Licensing Images for Use: The Royalty-Free Model.

Online September 1, 1998 | Berinstein, Paula A reader of my book, Finding Images Online, recently wrote to corn plain that a Web site I’d listed as royalty-free wasn’t free at all. The site’s owner was actually charging fees for images! I can understand the reader’s outrage. After all, “free” means “no charge,” or certainly ought to. Unfortunately, in the context of royalty-free, it doesn’t.

But royalty-free images are still well worth your attention. This column explains what royalty-free means and offers insight into how picture licensing works.

You may have purchased some of those nifty CD-ROM’s featuring royalty-free images or clip art for presentations, reports, and Web sites. Or you may have been tempted to. You usually can’t beat the prices, and while some pictures look canned many are attractive and can be used artistically. Such discs and similar online digital images are distributed under agreements that give the buyer more rights than with custom (one-of-a-kind) or stock photography (off-the-shelf pictures, charged for per use and by type of use). In fact, royalty-free licensing terms can appear so liberal that your rights as a buyer and publisher can seem unlimited-rights to use the image whenever, however, and wherever you like. However, such freedom is often as illusory as a free lunch. Royalty-free may also mean lower quality, non-exclusive rights to publish (which may not matter for your purpose), and some legal risk. This is not to say that royalty-free means “bad,” rather it’s a distinct business model appropriate for certain situati ons.

Disappointing? Sure. But when you consider what’s involved for the producers, sympathy is justified for creators and distributors. Comprehending licensing and fee issues requires familiarity with the image creation and distribution process, so let’s take a look at it. While this process somewhat resembles that for text, it involves more players and can be more complicated. Images involve different types of participants, and the economics of images diverge somewhat from those for text.

THE PLAYERS The participants affect the license acquisition process in two ways-cost and permissions. Creators and distributors want payment for their work, while models and trademark owners care about the use of their likeness and symbols and may reserve the right to grant permission. Even museums that own a depicted work get into the act. The more players, the more obstacles to obtaining a license. Fortunately, many vendors have streamlined the process by offering pre-cleared material, some of which falls in the category of “royalty-free.” The cooks contributing to the image broth are:

* Creator (photographer or artist) This person might be the rights holder, if only one exists. If the work was made for hire, the employer who commissioned the work holds the rights. It’s possible to have two creators-an artist and a photographer who snaps a picture of the artist’s work. The creator brings artistic skill, technical knowledge, and labor to the process and depends on fair payment for his or her efforts. Whether a photographer who takes a picture of an artistic work merits creator status depends on the individual case-the issue engenders much debate.

* Distributor (stock photography agency, library, photographer, museum, government agency, etc.) This entity may represent and collect royalties for the creator, may have purchased full rights to the work for a one-time fee to the creator, may commission works for hire, or may own the physical work but not sole rights to it. Distributors may also make public domain images available. Distributors must locate quality work, negotiate with creators, digitize and catalog images, administer sales and financial details, and so on. They expect fair compensation for all of this, even if only for costs incurred when duplicating and sending out public domain material. this web site public domain images

* Model (person in picture) Legal rights of privacy and publicity govern whether and how a person’s image can be used. In non-news photographs (news photos being those that educate or inform), depicted individuals can sue for invasion of privacy unless they’ve signed a model release waiving those rights. Famous people possess rights of publicity, which in certain circumstances let them control the use of their image. (Rights of privacy for public figures is one of the issues pervading the paparazzi hubbub.) A model may be paid for posing or may simply be concerned with how his or her likeness is used. The model’s pay does not enter into the image acquisition process, but his or her permission does. Creators and/or distributors often arrange for model releases, but buyers should be sure such releases exist and pay special attention to wording.

* Owner of trademarked property in the picture, or owner of the work of art depicted A photographer or a publisher can get into big trouble by, for example, snapping and distributing pictures of Coca Cola signs for non-news purposes. A property release protects the photographer and publisher from lawsuits. As with models, permission is the issue-not payment. Creators and/or distributors may or may not arrange for such permissions, so buyers need to follow up on this issue. In some cases, ownership of the item depicted, not trademarking, is the issue, as when a museum owns a work of art shown in a photograph.

