What You Need to Know About Business Use of Third-Party Photos – Part 1

By: *Amilcar Torres and Steve Gillen

You know it, instinctively if not empirically – there are many good reasons to use photos in your ads and print pieces and on your web pages – photos capture attention better than bold headlines and they add visual interest. Also, as many say, a picture is worth a thousand words, and is efficient at conveying the message where space is limited and expensive. But as effective as photos can be, new developments in digital distribution, the impact of artificial intelligence, and complex business models for licensing third party photography make it worth taking a few minutes to review the basics and get familiar with the terminology so you can steer clear of trouble.

Categories of Use: Editorial vs. Commercial

Professional photographers and stock agencies group their work into three broad categories based not on the nature of the photos but instead on the use to which they will be put: editorial, retail, or commercial use.

Retail use concerns photos which were commissioned for personal use and thus is not relevant to business use.

Editorial use encompasses photos used in news articles, educational materials, or non-advertising contexts that are educational or expository in design. As an example, one stock agency defines editorial use as: use relating to events, information, commentary and analyses that are newsworthy, a matter of public concern or of general interest to the public; provided that "Editorial use" does not include any commercial, promotional, advertorial, marketing, sponsorship, endorsement, advertising or merchandising use, or any other use that would violate any person's right of publicity or privacy under applicable law, absent such person's consent.

Commercial use, on the other hand, concerns photos used in advertising or promotion to sell or market a product, service, brand, or person. The same stock agency defines commercial use as: commercial, promotional, advertorial, endorsement, marketing, sponsorship, advertising or merchandising use or any other use that would violate any person's right of publicity or privacy under applicable law, absent such person's consent.

The distinction between editorial and commercial use is particularly important because commercial use typically carries a significantly higher price tag than editorial use. . Importantly, it is not always easy to draw the line between commercial use or editorial use. While the use of a photo in the interior pages of a product safety brochure is probably editorial, the use of a photo on a business’ web page may be editorial if it is associated with informational content being presented there . . . or it may be commercial if it is associated with a sales message.

Categories of Assets: Royalty Free vs. Commissioned Work vs. Rights Managed

“Royalty Free” and “Rights Managed” are terms that refer to the general scope of the license granted.

First understand that Royalty Free doesn’t mean free. Instead, it is a term used to describe a license that provides for an up-front, one-time payment in return for which you get relatively broad, non-exclusive usage rights. The obvious advantage to a royalty free image is that you pay a relatively small fee one time in return for the right to make multiple uses of the image. Be aware, however, that license terms vary from vendor to vendor and so even with a “royalty free” license there will often be some sort of limit on the use that you can make of that image, either in terms of number of copies or in terms of length of time, or in terms of medium or purpose. The disadvantage to royalty free images is that the rights you receive are non-exclusive and so the same image you select is also simultaneously available to others. Indeed, the others who also find it may have used some of the same search terms you used, thus and so the odds that the same image will show up in an ad for a related product or service are better than you might think.

Commissioned Work is the most expensive because it is photography specially staged or shot just for the commissioning business. Because it is intended for exclusive use by just one client, that client needs to cover 100 percent of the value/cost of producing that work. This gives businesses the opportunity to pay the entire cost up front and take an assignment of the copyrights in return, or pay as you go and receive a series of exclusive licenses as needed.

Rights Managed images represent a compromise between Royalty Free Images and Commissioned Work. These licenses are granted generally for specific uses which are defined by factors such as the market it is being sold in, duration which the photos can be used, geographic territory, the medium and so on. Since these licenses can often be exclusive within the defined parameters, they help businesses both save on costs and avoid duplication by competitors.

Limitations on Use

In summary, we have a spectrum of expense and associated rights, from commissioned commercial work to royalty free work for editorial uses, but between the two ends of this spectrum, the devil lies in the details. There are any number of limitations on use that can take a variety of forms from one vendor to the next. These additional restrictions involve placement, size, medium, quantity, territory, duration, language, and exclusivity. More on these restrictions – what they mean and where to find them -- in Part 2 of this article.

_{* Amilcar Torres is a Law Clerk and not licensed to practice law.}