Month: September 2009

My Business Organization Law prof started his class (last sumer) by saying that all successful businesspeople are optimists. They have to be. What they are attempting is fraught with danger and the odds are invariably against success, and yet they believe they will be the exception who makes it.

I think I have found the problem with many photographers and their businesses: attitude.

I’m not throwing that out there lightly or flippantly. Photographers, for all their amazing problem-solving and creative thinking abilities, are far too often closed-minded and, well, not optimistic when it comes to their businesses. Rather than seek positive solutions for problems, there is much wallowing in how much work there is and how things aren’t fair, etc. When something good happens, too often photographers will look for the bad in it. It’s like I told a dear photographer friend the other day: you sure can find the fuzzy end of the lollipop!

Here’s a real-world example: on APAnet this past week a call to action was posted, by APA itself, to sign a letter intended for the President (and Veep) expressing the importance of the arts and IP protection. It was written by people involved in the copyright protection struggle (the Copyright Alliance), in consultation with creative groups like ASMP and APA and many others. Many people signed enthusiastically (yea!), but others complained about the wording of the letter — saying it was poorly written, too flowery, whatever. That is finding the fuzzy end of the lollipop. The letter is a good thing, but all these natterers could focus on was what they found wrong with the letter (even though they did sign it) and implied that it would fail because of its defects.

Look, if you want to be successful you have to find the good, the hopeful. Look for solutions, not problems. Rather than say “that’s not the way it has worked” say “let’s try and see if this will work” and when someone offers help, don’t put it down, no matter how imperfect you may think it is. Give others the respect that they deserve. Assume that someone knows what s/he is doing rather than the opposite. Have faith that other people might know more than you.

In the case of that letter, I’ll bet dollars to donuts that the person who wrote it had more training in writing than anyone who complained about its wording.

I think photographers are amazing in their skills. I am constantly in awe of what I see you people do creatively. But you do not know everything about everything. You’re not experts in the health crisis or the workings of Congress or the law or medicine or even fields like design and writing. You are experts in photography, and that is mighty impressive in and of itself.

So stop trying to control everything. Let go and have some faith that things will work out. Trust in others. Try things that might look less than for-sure but which might, just might, help. Act like successful businesspeople in other fields who lean on wind of their optimism, their hope, rather than grasping at the possibilities of failure and the risks in every step.

Here’s a secret: you can do everything “safe” and “right,” find every risk and mitigate it, “fix” every imperfect thing in your path, and you may still fail. In fact, I’d wager that you would be more likely to fail. Why? Because you must take risks to succeed. Being an optimist, particularly in business, is your only chance at success. It is saying, at every new challenge (and preferably with a big-ass grin), “I know it’s risky, I know it’s not perfect, but it might just work so what the hell, let’s give it a try.” It’s trying the new and untried. It’s collaborating openly and with hope. And it’s having something not work and saying “Well, I gave it my best but it didn’t work. Oh well. What can I try next?”

So the next time you are tempted to complain or pick at an offering or suggestion given in good faith, the next time you are tempted to be negative about an idea, rein it in. Look for the good in whatever it is. Try to build on the positive. Take risks that things might work out well. And give others the respect of their professions as you would have them respect you in yours.

I’ve just posted the newest Creative Lube podcast–this one is on pricing. This is a very important issue we need to be working together to develop. We can’t sit back and complain about what hasn’t worked in the past or force our interests over our clients. We need to find an objective-based, equitable system.

Let’s start the dialogue.

If you’d like to purchase access to the individual podcast ($8) or subscribe for a year, just go here.

The other day, I posted some thoughts about indemnification clauses. Last night, ASMP-SD had a presentation on copyright by IP attorney Matt Murphey of Gordon & Rees, LLP, so I “took advantage” of Mr. Murphey and, before the event, asked him about what I had posted. He agreed with my points and even took the time at the end of his presentation to note that it is important to negotiate indemnification clauses. He emphasized that you can negotiate limitations on these clauses. Then, he pointed out that if you don’t have an indemnification clause in your contract, there is law that may, by default, grant broad indemnification to your clients!

