Features
Design Pics: where photographers are partners (Really!)
In the stock photo business, we have heard countless times that the managers and owners of stock photo agencies consider their photographers and artists "partners" in the business. Contractually, however, the artists have no true partner status with the companies that represent them. Many photographers have learned this the hard way when the companies they supply images to are sold. These "partners" get no share of the proceeds of the sale and, often, file integration delays with the new owner company cause their commissions to drop like a stone after the transaction. Not to mention the fact that their images may now be lost in a sea of content that the buyer represents, and the focused attention on a specific photographer's collection is lost.
One relatively new stock photo company, however, makes its photographers true partners in the business, by giving them a percentage of the proceeds of any eventual sale of the company. Design Pics Inc. (DPI,) a royalty free stock image supplier based in Edmonton, Alberta, Canada, starts by offering a competitive commission rate to its photographers on sales from both internal sales and through its extensive world wide network of over 160 distributors. In addition, the photographer's contract includes terms that, in the event of a sale of the archive, requires DPI to share a significant portion of the gross selling price with the photographers. In exchange for this, the photographers agree, in the event of a sale, to relinquish copyright in their images, in effect making the file "wholly-owned" for the buyer.
According to Rick Carlson, President of DPI, the idea for the business model emerged from discussions with photographers who participated in founding the company in 2002, and who desired a more equitable way of dealing with photographers in the event of an acquisition. The model calls for a pro-rated division among photographers of the photographers' share of any eventual selling price. The formula takes into consideration two components of the photographer's collection. 1) The number of images each photographer has in the file as a percentage of the total. 2) The amount of revenue generated by each individual photographer as a percentage of the total annual revenue. The formula is weighted in favor of the revenue generation factor.
Carlson says DPI will soon have over 45,000 images in their RF collection, and another 15,000 images in their RM and Editorial collections. The RF content represents the work of about 80 contributing photographers, and the majority of the current RM and Editorial content comes from DPI's recent acquisition of the Irish Image Collection, in partnership with a private investment group. Collectively, the photographers are adding about 1,500 new images per month.
Over 80% of the company's revenue comes from its distribution channel network and the rest form direct sales. The company is actively recruiting photographers to diversify its content both by subject and by geographic region. Carlson points out that while in most cases more images could mean greater dilution, that's not how it works with the DPI model. "Bringing in more good images increases the total value of the collection and, this equates to an increased value for all of our partner photographers." He adds, "Some photographers cannot wrap their heads around the idea of selling the copyright in their images in a buy-out scenario, but the majority of photographers see great value in having equity in the company that they are working so hard to build. We simply won't sign photographers who don't feel totally comfortable with the deal, and we are completely aware that this is a whole new business model for the industry." He points out that the company is not actively looking for a buyer, and that no deal to sell the archive is currently on the horizon. He notes, "What's important, is that the photographer's interests are protected if such a buy-out should ever occur. In the meantime, we all love what we do, and want to excel in every area of our business."
Web: www.designpics.com
Posted in: Features, Photographers, Stock Photo Companies
