Thursday, September 10, 2009

Ten Questions for Frank Micelotta

Frank Micelotta ranks among the legends of the entertainment photography community. After founding ImageDirect and selling it to Getty Images in 2003, Micelotta served as their Director of Entertainment, before leaving to launch PictureGroup, along with another industry veteran, Paul Melcher. In the late hours of September 10th, hours after the launch was announced on Variety (Micelotta Forms PictureGroup), Micelotta took the time to answer our 10 Questions.

1. How will you compensate photographers at PictureGroup? In the past, Getty Images required a copyright transfer/work-for-hire in order to earn an assignment fee, otherwise the assignments generally were on spec. So is PictureGroup going to follow that model, or return to a model where photographers keep their rights, earn their percentage of resales, and earn an assignment fee, which is much more akin to an agent/photographer relationship?
Yeah, well, that’s exactly the point. I think that luckily for us, I think that about 90% of the assignment work we do – the photographer still gets royalties. They get a share of the assignment fee and they also get royalties when the image is licensed. I think that we are making it an attractive place for photographers to work and I think that we’ll attract some really quality photographers. We also have a lot of announcements we’ll make between now and the end of the year.
(Continued after the Jump)
2. Getty images has certainly changed since they acquired ImageDirect from you back in 2003. What two or three changes are the most pronounced (or, alternatively, bad), since you came on board?
I think that not all the changes are bad. I think that they certainly increased their coverage and focus on entertainment. When I joined the company, it was certainly sports and news and entertainment was given very little focus. I think they’ve paid more attention to entertainment because that is where the money is. Conversely, I think that they’ve driven the prices down because of the premium access subscriptions, which I think are just not a good thing, and I think you’ve taken the one part of the editorial market that was still healthy, and I think damaged it by really lowering prices significantly. I think the other problem is that – you know they did the acquisition of ImageDirect, and later on WireImage and FilmMagic – I think they just have too much content. Too much content, too many photographers, and I think that’s a problem. I think it’s a problem for clients not wanting to see that much stuff. I think it’s just a little bit overwhelming.
3. Many of the talented team of photographers you had brought to Getty, I am hearing from them, and they are saying that Getty was trying to force on them a work-for-hire contract, when the contract you had with them was much more fair, with reasonable pay rates and 60/40 or 50/50 revenue sharing. Was Getty doing this, and if so, how did you, and your photographers handle this?
In our previous company, we really didn’t do work-for-hire, unless it was something the client wanted, and was paying for. In our current company, in PictureGroup, it’s the same way. We’ll do work-for-hire, but in a case where the client is paying a premium for that and usually even if it is a work-for-hire we’ll get – we’ll maintain – the editorial rights, which I think is really nice. I think that Getty does do work-for-hire with the majority of their assignments, and that’s their take on where they need to be with the business now. You know, they have a much bigger business to support than I do, so I think that at PictureGroup we can be a little bit more fair to photographers and if the client is hiring us and then it’s not a work-for-hire I think we can just pass that along to our photographer and share the revenue on the assignment with them, and then share the licensing or royalties with them.
4. A contact of mine at a major womens' beauty products corporation shared with me that when they hire a photographer to come cover a red carpet event, or inside, for a few hours, they are paying between $5,000 and $6,000 to WireImage/Getty, yet the photo editors are telling the photographers they only have $200-$250 to pay, and all the rights (including copyright) are a part of that fee. Can you explain how Getty/et al thinks this is fair, and why any photographer would accept such a deal?
I don’t know what – to be honest – I don’t know that much about that part of their business, only because when I was at Getty and had my assignment work going through Getty, I booked everything with the clients myself. So I never really had interactions with people – the sales people – that were handling that stuff. I don’t really know. I’ve heard the same thing, and I think if it’s true, then the photographers don’t really know about it. You know, unfortunately, when I started at Getty, there was a revenue share on assignments of 65/35 I believe, and it was my understanding that that was always the way it was. I don’t really know if – when there’s a policy in place now of just paying them as little as possible, or what. I just don’t know. If it is the case, you know, I don’t think it’s a very good deal for photographers, and I think they really should question it.
5. ImageDirect clearly was a profitable business before Getty bought it from you, and Getty primarily bought WireImage to keep them from impacting their bottom line (oh, and for the WireImage contracts) but now it appears, with the race to the bottom, that the market for celebrity images has been slashed to within an inch of it's life. Can you explain how this happened?
Yeah. I think there’s a lot of people that have participated in the race to the bottom for the editorial entertainment market. I think that everyone has their right to lower prices, but I t hink when you see companies – when you see agencies willing to give away photos fpr $5, for a photo for online use. I just think it’s a very bad strategy. Getty has premium access subscriptions that has lowered prices significantly, but there’s a lot of smaller agencies that I see and they’re either trying to match the prices or they’re just offering images at really – at rates that you cannot run a business on. So, I don’t know, I don’t see these businesses – I don’t see their pictures published that much, so I don’t know how much they’re making, but I think when you have a small agency, with just a few people running it sitting in an office, they’re just trying to sign as many deals as they can for $500 or $1,000 a month for unlimited use. I just think that’s a really short-sighted strategy. I wish they would think a little bit more about the long term, but I also think that these people are not going to be in the business long term, so maybe that’s why they just are trying to take the easy way out right now, and offer these really low rates. It’s not profitable and you can’t run a business on those rates, so I don’t really understand the continual lowering of prices.
6. It is remarkable to me that the editors at Getty think it's reasonable to pump out 3,000 images from an LA red carpet event, when prospective clients like US, Entertainment Weekly, AOL, etc, each will likely use 10 to 40 images, and usually very similar ones. Why do these editors think that forcing their clients to wade through the haystack to find the needed "needles", is making their clients happy? Or, is this a pump-and-churn mentality forced upon the editors by senior management?
