Dan Heller's Photography Business Blog Industry analysis from www.danheller.com

The photography world -- the business, the culture, the art, the politics, the technology.

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Saturday, July 25, 2009

Photography and Public Domain: Part 1

The term, "Public Domain" has been a recurring theme in the press these days, and the issue (and all it touches) is rather complex. And, as this article will illustrate, it can affect a great many in the realm of copyright and intellectual property, which by extension, has profound economic consequences.

As if the topic weren't complex enough, photography shakes things up even more because of its nature as being both an art form and a kind of "photocopy machine." Is a particular photo of another work merely a "copy", or is it a unique copyrightable work all its own?

That question is at the core of many disputes and misunderstandings, and depending on which side of the fence a given court judgment may go, it can establish precedents for how other copyright cases are judged.

Mix it all up and you get a Mentos-and-Diet-Coke effect in the flogosphere, where bloggers oversimplify positions, skew facts, misrepresent opponents, and pontificate their opinions to rally their core supporters.

Needless to say, there's a lot at stake. So, when reading articles about the matters, it's important to understand certain basic principles.

A recent case that's made it to the mainstream press illustrates how all this materializes: Britain's National Portrait Gallery (NPG) is threatening to sue Wikipedia for copyright infringement for not taking down 3,000 high-resolution photographs that Derrick Coetzee downloaded from the NPG website, and placed on Wikipedia to serve as head shots for important historical figures. The works of art are very old paintings, which are in the Public Domain. But the photos of the paintings are new, and, as the NPG claims, are copyrightable works.

The news made headlines, and the flogosphere took over. As a benign example, there's this quote in a UK photo blog supporting the NPG: "Owners of Public Domain images are in general under no obligation to put them on the web, and (they) have every right to charge a fee for supplying files, and to impose a suitable license on their use."

Another blogger added: I'm a British taxpayer and I'm delighted by all this. Don't we, the taxpayer, own the images?

First, no one owns works that are in the Public Domain. (By definition, the term means "not subject to copyright.") The authors' misunderstandings appear understandable--their statements assume that because the paintings are in the Public Domain, so are the photos. Or because the institution may be funded by the government, the photos are PD.

But neither assumption is true.

It'd be one thing if these blog comments were isolated. But, none of the photo blogs I've read fully address the central question of uniqueness. Instead, they use these similarly incorrect assumptions for a purpose: to suggest that photographers' photos could be stolen the same way, and therefore this event "harms photographers."

No one disputes that the paintings are in the public domain. It's the status of the photos that's in question. And you can't tie the two together quite so simply because there is a difference between a photo itself and what it's a picture of. A photo is a derivative work from the original, and it's true that it may not be distinct enough to have its own copyright status. But that in itself is not a threat. But it is the point of discussion. As far as copyright law is concerned, if it's unique enough, a photo could be protected by its own copyright status (so long as certain other conditions are met). If not, the photo is considered "identical" to the original work, in which case, it inherits the same copyright status -- whether that's its owner, or "the Public Domain."

What people should be addressing are these two questions: What constitutes originality? and How can this affect copyright more broadly?

Let's begin with a simple example: Say you took a photo of a hilly landscape; you own the copyright to it. Now let's say you licensed it to someone who then used Photoshop to add a car and a waterfall into the image. That person created a derivative work from your original photo. Under copyright law, he own the rights to his rendering of the photo, and he can do whatever he wants with it--provided it's permitted under the license terms you granted to him. (Most of the time, these terms indicate that he can publish it for his own use, but not grant the use of the photo to third parties.)

The pivotal point to consider here is that copyright does not transfer from original works to derivative works, or back again. Just as he has no right to redistribute his version work to others, you have no rights to redistribute his version of your photo either. This, even though you own the original photo. His photo is unique from yours and has its own copyright protection.

Now, let's consider "Public Domain" in exactly the same scenario: If the same guy used a photo that's in the Public Domain, he has still created a derivative work, just like before. And, like before, he owns the copyright to his newly created derivative work. That is, he controls the licensing rights to it, and consequently, can prevent others from either using it or relicensing it. If someone wanted to use his derivative work, they'd have to license it from him. Otherwise, it's copyright infringement.

By the same token, he has no claim to the original work just because he owns the copyright to his derivative work. That is, other people can still use (and redistribute) the original work (not his rendering).

In short, the two are solely independent--the status of one doesn't affect the status of the other.

Now let's put it into context of the NPG and Wikipedia case:
  1. The Paintings are in the Public Domain.
  2. The photos are derivative works.
  3. Wikipedia used the photos.
  4. Q: Did Wikipedia infringe?

