The Last Salvo

March 5, 2011 by pmelcher.

Is it the end of microstock and royalty free ? No, not because of decline in usage but rather as a result of powerful litigation. A french organization certainly thinks so.

The Union des Photographes Professionels , UPP (Union of professional photographers) just recently held a round table 0n the damages of royalty free, it’s damages to the photographic trade and what they intend to do about it.

We can skip the part where they talk about royalty free and it’s damages to the industry as we have all heard it before and there nothing new here. Rather, the panel gets interesting when the lawyer, Maitre Jean Vincent speaks. He explains that after months, years of careful study, they have found various aspect of the law that they can use to challenge royalty free. A couple we found noteworthy was deceptive advertising and pricing. let’s review:

French law designated as void  any sale of goods, product and services that is priced at infinitesimal price.  For example, if one was to purchase one image on Istockphoto for let’s say $5 and use this image for a book, a magazine, an ad campaign, a brochure, on a TV set, in a Movie set, over and over again for 70 years ( life of a copyright), it would amount for less than a cent per usage. Under this law, that pricing is so low that it would not constitute a sale. Thus become illegal. Furthermore, even a third party, not involve in the transaction, can bring this sale to court and have it voided. Nothing in France can be sold for a derisory price, even if both parties accept. Anyone can condemn such a sale, which is exactly what UPP intends to do against the microstock agencies licensing in France.

The second is deceptive advertising. Royalty free, in French, is translated by “libre de droits”, brutally translated to “Free of any kind of rights”. Maitre Jean Vincent explains that definition is deceptive and not true : Royalty free images are neither rights free nor free of royalties. Again, grounds for a legal action.

The organization is  seriously involved in bringing a couple of RF companies - Fotolia seems their primary target - to court in order to create legal precedent. That would facilitate the process for the rest.

Those outside of France might be smiling right now thinking this is more kakaboula crap coming out of the country of whiners. Not so fast.

Remenber that story, Save the Passport photo ? Well, they just have won. President Sarkozy has just agreed to remove all remaining free passport photo machines located in city halls across France ( about 1,000). This will force people to get their passport pictures to be taken by approved professionals.

France is not a consumer oriented economy. Rather, it is strongly entrenched in a long tradition of protecting trades, regardless of their public utility. Thus, there is a good chance that the UPP might win their legal challenge and force Royalty Free companies ( microstock included) to readjust their commercial approach ( raising prices, adjust their license agreements). Some might even close, not seeing any profitability in the new environment.

Could this spread out in other countries ? The challenge could be elevated to become a European issue and, depending on the politics of the time, certainly pass. However, it would take a long time and allow RF companies to find new ways to market themselves. The US ? Doubtful, as this Adam Smith based economy revers its consumers as semi-gods and would never impair in their ability to get “a good deal”

Nevertheless, this is a new development in what seemed the finished war between RF and RM. It could also be the last salvo.

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