Pricing & Negotiating: Forbes Magazine Contract

Aug 28, 2014
Consulting Case StudiesPricing & Negotiating

Over the years, I’ve shot for lots of business magazines, but my favorite was always Forbes. The photo editors were experienced, smart, and nice. They appreciated good photography and they used it well. Not only did they have a reasonable contract, and decent budgets for assignments, but I was often able to generate additional revenue from those assignments by licensing the pictures to other publications or by selling article reprints to the subjects or their companies. However, with Forbes experiencing the same financial pressures that most print publications are facing, their contract has changed dramatically. (After several years on the market, Forbes Media announced recently that a group of investors has acquired a majority stake in the company.)

In an effort to save money on assignment photography (or even make money on it), Forbes has created The Forbes Photography Collection to license pictures generated from their assignments through Corbis Images. They hired Robyn Selman, formerly of Corbis, to guide that process as their Director of Photography. Forbes Media isn’t the first publisher to syndicate their photographers’ pictures (Condé Nast comes to mind), but still, it’s a dramatic shift from the way most magazines and photographers have historically done business with each other.

In a nutshell, here’s how their new contract differs from their old one:

Instead of photographers getting compensated separately for residual use of their photos (including space, foreign Forbes editions, and article reprints), those rights are bundled into a flat shoot fee, and the photographer gets a maximum of 12.5% of third party sales through The Forbes Photography Collection. (The contract specifies that the photographer gets 25% of Forbes’ half of the gross fee when Corbis is the only agent involved in the sale. If another agent gets involved in the sale, the share to the photographer could be less than 12.5%.) From what I gather, the shoot fees are 1000.00 or more (plus expenses) now, as opposed to 700.00/day (plus expenses) against space with their previous contract. It’s hard to compare flat fees to day rate vs. space, but my own experience was that my Forbes assignments frequently generated space rate payments. So while the fees and expenses for the initial shoot may be about the same, photographers are giving up significant money (not to mention control), on foreign editions, article reprints (which are often worth more than the original assignment), and stock sales to the subject and to other magazines.

The flat shoot fee is negotiated for each assignment. In the past, photographers and the magazine would renegotiate day rates and space rates every couple of years (as a practical matter, the magazine would simply have standard day and space rates that they would pay). With this contract, Forbes no longer ties the fees directly to the amount of time it takes to shoot the job or the size/number of photos that appear in the magazine. That’s problematic in several important ways. First, if the value of the assignment isn’t tied to the amount of time it takes to shoot the job or the space the pictures occupy in the magazine, then what will be the basis of that negotiation? Second, putting the photographer and the photo editor in the awkward position of renegotiating the fee for every assignment wastes valuable time and energy at exactly the moment when you need to get a job done fast, and it sets up a regular source of conflict that will have the effect of eroding rather than building and streamlining the relationship between contributor and editor. Third, it creates a conflict of interest between the photographer and the client. It’s natural and sustainable to put the photographer’s economic interests in line with the client’s. Lastly, anyone growing a business (even a freelance photographer), needs to build equity along with revenue. For photographers, the rights to their photographs are their main source of equity.

I can understand Forbes Media’s impulse to capture this additional revenue in the short-term. But is it in their long-term interest?

I’m not sure it’s sensible for Forbes to enter into the business of syndicating photographs. For starters, it’s clearly outside their area of expertise. Though there is a modest amount of residual value to the photos for Forbes, I wonder how much of it is negated by the administrative costs of starting up and maintaining the infrastructure required to support those sales, and the additional up-front fees they have to pay the photographers. Also, the minuscule back-end split they’re offering photographers not only removes any incentive for them to produce lots of excellent photos (which would otherwise earn those photographers space rates and other residual fees), but they’re also making it less attractive for good photographers to work with Forbes in the first place. So the photos they’ll end up with won’t look as good in the magazine and they won’t have as much residual value as they otherwise would. A smarter approach would be to maintain the day vs. space fee structure, and simply lower or raise the fees as their ability to afford high-quality photography shrinks and grows. (Another approach might be to maintain a higher fee structure, and increase or decrease the number of hand-out and stock photos that they use, as their budgets ebb and flow.) Either way, it’s naive to think that you can reduce the compensation to photographers without adversely affecting the quality of their photos.

Here’s the contract. It’s separated into an Artists’ Agreement (which gets signed once), and a Schedule A (which gets signed for each assignment):

1_forbes_contract_four_up

If you are a photographer (or a magazine), and need help building an estimate or reviewing a contract, please feel free to contact any of our producers. If you’d like to read more of our Pricing & Negotiating articles, you can find them here.

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