iStockphoto to Warranty all Content

In various forum posts around the net, people have posted that their company will not buy content from iStockphoto.com because they do not offer a warranty against legal action, like some of the larger stock houses.  Times, they are a changin’.

Today, iStockphoto.com has announced the “iStock Legal Guarantee”.  From the forum post:

Beginning Wednesday, iStockphoto promises that files purchased and used in accordance with the iStock license, will not breach any trademark, copyright or other intellectual property rights or rights of privacy. We’re calling it the iStock Legal Guarantee and if a customer does get a claim, iStock will cover the customer’s legal costs and direct damages to a combined total of $10,000. Here’s the best part: it’s on us. Starting Wednesday, every iStockphoto file automatically comes with a free Legal Guarantee.

This is truly a first for the big names in micro.  A smaller company was offering such a warranty, but I don’t believe they made it out of Beta.

Amazingly, this announcement come of the heels of my blog posting yesterday “Keep an Eye on your Content Sources“.  Now, you can feel perfectly safe, and legally covered (up to $10,000) when sourcing iStockphoto.com for your content.

In addition, there is an extended licensing option for more legal protection, up to $250,000, available for 100 credits.  I haven’t yet determined why you might purchase this option.  Maybe, for a huge national campaign with lots of visibility.  Anyways, the option is there.

Why shop for image, video, audio or flash content anywhere else?

Keep an Eye on your Content Sources

There was an article in the LA Times yesterday on “Controlling Illegal use of Copyrighted Material on the Web“.  The article is basically about the penalty cost that Getty Images will fine someone if they discover that someone using unlicensed copyrighted Getty material on their website.  It doesn’t really contain any new information – Getty has been doing this for 3-4 years now.

Basically, Getty uses an online service called PicScout to scan the web for images that match the content in its vaults.  When it finds a match, somehow, it compares the site owner/registrar to it’s history of licenses sold for that content.  If it doesn’t find the image was legally licensed, it sends its legal dogs out to fine the owner and get the work removed.

Too Much?

The question the article brings up is “Are the fines too excessive for the crime?”.   The point of a fine or punishment is not only to dissuade the person receiving it from committing the act again, but to also scare off others from doing the same, out of fear they will be caught as well.  I think you can see this in the RIAA lawsuits that occurred over music sharing.  The general outcome that I see is that normal people who might have thought music sharing was ok, got really freaked out about being fined hundreds of thousands of dollars and turned to legal sources, like iTunes, which is selling 25% of the music in the USA.  Of course, there will always be people who will do their best to step around the rules, but your everyday, average Joe MusicGuy probably will turn to iTunes or some other legal source, for their music needs.  I know I do.

Now, it certainly wouldn’t have made sense just to fine illegal music users the cost of the song on iTunes.  You might as well just continue to keep downloading on the off chance that someday, you might have to pony up a few cents for the downloads you did.  The cost of the risk taken (morality aside) would seem to justify continued downloading.  ie., low risk and a low cost if caught = keep on doing it.  However, through the media reports, we saw that a large number of people were actually tracked down, and the fines were very high: high risk + high cost = STOP NOW!

How Much?

Looking at that scenario, for one thing, it wouldn’t make sense for Getty to just fine people the actual cost of the license.   It would be like catching a shoplifter.  “We caught you, but just pay for the item and we’ll let you go.”  The person would just try again next time.   There needs to be a punishment factor.   The second thing coming into play is that there is a real cost to protecting the rights of the Getty submitters.  PicScout certainly isn’t free:

If you’re goal is to monetize the images found (either by licensing or unauthorized use claims), we charge based on a percentage of the recovered revenues.

So, Getty has some negotiated cost with PicScout they need to meet to use the service.  Then, you have Getty’s law team that goes into action once the infringement is found.  We all know lawyers aren’t cheap.  So, there is a per image cost to pursuing an infringement claim.  We just don’t know how much it is.  There is the notion in the article that it is based on the licensing cost of the image for the found use:

“When we’re made aware of an infringement, we seek an amount that’s in line with the cost of licensing the image,” said Claire Keeley, senior corporate counsel for Corbis. In many cases, she said, that can mean damages of as much as 10 times the original licensing cost. In other words, a photo that costs $50 to license could result in damages of $500 if the copyright is violated.

