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Sources are telling Photo Business News that Getty Images has laid off their entire creative department in Los Angeles, although the LA office remains open - likely with editors, photographers, and sales people still hanging in there.

However, that was a part of a much more global round of layoffs. While we are prepared for this to be a typo, the layoffs in the Los Angeles office are a part of another global round of layoffs purported to be, once again, over 100. Just 10 days ago we reported (5% Of Our Workforce Will Be Asked to Leave Getty Images, 3/16/09), 110 layoffs, and it is unclear if the layoffs in LA were a formal "layoff" as opposed to the "asked to leave" approach. I can't believe that Getty would confirm 10 days ago that 110 people were being "asked to leave", only to follow 10 days later with actual layoffs of them, or, frankly, of another 100+. While we are working to confirm which way this wind is blowing, we will put it out to the masses for discussion since we can confirm the LA creative department layoffs for sure.

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Sometimes, someone elses' blog nails it so hard to the wall that you just want to send your readers there. Often there's a nice list of speedlinks. Today it's a singular suggestion, instead of multiples, where greedy Getty isn't making good on their contractual obligations.


Getty Uses A Nefarious Tactic To Raise Rates
(over at APhotoEditor.com)


This is just one more of the nails in the coffin of Getty. I suggest those of you that are Getty staffers should make your list and check it twice because it wouldn't surprise me in the least that Papa Klein-Grinch would milk you dry of every last one of your bonuses, raises, and so on, before taking a nice billowingly-fat golden parachute out of the company, as you are all shipped off to the unemployment line.

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In an internal e-mail being sent out, Getty Images has announced "Today we are announcing that approximately 110 employees globally, which is roughly 5 percent of our workforce, will be asked to leave Getty Images".

We recently wrote about planned departures because of the Getty aquisition of JupiterImages (Boo Hoo, and Buh-Bye, 3/5/09) but the announcements' wording is interesting to parse.

"Asked to leave"? Is that a polite way of saying they're being laid off? Or, is it that Getty is asking for people to volunteer to leave, and if so, are they offering packages for that voluntary departure? If I were a Getty employee, I would surely be posing the "what's in it for me if I volunteer to leave" question, and if you are being laid off, be sure to go and file for unemployment.

Make no mistake about this - this trend will continue.

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It's official. The NFL sent out a message to the 32 club owners' Public Relations Departments, announcing the change. A particularly interesting passage from the memo that went out reads:

In addition to covering every NFL game and numerous other NFL events, AP will provide the league and its 32 clubs with full use of all AP NFL photos for editorial, marketing, and charitable use free of charge. AP also will coordinate the annual team headshot process.

Clubs will need to credential AP in a manner similar to Getty in years past.

So, AP will be getting more, (and presumably better) credentials, no doubt. This will give them (potentially) better access and a leg up on competition with Reuters, Agence France Presse, and so on. But, at what price? How much editorial integrity will be sacrificed by the AP in exchange for this commercial deal?

As we noted previously (NFL and the Wayward Getty Images, 4/9/09) , the AP carried images of the NBA brawl, but Getty's site, which originally had similar coverage up, were instructed (asked?) to remove them by the NBA. How will the future "black eyes" on the NFL be covered by the (now supposedly?) independent press that is the AP? The next "Michael Vick incident"? Another "wardrobe malfunction?" And what will happen to the AP guarantees if the players get locked out in two years for contractual reasons?

There is a lot to ponder in this new deal, and I surely expect much more to come. The full memo is after the jump, less the redacted e-mails and names.

MEMORANDUM

TO: Club Public Relations Directors, Club Internet Directors

FROM: XXXXX, XXXXX

DATE: April 15, 2009

SUBJECT: NFL / Associated Press Agreement

We are pleased to report that the NFL has entered into an exclusive new commercial licensing agreement with The Associated Press for all NFL photos. Beginning this month and continuing through at least the 2011 season, AP will provide the services previously handled by Getty Images.

AP will serve as the NFL’s exclusive commercial photo distributor – the only entity authorized to sell NFL photos to NFL business partners and licensees. AP also will have the exclusive right to license NFL-owned historical photos for commercial use. AP is also willing to manage and license images owned by individual photographers, but it will be the decision of the individual photographer who owns the copyright on whether to work with AP. (AP will continue to license NFL editorial photos non-exclusively as it has in the past).

