iStockphoto Guarantees All Files
Posted by Lee TorrensHave you noticed iStockphoto recently cleaning up the older photos in your portfolio too? I’ve had old images deleted for not having a model release or having possibly trademarked designs (like cars) as the primary subject of the photo. This cleanup is not just about tightening up the collection. It’s making possible what iStockphoto are announcing today: a legal guarantee for all files.
The iStockphoto Legal Guarantee
As of today, iStockphoto will now cover legal expenses if their customers receive a claim against any trademark, copyright or other intellectual property rights. They will cover legal expenses and damages up to $10,000 per file – image, video or audio. Customers can extend the cover to $250,000 for the price of 100 credits.
What About Vivozoom?
If the idea of a legal guarantee for microstock sounds familiar, that’s because it’s the unique selling proposition of recent market entrant, Vivozoom. They launched to contributors late last year and to buyers earlier this year, offering a $25,000 guarantee ‘per project’ – the first in microstock.
iStockphoto insist their guarantee is not a reaction to Vivozoom and that it has been in planning for a long time, though the coincidental timing will make it difficult to convince people it’s true.
Vivozoom built their business on the basis of research which suggested the absence of a guarantee was keeping a large portion of the stock photo buyer market away from microstock. They believed that a limited number of invited contributors was the only way to build a collection that could be backed by a guarantee. Today’s announcement from iStockphoto says that there’s another way.
Now that their point of differentiation is no longer unique, Vivozoom will have a difficult time keeping their buyers from switching to the larger and cheaper collection at iStockphoto. At the very least, they have some updates to make to their Warranty page and their branding.
Changing the Industry
Contributors’ reports of sales at Vivozoom are particularly unenthusiastic, which is not unexpected so early after their launch. If Vivozoom had achieved a high sales volume in a short time it would have provided instant proof of concept for an image guarantee. That doesn’t mean it won’t prove a substantial difference, but now that it’s not just Vivozoom offering a guarantee it won’t be so clear.
Other microstock agencies may find it difficult to follow iStockphoto’s lead on warranting files. Their high volume and low commissions gives them the necessary liquidity to finance the strategy. Their persistently high standards on file legalities, combined with the recent cleanup, gives them the necessary confidence in their collection. The backing of industry leader Getty Images can’t hurt either.
For more details see the Legal Guarantee FAQs at iStock.
Posted September 15th, 2009 by Lee Torrens
Interesting guarantee. I will be watching this one to see how it all plays out and how the details unfold.
Correct that Vivozoom was more than a year ahead in this. They seemed extremely picky, though, in accepting images that were done outside studio. What “killed” Vivozoom prematurely was not their very elusive acceptance policy, but their flaky web interface for attaching MRFs. In the upload workflow, it’s not the upload itself nor the categories that make a site cumbersome for a contributor, but the MRF attach. Contrary to popular belief, not the buyer’s side of a brand new site that should be addressed first, but the contributor’s side. The first priority for a startup should be to attract many quality contributors even before to start marketing.
As MRF attach is the main bottle-neck (at least for me) I could easily predict who will fail and who will make it. Notably bad at this are Vivozoom, Zymmetrical and the new Pixamba (sorry David). iStock is very bad at MRFs, but of course Eazign’s Deepmeta saved them. Very good are YAY and 123RF. On deciding what sites to keep, upload/image registration workload is a prime concern. Who cares that YAY doesn’t sell (although they seem to take off since September): their upload is so damn fast and easy. The best proof of this is CanStockPhoto that had a vigorous restart with their new fast upload interface.
All the legalities around the warranty and the new strict Releases policy of iStockphoto might be very “American” and can be blamed on the outrageous US suing and damages culture. In W Europe, and notably in Belgium, claims are treated much more realistically. An unreleased model for instance will mostly get 1 euro symbolic damages for its public appearance, and it needs to prove the real damage _and_ the link between the publicized photo and the damage. For unreleased property, for instance a car, the judge will most probably rule that it constitutes free publicity for the car brand, judge the claim void, and will probably rule that the car company has to pay for the trial cost.
If a non-European stock agency is clever, it will state in the TOS that all claims have to be made in local courts according to local law. For IP infringement, that might be bad since US practices are tougher, but on the “damages” side, this might be good since nobody in Microstock can afford to spend 10,000K$ on a fantasy lawsuit since images are sold “as low as 0.10$”.
ditto that on that vivozoom interface – very basic, but not unexpected from a startup, we’ve seen much slicker websites flounder. So do we now think vivozooms days are numbed? Vivozoom accepted a surprising number of my images (more than 95%) but my images are mostly table stop stuff without model releases, and unlikely to generate any legal problems so that’s a bit false comparison – my vivo sales? lol
“Other microstock agencies may find it difficult to follow iStockphoto’s lead on warranting files.” yes, but it’s something they could attach as a selling point to a premium or exclusive collection. Any of them can offer a cleverly worded “guarantee” that has limited or no real world value.