This morning I did a teeny bit of research on the issue and found that the UCC §2-312 has been interpreted by courts to apply to copyright licenses. That’s probably gobbledy-gook to you and that’s fine, don’t worry about the UCC (it will make your head spin) but do know that it is a set of laws that 49 states have adopted (not LA) and which serve mostly to function as the default rules for contracts. In other words, if you don’t write your contracts to cover a topic in the UCC, the UCC rule will apply by default. For indemnification issues, §2-312 is the default rule of concern and it says essentially that the seller (you) guarantees that your work doesn’t infringe (on someone else’s IP rights) and if a claim saying it does infringe is brought against the buyer (your client), you will pay up.

So, having an indemnification clause in your contract is a good thing FOR YOU. As long as it is written well, of course. You need one to limit your liability. Your clients will likely want a broad one. Negotiate something fair and reasonable and get on with shooting the project.

[Again, and as always now, this is NOT legal advice. I am not a lawyer! It is only my opinion.]

I’m hearing/reading lots of photographers having hissy-fits about indemnification. The timing is perfect since it is something we have been talking about a lot in my Licensing class.

[NOTE: This is just my opinion and NOT legal advice. I’m not a lawyer! Work with your own IP lawyer to get the best answers to your important questions.]

Yes, I said “hissy-fits.” People are getting their knickers in a twist rather than looking at the actual issues involved and trying to find a reasonable solution. Just saying “no” is not reasonable. Panicking about possibly having to pay for anything and everything is not reasonable.

Let me explain…

Indemnification is kind of like insurance or a guarantee. For the issuer (the photog in our situation), it is essentially saying, in very general terms, “I promise that my image doesn’t infringe on anyone’s copyright or trademark (or whatever) and if it does, I will pay up.” It is NOT saying that if the client or agency gets sued for any reason your ass is on the line. It means that if they get sued (for the claims described in the clause, usually © or ® infringement) and the other party wins, you will pay the agency what they had to pay to the winner.

Of course, if the clause doesn’t limit the scope to, for example, infringement claims, that is something you’d need to negotiate and change, but we’ll get there in a sec…

First off, almost every license contract in business has some sort of indemnification clause. It’s logical: if A licenses something from B, A shouldn’t be held legally responsible for the errors B makes. You wouldn’t expect to be held responsible for an accident caused by a car with manufacturing defects, right? The car company should pay for their mistakes. Same basic idea. So there is no reason to flip out about indemnity.

There is even more reason not to flip out: you can negotiate the terms of the indemnification clause. You can say, for example, that you will only indemnify US claims and then only up to the amount of the licensing fee for the image. That way, you would only be on the hook for the fees you got for the license of that image and only for US suits (that can be a big deal, btw). That makes sense– it’s like a money-back guarantee.

And if you do your job well and get the proper permissions, you should not have any issue of infringement anyway, so the clause would not likely ever get invoked–that is, your client will not likely be sued for anything about your image and so there will be nothing to pay up for anyway.

For you, as a businessperson, the issue is one of risk– how much risk is there that you are making infringing images? How much are you willing to bet on that? How much are you willing to put on the line for this one project where the client wants an indemnification?

Then, ask yourself (or better yet, your lawyer) how can you structure the clause so both your interests and your clients interests are satisfied?

And don’t forget that you can (and arguably should) get indemnified by your clients if they insist, for example, you use a certain ® product when you can’t get a release. They should indemnify you if you get sued. See, makes sense when you see it from the other side, doesn’t it? For example, I wouldn’t shoot an ad with a Barbie® in it, without  a release from Mattel, without getting indemnified by the client or agency. Mattel protects her big-time.

Think about being fair and reasonable; think about your client’s issues; and there is usually a reasonable solution. Here, it is to negotiate a fair and reasonable clause and to shoot the gig. 🙂

Rob has an important post on APE about GM’s agency refusing advances and requiring photogs to be last in the payment foodchain.  If you get a contract like this, you must say “no.” You do not need to finance both the agency and GM. That’s what it means. And that is IF they pay.

The risk is far too high to take. If there is another reorganization of any kind, you will be the very last entity to get paid, if at all. More importantly, other agencies will claim that “in these tough times…” they require the same kinds of terms. We need to make a hard stand now against this. Get the word out, especially to some of your less educated and more desperate colleagues.

[yes, this has been cross-posted on several forums… we need to get the word out and make a stand about this]

You may not think that a rant against a stupid viral that purported to be about a Danish woman who was looking for the father of her child but was, really, a Danish government paid-for ploy to get tourists to visit would have anything to do with your business. But you’d be wrong. This post is about the rules that all marketers need to remember.