THE ECONOMICS OF PHOTOGRAPHY You might be thinking that with all those cooks a-stirring, you’re going to have to pay through the nose to make sure each gets a fair cut. Not necessarily. What’s more likely than having to spend big bucks is that you’re going to spend some time tracking down rights-holders at various levels-but that depends on whom you purchase from.

The economics involved in image creation and distribution are changing. While photography has never been a career for the materialistic, mere survival is becoming even more difficult. To make money, a creator has to perform one or more of the following:

1. Do custom work for publications, advertising agencies, individuals, movie studios, etc. Custom work means one picture, one payment. Thus, a photographer must get good money for the job, lots of work, or both. Sometimes he can retain rights to the images so he can sell them elsewhere, and sometimes he can sell his out-takes, but often the commissioner desires exclusive rights. Fees for custom work vary. Both portrait and National Geographic photographers perform custom work.

2. Work on a payroll. Payroll photographers work on salary and retain no rights to their photographs.

3. Publish collections of his or her work in books, or perform fine-art photography. Neither of these options generates much income unless you’re Annie Liebovitz or team up with Madonna.

4. Do speculative work. Stock photography is almost always work done on spec. There are two types of stock photography-commercial and editorial. Commercial represents the market for advertising and promotional material, while editorial focuses on books, magazines, and educational materials. Commercial stock photography is a gamble–one requiring substantial time, investment, travel, and equipment. The way to make money is to offer works that will appeal to many people. In so doing, a photographer can sell the same work over and over, leveraging the labor and materials that went into its creation. The need to appeal to lots of people may sometimes, but not always, result in Muzak-like work.

5. Market his or her wares on the Web. This method bypasses employers and agencies and goes straight to buyers. However, as ONLINE readers know, maintaining an effective Web presence requires time, time, time.

To maximize income, not only can the photographer sell the same work to different people, but he can sell the same work more than once to the same person-for different uses. And he can charge more for uses that generate income for the buyer than for those that don’t. That’s why a picture that’s used for advertising costs more than one to be used in a non-profit organization’s newsletter.

However, whether the photographer or his representative charges for every separate use, or offers the buyer a one-time fee that covers multiple uses, depends on his business model. If he thinks he can get away with demanding payment for each distinct use, he’ll try that. If not, he may sell all rights for two to three times the price and be done with it. If he thinks such a practice will alienate buyers, he may opt for a more generous licensing model designed to attract more buyers. Or, if he’s going after a high-end market, he might set his prices high, target tightly, and not worry about a broad market made up of price-sensitive buyers. Many photographers mix and match business models.

Most photographers represent themselves (a practice that’s becoming more common thanks to the Web), while many contract with agencies that package, market, and distribute their work. It used to be that each sale by the agent resulted in a royalty for the photographer. With the advent of digital images, however, a new “clip art” model is emerging in which the CD-ROM publisher pays the photographer a one-time sum rather than a royalty each time someone licenses the picture. This model, which represents one definition of “royalty-free,” results in lower fees for buyers like you and me, but less income for the creator, unless the publisher aggressively markets the discs. Sometimes the photographer independently markets the same photos himself, leveraging his investment.

In addition to the one-shot, up-front fee, there are other definitions of royalty-free. Royalty-free may mean that no royalty is paid to the photographer if the buyer uses the picture in certain pre-defined ways. If the buyer wants to use a picture for some other purpose, a special higher license fee will apply, and the photographer receives a royalty. Royalty-free may also flat out mean the opposite. In some models, distributors of CD-ROMs pay photographers an up-front fee, then a royalty for each disc sold. (If my correspondent was confused before, let him try to figure all that out!) However, according to Rohn Engh, publisher of the industry newsletter Photo Stock Notes, the term “royalty-free” generally applies to the buyer, not the photographer. It means that the buyer doesn’t have to pay extra reuse royalties, as is the case with managed photos (those where usage is tracked). In other words, there are no more hoops to jump through as in traditional stock photography, where each use is negotiated separately.