I’m not writing off Vivozoom quite so quickly. Let’s see how they respond.
I don’t imagine a guarantee with no real world value would stand public scrutiny, at which point it would become a public relations disaster for the agency. A premium collection, however, is an interesting idea.
From Lawrence Gould, CEO VIVOZOOM
We are delighted to see that iStock/Getty have endorsed our proposition of a guaranteed product – this is clearly what the customers want, and what will sell images.
I would note a few significant distinctions between the vivozoom and the(soon to be) iStock/Getty guarantee:
1) iStock /Getty do not cover any settlements or damages arising (we do) – so it’s very limited guarantee
2) their cover is only $10,000, whereas ours is $25,000
For image buyers who care about a guarantees, these are pretty significant differences.
I wonder how this will affect their existing clients, those (many) who have been buying images with the so-called “Royalty Free” licenses who believed (wrongly) that they were getting a regular Royalty Free guarantee. I think they might be shocked to discover they have no cover over all the images they have already downloaded.
Hi Lawrence, thanks for responding.
Regarding the difference in cover, iStock point out that their $10,000 is per file while your $25,000 is per project. Does this make a worthwhile difference for the buyer? If a buyer users three or more files in a project, that’s already more coverage, but isn’t it likely that a legal dispute will be about more than a single file? Unless, of course, they’re a set and the legal dispute pertains to all of them.
-Lee
Larry,
RE:
“those (many) who have been buying images with the so-called “Royalty Free” licenses”
iStock content is offered under a Royalty Free license, not a “so-called” Royalty Free license.
RE:
“who believed (wrongly) that they were getting a regular Royalty Free guarantee.”
I’ve never heard the term “Royalty Free guarantee” and can’t find it anywhere in google in the sense you seem to be giving it. I would think that buyers believed they were getting what is specified in the iStock license terms which hasn’t included that term anywhere, in the past.
Perhaps you’d like to elaborate on your thoughts above?
Sean L.
Hello Lee & your prestigious guests,
great debate here. I’d like to add a point. What’s the real risk for the buyers? How many claims have been registered in the microstock history? What’s the overall amount of money? I know that it’s not easy to have this kind of data and I don’t want to underestimate the question, it’s just to have a realistic view of the problem.
Cheers,
roberto
Hey Roberto,
From my understanding, the risk is almost entirely academic. There have been so few issues that iStock has the confidence to cover their entire 5 million file collection. However, for some buyers where the designer could lose their job or the company has a particularly low risk tolerance, the lack of warranty is too serious to overcome the price difference between microstock and traditional stock prices.
So it’s not so much overcoming a ‘problem’, but more a ‘perception’ and risk management issue.
-Lee
Hi guys
Further comments from VIVOZOOM
There is some really good stuff here. I would like to highlight two points:
The over whelming question must be: WHY, if iStock are so confident, are they just guaranteeing the legal fees and not guaranteeing any settlement or penalty? Our own research has shown that there are significant numbers of confidential settlements to claimants for copyright breaches (not covered by the iStock guarantee).
It will be interesting to see how many claims are made now that iStock has “stepped up to the plate” – although I somehow think this will be confidential information.
Our project cost of $25,000 covers settlement and penalties, so is already far superior to the limited cover of iStock per image of $10,000. The reality is that any justifiable claim will be quickly settled, most likely for a few thousand dollars – our $25,000 cover is more than ample in my view.
Feel free to post any more questions to me !
Best wishes to all
Lawrence
Hey everyone – I just wanted to step in and quickly clarify that iStock’s Legal Guarantee covers more than just legal fees – it covers damages, liabilities and expenses (which include outside legal fees) and that, yes, our free $10,000 coverage is offered per file (audio, video, flash and illustrations are also covered), not per project. If anyone is interested in reading more legal on both these points, feel free to check out sections 8a of Article 8 of the iStock Content License Agreement (http://www.istockphoto.com/license.php) and Article 9 of the iStock Audio Content License Agreement (http://www.istockphoto.com/license_audio.php).
Rob Sylvan
Site Director
iStockphoto LP
Given the istock contributor agreement, does that mean istock are prepared to fund image buyers to take legal action against their contributing photographers?
( i.e. indemnifying istock at 10 here: http://www.istockphoto.com/asa_non_exclusive.php )
Hmm, nice, nice! Market is getting tighter and tighter
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