Assuming Getty has the same thought process, the problem here (for Getty, not for the user), is that Getty prices for web usage/size, at least, have dropped noticeably in the past few years, to the point now, where a blog sized image can be licensed for $5.  Obviously, a multiple of $5 fine is not going to pay any of the overhead bills for the action, so there must be some minimum to cover costs, as well as to scare off future offenders.   Despite the image fees dropping, the fines seem to have stayed stable at $1000 or so per infraction since the start of the program.  So, it would seem that around a thousand dollars is the place Getty wants to be.  They must walk the line between recovering costs for protecting their artists, dissuading others from infracting and not annoying people so much that they lose too much market share from people vowing to stay away from Getty Images for all eternity.

Whose Fault?

The article brings up the question of where the fault lies for these infringing uses.  Does it fall to the web designer who procured the imagery/content, or to the end buyer of the site design, who commissioned and approved of the site?  I would say that this depends, of course, on the contract between the two, and things like indemnification clauses and work for hire and such.  What I think that we can take out of this, though is that the choice of a designer goes back, again, to a cost/risk analysis.  Do you hire the college student or neighbor with no references or knowledge of copyright for a low price, or do you pay more for someone or a company with a history of web design knowledge and experience?

From a survey conducted last year:

A recent study of more than 1,000 people conducted by KRC Research and iStockphoto, the world’s royalty-free multimedia sales leader, revealed that 33 percent of Americans are using downloaded digital content, but nearly 30 percent are unaware that permission may be required for its use. This lack of awareness spikes to 38 percent among Americans in both the 18-24 and 65 and older age groups.

This is not to say that these more expensive companies are immune from mistakes, but when finishing a project, hopefully a buyer has negotiated or included the right to take a look at the designer’s receipts for image/content licensing to best insure legality.

End Thoughts

Of course, at this point, I’m going to say that those commissioning designers should insist on those designers using a reputable image/content site as their purchase source, and should also require receipts or other proof for said licensing.  Avoiding free sites, or public domain image sources, where there is no oversight to the content available, is just common sense.  There are loads of people, mostly in Asia/Eastern Europe, who delight in procuring large numbers of stock images from various sites and putting them up for free downloads.  Some sites, such as Flickr, may even strip internal image information, making it difficult to determine image source, even if the image is offered with a proper license.   These free sources of content may be extremely attractive to designers looking to cut costs, but they may not be the best solution to the person commissioning the designer.  You must be vigilant in checking the source of the content you are responsible for.

Toward that end, I will, of course , suggest using iStockphoto.com as a source for content.  Regular buyers are able to view and screenshot a list of licensed content.  A record of a purchase, even for a prior project of the designer, ensures proper licensing, since, with iStock’s Royalty Free licensing, the designer can use the content in perpetuity (forever).  Even better, a corporate account user can:

Get full reporting on financial activity within your network. Keep track of who downloads what for each project. Stay organized with customizable reporting tools that output to a CSV file.

By the way, here’s a good iStock article on incorrect content usage: http://www.istockphoto.com/article_view.php?ID=616 .

Here’s to staying out of trouble!

Extended License Advice from iStockphoto

Previously, I’ve posted examples from the forums about whether or not a buyer would need to purchase an Extended License on iStockphoto for their licensed content.  Here’s one article and here’s another.

Well, in case you missed it, iStockphoto.com has put together their own page to try and give some examples that would help you when deciding to purchase an extended license.

You can find the page on extended license examples here, and it also lists some license prohibitions, which is a nice touch.

More “Which License Do I Need” ?

This posting is sort of a follow up to my article “Do I need an extended license?“.  I’ve seen some recent queries in the iStockphoto.com forums, and I’m going to review them here, and post some more when they come up.  I’m going to post my rationale behind the answers, which, from experience, seems to be pretty in line with the iStock support thinking.

E-Cards for a Client

I’m doing some e-cards for a web-based company. Do I need the extended license for istock files on this work?

