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Collective administration of media photographers' copyright rights

By Richard Weisgrau

Copyright 2000 ASMP
Licensing Intellectual Property In The Digital Age
New York County Lawyers' Association
New York, NY
March 10, 2000
PDF version
clpaper.pdf / 39K

The collective administration of copyright rights is well established in some segments of the copyright industries, particularly music and art, but it is a relatively new means of transacting business in the media photography business. It is emerging as an alternative to an agency system in which a variety of companies represent a number of photographers. While some are fully aware of the difference between collective administration systems and this existing agency system's approach to licensing rights, others do not recognize the seemingly imperceptible, but quint essential, difference: control of the license fee. This control is not evident on the surface. In fact, it is of little consequence to anyone except the photographer and the existing agencies. For media photographers the issues of increasing concern are the control of the value, alteration and subsequent nature of the use of images. Collective administration offers this control.

In decades past, beginning in the 1940's, the licensing of photography was relatively uncomplicated. Photographers licensed the original use of their images to either commissioning parties or other first time users, and they licensed any remaining rights in their images to additional users. Most photographers were and are sole proprietors, operating without the desire or regular need for staff support. Existing to create images, a majority of photographers were and are not motivated to build enterprises to serve more than their basic business needs. However, limiting oneself to such basic enterprise is to cut off sources of additional revenues which can flow from the licensing of residual rights of unpublished and previously published works. As the use of photography in publications flourished during the era of the picture magazines, assignments to produce the photographic content grew astronomically. The worldwide demand for photojournalism seemed insatiable. It did not take long for enterprising individuals to recognize this demand and develop businesses to satisfy it. The publishing world began to see names like Black Star, Magnum, Globe, PIC, FPG, and others cropping up. These agencies could provide photographers for assignment, license use of the images from those assignments, and they could license any residual rights in those images. Photographers were free to make photographs since their agents were taking care of business.

Over the years, the marketplace for images has grown larger and more diverse. Most of the great picture magazines are gone. The few that remain no longer employ photography as they did in the heyday of photojournalism. Television brought the news, documentaries and features with sound and motion into the home. The cost of distributing the printed page has escalated. The public's taste for images has changed with the times. The cost of producing fine photography has increased. Yet, the demand for images grows and grows. Whether used in consumer, trade or corporate publications as informative content or in advertising and promotional media as persuasive content, the demand for images increases every year. This demand for images is increased by the use of images on the Internet, on intranets that connect the parts of institutions and companies, and by extranets that are beginning to connect these intranets to one another. In the decades to come, the demand for images will grow in direct proportion to the development of the global information infrastructure. What must grow with that infrastructure are systems for licensing the use of images. This need has not gone unrecognized by corporate America. Corbis, Getty Communications, Time Warner and other large corporations have moved aggressively to secure market position in this emerging information marketplace. The followers of developments in the marketplace in which these companies operate know well that dominance is a goal, not a dream of these major players.

The domination goal cannot be achieved without several things:

1. representation of a substantial volume of content
2. control of the fee to use the content
3. control of access to the content.

This dream of domination is not a new one. In 1989, before the merger with Warner, Time Inc. printed the following statement in its annual report: "In the future the winners in the entertainment industry will be those that control the copyrights and the means of distribution." The word "control" is worthy of comment. Notice that the word own was not used. This was not a mistake of editing or judgment. "Control" was a carefully chosen word. To illustrate, let's look at the Time Inc. Picture Library, which houses more than eighteen million photographic images. The copyrights to about one-third of the collection are owned by Time Inc. under the Work For Hire Doctrine or by contractual assignment from the photographers. Time Inc. has been licensing images from the collection for decades. It is licensing these images by all means possible, most recently on the Internet. It has secured the right to license many images, in which copyright is vested in a photographer, by contract. Under that contract, Time Inc. has sole control of the licensing fees. The contracts offered to photographers by Corbis and Getty Communications and by the companies held by them also provide control of licensing fees to the agent. These companies insist that such control is necessary to allow them to compete in the marketplace. Some contracts are non-exclusive. Others have some degree of exclusivity. Frequently, pseudo-exclusivity is a product of circumstance, since many photographers have no desire to market their own images and others do not care to deal with the problems of having more than one agent or vendor licensing residual rights. The common contractual factor is control of the fees. The common condition, regardless of contractual terms, is control of the content. All such agencies, not just the giants mentioned above, insist on the unrestricted right to license the photographer's images in any way and for any purpose. To be represented by these giants the photographer must surrender control. The photographer effectively becomes a principal without any control over the acts of the agent.