WHAT DOES THIS MEAN FOR IMAGE BUYERS?

Why should you, the buyer, care about all this esoterica? Because it affects what you’ll pay, how you can use the images you purchase, and the quality of the images you acquire. It may also affect you legally. You should also be aware that you’re probably going to have to spend some money even to acquire public domain images, and I want you to know why.

Here are some cautions and truths about buying and using royalty-free images:

Caution: Royalty-free does not mean “no cost,” nor does it mean “public domain.” Truth: Royalty-free images generally carry reasonable prices. You can purchase a CD-ROM containing 100 images for anywhere from $35 to $250 per disc. Whether you find the $1.50 to $2.50 per image price reasonable, of course, depends on whether you use a substantial number of the images on the disc, or if those you do use are worth it for you. A single digital image may run you $10-$20 for low resolution (Publishers Depot charges $10 for a 300K file not for resale, PhotoDisc’s 600K 72dpi image costs $19.95), $70 for medium resolution (Publishers Depot charges $60 for a 12-18 megabyte file not for resale, PhotoDisc’s 10MB 300dpi image runs $69.95), or $130 for high resolution (PhotoDisc’s 28MB 300dpi image costs $129.95).

Caution: Royalty-free does not necessarily mean you can do anything you want with the picture. Check the license. You may be surprised to find that your purchase price affords you some rights, but not others. Double-check the model release if you plan to use the photo in a sensitive situation, such as drug abuse or mental retardation. Be wary of royalty-free companies with no track record. They may not possess the proper releases. (You may be able to identify such companies by looking at their packaging and advertising materials. According to Rohn Engh, established companies look it, “fly-by-nights” don’t.) Truth: Traditional stock agencies guarantee “managed rights” and exclusivity, but royalty-free agencies do not. Stock agencies track usage of their images to make sure your use doesn’t conflict with that of a competitor or other undesirable buyer. They will also, for a fee, guarantee that you are the only authorized user of a particular image and/or provide you with the photo’s history. web site public domain images

Caution: Royalty-free images from different vendors carry different rights. This is a real stinker, but not unfamiliar to those of us who deal with information vendors.

Truth: Royalty-free pricing depends on the quality, range, and breadth of images offered by the agency, and business model. Sometimes royalty-free images simply represent a different product line from traditional stock photos, not an inferior product. To check image quality, see if the specs tell what type of scanner has been used. Drum-scanned images usually represent higher technical quality than images produced with a flatbed scanner.

Caution: Royalty-free images claim to carry model releases, but you can still potentially violate a model’s rights if you use a picture in a negative or defamatory way.

Caution: Watch out for the term “moral rights” in image licenses. Even if you see no such terminology, be careful about using images of people in depictions of controversial issues like abortion and politics.

Truth: Despite the pitfalls, royalty-free agencies generally streamline the image licensing process for purchasers.

Caution: The quality of royalty-free images varies, just as does the quality of merchandise you buy in a discount store. (Discount merchandiser Sears sells great tools, does it not?) Caution: Don’t go by what customer service people tell you. Go by the printed license.

Truth: When you purchase photographs, don’t resent the money you are paying. Realize that you’re contributing to someone’s honest living.

Truth: Royalty-free can be fun. You can afford to spice up your presentations and promotional material, and you’ll have a ball exploring the offerings.

LOG ON TO IMAGES Now that you know a little about the ins and outs of royalty-free images, check out some of the great online resources listed in the sidebar with this column.

Finding Royalty-Free Images Paula Berinstein Here are some online resources for royalty-free images. Some offer single images, some CD-ROMs by theme, and others both. One last caveat–while most Web vendors make it clear where to find technical specs and ordering information, almost all hide their pricing well. Sometimes you have to go to the page for a particular CD to find the price. Sometimes the FAQ provides it. Almost never is the location logical, i.e., a link that says Pricing. I’m not sure why–their prices are nothing to be embarrassed about.

Berinstein, Paula