The regular license clearly states you may use content for “advertising and promotional projects”.  What the original poster above terms “e-card” could probably be thought of as just a  “promotional email design”.  In this sense, the use falls within regular usage.  iStock is very clear on “e-cards” in the license as being prohibited, and they are referring to a website or such where  users send ‘greeting-type’ cards from the web based company’s site.

VERDICT: Regular License

Jewelry Design

I design and sell jewellery (pendants in particular) and use patterned paper, wrapping paper etc as the design features on the pendants. I’ve noticed that some of my competition use some istockphoto images in the same way. I wanted to ask whether this was actually allowed under the standard license? Can I use files on istockphoto for this purpose?

The regular license states you may not “use the Content in any … items for resale, license or other distribution for profit” (without an Extended License).  To clarify this point a bit more, in the section about permitted uses, it says:

For clarity, you may not use the Content in products for resale … unless … the original Content has been fundamentally modified or transformed … and where the primary value of such transformed or derivative work is not recognizable as the Content

While there is certainly value in the jewelry design and construction, it can be said that merely putting the content on the jewelry does not modify or transform it enough, and it also adds significant value.  Much like a calendar that showcases the content.  Also, as you can read in this linked thread, the official word from support is:

You may also create these unique pieces for personal use, however, if you wish to resell the final product then each image which you have installed within the design must have been purchased with an Items for Resale – limited run of 2 000 pieces of artwork Extended License.”

VERDICT: Extended License – Items for Resale

Icons in a Software Application

Does the license agreement for iStockphoto purchases allow me to embed an icon created from a purchased image inside an iPhone application that is sold on the Apple App Store?

So, we have a designed application, that someone wishes to sell.  Does using iStock content (icons) in this case require an Extended License for “Electronic Items for Resale”?  The answer is no.  The regular license states:

You may also purchase the option to resell the Content in an unlimited number of electronic templates for e-greeting or similar cards, electronic templates for web or applications development, PowerPoint or Keynote templates, screensavers, and email or brochure templates.

This, however, does not apply here.  The poster is not creating a template for applications development.  He is actually creating an application.  Two different things.  In addition, the icons are not the primary content in the application, like you might find in a screensaver application.  Removing the content from this application would not greatly affect the value of the application.  And iStockphoto legal agrees:

…the consensus was that it would be ok provided it’s not a main selling feature

VERDICT: Regular License

Campus Cookbook

We are creating a campus cookbook that is going to be available to faculty and staff. However, we are considering selling it in our campus bookstore at cost (it will not make a profit). We would just like a way for our students to have access to the cookbook. Will I need an extended license for any images I may use in the cookbook?

The poster mentions “it will not make a profit”.  That is not a determining factor in whether an extended license is needed.  What is important, is that the regular license clearly allows books (in general): “entertainment applications, such as books and book covers”.

It also prohibits using the content in “items for resale, license or other distribution for profit”, though.  Here, one can infer that the statement is discussing items for resale where the primary value is derived from the content.  For example, a book consisting of only full page iStock photos derives its value from the content and would probably not fall under the regular license, while a cookbook’s value comes primarily from its recipes and text.

VERDICT: Regular License

RM vs. RF

iStockphoto.com is a Royalty Free stock photo site.  It does not sell imagery Rights Managed.  You may have heard these terms before, but what do they mean, and what is the difference between the two?

To start, they both refer to licensing agreements.  When you purchase an image at iStockphoto, what you are actually buying is a license that gives you certain rights to use a specific piece of content, here a digital image, movie clip, flash composition or audio clip.  The license gives certain rights to you, the buyer, and withholds certain rights, some of which can be purchased with an extended license.  You may think of the iStockphoto license as Royalty Free with a touch of Rights Managed built in.

I recently update some online documentation about these licenses, and I’m going to include that text here.

Royalty Free

Royalty Free refers to a type of contract between a two entities (the licensor and licensee), that is employed when licensing the rights to use content, such as photographs. The term Royalty Free means that that once the content is licensed under a set of guidelines, the licensee is normally free to use it in perpetuity without paying additional royalty charges.