'Til recently, this system has gone unchallenged. In fact, the system has made money for photographers. Some photographers actually have abandoned the business of assignment photography to concentrate on producing independent work for distribution by agents. This paper is not a condemnation of such action or of the practices of the agencies. Instead, it is intended to describe the vision of new model for licensing copyright rights of photographers. This is a model in which the photographer, as copyright proprietor, actually retains and exercises the substantial control allowed by virtue of that ownership. This is a collective administration model, which provides for the licensing of copyright rights for both initial publication and republication rights of commissioned photography and for the licensing of the residual rights in non-commissioned photography.

This model, like any, is built to meet certain needs and within certain specifications dictated by practices of the trade with the industry. To have a thorough understanding of the model, one must understand the terminology to be employed. The definitions that follow are either current terms of art or have been fashioned to provide terminology where none has developed due to minimal experience of the trade.

Collective licensing

a system of cooperative administration of copyright rights with non-cooperative pricing, in which rights holders combine to share the burden of administration while retaining the freedom to establish the licensing fees for the use of their works.

Primary rights

copyright rights of higher value by virtue of use, e.g., an advertising or editorial illustration appearing in consumer, trade or educational media.

Secondary rights

copyright rights of lower value by virtue of use, e.g., a photocopy or "quick" printed materials usually appearing in very small circulation or lesser media.

Image file:

an image or duplicate of same, regardless of the media in which captured.

License:

a permission to use certain of the copyright rights in an image.

First generation publication right:

the right to reproduce an image from an image file delivered to the user (licensee) by the provider (licenser), e.g., a photograph in a magazine or in a web site made from an image file delivered by the photographer or agency.

Second generation right:

the right to reproduce an image captured by copying by any means from a first generation licensed application, e.g., a copy of a photograph acquired by scanning a printed page or downloading a digital file from an electronic application

Reuse right:

the right to use a photograph published under a prior license for subsequent additional use, such as the republication of a photograph in a subsequent press run of a brochure, or in another application such as product packaging.

Some of these definitions, particularly those of primary and secondary rights, are debatable, as the terms have evolved to have different meaning depending on industry and segment therein and even from country to country. The terms "Primary right" and "Secondary right" have become the most problematic. Within the copyright environment, secondary has been used to describe rights to use content in both applications of lower quality and lower value. For example, the photocopying of text has been seen as secondary, while the printing of text has been seen as primary. In some European countries, the use of a photograph in print media is considered primary, while the use of the same image on cable television is considered secondary. Media photographers do not care to make such distinctions. The difference between a photograph and a digital copy of same is so imperceptible as to be meaningless in regard to the use of the image. Digital technology is eliminating the quality standard for determining whether a use is primary of secondary. The gradual disappearance of the quality distinction is coupled with another reason to abandon the words primary and secondary. The practice of determining value based upon size of audience in addition to type of media makes the word secondary useless. There is no reason to consider a cable TV use as secondary to a printed publication use. The more relevant factors for determining value are the placement and size of the image and the size of the audience to which it will be published. In short, to media photographers, use is use, and use is qualifiable and quantifiable, so fee is based on the analysis of such factors and not on broadband labeling.

Understanding the collective licensing model to be described herein requires a minimal understanding of the origin of most works to be licensed by such systems. Most professional photography is created under one of three circumstances. The most frequent is work commissioned by a client requiring certain rights to use for a negotiated fee and expenses. Photographers also engage in projects of their own with the hope of finding a market for the work thereafter. Probably the least frequent, but sometimes the most valuable, is the unplanned photograph of an unexpected situation. Regardless of origin of the work, its producers share a common dependency. To provide revenue to the photographer, the work has to enter the marketplace, be licensed and fees have to be collected. This dependency means that the individual photographer can be exploited by commissioning parties, agents and vendors. By the nature of the industry, even the smallest of clients, agents and vendors is a giant when compared in economic strength with the photographer. In the media photography food chain, Time, IBM, Corbis and Getty Communications are the whales. Photographers are the plankton. There is no balance of power, at least not yet.

Fifty years ago, media photographers banded together in an effort to bargain collectively for their rights and minimum fees. There is a complex history of that effort, which, being removed from the immediate context, will not be reported. Suffice it to say that antitrust concerns, FTC and Justice Department inquiries, denied petitions to the National Labor Relations Board, and Congress' unwillingness to vest such power in independent creators' hands, have simply forced photographers to seek other and legal means to retain control over and to protect the value of their work. The weakness of the individual can only be compensated for by collective action. With collective bargaining beyond reach, collective licensing is the only alternative with any prospect for improving the media photographer's situation.

