New York, NY, Oct. 03, 2008. The Photolibrary Group (‘Photolibrary’), which represents over 250 of the world’s leading brands and more than 2000 professional photographers globally, today moved to correct misunderstandings and establish the facts in relation to its continuing program of payments of legacy royalties to IndexStock contributors.
Photolibrary has become aware of circulation within the industry of a number of misleading and inaccurate statements casting doubt on the Company’s level of commitment to its ongoing program of discharging its inherited royalty payment obligations to former IndexStock contributors.
This misinformation has led to a significant level of unwarranted contributor concern about the reliability of Photolibrary’s royalty payments system overall.
Photolibrary Chairman Mr Tim Moore stated that Photolibrary inherited (and willingly accepted) its obligation to pay outstanding royalties to IndexStock contributors when the Company purchased IndexStock in late 2006.
“However, until we assumed control of the business we had no real understanding of the complexity of this task. Years of poorly-kept or non-existent contributor records meant that it became extremely problematic and time-consuming for us to match royalty obligations against IndexStock contributors, who in many cases had changed addresses or become otherwise hard to locate,” he said.
“We established systematic and rigorous royalty payment procedures to discharge outstanding debts to IndexStock contributors. These procedures have now been in place for ten months with a dedicated team reviewing files and seeking to contact and pay past contributors.”
Progress to Date
Photolibrary noted that great progress had been made so far, with $1.96 million - more than four times the amount being incorrectly circulated - injected into the IndexStock business since December 2007 to pay IndexStock royalties. This cash injection is incremental to previous amount of $3.7 million detailed in our media statement of December 2007.
As noted in Photolibrary’s letter to contributors of February 2008, the Company is making royalty payments to IndexStock contributors in the following categories:
- Top-earning artists in the past 12 months.
- Artists who submitted images to IndexStock who are not in group 1.
- Top-earning artists over the last two years that are not in group 1 or 2.
- Artists owed $250 and below with EFT details (with no review of account).
- The remaining dormant contributor base that does not fit into the above categories
Our royalty resolution team has encountered:
- Many instances where images have been allocated to the wrong photographer. Photolibrary has then to back-track more than six years and remove accrued royalties from one artist and credit the correct photographer.
- Contributor statements which in up to 30 per cent of cases include cancelled sales. These confuse photographers and slow our review process. As the cancelled sales are counted as royalties owed, they need to be double-subtracted from the amounts owed.
Photolibrary has become aware of a perhaps well-intentioned but misguided campaign by an industry association to misrepresent Photolibrary’s program of IndexStock royalty payments. This campaign has used inaccurate and misleading statistical data to claim that:
- Photolibrary has made only half-hearted efforts to contact and pay IndexStock contributors
- IndexStock records are accurate and contact with past contributors is straightforward
- Photolibrary is not committed to a ‘good faith’ process to meet outstanding royalty payments for IndexStock contributors
“All of these assertions are simply wrong,” said Mr Moore. “To the extent that industry association involvement has prompted IndexStock artists to contact us we are grateful. Given that we are making payments to artists on a systematic basis, it can be mere coincidence (not causality) if payments are made at around the time of industry association contact.”
In Photolibrary’s February 2008 letter, the Company advised contributors that its review and payment plan would take most of 2008 to complete.
“We continue to work on reviewing accounts and scheduling payments and we still anticipate this review process being resolved before the end of this year,” said Mr Moore. “However, the current payment schedule stretches well into 2009 and may extend even further. While many people may have preferred this process to be faster, we have chosen to proceed in an orderly manner that ensures that the payments we promise are sent according to the schedule we have communicated directly to the artists involved. We appreciate the patience photographers have shown while we work through this very difficult and labor-intensive process at Index stock.” he said.
As Photolibrary has consistently stated, accounting inaccuracies and record inadequacies are an inheritance from IndexStock and are thus ‘quarantined’ from Photolibrary’s continuing business.
“I cannot emphasise strongly enough that the IndexStock legacy royalty issue has and can have no impact on Photolibrary’s present contributor base. Since inception in 1990 and today with multiple brands and with offices in 10 countries Photolibrary has an excellent record of meeting its obligations.” said Mr Moore. “All post-acquisition IndexStock commission payments are up-to-date. No current contributors should be concerned and if confusion has been caused within the Photolibrary contributor base, Photolibrary finds it regrettable and deplores the dissemination of misleading information by third parties.
“Photolibrary has made and will continue to make progress in reviewing accounts, contacting photographers, and paying off IndexStock’s royalty debts, a legacy issue following our acquisition of that business two years ago,” Mr Moore concluded.