You'd think that they did infringe because of how I set up all this: I suggested that the "derivative works" are unique from the originals, and therefore, separately copyrightable works. And, that's how misinformation gets disseminated, especially if a commentator has a particular bias he wants his readers to believe.

However, recall that there's still a factor of originality. The question before a court is whether the photos of the paintings are "distinct" from the original paintings. If so, then the photos may be copyrightable--hence, not in the Public Domain. (Wikipedia infringed.) If they are not distinct, they are considered the same as the original works, and are therefore in the public domain. (Wikipedia did not infringe.)

What's your view?

Many people think that because paintings are uniquely different art forms than photographs, each is uniquely different. But there's also the argument that photos can be merely "photocopies" of other works, which is not a form of originality.

Now consider this example:

In 2007, Getty Images created high-res scans of negatives of famous public domain photos, and then licensed those images in their stock library. When people started using those images without licensing them, Getty sued them for copyright infringement. Their claim is that, as part of the scanning process, they removed dust and scratches, thereby creating derivative works that would produce much better prints than the originals would. Therefore, Getty's scans are unique from the originals, making them separately copyrightable. Do you agree? Or are they the same as the originals, causing them to inherit their Public Domain status?

Needless to say, this story got a lot of attention in the flogosophere--meaning that most people ripped a new breathing hole into Getty. Now we're in the Mentos-and-Diet-Coke territory.

An example is in this article titled, "Getty Claiming Copyright to National Archives Images and Selling Them."

The bias is evident in the headline itself. Here, the commentators focus almost entirely on whether the original works are in the Public Domain, giving little credence or attention to the fact that Getty's edits could constitute "uniqueness." The article is also highly slanted by falsifying Getty's claim: it leads the reader to believe that Getty is claiming copyright to the images in the National Archives. But that's note true. Getty is only claiming that their scans and subsequent alterations are protectable derivative works. That is the question up for debate, and it's a legitimate one. It's entirely irrelevant that the original photos are Public Domain, other than to note that if the courts decide that the scans are not original enough, then they would inherit the status of the Public Domain works.

I'm not weighing in on how the courts would decide in such a case, though no one has yet to challenge their claim in court. I'm just observing that what should have been the topic of debate, wasn't. And as a consequence to the slanted portrayal of the company and an intentional perpetuation of misinformation, most photographers feel that Getty's actions are more than just unethical--it could happen to them. That is, if Getty gets away with this, and if Wikipedia gets away with that, then any photographers' images are next: that someone could make some kind of "frivolous photocopy" and then disseminate it without compensating the photographer.

This is nonsense, and such fears are based on false assumptions on two levels. First, both cases here involve "Public Domain" works, not works whose copyrights are still owned by the photographer. Second, the fallacy that a "photocopy" is easy to justify as a unique, protectable work--one in which an infringer can use to justify copyright infringement.

As the reader should have already learned from this article, even if a photo were deemed to be unique from the original, then it doesn't mean that it can be re-licensed or redistributed. It only means that the new work's restrictions are limited to those permitted by the owner of the original: if the original is in Public Domain, there is no owner, so the derivative work can be used for any purpose; but if it's owned by someone, that owner must explicitly grant usage terms to the licensee that created the derivative work. Unless you declared your own photos are in the public domain (which is not easily done, a topic I'll address in my next blog post), no one can just make derivative works of your photos and do what they like.

Determining whether a derivative work is unique is not easy to analyze, let alone decide. I dedicate almost an entire chapter to it in my book on model releases. In the section on Property Releases, I discuss the case of Bridgeman Art Library v. Corel Corp, which is probably most similar to the NPG v. Wikipedia event, and which illustrates why the analysis is not so cut and dry. The first paragraph on that page above summarizes the case in a manner that initially appears (to the casual reader) that it's a done decision:

On November 13, 1998, this Court granted defendant's motion for summary judgment dismissing plaintiff's copyright infringement claim on the alternative grounds that the allegedly infringed works -- color transparencies of paintings which themselves are in the public domain -- were not original and therefore not permissible subjects of valid copyright and, in any case, were not infringed. It applied United Kingdom law in determining whether plaintiff's transparencies were copyrightable. The Court noted, however, that it would have reached the same result under United States law.

Yet, subsequent events (described by the paragraphs that follow), show there is a great deal of debate on various matters that put the whole issue into question. The details of which are not relevant to this article.

The simple fact that so many in a position of knowledge can disagree so strongly is also reflective of the fact that many court decisions are often split, even among the judges who decide these cases. The reality is that drawing simple conclusions on such matters lead to incorrect decisions on matters of commerce and policy. And no one does themselves (or the industry) any good by focusing on matters unrelated to the pivotal questions at hand.