In 1989, motivated by the previously quoted statement of Time Inc. regarding control of access and copyrights, ASMP - The American Society of Media Photographers, a business association of publication photographers with about 5000 members, began a process of investigating and evaluating the future business prospects for media photographers and the best means for ASMP to fulfill its purpose "to protect and promote" those interests. The study was completed in 1990, and the final report to the ASMP Board of Directors was adopted as the basis for strategic planning of ASMP's future efforts. The report recognized some certainties. These included the facts that within ten to fifteen years, the digital distribution of photography from provider to user would dominate the business, and that these digital systems owners would demand total control over content. It also concluded that such digital systems technology would be beyond the interest and means of most photographers, creating a reliance on systems owned by others, almost certainly large corporations. The perceived end result was that once control of the content and its value was in the hands of these large corporations, the rewards from professional publication photography would be diminished to a point where the economic benefit did not warrant the risk and hard work associated with success as a media photographer. Finally, ASMP projected that these corporations would end up owning the copyrights to many photographs, which would either be purchased outright or created as work for hire. It appeared that the incentive to be an independent, creative media photographer was threatened.

Since then, there is substantial evidence that ASMP's projections were and continue to be correct. Certain large corporations, calling themselves the "agents" of some photographers, have begun to sell royalty free images in direct competition to the royalty required images. Some have actually hired photographers to produce photography to which the corporation will own all rights. This work is marketed along side the work of the independent photographers represented by the agencies. In one case, the agencies make 50 to 70 percent of the license fee and in the other they make 100%. The idea of an agency competing with its principals seemed far-fetched a dozen years ago. It has become a reality today. The photographers under contract with such agencies have had little alternative in the past. However, that is changing. Seeing the need for alternatives, ASMP set out to in 1991 to establish one. Research provided the only feasible alternative to the status quo. Collective action was the only answer. If photographers could work collectively, it might be possible for them to leverage their effort into opportunity.

ASMP turned to the music industry as an example of what could be achieved. With the good advice and expertise of ASCAP, BMI and the Harry Fox Agency, ASMP developed an approach to establishing collective licensing for photographers. While we had hoped that one of these three entities might have wanted to expand into licensing right to use photography, that dream was quickly dispelled, as none was ready to pioneer this effort in an unrelated business. Having exhausted every effort to find an existing entity to support such an effort, in 1993, ASMP created its own licensing entity. MP(c)A - Media Photographers Copyright Agency was incorporated as a for profit corporation. Solely owned by ASMP, it emulated the relationship between the National Music Publishers Association and its licensing agency, the Harry Fox Agency. The MP(c)A set about the difficult task of building a start up enterprise. Capital was raised. ASMP members were recruited and were offered contracts that provided for maximum control to be left in the hands of the photographer.

Recently, the corporation was liquidated, and its operations were folded directly into the ASMP, as collective licensing was given top strategic priority by the Society. ASMP has transferred its educational mission to the ASMP Foundation, which it recently chartered. ASMP is concentrating on information services and collective licensing as its central missions to fulfill its advocacy purpose. This action was made easier as a direct result of a beneficial alliance formed the ASMP and CCC, The Copyright Clearance Center, the nation's largest reproduction rights organization. Uniquely, the CCC had been ruled out as a possible ally in prior years, but due to certain policy and management changes and new strategic directions, it became a near perfect ally. CCC was already heavily engaged in the business of collective administration of copyright rights. It had an existing business with twenty years of history, and it was preparing to take its first steps in diversifying from secondary rights administration only by adding the administration of primary rights. CCC had or was developing the systems, so MP(c)A, which represented content owners whose work was well suited for primary rights licensing, did not have to build its own systems. When the alliance was first agreed to, the MPCA represented about 400 ASMP photographers. Today, the MPCA program of ASMP represents about 650, and the number grows daily. About 70% of these photographers have placed images into the CCC's online marketing and licensing system, MIRA. With approximately 70,000 images online, MIRA is still an infant in a world ruled by giants, but growth is inevitable, as more and more photographers become disillusioned with the terms of working with the giants, and as the giants demonstrate that their quest for dominance leaves little room to protect the value of photographers' images.

The ASMP, recognizing how long it took to establish flourishing collective rights administration in the music business, is nothing less than pleased that in a few short years it has helped established viable collective administration of media photographers' rights. With nothing less than a zealot's fervor, ASMP is continuing its fifty-five year history of protecting and promoting the interests of media photographers, by making the establishment of collective licensing systems for photographers its highest priority. The battle for control is not ending. It is just beginning. ASMP has strategic plans to introduce collective licensing into four major areas. These are:

• Licensing of residual publication rights in existing photography.
• Licensing of rights to reuse previously licensed photography.
• Licensing of rights to make copies of published photography.
• Licensing of publication rights to commissioned photography

Once these goals have been accomplished, the media photographer can concentrate on making images, while copyright rights to her or his works are administered by a collective from the moment of creation to the moment copyright protection expires. This cradle to grave approach will take years to implement, but it is the inevitable, and currently the only means of allowing media photographers to protect the value of their work in the marketplace.