You are a marketer.

These apply to you too.

A Photo Editor has been posting estimates lately. He has been doing this to try and help the industry–Rob is a good guy and means well. However, the estimates he has been posting are sort of working against their intention. I think he intended to show what real world pricing is like out there but, when you look at the estimates objectively, you can see how pricing is a total fiction. Some examples from the various estimates:

• 32 images for unlimited media for unlimited time in the US for $25K? That is $782.25/per image. Forever and in all media… including creative fee (because the photog used a combined fee)… Way too low.
• When you break down the number to per-image prices, you get one image for one-time use for $2500 in one estimate and one image for unlimited global use for $2500 in another. How is that possible?

We need to fix this. We need a system for pricing usage, particularly in the advertising & client-direct realms.

These days cost consultants reign supreme. They are numbers people. If we can find a system that is wholly logical, that works in the minds of the numbers people, we can still get appropriate fees. You can’t argue with facts, only the interpretation of facts. And math, well, that is the least arguable interpretation tool out there. So that is why devising some mathematical system will benefit everyone.

I have argued for tying the Usage Licensing Fee to the media costs–a percentage system and maybe even a sliding scale to take into account economies of size. The only significant downside to this is that agencies sometimes do not have these costs. Okay, that is a problem. Let’s find a solution.

Those costs are ballpark-able by anyone and that will get you closer than just guessing. For example, if the agency says the client is going to do OOH and print ads in one state, but they don’t know how much the client is spending on media, ask them if they know how much the client spent last year or what media the *do* know about.

Perfect? No. But better than wildly guessing. Better than underpricing which is what is happening far too often. Most of the estimates posted by APE are way too low.

And the License Fee needs to be separate. Other license-based industries do this–like software and music. Why? Again because it is logical and fair. A license for one year print in the US is worth $X no matter WHO the photographer is. And the next year that license will still be worth $X (plus inflation, maybe)–not some percentage of $X.

This whole thing about taking a percentage of fees for reuse came about BECAUSE the fees were combined. The clients did not want to pay for the act of creation again, so the percentage worked to take that out. Then it morphed into a way to get more for less. These aren’t stupid people, these agencies/clients! By separating fees we re-take control of our pricing and instead of defending our pricing can turn to the client and get them to explain why a license that is identical to a previous one should cost less (They can’t, not logically). One they “get” the logic, they can see it isn’t you against them, it is just math and logic. No good guys/bad guys. It just works.

Logic and rationalism and math can put us, creatives and clients, on the same page. It becomes an objective system that helps everyone achieve their goals.

Over the weekend I was doing my reading for my Licensing class when I noticed an interesting linguistic flip. It got me to thinking about how we look at licenses and I thought this alternative might be helpful. In the casebook (textbook) the authors refer to a license not (only) as permission for someone to use some intellectual property, but rather as an agreement by which the IP owner agrees not to sue the user (licensee).

Hmm… an agreement not to sue. I like that. It puts the perceived power back in the hands of the IP owner.

The casebook also points out that in “regular” contracts (not licenses, which are also contacts, but let’s not get confused), if there is ambiguity in the language the courts will construe the contract against the drafter. That means if you present a contract to someone else, like to buy their house, and the contract ends up being litigated for some reason, the courts will be more harsh on you, not the other side, because it was your contract. You had the burden, essentially, to get the wording right and clear and if it wasn’t, well, that’s your bad and you have to suffer the consequences. Using the house example, if you don’t expressly note that the porch swing is NOT a part of the deal, it will be included as part of the house.

However, and this is important, a license is construed by the courts narrowly, that is, in favor of the licensor (the IP owner). If a license does not include something, the courts will assume that the something is NOT included–the porch swing would not be part of the house sale, so to speak (don’t get picky here, the house sale is not a license, but I’m trying to simplify some things  for understanding).

These two things can give you more power in your business. When you know that you are licensing ONLY the uses you specifically name in your license and that your license is your promise not to sue (unless the other side screws up), you hold the power in that relationship! While I am all about seeing both sides as equals, too many photographers see themselves in weak positions. Hopefully this will help balance things in your heads.

[as always, this is not a legal opinion or legal advice–just the musings from my own head–consult a lawyer for your legal needs!]