Masterfile employee: 85% of revenue comes from litigation

[infringer]

Hello,

My company recently negotiated a settlement with Masterfile under circumstances familiar to readers of this website.  A question I've been pondering that has come up on this forum before is: how much revenue is Masterfile and other stock photo companies receiving from these letter campaigns?  My original guesstimate was 20% of their revenue stream; It turns out I was off by a factor of 4.  The key piece of information comes from a presentation given by the "copyright compliance officer" we were dealing with at Masterfile to a Canadian women's organization:

"... she threw out some statistics to illustrate the extent of the copyright nfringement problem, stating that eighty-five percent of revenue from stock photography is not garnered from legitimate deals, but collected from infringement." (See: http://www.womenenter.com/womenenter.com/M.O.M.html)

Everyone negotiating with Masterfile and others need to keep that number in mind.  The person you are dealing with may call themselves a "compliance officer" but in fact they are nothing more than a salesman employing high-pressure sales tactics to get you to purchase a "retro-active licensing fee" for ridiculously over-priced images.  Since such a large portion of Getty and Masterfile's revenue comes from demand letters, I would not be surprised if they pay their representatives a commission on the negotiated settlement amount.

[Lettered]

Makes sense to me. Actually 85% sounds low. Who on earth would willingly pay some of the pricetags on some of these stock photos of simple everyday objects is beyond me.  I mean, if you needed a thumbnail of a shopping cart and you saw it for $200 for a year license wouldn't any reasonable person just take the picture themselves with their own camera ... or go to one of the discount providers and get one for a few bucks?  Who else would be paying these prices other than victims of unscrupulous website designers who feel forced to under threat of legal action?

[infringer]

I'm afraid that most people who are receiving demand letters are not savvy enough to realize what it really is.  A lot of people are not comfortable negotiating (especially with a gun to their head) and may even be sending a check for the original demand amount without even trying.  I consider myself to be a pretty cynical person, but like I said in my original post, I had no idea how lucrative these campaigns are for the stock photo industry.  This is why we need a site like ELI to expose what these companies are up to.  The music industry and Hollywood get a lot of press about their efforts to control their IP, but these guys have completely flown under the radar and a lot of people who would have done good otherwise are getting blindsided and taken to the cleaners.

[Oscar Michelen]

Thanks

[Matthew Chan]

Infringer,

Thank you for your contribution. Your insights and other submissions by other community members is what keeps us current and on our toes. It is no secret that these so-called Compliance Departments are extortionistic revenue centers, not simply a deterrent operation.

And regarding these so-called license compliance officers, I cannot speak to Masterfile, but I can tell you that Getty Images uses college kids from law schools and put them on the firing line. I understand that people in compliance have now gone to disguising or abbreviating their true names.

It is interesting that in the last couple years how the corporate employees have off-loaded some of the front lines to third-party firms.  But people have a long memory.  People also make it their business to know the names of people who are in charge and condone this sort of behavior.

But it doesn't really matter if anyone tries to hide their names because the minute they change their jobs and any reputable employer decides to Google their name, their old employer, and their job title, they are going to start looking radioactive. And the only people who can stomach having radioactive employees on their staff are law firms or other companies that engage in similar practices.

The job title "license compliance" sounds sexy until people find out how most of the stock photo industry are becoming like the RIAA who are hated by the mainstream. I don't have an axe to grind with anyone in the RIAA but if I ever came across someone in the RIAA, my antenna goes up.

Just like nowadays, if anyone says they work for any of the major stock photo companies, you are automatically suspect if you are anywhere near their legal department.

The rest of us have long memories and will certainly not forget for the rest of our professional lives. My guess is that the majority of letter recipients are between 30-50 years of age.  For every letter recipient they hit, that is one more negative karma they are creating, more venom generated, and bad-mouthing that is happening for another 20-30 years. What a huge snowball effect it will be.

I have wondered where the tipping point is. I am certain there are at least 10,000 letters that have gone out over the last few years. But if and when they collectively hit 100,000 settlement demand letters, that is a lot of upset and angry people.

Matthew

[Oscar Michelen]

Matt Getty has sent out much more than 10,000 letters over the years, I think it is much closer to 100,000

[Matthew Chan]

I am contemplating what and when the tipping point will be.  If the numbers are high enough (I am not sure what that number is), this controversy will take on a whole different level of awareness. If they are closer to 100,000 letters, if they hit 250,000 (quarter million letters), it could get very juicy.

Matthew