Purchase of photo agency stirs concern


January 20, 1992|By Charles Storch | Charles Storch,Chicago Tribune

Eastman Kodak Co. has developed an image problem among professional photographers, who wonder how Kodak's plans for electronic imaging technology fit into its recent purchase of the country's largest stock photo agency.

Despite antitrust objections raised by 43 stock houses around the country and scattered threats of a boycott by professional photographers, Kodak completed its $24.9 million purchase of Image Bank Inc. in late October.

Since then, Kodak has tried to ease concerns of these customers of its equipment and supplies, but some resentment and mistrust linger.

By buying Image Bank, Kodak "has crossed the sacred line and entered into competition with me," said Jack Van Antwerp, a Cleveland photographer who toils for a rival photo agency.

He has stopped buying Kodak supplies and has been trying to get other photographers around the country to follow his lead, apparently with limited success.

"Too many photographers are wimpy toward Kodak. They think it is some kind of Great Yellow God," he said, alluding to the color of Kodak's logo and packaging.

But others in the industry believe even a $20 billion company from Rochester, N.Y., deserves the benefit of the doubt.

They are suspending judgment until they see how Image Bank fits into Kodak's plans for electronic imaging technology, particularly a system called Photo CD.

Kodak has vowed not to favor Image Bank over other stock agencies by giving it exclusive access to technology or selling it supplies at artificially low prices. Kodak said it wants to work with the industry in establishing standards for new electronic systems and for handling copyright issues created by Photo CD.

"Professional photographers and stock houses are our customers," said Kodak spokesman Paul Allen. "We are trying to address their concerns."

In general, photo agencies license the works of photographers to such clients as graphic art firms, advertisers and publishers. Photographers retain the copyright and receive a royalty for each use of their pictures.

Image Bank, based in New York and with 60 offices in cities around the globe, is one of the world's largest stock houses, with some 5 million photographs on hand. However, it was struggling financially when Kodak came to its rescue.

It is widely believed Kodak bought Image Bank to prevent a computer software company such as Microsoft Corp. from doing so, and to give it a large, captive customer for its Photo CD equipment.

Photo CD is expected to hit the market in mid-1992. It will allow photographers, professional and amateur, to transfer images on film to a compact disc for viewing on a television or computer screen. Computer users will be able to edit, enhance or combine the images and then reproduce them with printers.

Kodak claims Photo CD will provide higher-resolution images than any existing electronic imaging system, including those now used by some photo stock houses to produce video catalogs for clients.

By installing its Photo CD equipment in Image Bank offices and putting Image Bank photos on compact discs, Kodak may be able to establish its system as the preeminent standard before ++ another format gains a foothold.

But photographers worry that by making high-resolution discs widely available, especially to people who don't ordinarily deal with stock houses, Kodak will make it easier for pictures to be improperly used or pirated and for copyrights to be infringed or ignored.

Photographers point to comparable problems in the movie and recorded music industries to justify their concerns.

"Copyright infringement is not a new problem" in the photo industry, said Richard Weisgrau, executive director of the New York-based American Society of Magazine Photographers. "Thieves are already out there, and they don't have to buy a lot of technology to do it."

Mr. Weisgrau has come away from talks with Kodak officials believing they will be sensitive to copyright concerns with Photo CD. But he acknowledged that some photographers fear the new technology and mistrust Kodak, if only for its size.

"Some people hate big corporations," he said. "You can't be as big as Kodak and not be a target."

Some in the photo industry believe the seeds of mistrust were planted early last year by Microsoft, which has been seeking to obtain rights to photos and other works of art for a proposed electronic encyclopedia of art. Photographers and stock agencies supposedly were shocked at the low licensing fees offered and broad usage rights sought by Microsoft.

"Microsoft doesn't look at [photography] as an art form but as a widget," said Douglas Segal, general manager of Panoramic Images Ltd., a Chicago stock agency.

Richard Groman, president of West Stock Inc., a Seattle stock agency, said Microsoft may have "put fear and suspicion in people's minds of a very large corporation wanting to gobble up a large amount of images at low prices and with broad rights to use them in perpetuity."

But not all the suspicion is directed at big firms.

Mr. Groman's agency has come in for some industry badmouthing because of Photo Disc, a 400-image CD it plans to begin selling this month.

He thinks Photo Disc will allow his agency to reach a new market, desk-top publishers, or people who use personal computers to produce such materials as newsletters, brochures and in-house corporate reports.

Mr. Groman said photographers whose work appears on Photo Disc will receive a royalty for each disc sold rather than the traditional fee for each use of their images.

He said his photographers are enthusiastic about Photo Disc. However, Mr. Groman acknowledged that many of Image Bank's photographers may be more prominent and feel they have more to lose financially if their work becomes widely disseminated.

"The great middle spectrum of photographers [comprises people] just trying to make a decent living," he said. "A lot view [CD products] as one more way to leverage their work and make more money off it."

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