Amid layoffs, reorganizations and market imbalance, a number of photo stock agencies have decided to trim the royalty rates they pay for rights-managed images.
The changes began in September 2008, when Alamy announced that it would reduce its royalty rates from 65 percent to 60 percent. A few weeks later, during the 2008 PhotoPlus Expo, Corbis senior vice president Don Wieshlow said Corbis would lower its rates from a range of 45 to 50 percent to 40 percent as contracts come up for renewal.
Earlier this year, PDNPulse reported that the Costa Mesa, Calif.-based PhotoEdit agency will soon join in with its own royalty-rate cut, from 50 percent to 40 percent. According to a January statement cited in PDNPulse, PhotoEdit told its customers that they had until March 16 to accept the new terms, which will become effective on April 6.
The cut was criticized by Zave Smith, president of the Stock Artists Alliance, who says the cuts won't bolster business for Corbis, which has never been profitable.
Wieshlow and other Corbis executives claim that the rate reductions, which will last for three years, will help Corbis invest in more growth opportunities. Even with the royalty cuts, they said, Corbis will still pay its contributors higher royalties than its arch competitor Getty Images.