In Part 2, I will discuss the matter of Public Domain more directly, and why photography is the odd and unusual case, distinctly different from all other copyrightable art forms.

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Tuesday, July 21, 2009

Photo Agencies and The Stock Industry: a Matter of Proportion

In my blog post, "There are Lies, Damn Lies, and Statistics", a series of email replies inspired me to post a follow-up. I'll get to them at the end, but first, a recap:

In that article, I mentioned how a Shutterstock survey focused on a small, select group of traditional image buyers to gauge their purchase expectations over the next year. I went on to say that it is the result of surveys like this (and others) that most stock photo analysts draw the wrong conclusions about the nature of the broader stock photo marketplace, which itself leads to a trickle-down effect of misinformation throughout the industry. In this case, the Shutterstock survey lead many to conclude that the industry is growing. And this perpetuates another misperception that agencies represent the lion's share of sales and revenue, which itself leads to the misperception that making money in stock requires joining an agency.

Each misperception leads to another, and another, and another, until finally, the industry is full of chaos and confusion, myth, and suspicion.

For now, I want to clarify that, just because it's easy to see how most analysts misinterpret information, it doesn't necessarily mean that it's easy to know how to do it right.

A primary example of this can be found in a July 18 article in the New York Times business section, titled, A Matter of Opinion?. The issue is how credit rating agencies were giving high marks to the very companies that were ultimately responsible for the credit crisis that lead to our current economic meltdown. After facts were uncovered, many feel these credit agencies should have known all along that banks and other institutions were engaged in speculative and complex financial instruments that would lead to this.

And that's how I feel about those who cover the photography industry. The evidence is so overwhelming that the predominant view of the stock photo industry is so wrong, that it is flatly irresponsible of the press and analysts to perpetuate that view. It's also important to point out that this is not the company's fault. Their survey and their data is just fine -- their goal was to illustrate other points more german to their businesses. The problem rests entirely within the press and blogosophere who are inappropriately using that survey to support (and perpetuate) incorrect conclusions about the industry at large.

First and foremost: The stock photo industry does not revolve around stock photo agencies. Though there are no scientifically viable surveys that show the total size of the market -- and therefore, the proportion that agencies may represent -- there is a great deal of asymmetric information (indirect data gathered from independent sources) to support the premise that agencies' role is minimal.

I've written many articles that cite multiple data sources that suggest that most stock imagery is licensed on a peer-to-peer basis--directly from photographers. Even though many of these individuals do tiny amounts of licensing annually for themselves, it's their collective economic activity that has far more gravitational pull on the industry than the entirety of stock photo agencies combined. (They are what my books call the "dark matter" of the photo industry: you don't see them, but they are there, and they account for over 80% of the stock photo universe.)

Once taken into account in discussing and analyzing the nature of the stock photo industry, a great many assumptions and other factors are instantly called into question. For one, the effects of pricing and other actions taken by agencies. If, even for the sake of argument, one assumes they are not the center of the universe, but rather, involuntarily pulled by everyone else, how they are presented and covered would not just change industry perceptions, but it could have a trickle-up effect, putting more pressure on industry executives to make better, more economically viable decisions that lead to industry growth.

As for the stock agencies themselves, I have no qualms about how they conduct their businesses, per se. True, I think they leave a lot of money on the table with their pricing, and I think they miss out on a great deal of consumer opportunities, but I don't think this harms the market at all--again, they do not "set trends", they are inadvertent followers of larger forces. I also understand well that running a profitable business is difficult, and growth is often fraught with risk. The graveyard of companies that tried to migrate to a consumer-oriented business is crowded.

Nor do I have an issue with how they market themselves. There was absolutely nothing wrong with the Shutterstock survey that I alluded to in my prior article. Shutterstock's business is to sell stock imagery, and their survey happened to focus on a particular market segment that they felt was their primary buyer base. That this segment of buyers (narrow, though it may have been) happened to show certain behaviors that also happens to underscore Shutterstock's future prospects shows that Shutterstock has a bright future (at least for the short term).

Also, the PR agency that helped promote the message, Morton PR, was particularly honest, insightful and articulate, not just about the survey itself, but in its own recognition that the survey was not (and did not intend to be) reflective of the industry at large. Not every survey is designed for that purpose, and Morton was uncharacteristically open about this, as compared to other PR firms that have contacted me as representatives of other stock agencies.

I also happened to point out that iStockphoto also had a banner year, and is showing signs of improvement for next year as well. This fact being anecdotally supported by a comment from Lee Torrens at microstockdiaries.com on his own bump in sales, despite the fact that he hasn't increased his submissions to any stock agencies.