• Licensing of residual publication rights in existing photography.

This program provides photographers with the opportunity to license their images collectively to a wide array of users via an Internet accessible service, named MIRA, operated by the CCC, Copyright Clearance Center. Photographers select photographs, which are then scanned at the photographers' expense. Scanned images, after being converted into a popular digital image format, are coupled to identifying text data and stored in a database. This database feeds an Internet server, and rights management software tracks everything from the photographers' prices to the final licensing details.

Each image in the system bears a unique identifier, e.g., MPCA0825A001. This number indicates that the image is covered under the MPCA contract (ASMP's licensing program); that its copyright owner is ASMP member #0825, and that it is image A001. This number can be used to identify the image forever. The numbers are assigned by software, and no number can be duplicated.

The images can be retrieved by a variety of search criteria at MIRA's Worldwide Web site. Any image retrieved can be licensed for a variety of uses. A fee for non-exclusive rights, based upon a variety of factors can be obtained online, as can be the license for use. Exclusive rights can only be obtained, where available, by direct contact with the service. The automated pricing, established by each photographer, does not extend to exclusive uses. Should a user wish a license that is beyond the scope of the automated system, the photographer is contacted to approve the transaction, including price. This system has already proven that the traditional agencies' stated need to control the price of content in their systems is unsupportable. The agencies mantra of need is supported by a claim that administration of hundreds of photographers' prices within the same system would cause chaos. Now proven untrue, the real reason for the control of prices becomes clear. The traditional agencies want control of fees so that they can price licenses to assure sales, regardless of the impact on the value of the photographers' works. In a 1999 survey of members who earn more $30,000 a year in revenues from residual rights, ASMP found that the photographers, when licensing their own work, received higher fees than their agents for the licenses of the same nature as those sold by their agents, and that their average sale was higher than that of their agents' average sale. This helps demonstrate that agents do not protect the value of their photographers' works. It is a further justification of the need for and example of the benefit to be derived from collective licensing.

• Licensing of rights to reuse previously licensed photography.

This program is not functional at the time of this writing. It is a system in development and in a very early beta test stage. The Eastman Kodak Company is working with ASMP to develop the system, and has committed to be its first user.

When an image is created at the request of a commissioning party, certain right are negotiated for a license fee plus production fees and expenses. At times, the commissioning party will want to secure additional rights for additional uses in the future (reuse). The commissioning party can be disadvantaged in any negotiation for these rights, since the photographer controls the rights to an image, which the user is committed to use. Consequently, in many cases, the commissioning party insists upon purchasing all rights in the initial transaction. This results in tensions in the business relationship and more rights being purchased, presumably at higher cost, than needed. Research has shown that many users demand use all rights transactions because there is no effective means to assure fair pricing in a future negotiation, and because there is no rights management service to track the rights to images granted and used. This absence of tracking capability also leads to defensive posturing by users who fear any mistake will make them a target of an infringement claim. This reuse system will eliminate both concerns.

The reuse licensing program requires that the commissioning party and the photographer subscribe to the service, while only the photographer must grant licensing authority to the service provider. The system is fully automated and will operate either as an Internet or intranet application.

The system is designed to employ the initial negotiated fee as a factor for use in determining the fee for a reuse. To do that, a complex process of gathering and evaluating pricing data was required. Through that process, the relationship of values of different types of usage was plotted. There is a percentage relationship among the fees charged for different types of licenses when pricing the value of residual rights, such as those licensed in the previously explained system. Deducing that relative values that are acceptable in one kind of licensing should be acceptable in another, those percentage relationships were installed in a database program (the calculator). Users and photographers will have copies of this calculator to evaluate these relationships as they negotiate.

When the fee for the license to use the image in the initial (commissioned) application is agreed, it is entered into a rights management database, along with pertinent data about the image and the transaction, including a digital copy of the image. At a later date, should the user wish to reuse the image in any manner, it accesses the rights management database and records the details of the desired new use. The calculator factors the fee-determining ratios and the original usage fee, generating the reuse fee. A license is then issued by the system, and the user is now permitted to use the image. The system invoices the user, collects the fee, and pays the photographer. A flat fee for service is deducted from the photographer's license fee, and the user is assessed a flat fee for the transaction. Flat fees are charged because the cost of a transaction is the same regardless of the size of the license fee.

