Posts Tagged ‘micro royalties’

OK, never let it be said we don’t listen to you.

It would appear that a small majority of our members are threatening to leave fotoLibra if we pay them more money.

Blimey, I really didn’t make myself at all clear in my last blog, did I?  I blame the flu.

I think people saw the word MICRO and just stopped reading. Or understanding.

This proposal has nothing whatsoever to do with cash flow. It is merely a new concept to make image buying more attractive. It may not catch on. It may even not work. But the day we stop searching for new ideas and new concepts will be the day fotoLibra subsides into being just another everyday picture library.

Here’s our reasoning. Please note, this is merely for illustrative purposes only, and none of these figures are real.

With MICROSTOCK, photographers are lucky to make 20¢ for each image sold. So they have to sell 250 images before they earn a penny because payouts aren’t triggered till they accumulate $50. And all they will ever earn from that picture sale is 20¢ per picture sold.

But with fotoLibra’s MICRO ROYALTIES proposal, photographers will be paid a portion of the net sales receipts of the book per picture used, just like an author — except of course the portion will be smaller.

They will be paid after each royalty statement, which is usually every 6 months. fotoLibra payments are triggered when the member has accumulated £30 / $50 worth of sales.

The percentage share of the Micro Royalty will be based on fotoLibra’s existing average picture sale, which is $80. We pay photographers 50% (Platinum, 60%).

On our standard licensing model, the fotoLibra photographer receives an average flat payment of $40 when a sale is made.

Under the Micro Royalty system, the idea is that if a book retails at $10 and sells 10,000 copies in 6 months, the fotoLibra photographer will receive a micro royalty of $40 — the same as our standard licensing model.

When / if the book sells 20,000 copies, the fotoLibra photographer will receive a micro royalty of $80.

When / if the book sells 100,000 copies, the fotoLibra photographer will receive a micro royalty of $400.

When / if the book sells a million copies, the fotoLibra photographer will receive a micro royalty of $4,000. Per picture sold.

On our current licensing model, if the book sells a million copies,the fotoLibra photographer receives $40.

I hope this makes it clearer. It seems like fair play to us.

Micro Royalties

January 11th, 2011

We don’t need to tell you it’s a tough world out there economically, especially in the picture business. People are buying fewer photographs and paying less for them.

There’s an American photographer whose work I admire enormously. His name is Mike Yamashita and he shoots mainly for National Geographic Magazine. I met him a few years ago at the Frankfurt Book Fair when they built a large gallery showcasing his photographs in one of the halls at the fair. He had traced the footsteps of the thirteenth century Venetian explorer/ trader Marco Polo, documenting his journeys in a stunning series of images.

Great photographer through he is, Yamashita is not the most Pollyanna optimist you’re likely to meet. His glass is rather more than half empty. For some time he has been pronouncing with gloomy relish that “Stock is dead.”

Well, this is simply not true. The proclamation may have been triggered by three of his picture agencies closing their doors over the past year. What is true is that the old established market has been well and truly disrupted. Photo sales used to be the preserve of an elite few, many specialising in one field — jazz, aviation, cricket, ethnic populations — and because communication was twentieth century in its slowness, and photographs existed as physical, analogue objects, they had a scarcity value of their own.

Now of course — and fotoLibra is very much responsible for this shift — anyone can take and sell a photograph. Just before Christmas we were asked for photographs of specific situations in Kazakhstan. Twenty years ago this would have involved the buyer telephoning a series of picture libraries with the request. Each picture librarian would know, firstly, if they had photographs of Kazakhstan or if the buyer was barking up the wrong tree. If they did have pictures, they would charge a search fee to look through the files to see if there were any images that fitted the bill. If there were, they would be despatched in sealed clear envelopes to the client. If the seal was broken, the client would be deemed to have used the image, and would be charged accordingly. If the images were lost, which happened frequently, it would be simultaneously a disaster and a bonanza for the photographer — £400 for each lost transparency, for example.

Today fotoLibra has a number of photographers living in Kazakhstan. We can contact them instantly via email at no cost. One of them is an airline pilot by trade and a keen (and good) amateur photographer by inclination. He is on the spot, and can take precisely what the client wants. We supply the images to the client within the unfeasibly short deadline of 48 hours he has given us. There’s no special thanks — it’s what the client expects. Twenty years ago this would have been completely and utterly impossible.

We break our backs to provide an unsurpassed client service. It’s expected. But it’s still really hard to make a sale.

So we have devised a scheme to make more money for our photographers, with less outlay for our clients at the same time. Impossible? Having your cake and eating it? Barking at the moon? We don’t think so.

We want to make dealing with fotoLibra as easy, as painless and as simple as possible. But Simple and Easy are among the most difficult things to achieve well. Look at the simple Google interface. You don’t need to learn how to work it — it just works. That’s because a large fortune has been spent in making it simple. Underneath it’s very, very complex, like fotoLibra. If you buy a picture from fotoLibra, four simple choices take you to the price. Underneath that is a matrix of 1,447 price points. But you never have to see that. We’ve made it simple and easy.

And our new Micro Royalties initiative follows the same thought process. We want to sell more pictures. We want to pay our photographers more money. How do we solve this? We would move more images if we gave them away. But that wouldn’t benefit us or our members. How about this — instead of selling image rights for a flat fee, how about hire purchase? Deferred payment? Pay nothing now, and the rest over four years? That’s how they sell furniture. Why should pictures be different?

Here’s the plan. We can write a routine so that instead of publishers being billed for image usage in one great lump on publication, they are billed micro royalties six months after publication, when royalties become due. The amounts may be small, but they will come due again every six months. The image providers share in the success of a book. If it sells and sells, the photographer will earn much more for his photograph than if a straight sale had been made.

Of course our normal way of business will be dominating our trading for years to come. This Micro Royalties proposal is simply an alternative option, it’s only designed for book publishers which are one section of a picture library’s business. We don’t expect the take-up to be enormous, until people have tried it and found that it works for them. Maybe it won’t work for them at all. We’ve subjected the plan to all the various SWAT analyses, and we have pinpointed just one downside — if a book doesn’t achieve the publisher’s expected sales, then the photographer’s income will suffer. We’ll make adjustments to the percentages in the next sale to that publisher to allow for that. But this scheme is configured to appeal to the rapidly expanding, untested and as yet illustration-light eBook market, and the joy of eBooks from a publisher and author’s point of view is that they never go out of print. The drip may be small, but it is constant.

Picture libraries invented the Royalty Free image. They created Microstock. Neither of these plans favoured the photographer particularly — they were skewed in favour of the buyer. The creator of the image was outside the loop, the unwanted presence, the cow in the milk bar, the author at the book fair. This new fotoLibra plan rewards the photographer for his part in the success of a publication. If the writer gets royalties, why not the illustrator? The labourer is worthy of his hire.

No publisher has yet taken us up on this proposal, so we will be running a couple of experiments this year to test how easy this is to implement. Then we can tell them about it and demonstrate how it works.

We wish you a happy and profitable New Year.