So, if that data isn't representative of the entire market, what kind of conclusions can we learn about industry trends? And what data do we use to learn this information?

In the spirit of setting expectations correctly, I can address these questions by proxy: my replies to the emails I get on this subject.

First, there's the most common question: "How does a photographer succeed at selling stock if not through agencies?"

Begin by dispensing of the premise that agencies are the de facto channel for stock photo purchases. You can (and should) sell directly yourself, irrespective if whether you also sell through agencies.

As an added note: I strongly discourage anyone from signing an "exclusive" arrangement with an agency that did not reciprocate by prepaying minimum royalties. After all, this is standard boilerplate contract language for book publishing. Why allow a stock photo agency better rights than a book publisher?

Once you take out the exclusivity clause, you can and should sell your images through any and all channels you can. Including--and especially--your own website.

Selling your own stock is easier now than it ever has. Many applications allow you to build your own stock site, that even the most technically squeamish can produce. It's beyond the scope of discussion to address that; I talk about it more in length in this article, which also happens to be in my book on building a photo career.

The barrier to success in stock photography is less technology as it is psychology. Most don't think it's possible (the "agency" fallacy), or they just don't want to put the time and resources into it. There's also a misperception of time: that sales should come right away. Or that they'd come sooner with an agency. No -- It takes time for your stock images to derive revenue, regardless of where they are for sale. Yes, the revenue curves are different between a personal site and an agency site, but "different" isn't necessarily better. After one year, you may get more revenue from an agency site than yours, but over five years, you're sure to get more from your own site. This is usually because you will charge more on your site (because buyers are more willing to pay higher prices--a factor that most agencies don't really understand yet), you will keep more of the revenues (in fact, all of your own revenues), and your own site will likely get more traffic to your pictures than the agency's site will.

The assumption that the agency is going to do better for you and every other contributor is naive. There's going to be an uneven distribution of traffic to contributors on agency sites, and there's a 90% chance you're going to be on the short-end of that stick.

Which leads to next question I get: "It just doesn't seem to me to be that smart to be in a situation where you give away 80 to 90% of your profit. I want to create something where I keep 80 to 90% of the profit."

Stock agencies get 90% of the profit because they're doing 90% of the work. If all you do is take pictures and upload them, then all you deserve is 10% (IMHO). The value of stock photography is not the photo. It's getting it sold. If you go to the effort of creating your own website, generating traffic, building a buyer base, then you too can earn 90% of the profit (the 10% you don't get goes into your cost of setting it all up). I talk about that in my two articles on stock agencies, here and here.

This next email question represents another misimpression about stock sales: "...discussions among a number of us who primarily do landscape, scenic, wildlife photography [...] lead us to think that there is no significant stock market for this type of work. What are your thoughts?"

Most stock photo sales are done in vast, wide, disparate and unstructured transactions around the world. There actually is a very big market for landscapes and scenics and wildlife photos, but there are also billions of such images from millions of photographers too. Even bad photos sell. The problem isn't that there isn't a market--it's getting noticed among the crowd. This leads to two points, one of which I've already made: getting noticed and ranked is a function of building your own personal site and personal presence on the internet.

The second point is that stock photography should not be regarded as a vehicle for generating lots of money with little work.

Stock photography touches many people as either a buyer or seller of a photo. So much so that it is so thinly distributed among people around the world, it's fool-hearty for an individual to approach it with high expectations.

So, what does all this say about selling stock photography as a form of personal income?

For so long as the industry remains chaotic and unmanaged by any central body, stock photography will also be unstructured. There will be little innovation that helps sort, rank and distribute photos based on merit--it'll remain as it is now: arbitrary. And just as you should not rely on buying lottery tickets to sustain an income, neither should you rely on on stock imagery when it is so highly subject to sales channels that are diffuse and arbitrary.

In this day and age, stock falls into Truism #4 of my list of The Five Truism about having a Photography Business, which I originally wrote in 1998. Truism #4 says Diversify Your Business. Only a very few who truly know and perfect the stock photo marketplace should do nothing but stock. For everyone else, you don't "succeed" at stock so much as you use your existing imagery from other sources to augment your income.

Most who sell stock -- even well -- do it as fun way to earn a bit more from their hobby or as a lifestyle business. That's how it was for me for well over ten years of my photo career. And as I am more into consulting now, it's that way for me again.

In closing, I will summarize by quoting my last blog:

Turning a blind eye to the rest of the stock photo universe affects decisions about where to put marketing dollars, where to do research into buyer behaviors, pricing, and business development. If it were generally accepted that the market were larger, agencies could form partnerships with other media licensing agents, social groups and legal networks that reach that larger market.

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