The system will reduce the probability of suits for copyright infringement. When participating in the system, the photographer agrees not to file a suit for an unauthorized use by the participating user, but rather to rely upon the systems' determination of value in the event of the failure of a user to secure license for a reuse. In effect, participation in the system is seen as due diligence on the part of the user by the photographer who will forgive an omission, provided that the required fee is paid when such an omission is discovered.

• Licensing of rights to make copies of published photography.

Photographers' images are published in many applications and different media. Today's technology makes copying those images, while retaining high quality, a very easy task. The quality of a scanned image is close to the quality of the printed image of which the scan is made. The quality of a downloaded digital image file is identical to the copied file. Copying no longer means inferior quality. It is viable means of content acquisition. Anticipating the need to make licenses available for such copying and subsequent use, ASMP is fostering the development of automated licensing of such copying. This second generation licensing will be of growing importance in future years as scanner technology continues to improve, and as the Internet develops into an even greater communications tool.

Second generation licensing requires that images be published with an identifier that is readable by the prospective licensee. This identifier will be a number that identifies the photographer and the image. Any application containing the image would display information about how and where to receive a license to download or scan and use the image by providing the identifier and the details of the desired use. CCC has the technology and systems in place to license these rights. Adaptation of the MPCA reuse licensing system's rights management application, coupled with same pricing schematic MPCA developed for photographers working through the MIRA system, would allow ASMP to license these rights.

The success or failure of such a system is dependent upon the cooperation of publishers, which must be willing to display identifiers linked to images and contact data for licensing information. It is quite conceivable that this will result in a revenue sharing arrangement between photographers and print and electronic publishers. Technology makes strange bedfellows on the path of progress.

• Licensing of publication rights to assigned photography

Last to be described is the system that would actually be the beginning of a licensing chain in which the programs previously described would follow. Within ASMP, about ninety percent of members earn the major portion of their income from assignment photography. While most members engage in licensing existing (stock) photography, it provides only supplementary income. This fact clearly demonstrates the need for some collective administration of the rights to assigned work.

The fact that commissioned work is usually the object of some negotiation between the parties means that it cannot be automated until after a deal is agreed. This complicates any collective licensing attempt, since many photographers and clients want to maintain flexibility to meet each other's needs. Pricing photography is complicated, as the skill of the photographer, coupled with the complexity of the job, are subjective values. This is especially true in advertising and corporate photography. Editorial photography, on the other hand, fits a neater mold. Most publishers have an established fee structure for a set of rights, and most photographers accept it, since there is an ongoing process of evolving practices of the trade which has proven effective over the past four decades. The existence of these trade practices make editorial photography more suitable as a proving ground for collective licensing. While no system has been created or even designed at this point, in 1996, the ASMP's Board of Directors did create policy that would allow the incorporation of such an effort into ASMP's strategic plan, with subsequent operational planning and execution depending upon budget approvals. It is only a matter of time before ASMP acts on this aspect of collective licensing. It has chosen to work the chain backwards to take advantage of the more automatable processes of licensing the rights to existing images. The systems being developed for that licensing will make the task of implementing the more difficult assignment rights program easier.

In a collective licensing program for editorial assignment photography, the administrator would primarily exist to issue licenses, manage rights, collect fees, and distribute royalties. While it could recommend appropriate fees, the final decision on fees to be charged would be the photographers'. This is the difference between a collective licensing and a collective bargaining service. Terms and conditions governing the transaction, as previously mentioned, are usually governed by practices of the trade. Where they are not, the collective could employ publisher-specific contracts.

A collective licensing system would reduce the costs of all the parties involved. It would free the photographer and publisher of administrative burden, including rights management and excessive. A publisher could be invoiced once a month, with full accounting details on the invoice. The invoice would include all work performed and delivered within given period. The publisher would issue one check for the invoice. The collective would then distribute checks to individual photographers. In the process, each publisher would have access to a database of all the work it commissioned and accompanying rights. This could be an invaluable reference tool.

• Interlocking systems

Once these systems are individually completed and operational, they will be tied together. Collective administration of rights will be pervasive in the field of media photography. Photographers will have their rights administered from point of creation and throughout the useful life of the work. Photographs created on assignment will be available for automatic reuse by the client, and, if available for licensing remaining rights, photographs will automatically be entered into online marketing services for further distribution. Published assignment and stock images will be identifiable as to source of rights. Users of photography will be able to obtain licenses with automated ease. Photographers will be able to concentrate on creating images. Collective licensing will bring better profitability to user and provider. Collective licensing is the inevitable solution to administering media photographers' rights in the information age.

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