In addition to covering every NFL game and numerous other NFL events, AP will provide the league and its 32 clubs with full use of all AP NFL photos for editorial, marketing, and charitable use free of charge. AP also will coordinate the annual team headshot process.

Clubs will need to credential AP in a manner similar to Getty in years past. A recommendation with regard to specific numbers will be communicated in the months ahead.

The AP is one of the preeminent global news gathering organizations in the world and we believe that the services provided to clubs and the league will be outstanding. We appreciate the work that Getty did these last five seasons and we are confident that AP will service the clubs in a first-class manner going forward.

You will receive an e-mail shortly from AP with login information for its web site where you will be able to download photos. The e-mail will include instructions you can send to other members of your staff that also require access to AP’s web site.
We will follow up with Public Relations directors in the days ahead to provide additional information regarding specifications for headshots (the process will be similar to the one used in previous years).

To the extent that your team photographer is currently a Getty contributing photographer or if you receive questions from other contributing photographers, please have them contact XXXXX at AP (XXXXX@ap.org) for information about becoming an AP contributing photographer.

If you have any questions, please contact XXXXXXXX (PR), XXXXXXXX (Digital Media), or XXXXXX (AP –XXXXXX@ap.org).

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For a number of years now, I've been hearing the iStock-a-razzi congratulating themselves with atta-boys and high-fives when they see things like their images used on the covers of places like Time Magazine (here), and for all manner of uses that should have garnered thousands of dollars in stock licensing fees, but instead garnered less than subway fare for a day. "It's all about seeing my photos in print..." or the otherwise celebratory "wow, they used your photo for their album cover..." back-slaps. They, with bright eyes and bushy tails were like a doe in the headlights as the oncoming frieght train of reality came towards them, and they just seemed to think "oh, look, pretty light". In fact, people were bemoaning those who actually cared about the money.

Enter reality.
As Getty Images CEO Jonathan Klein can afford to drop $10,000,000 on his New York City Park Avenue spread back in March (Real Estate Mack Daddy Sells 760 Park Spread to Getty Images Chief for $10 M., 3/11/10), he, and his subordinate company, iStockphoto can't seem to keep paying the contributors who supposedly didn't care about money (until they did) the same amount.

Jeremy Nicholl, here, has done a great job of highlighting the hypocracy of iStockphoto, from within, as a contributor (apparently, not! Sorry for the mistake!).

Nicholls cites an August 9, 2010 company missive, which reports:

“Since roughly 2005 we’ve been aware of a basic problem with how our business works. As the company grows, the overall percentage we pay out to contributing artists increases. As a business model, it’s simply unsustainable.”

Really? REALLY?!?! I mean, come on, I've been writing about how just how unsustainable the iStockphoto business model has been since like 2006. SERIOUSLY? SERIOUSLY!?!?! I was strung up by all the iStockers who wrote me and commented here on the blog about just how this wasn't about money, and how I was off base. I mean, saying "I told you so" just seems so inadequate to the facts as they were, and still are. Just now they're admitting these things? Hmm, or was it that they were lying? in January of 2008, iStockphoto stated:

“That our revenue and payouts have eclipsed those of many traditional stock photography companies confirms that microstock is a viable and profitable business model for contributors and clients.”

Oh when it comes to judgement day, these boys will be on the fast track to a burning caldron of boiling sweat from the toiling of the contributors who have given of their creative genius. But, will these creatives be able to find their way out of a canopy tent? I mean, when God was passing out business sense these dimwits must have thought he said "brightness scents" and said "what? Smart people can't smell..." and took a pass.

Wake up and smell the free coffee down at your local shelter after you check your pockets to make sure your twice-chewed bubble gum is still in the used wrapper as you roll off your free cot, and see that your change from the night's pan-handling becomes more of an income than licensing photography - there will be droves and droves of people behind you - the Flickr-ites - that will swarm to iStockphoto like moths to a flame. You've already been burnt, now it's their turn.

The COO, in this missive - Where we go from here - writes, in part: "I want you to know that I would tender my resignation at iStock before I had to do something I couldn't stand behind." Ok. I'm waiting. Please be sure to send me a copy. I've set up my inbox with a rule for an email from you to play "Ding Dong The Witch is Dead" when it comes in. I can't wait. Jonathan Klein will still be trying to convince you of his altered reality, as his minions call out "pay no attention to the man behind the curtain..." Guess what? There are a lot of "Toto" dogs on Park Avenue, and one of which can nip at his heels in real life, and the Wizard of Oz was just a fantasy, but these are the lives of real people that iStockphoto and, in turn, Getty, is screwing up.

