Paparazzi Take on People Magazine in Digital Rights Fight

The celebrity picture-taking industry is notoriously cutthroat, with photographers competing against one other -- sometimes physically -- to snap the juiciest photos and score lucrative exclusives they can sell to magazines and websites. But the digital age, and especially the explosion of apps for mobile devices, has made the once-simple transaction between photographer and publication a lot more complicated, leading to new questions about how much a paparazzo's shot is worth -- and how many times he should be paid for it.

Content providers of all stripes have long fought to get paid for their work. But photo agencies in particular are facing a financial crunch due to the recession, a severe drop in magazine and online ad revenues, and diminished print space to feature those hard-won celebrity shots.

I Already Paid. No, You Didn't

Now competing companies are doing something crazy -- working together. To wit: as The Hollywood Reporter revealed earlier this week, more than a dozen paparazzi services have joined together to prevent People magazine (TWX) -- which famously shelled out $14 million for exclusive rights to the first photos of Angelina Jolie and Brad Pitt's baby in 2007 -- from licensing their photos on the magazine's iPad app.

People wants the photos for free, claiming the app is merely an extension of the print product and that the photos essentially serve as a marketing tool, not new content that must be additionally paid for. The photo agencies, as you might guess, disagree, and say they might pull their sought-after photos from circulation if they don't get their way.

As a result, People's app, which was supposed to debut this month priced at $4.99, has now been postponed indefinitely. (A spokesperson for People did not return a request for comment, but did tell THR that "the People iPad application launch date has absolutely nothing to do with photo agencies.")

Making an Example of Perez Hilton

Brandy Navarre, vice president of the photo agency and celebrity website X17 (which is negotiating separately from its competitor consortium on the People iPad app), has had ample experience on the digital photo rights front. The agency sued popular gossip website PerezHilton.com in 2006 for excessive copyright infringement of its images.

"We really felt was absolutely necessary to set a precedent and to educate the public, frankly, in copyright law in digital age," Navarre tells DailyFinance. "There are plenty of people using images, smaller websites that could grow larger like PerezHilton.com, [who] genuinely didn't know the law and were uneducated where these things were concerned. But [the lawsuit] was also a bit of a warning for larger companies who should and do know the law and continue to skirt it."

The case was settled out of court in February of 2008, and Hilton has not used any of X17's images since. Navarre also said that X17 has seen "a drastic reduction in. . .copyright infringement on Internet."

So far, Navarre hasn't devoted a lot of time and energy to parse rights clearances for the ever-multiplying array of mobile devices, because the revenue stream still isn't significant for X17. Knowing full well that may change in the future, she says "it doesn't make sense to overcomplicate [rights matters] to the point where you are producing so much work for both sides to track usage, the money spent outweighs the money you're going to make."

The New Marketplace Realities

As the People iPad app kerfuffle suggests, similar complications will only continue to grow. "It looks like it's Tasini all over again," says copyright and intellectual property lawyer Lloyd Jassin, referring to the 2001 Supreme Court decision that determined newspapers could not license work by freelancers in electronic databases such as Lexis-Nexis. "Regarding how it is played out, fees and/ or revenue-sharing will have to be recalibrated to reflect new marketplace realities."

Content producers, meanwhile, are starting to weigh serious cost-benefit considerations. "I honestly see a day where we won't track all of that stuff," says Navarre."Eventually, rights will be rights, and magazines will be able to use [photos] across any platform, even if they may have to pay more. The way it's gone for past two years, with prices dipping lower, people just aren't able or willing to give away rights. It's not a fun time for any of us right now."