, low grounding marketing plow to catch the headlines and conversations of every image buyer worldwide. A trap, maybe ? a media coup ? One that Photo news website might easy fall into ?

mmm… more tea my dear ?

Posted in Search, Midstock, license, No sense, keyword, Royalty free, transaction, finance, Microstock | Print | No Comments »

The Philosopher’s Stone

February 14, 2008 by pmelcher.

All other parameters set aside, it has always been the industry standard to price an image based on how many people would see it. And for a very good reason: If it was used in a lesser publication, in a small format, there was more chance that it it would be used again, by someone else, in another media. On the other hand, if it was used worldwide, in many media, it would fetch a “buy out” price.

Example of an advertising based image from GumGum and X17
We rely on circulation, printing run and languages to estimate the amount of potential views. Than came the internet. At first, the initial website where “tests” and minimum funding. As friendly as this industry could be, images where licensed for a flat fee, at an extremely generous price. Granted, the traffic was small and the promises big.

Agencies and photographers where eager to help and see this new market grow. $125 for a home page and $50/$75 for “inside” quickly became an editorial standard price as we all struggled to make it work. For commercial usage, price where, and are, in the thousand of dollar. Because they are licensed, they are even given a time frame, although the biggest majority of websites never pull out images but archive them. The images thus become licensed in perpetuity. Granted, harder to find and see, but still there.

Websites came and website went. New one appeared, funded by obscene amount of dollars, while other crashed and burned in a masquerade of quirky business plans. A lot didn’t even bother hiring real photo editors and relied on web designers or producer with no experience in photography, to license images. Prices remained the same.

For two main reasons : The promise of massive usage and the impossibility to seriously track usage. Websites claimed that even if they were paying a small fee for usage, they would be using a lot of images, thus making the volume compensate for the low payment. Appealing for photo agencies, not so for photographers. Some companies, like Wireimage, even created baffling subscription plan ($1000 a month  with eonline.com for all you can eat images) just to gain market shares and kick the competition out of their space . The gold mine turned into a mine of chalk.

Then came the RF and microstock guys. Their model was to not even bother negotiating anything. Here is our images, here is the price, do whatever you want with the image. Perfect for the internet space and its web designer who could get images at 3 :00 AM and not have to justify its usage. Image tracking companies like Picscout or Digimarc just made the management of RM on the internet even worse for users and pushed then even more into using RF images. But it didn’t help the editorial world. Long gone was the accepted model of the more an image is seen, the more its price should be higher, exactly like advertising.

Finally, two guys from the West coast of America, not from the industry, looked at this and said : “this is insane !!!”. In a medium that can finally track exactly how many people actually see an photo, images are still priced with a scheme right out of the medieval ages. Ads are being sold on how many hits they receive, why not images ?

They launched GumGum, which became live today, first offering X17 content and with many more to come. You set your price for how much an image is worth per views ( or thousand of views) and there you go. The bigger the site, the more they pay. If no one visits the site, the image is free. You can also put a cap and decide you want to license an image for 1 million views. Once you reach that target, the image ads an advertisement. Thus you can archive the image while the owner still gets revenue.

This is the most refreshing and revolutionary idea to hit this industry in decades. It is not going to be an easy sell to publishers who had a sweet deal up to now, but it is the future of licensing online. It is fair, simple and automated. easy to understand, to use and to apply. No need for Plus coalition complex interaction and implementation, no need to add any salespeople, no need for drop down head banging menus and complex calculation. No need to ever figure out the pricing. The usage figures out the pricing. Its the ease of RF applied to RM. The Philosopher’s Stone.

More on Gumgum here .

Posted in celebrity, copyright, magazine, Plus, gumgum, license, web 2.0, news, Royalty free, law, editorial, finance, Microstock | Print | No Comments »

I don’t know why ?

February 13, 2008 by pmelcher.

Every time I see this commercial, I think about the photo industry :

Posted in web 2.0, keyword, Midstock, copyright, prosumer, flickr, Royalty free, getty, editorial, Microstock | Print | No Comments »

The next step

February 12, 2008 by pmelcher.

The most World Press awards this year and not a buyer. Shows that photojournalism doesn’t pay. It is quite ironic that the company that has grown through so many purchase cannot sell itself. But then again, it never said it wanted to. Johnathan Klein and the official voices of Getty Images never confirmed the selling option, referring only to a search for strategic partnership.

One of my readers, who would much prefer to remain anonymous, brought up an interesting theory. The upper echelon of management at Getty wanted this to fail. The false real leak to the New York Time ( sorry, but I have a hard time believing they have a staffer investigating Getty Images day in day out) helped fuel the news to shareholders. The stock is low, thus we will try to grant you a nice offering by putting the giant on the block. It certainly helped bounced the stock a little bit, albeit not for too long. What next ? well if no one wants to buy the company, we will, says the management. It is called a MBO, and it allows to take the leaking company private. With this failed sale, the company is evaluated and the shareholders, depressed. The cost to purchase the company becomes affordable since everyone would love to get rid of its useless shares.

Klein and co. had a good ride on public money. It allowed them to pay for the start up cost and alleviate debts. If they sold, which I am positive they did, they even made a nice nest egg. But now, it is becoming a burden. Not only for the bad press it is generating, but also for the huge amount of paperwork that it requires to keep. Finally, it makes management difficult as you have to keep an eye on Wall Street every time you want to make a decision.

Time to get rid of the public’s money . Time to regain control of the ship and become bold and aggressive again. Time to close the book on the financial that are too embarrassingly visible and charge full speed ahead.

I find this theory interesting and , like many others in this industry, cannot wait to see the next step.

Posted in Search, license, photojournalism, wire service, law, transaction, getty | Print | 3 Comments »