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Getty Images has several distinct brands. However, unlike a guest at the Intercontinental who would not take offense in knowing that the same company owns Holiday Inn Express (IHG.com), knowing that income that supports Getty Images comes from Paparazzi "gotcha" moments, as well as helicopters flying overhead, and a mom trying to have a normal day at the park with a crying child, among the thousands of images that Getty Images is making money from, likely wouldn't sit well with the celebrities. Thus, the recent distribution deal between Getty Images and paparazzi agency Buzzfoto should be brought to the fore for a bit of discussion.

Would Brad Pitt have been comfortable knowing that he used Getty Images for his avenue of distribution for the first photos of one of his children, when they are also profiting from this photo of him, or this photo of Angelina?

Paul Melcher quotes, in his posting "It's Crazy, indeed", Getty's Global Vice President of Entertainment, Mark Kuschner , from a July 2007 article in the industry standard Variety Magazine:

”We’re never going to get into the business of the long lens, hiding in the bushes, hunting people down. Our business is based around relationships with celebrities and publicists and publications. The way we shoot is we’re invited. Paparazzi business is getting more play, but that’s also a very cyclical business.”

Never? Never ever? Oh, how the times have changed.


Kuschner is quoted here as another segment of the Melcher quote "Our business is based around relationships with celebrities and publicists and publications. " So, I ask again - what do you think the celebrities you have built those relationships with would think about you profiting from their looking their worst through a backdoor channel?

The key players at WireImage, FilmMagic, and other companies built their companies on access, and ensuring that the celebrities they photographed, looked their best. I've personally seen more than one editing session where a celebrity image going out for distribution that had the celebrity looking less than their best would get axed. This was how these companies were built, and how they leveraged the relationships into companies that were then sold, and frankly, as long as everyone knows what's going on, there's nothing wrong with it.

Except when you make public statements that you would never do something, and then you do it when you think no one is watching.

Take a minute and dissect a single events' coverage.

Consider that a publication (either in print, or online), has just a few slots for images from a particular small to medium-sized event. If there is no "inside" photographer, then all the photos that are actually available, will come from the arrivals area. However, if you have these great images from inside, pairings of celebrities, those images will be more likely to get play than an arrival image - because they're better. Thus, When a publicist hires Getty or WireImage, and pays them $5,000, (and, by the way, the photographer gets about $250, for work-for-hire), that photographer is producing images inside, yet, on the outside, or in the bushes, or sneeking in through the kitchen (a la Blast 'Em) another photographer (or many of them) are producing images that places the same celebrities at the same event not only in a bad light, but also then has those images running side-by-side in searches.

So, when a photo editor can choose the pretty inside images from the $5k photo shoot, or the "more realistic" images from Buzzfoto, where the celebrity may look less than their best, the publicist's efforts have been watered down, possibly to the point where they become ineffective, yet, in the end, Getty not only collected the $5k, but the royalties from the less than flattering images as well.

Melcher makes a similar point in his piece:

"But how do you combine being the official photographer for a premiere or party, where you are hired to shoot the event and thus play along the publicists demands that all look nice, happy, and beautiful to the needs of a marketplace that would much rather see the same group of people, drunk, sick, dirty and arrested ? Especially since you went through incredible efforts to shut out your competition from all these official events, forcing them to wait outside and thus get those unauthorized shots ?"

Getty is trying to have it both ways, and in the end, if even one celebrity with the next million-dollar exclusive they want to distribute (Pitt/Jolie, Cruise/Holmes, etc), choosing Corbis, Zuma Press, or another agency may well cost Getty far more than Getty will likely earn from the paparazzi images they said they were "never going to get into the business of."

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Getty images has made what can only be a colossal blunder in losing the NFL's commercial licensing deal to the Associated Press. Sources close to both parties reveal that this is a done deal, minus official announcements, Photo Business News has learned. As an interesting side note, it is unclear how the AP would have noted in their annual meeting in San Diego recently that the deal is done, prior to the NFL actually announcing it.

So, what does this portend for the actual people making images under Getty's contract?

The problem is multi-fold.

