Stock Agents Target Web Infringers December 2, 2005 Photo District News Convinced that image theft in cyberspace may be costing them millions of dollars in lost revenue every year, stock photo agencies are pursuing unauthorized image users with newfound resolve—and some powerful technology. Corbis has been one of the most avid enforcers of copyrights to date. With the help of Digimarc, a nine-year-old provider of Web crawling and image tracking services, Corbis has collected more than $2 million in the last two years for unauthorized image uses. And that's not counting fees collected from customers caught using images—inadvertently or not—beyond the scope of their licenses. Also showing the industry the benefit of active enforcement is PicScout, a two-year-old copyright policing service. Among new PicScout customers is Getty Images, whose CEO, Jonathan Klein, recently told Wall Street analysts that "the degree of unauthorized uses is significantly larger than we thought." And the theft isn't limited to personal Web uses or lawless frontiers such as China, Klein added. "[Unauthorized use] is reasonably high for big customers, even in the United States." PicScout customers pay an up-front charge plus a percentage of recovered revenues "on the order of what a lawyer would get" (30 to 40 percent), according to one of its stock agency customers. In September, the company began offering its services to individual photographers starting at $15 per month plus as much as 50 percent of recovered fees. Among PicScout's first customers was Zefa, which reported 18 months ago that 90 percent of online uses of its images were unauthorized. PicScout has been using that testimonial to good marketing effect ever since. Many of its three dozen agency customers have signed up within the past year. But an unauthorized online usage rate of 90 percent? "That number [90 percent] certainly gets your attention, but even if it were 50 percent, it would be huge," says Betsy Reid of the photographers advocacy group Stock Artists Alliance (SAA). "And [90 percent] probably isn't way off. It's so easy to go in [to a stock agency Web site] and pull an image. All you have to do is...click and drag." A year ago, when it was trying to convince stock agencies of the value of its services, PicScout scoured the Web for images belonging to SAA members. The experiment included 16,000 images in Getty's collection, and in three months, PicScout uncovered more than 200 unauthorized uses of those Getty images, Reid says. "We were astonished to find out these [Getty] images were found 11 times the rate of the average that PicScout finds," PicScout CEO Eyal Gura said in a press release at the time. That had the desired effect of getting Getty to sign up for PicScout's services. So far this year, Getty has recovered about $2 million—a drop in the company's $720 million revenue bucket—for unauthorized uses. But Klein told analysts he expects recovered revenue to be "extremely relevant" to the company's bottom line within the next few years. The problem for Getty and other agencies, though, is that services like Digimarc and PicScout only report uses found by their crawlers and clipping services. It is still up to the agencies to do the hard, expensive work of determining which uses are unauthorized and worth pursuing, and then collecting money from deadbeats. As a result, revenue recovery is a lot more modest than the 90 percent infringement statistic might suggest. SuperStock, for instance, identified 680 instances of infringement from its PicScout reports from September 2004 and September 2005. So far, it has recovered "several hundred thousand dollars" (executives won't give exact numbers) from about 135 violators who responded to Superstock's demand letters without a fuss. The agency is still negotiating with 220 or so other violators. Approximately 80 additional cases involving stubborn infringers have been sent to the agency's lawyers. And the agency has written off the rest—250 cases, amounting to one-third of the total—as not worth pursuing. Index Stock Imagery has discovered about 200 cases of unauthorized use worth pursuing in the last year, including about 40 instances of clients using images beyond the scope of their licenses, says agency president Dan Russelman. Index has recovered fees from about 50 unauthorized users, and is in negotiations with the rest. "We could collect between $200,000 and $400,000 if all of the cases are closed," Russelman says. Masterfile, meanwhile, says it has collected $1 million for unauthorized uses in the last year, which is four percent of its annual revenues of $25 million. Two thirds of the unauthorized uses were online, and the remainder were in print, says agency president Steve Pigeon. "We go after them for three times the normal licensing fee. The way I look at it, 90 percent of the time someone in food chain knew what they were doing." A dilemma for most stock agents is that tough enforcement policies may alienate potential customers. Wanting to give infringers the benefit of any doubt, some agencies pull their punches. Klein told the Wall Street analysts, "As we've often boasted, we don't sue people and never have done so.... We point out the infringement, and that way we can get some money and also develop a better relationship with the customer." "This helps establish a climate, industry wide, of accepting copyright theft," says photographer Leif Skoogfors, who is currently pursuing hundreds of online infringements of one of his images. SAA complains that Getty has been slow to pursue the more than 200 instances of unauthorized use that PicScout and SAA brought to the agency's attention last year. "Getty would not get a very good report card for follow up," Reid says. Getty spokesperson Deb Trevino says the agency will "continue to aggressively pursue violations." Corbis also prefers to turn infringers into paying customers. "Most misuses aren't malicious. They stem from ignorance or oversight," says spokesperson Dov Schiff. But the company has sued about two dozen infringers over the past two years, forcing most to pay settlements. Some agencies play tougher than others with infringers, but vigilance is up across the board, and the industry is beginning to staunch some losses. How much the enforcement efforts slow cyberspace infringers in the long run, though, remains to be seen. © 2005 VNU eMedia Inc. All rights reserved. Reprinted with permission of Photo District News.