Photography agencies challenge, and delay iPad app

In another article here today I wrote about the Wired coverstory declaring that the web is dead. What the authors were really saying is that the web is moving to more controlled environments and that apps will play a large part in how people consume information. Earlier this week I suggested that (stock) photography companies start thinking about how to find revenue models for media that are moving to the apps.

A number of entertainment photography agencies ( Bauer-Griffin, Startraks, Pacific Coast News, Splash News, Flynet Pictures, Star Max, INF and Fame Pictures) have decided to do just that and go one step further. The Hollywood reporter writes that they have taken action against the upcoming People magazine iPad app by disputing not being paid for it and demanding to be paid a licensing fee. It is reported that this has now led to a delay in the launch of the app  (although this is being denied by People Magazine).

“They don’t want to cede ground on this because this is the future,” said an editor at a rival publication to People who wished to remain anonymous. “If they don’t take a stand now, they’re screwed.”

With the incredible sales of the iPad and a large number of similar devices in the making the agencies are worried that this model is the future and that they won’t see any revenue from the use of their photos. Right now People pays the highest fees of any magazine. The magazine on the other hand claims the medium is in its infancy and needs time to mature before it even gets profitable. Others have claimed that the iPad application is merely a promotion, or ‘brochure’ for the actual magazine and that promotional use of images is allowed.

This is an incredibly important debate for picture industry buyers and sellers alike. As I pointed out here repeatedly, buyers will need more and more content, while their budgets will stay flat at most. Sellers on the other hand will want reasonable revenue in return to re-invest in the creation of relevant content (and to pay the rent). The Hollywood reporter points out:

But the increasing multiplicity of platforms is proving to a be a logistical nightmare for tracking usage, which is why publishers are likely looking to steer negotiations to a subscription model, whereas photo agencies prefer a la carte deals that recognize the widely varying value of each individual photo.

It looks like the Hollywood reporter is hitting the nail on the head. Companies don’t just switch to subscription because it’s cheaper but also because it’s simply a more practical way to license in a world where information is presented via a multitude of media.

Is it time for an industry to facilitate this need and adapt to new realities? The outcome of this dispute will be a first test of how buyers and sellers resolve licensing content for new media applications.