In the run-up to the 2011 Cepic congress a group of Stockphoto producers is planning to start a series of audits of the reseller network.
Cepic is the largest event of its type in the picture business. An important part of the event is the opportunity for producers and sellers of content to meet up, explore ways to collaborate and create new revenue streams. This is apparently where the challenges may lie. There are hundreds of companies in the industry selling content all over the world and generally contracts are easily signed and executed with content changing hands rapidly. From this moment on producers trust the resellers to report on sales made in a timely and correct manner.
I have been informed that producers are experiencing challenges in collecting reported sales, and more importantly, have the feeling they may not be receiving reports on sales that may have been made. Most, if not all, contracts contain a clause that allows producers/suppliers to audit resellers’ books to see if all sales have been reported correctly. In this clause producers generally have the right to break contracts and serve penalties if reports are off by 5%. These clauses are hardly, if ever, adhered to but now this looks to change with this action. It is felt that this is now necessary as pressures on the industry appear to have increased this issue. The economic problems of the past years as well as challenges on the industries’ business model may have led to more cash being locked in and the goal of the audits is to get a clear picture of how big the funds are and where they are available. The key is to find a way quickly that allows producers to be paid.
At this stage it is unclear when this action may start and which companies can expect to be audited.
Picture:www.sxc.hu / Richard Dudley