• Getty loses what amounts to the cash cow with a large portion of all their commercial sports sales, according to sources.
  
• Getty loses what is seen by many as their most prestigious sports relationship
  
• Getty likely loses what is arguably the most prestigious group of sports photographers to the AP
• Getty could find themselves in legal trouble if they preclude "their photographers" (that is, contractors) from doing other work for another media organization, forcing photographers to choose between leagues.

Getty's Commercial Cash Cow

With the stock licensing image revenue streams in freefall, commercial sales have remained profitable for photographers, especially Getty. The deal that was in place is an estimated guarantee of $400,000 in revenue to the NFL, and one rumor has the guarantee of revenue from their new partner, the AP, in the $700k-$800k range, and possibly $1m or more.

Further, one photographer we spoke with who migrated from Wire Image to Getty reported to us that in addition to being staff, he also earned a percentage of sales as well. Another source reports that this is one carrot that has kept select Getty staff photographers happy, so this could also mean a huge slash in revenue for Getty photographers that "stay behind" and don't follow the NFL deal.

The NFL, likely frustrated with seeing Getty paying upwards of $200M to acquire Wire Image, wanted a piece of that figure, according to some, relative to seeing a paltry sub-million-dollar figure being paid/guaranteed, so when the contract came back up for renewal, even in this troubling economy, it was the NFL's turn to exact a more lucrative deal.

Another issue, is the ill-conceived premium access revenue model Getty began pushing recently, which has further eroded photographer's editorial revenue streams in the last 6 months, and will likely cause even lower sales figures in the coming months.

Lastly, this deal was worth millions in revenue, not just to Getty, but also a great deal for the NFL (from revenue to servicing their corporate partners), and was a decent source of revenue to those staffers and contributors partaking in resales percentages, and an even larger portion of revenue to contributors. With $4m-$5m in gross sales from the editorial and commercial sales combined, this should have been a lot of money, but perhaps, to a company focused on a breakup, not so much?

Getty Loses Prestigious Business Relationship

Arguably, the NFL was Getty's crown jewel in their sports photography division. All other sports leagues have followed the NFL's lead on everything from merchandising to television rights deals, and so on. The NFL deal not only solidified Getty's place as the sports imaging leader, but as noted above, was their main sports cash source as well. Getting this deal for Getty (via the Wire Image acqusition) was akin to the billion-dollar deal the the NFL signed with Fox and CBS back in the 90's. In that situation, The previous deal being for much less a year, and the NFL cut a deal which, combined, was worth $2.2B (that's billion!) a year over eight years . Getty became a real player when they got this deal, as did the, at the time, largely non-existent Fox Sports division.

The AP on the other hand, really is not equipped to handle or manage a Getty-like service, and the NFL may, unless the AP overstaffs with photographers, editors, not be as prepared as they should be. The problem is, AP staff photographers are already grumbling about having to file their outtakes (known as OTK's) in the day(s) following an assignment, during down time. The time commitment to the AP/NFL deal will tax the AP's photographers even more, as they look to bulk up their image archive to squeeze every dime of sales. For example, the AP is now encouraging staff photographers to file vacation, and off-hours photography to them, offering a paltry 30% on the sales of those images, but here's the kicker - when that staffer dies, neither their spouse, nor heirs, will continue to get that revenue, and that's just plain wrong.

Further, AP staff photographers have a limited knowledgebase when it comes to commercial keywording, and how to maximize revenue in that manner, so there will also be a serious learning curve on that front.

Look next, for the other leagues to re-evaluate their Getty contracts as they come up for renewal. When you are the sole source for commercial licensing of sports images, you can set your own prices without competitive downward pressure on pricing, and now Getty has lost that, and will likely lose others. While the AP had bid on, and lost the MLB contract a few years back, they are now distributing the the NCAA images from Rich Clarkson's deal with them (Getty had also tried to secure that deal), so this is the next step for the AP in their evolution towards more sports imagery.

Getty's Talented Team of Sports Photographers

En masse, Getty's sports photography team is probably the most talented sports photography department in the country. While Sports Illustrated may have a dozen amazingly talented (and some might say more talented) sports photographers, the 30+ team that Getty has assembled to serve not just the NFL, but the other leagues year round was a can't-be-beat team, especially in serving the commercial marketplace. The mindset is not just editorial, but also very commercial in nature.