The Royalty Free license contrasts with the Rights Managed license, wherein the buyer usually receives the right to use the content in very specific ways, with restrictions placed on things like period of time used, geographic region, industry, size published, etc. Rights Managed because the licensor is specifically managing the publishing rights for the content.

For an image that has been licensed as Royalty Free, the licensor is unable to provide a history of usage to a prospective licensee. This may negatively affect the licensee, because they cannot be assured specific content is not being used in a certain geographical region by a competitor, for example. There are examples of the same Royalty Free content being used in large promotional advertising campaigns by competitors, one notable such incident involves EverywhereGirl.

The concept of Royalty Free comes from copyright, a statute that allows authors and publishers of works to be the sole arbiter of the exploitation of that work, and to set fees associated with that work. The economic incentives afforded by copyright give artists one way to make a living through their creative works.

Typically, the royalty charged for content under a Royalty Free license is based on the physical attributes of the content. For example, the larger pixel size of a digital image, the larger the fee, since the licensee gains more benefit from an image with more resolution. The typical charge for an image that reproduces well at a two page magazine spread size may incur a charge of up to $500, wheras a blog-sized image may run much less. Likewise, a longer piece of music, or a more complex Flash work could command higher prices.

Royalty Free does not mean a user is free to take and use whatever content they find available to them. It only refers to a specific licensing contract between two entities. The licensor, usually the content creator, always retains all copyright to the content, including the ability to distribute it, or allow redistribution. Each licensing contract is different. Some may allow reselling of items that include that content, such as a t-shirt or calendar with an image, and others do not. The terms of the license should be researched, to be assured if the license includes the rights desired by the licensee.

Rights Managed

Rights Managed refers to a type of contract between a two entities (the licensor and licensee), that is employed when licensing the rights to use content, such as photographs. The term Rights Managed means that the seller of the license is specifically giving permission to the buyer to use the content in a certain way. This typically includes restrictions on the length of time, the medium, the size, the format and the location the content can be used (in). The more flexible, or beneficial rights one purchases, the more expensive the license.

The Rights Managed license contrasts with the royalty-free license, wherein the buyer usually receives the right to use the content in perpetuity, with much more flexible restrictions. Royalty Free because they normally do not need to come back to pay more royalties for additional rights for other uses.

Typically, for an image that has always been licensed as Rights Managed, the licensor is able to provide a history of usage to a prospective licensee. This can benefit the licensee, because they can be assured specific content is not being used in a certain geographical region by a competitor, for example. The history can also provide the licensor with the opportunity to make additional income from offering the licensee an option such as exclusivity within a specific region or industry. If the image does not have a recorded history (it may have initially been sold Royalty Free, for example), the licensor would not be able to provide such an opportunity. Again, the Rights Managed license is merely a set of restrictions placed on the content’s use. At its base, it is not a guarantee of exclusivity in any sense.

The concept of Rights Managed comes from copyright, a statute that allows authors and publishers of works to be the sole arbiter of the exploitation of that work, and to set fees associated with that work. The economic incentives afforded by copyright give artists one way to make a living through their creative works.

An example of how Rights Managed works benefit you and the content’s publisher might be that you simply have a local business’ newsletter which is printed monthly, and which prints 400 copies. A fee for this small use might be $100, because the benefit the business receives from the use is small, so the fee is comparable. This same image, used editorially in a national publication, reaching 15 million people might have a fee of between $500 and $1000, for the same image. The concept here is that when the benefit to the organization increases, so too does the fee paid to the publisher.

Some standards exist for the royalty charges for the various restrictions. Fotoquote is a piece of software that can provide sample royalty charges for photography content based on any number of category restrictions.

Where’s My Image?

So, you’ve bought credits on iStockphoto.com, and you’ve found the image you want.  You’ve selected the size, and hit the “Download” button.  The agreement pops up, and you accept it.  The browser shows the next page … and … … ??? … where’d the image go?

You’re not alone.  This seems to happen quite frequently that buyers are unable to find the image they downloaded on their computer.

Buying an Image License

So, let’s go step by step through the buying process.  I will download this recent image of mine (sorry, I just love the colors in this image):

Underneath the image, you choose the image size you want, and the cost will update automatically.