I think there’s too much content coming from almost everybody. I don’t think – it’s easy to look at Getty because they have three brands and they have so many photographers. It’s easy to look at them and the amount of images they put out. At the same time, I think that in certain ways they are stuck with the situation where they have a lot of photographers that they have contracts with and they have to support all those photographers contractually. So, they’re stuck with a certain volume. I’m not sure they can really take their volume down very much even if they wanted to. Again, I think there are a lot of smaller agencies that are putting out a lot of photos just because it’s digital, and just because it’s easy, and doesn’t cost any more to send 1,000 photos, then to send 100. I think if it cost them money to send more photos, you’d see the amount of images drop drastically. So, I’m not saying that’s something that people should do, you know, charge for the amount of images we submit, but, I would say that a little bit of editing goes a long way. When we met with all the magazines, what we talked to them about was returning to a reasonable edit. So, do a job, do a reasonable edit, make sure the event was covered, and that everybody was represented, and all the good pictures made it to the site, and to the magazines.
7. So many people talk about how clients are requiring work-for-hire contracts, yet that's not really the case, is it? I mean, while a corporate music client may want an extremely broad span of rights, and you can't license commercial rights anyway without releases, you surely are able to continue to license your editorial rights forever, right?
Right. I mean, the way we deal with work-for-hire is – my main objective is that we have the editorial rights. If we have to give up some rights on the other end, we don’t usually have a problem with it. I understand the realities of business now and we do a lot of music. The record companies are having a tough time financially, so our rates for a lot of the record companies have come down a little bit, and they need to have ownership of certain things we do for them. But, if they want ownership, but will give up the editorial rights, then we’re fine with that. Really, the editorial rights are all we have anyway, unless we negotiate the commercial rights, but they still come back to us when they want to license a picture for a CD single, or some other use, other than publicity, which is what we’re hired for. So, there are ways around it. There are ways to make sure it’s still a good and profitable business for both parties.
8. Why do you think photographers are so willing to believe prospective clients when they force a work-for-hire contract on them, and pay them a pittance, when the work is really worth much more? I know that people might think that your opinion will be based upon the fact that you are at the top of your field, but what advice would you give aspiring photographers about keeping rights and about being paid equitably for assignments and earning resales down the line?
I think that we have to look at the realities of the marketplace. That budgets have come down for quite a lot of work. I know it has for entertainment. It’s probably true for news and sports as well. I think if you have a combination of a reasonable rate for an assignment plus the ability to license it and generate royalties – I think you have to just balance it. Find a balance with your client that’s going to let you accept an assignment and feel good about it. I mean, we’ve very open with our clients. I’ll talk to them about things. Sure, we can shoot that for this rate, even though it’s lower than we would like, if we have the right to license the pictures and make up some of the difference. So, as long as they’re open to that, then we’re open to it too. I tend to not really want to walk away from an assignment – especially from a good established client – and if I have a relationship with a client for five years, or ten years, or, you know, 20 years, almost 25 years as is the case with MTV. When they need something, I’m going to take care of it. If the rate is down, or they’re at the end of their fiscal year, and they don’t have much money in the budget, I’m still going to take care of them because it’s in my own best long term interests. I think it’s a bit of a balancing act now. I think in particular, the way the economy is, the publishing market has been hit pretty badly. I think as photographers we need to look at that, and just be a little bit more intelligent about both the way we quote prices to our clients, and what we’re willing to accept from a client. I think a little bit of negotiating can go a long way.
9. Morale, from the people I am talking to, seems to be very low amongst the Getty editing staff. Do you think they are seeing the end-game, and realizing that their contributory role as "editor" in producing a quality product has become more of an image processor that is devoid of any real "editing"?
Well, I think that if you look at the way editing is done at big events, we’re all racing to move as many pictures as we can as quickly as we can. I think that for that reason, a lot of editors feel like they’re just pumping images out. Not really editing, as much as they are just being part of the workflow that moves images from the camera to a website. I think at some point that will have to scale back a little bit as well. These things are all connected. The amount of images, the amount of photographers, the larger file sizes coming out of the cameras all sort of command more work on the back end, so I think the business in general is stuck in a cycle where we’ve had to increase production on the back end due to all these other factors. It’s very costly to have editors, and we’ll have six editors at the video awards for MTV this Sunday, and that’s a pretty costly expense to have. I would like to be able to scale back on that as well, as I am sure others would. I’ve got to think that at some point we have to all find a more economical way of handling that workflow.
10. We have written separately - Associated Press and PictureGroup to Form Distribution Alliance – about your launch of PictureGroup and your distribution deal with the AP. What can you share with us that wasn’t in the press release?
I would say that we are working on a lot of other things both on the client side that will hopefully happen between now and the end of the year as well as on the photographer side. We have just begun this relationship with the AP, and we’re going to work very closely with them in the next few months to implement the workflow and make sure it works efficiently. I think probably the things I am most excited about are things that will happen in the next six months or so. We’re working on some deals that will be very big. Very good for Picture Group, and good for the photo industry as well.

Associated Press and PictureGroup Form Distribution Alliance, 9/11/09

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