Next, I click the orange download button (I have enough credits in my account to cover the total).  You will then see the license agreement pop up.

I agree to the agreement, and that popup goes away, and another pops up telling me the purchase was successful and the download was initiated. I get some other options, like “Start Download” (again), and links to support tickets.

I am using FireFox 3.0, so I also get the Firefox download box telling me something was downloaded, along with all my other recent downloads.

You may have figured out that the file number of the iStock image, 7106440, is included in the downloaded image name.  Now, if I right click on that filename, it will give me some options, including one to go to the folder where the image is.

So, I can open that folder, grab the image, and go from there.

Alright, we’ve covered the actual buying process.  Let’s look again at finding the purchased image.

Where’d It Go?

I use Firefox on Vista.  So, I’ll cover using those tools from my knowledge, and I’ll list some tips from others for other tools as I find them out.  To find your image, try one of these methods:

Using Firefox:

1. In the “Tools” menu, choose “Downloads”.
2. Scroll through the list until you find your image.  You may not recognize the image name, since they get downloaded with a title like “iStock_000007106640XSmall.jpg”.  In that case, right click on any name like that and “Open Containing Folder”.  Once you have that open, change your view style to “Medium Thumbnails” (or large, or XL).  Then you can visually choose your image.  If you are on Windows XP, use “Filmstrip” or whatever visual representation you can get.In Firefox, the download directory is, by default, under C:\Users\***\Downloads

Using Windows Vista:

1. Right click on the start button, and choose “Explore”.
2. Navigate to your harddrive “C:” .
3. In the search bar in the upper right, enter “istock*jpg”.  If your image was recently downloaded, it should pop up in the file listing.
4. If it does not show up, try opening the “Advanced Search” options, and clicking the “Include non-indexed files” option.  This will show older files Windows hasn’t touched lately.

Using Internet Explorer 7.0

1. There seems to be an issue, in that IE doesn’t actually automatically start your download for you, even though it says it is.
2. If you still have the “File Successfully Purchased” pop up on your screen, you can right click on the “Start Download” link, then “Save Target As”, and put it wherever you like.  Alternatively, just click on the “Start Download” link, and the open/save dialog should pop up for you.
3. If you don’t have the popup still up, and you are still within 24 hours of purchase, just revisit the image page, select the correct credit option that you had picked before and download as before.  Then follow step 2 above.

That’s what I have so far.  If anyone wants to let me know how the Mac or Safari or anything works, just let me know in the comments below, or email me.

Do I Need an Extended License

Imagery sold at iStockphoto.com, and most other microstock agencies as well, is primarily intended for your to use in a promotional, commercial fashion.  We, as contributors, are providing content to help you build and promote your business, or by extension, your client’s business.  I’ll list some examples below.

The iStockphoto.com license agreement, spells out pretty clearly what you can and can not do with content, but sometimes the legalese gets a little confusing.  Let’s see if we can clear that up.

The Regular License

We hereby grant to you a perpetual, non-exclusive, non-transferable worldwide license to use the Content for the Permitted Uses (as defined below).

Remember, iStockphoto.com is a “Royalty Free” site, which means that once you purchase content, you are free to use it forever, as you like, within the permitted uses.  What kind of uses?  Most importantly …

You may only use the Content for those advertising, promotional and other specified purposes which are Permitted Uses (as defined below).

Earlier, I mentioned commercial, promotional use.  What kinds of things does that mean?

• website design for a client, including header bars and user interface, background graphics, etc.
• promotional poster for a client’s upcoming event (or any client need)
• brochure selling gym memberships
• billboard about upcoming summer camp registration
• television ad for a contest (or anything other subject)
• inclusion in a catalog ad, such as a laptop with money coming out of it
• your company’s annual report

These are all uses that help promote a business in some way, or help your client promote their business.  These are pretty straightforward.  But there are lots of other allowed uses.

• video screen graphics at a rock concert
• front cover of a national magazine
• business card background graphic
• food packaging graphics
• book cover of a best seller
• poster sized print for you to hang on your wall
• screensaver on your computer
• icons on an iPhone application, or other user interface elements in an application
  
• any editorial use, such as a magazine or newspaper article
• use to illustrate a blog article
• use it as part of a PowerPoint presentation

So, there are a ton of things you can do with a regular license.

Also, note, you are free to modify the content to your needs.  Cut it up.  Resize it smaller.  Tint it pink.  Photoshop in a sticker element.  Put your text on top.  You don’t need to keep the content pristine in your presentation.

However, there are restrictions, and you can see some of these as things, compared to maybe some more expensive sites, that you are trading off for the lower cost of the image.  Some restrictions are just good legal protection, and some are just common sense.

What, according to section 4(a) of the license, can’t you do ?

• You cannot use the content in any kind of template, that you would resell over and over again, to other buyers, like a web design template, or business card template.
• You cannot use the content in items for resale, like posters, mugs, tshirts, etc.
• The use of the content may not depict the model in a defamatory manner, or in a sensitive context.  You may also not use the model in a way that implies endorsement, ie. “Mary loves using Crest!’
• You may not sub-license, re-sell, rent, lend, assign, gift or otherwise transfer or distribute the content.  This does not apply to a finished website design, for example, that you would transfer to a client.  But it does mean you cannot give them the original files.
• The content may only reside on one “seat” at a time.  The content must reside with one person, or only be accessible to that one person, the buyer, at a time.
• The content usage may not be printed more than 500,000 times.  This does not apply to advertising uses, like an ad in Parade magazine, but it does apply to editorial uses, like an article in the NY Times.

That’s the basic idea of the restrictions.  The license itself goes into far more detail.

So, what if your use flies in the face of one or more of these restrictions?   The answer is … the extended license.

The Extended License

Maybe you do want to purchase content to put on a poster you want to sell on eBay.  Or you need to distribute the content to your entire company to use.  That’s what the extended license is for.

Under the credit cost details, is a radio button, offering you the regular license, or the extended license.  Clicking on the latter opens up your options for extended licensing, and the associated cost.

• Multi-Seat:  As I mentioned above, the content is only allowed to live at one “seat” or be accessible by one seat at a time, that of the purchaser.  The term “seat” is a traditional software term, as in you buy one “seat” of Photoshop.  If you want to make the content accesible to a multitude of designers, like by putting it on a server, you need to purchase a multi-seat EL. You may physically transfer the Content and its archives from one location to another, in which case you may use the Content at the new location instead. If you require the Content to be in more than one location or accessible by more than one person, you must download the Content from the Site for each such use or obtain an Extended License for a multi-seat license for the Content.
  
• Unlimited Reproduction / Print Runs:  If you need to print or otherwise use the content more that 500,000 times (like a large newspaper run), you need this EL.  This restriction does not apply to advertisements in magazines, newspapers or websites or to broadcast by television, web-cast or theatrical production.
• Items for Resale: If you want to use the content on things that you intend to sell, where the content is the primary focus, you need this EL.  This does not apply to books, for example, where the content is secondary to the text.  However, if you printed a book entitled “The Best of iStock” where the only content was the imagery, you would need an EL.
  • up to 100,000 cards, stationery items, stickers, or paper products,
  • up to 10,000 posters, calendars, mugs, or mousepads,
  • or up to 2,000 t-shirts, apparel items, games, toys, entertainment goods, or framed artwork.
• Electronic Items for Resale:  This EL covers your right to resell the Content in an unlimited number of electronic templates for e-greeting or similar cards, electronic templates for web or applications development, PowerPoint or Keynote templates, screensavers, and email or brochure templates.  This does not apply to the use of content as part of an electronic application interface, like buttons or header graphics on an iPhone application, or other program.  Something like an online jigsaw puzzle might require the use of an EL, because the content is the main focus of the application.  See this post for more discussion.

Conclusion

If you like to read legal, and who doesn’t, all of this is presented in more detail in the iStockphoto.com license agreement.  Actually, it isn’t really that bad of a read.  From questions I’ve seen from buyers in the forum, there is some confusion out there as to how you can use content.  Hopefully, you’ve seen here, the usage terms are very flexible.