Written evidence submitted by Getty Images

1. This is the response of Getty Images to the Inquiry (please see Annex I below for a summary of the operations and history of Getty Images).

EXECUTIVE SUMMARY

2. Getty Images supports the overarching goal of the reforms proposed by the Hargreaves Review report ("the Hargreaves Report") and the Government Response to that report (the "Government Response"), i.e. to reform our intellectual property laws in order to better promote innovation and growth in the UK economy.

3. We set out below a summary of our views in relation to certain recommendations for reform set out in the Hargreaves Report (as endorsed by the Government Response). We have confined this response to those recommendations which affect our commercial interests as a B2B digital content licensing business:

· Third Recommendation: We have a number of reservations with regard to the proposed establishment of the Digital Copyright Exchange ("DCE") as set out below in the section entitled ‘DCE’;

· Fourth Recommendation: We also have a number of reservations with regard to the proposed introduction of legislation to permit the licensing of orphan works and the introduction of extended collective licensing schemes ("ECLs"). We believe that there are alternative technology led solutions available to tackle the problems which these schemes seek to address. Our views on these issues are set out in more detail below in the section entitled "Orphan Works Reform and ECLs";

· Eighth Recommendation: We support the recommendation made that "the Government should pursue an integrated approach [to enforcement of IP rights] based upon enforcement, education and, crucially, measures to strengthen and grow legitimate markets in copyrights and other IP protected fields". We also support the proposal to "introduce a small claims track for low monetary value IP claims in the Patents County Court" in order to support rights holders with the enforcement of their rights;

· Tenth Recommendation: We support the recommendation made that the IPO "should be empowered to issue statutory opinions where these will help clarify copyright law", and that the IPO should publish "an assessment of the impact of those measures advocated in this review which have been accepted by Government".

Application of the DCE to the B2B content licensing industry

4. We believe that the existing UK copyright licensing regime for the visual industry (photographic and broadcast content) already possesses many of the optimal characteristics which the DCE seeks to bring about, i.e. the facilitation of a fast, secure, reliable and cost effective licensing process. In particular, it is characterized by the following features:

· For creators, a wide choice of routes to market (whether directly through their own websites etc. or in collaboration with one or more of the many intermediary rights holders);

· A highly competitive market for content users which offers a vast array of choice at a wide range of price points (Getty Images content is available at an extremely wide range of price points, with substantial volumes of micro-stock images available for licensing at less than £1 per image and imagery for use with high commercial value, e.g. use in an advertising campaign, costing tens of thousands of pounds):

i. www.gettyimages.com itself has over 8.4 million images available online and a further 70 million images available in its archive collection. Today, gettyimages.com serves an average of 7.3 million visits and 4 million unique users, in addition to an average of 175 million page views, each month;

ii. www.iStockphoto .com offers very affordable content with millions of vetted, royalty-free photos, illustrations, video, audio and Flash® files. Using the most advanced search in the business, customers download a file every second from a collection of more than nine million files for use in business, marketing and personal projects. iStockphoto started in 2000, pioneering the micropayment photography business model, and has become one of the most successful and profitable user-generated content sites in the world. iStockphoto receives in excess of 50,000 image downloads per day globally and more than 5,000 image downloads per day within the UK. It pays out more than $1.7 million per week in artist royalties ;

iii. www.t hinkstockphotos.com , our royalty-free imagery subscription s ite provides access to over 7 million high quality images ;

iv. Every day Getty Images issues approximately 400,000 thousand licences to customers globally and 54,000 licences to UK customers, across the various offerings within its corporate group;

· A highly automated, cross-border e-commerce licensing system which offers content users low transaction costs, in many cases effectively a 'one-click' licence;

· A high degree of price transparency (prices for standard licences are typically available for review on the websites of creators and intermediary rights holders);

· The absence of a complex network of collective licensing regimes of the type which applies to the music industry.

5. Given the optimal nature of the existing licensing processes for visual content, we believe that it would not be beneficial (and may potentially prove harmful) to include the B2B visual content industry within the proposed DCE regime. In particular, we are concerned that it would require a very substantial amount of resources and commitment from rights holders to ensure that all relevant rights are recorded within (or accessible via) the DCE. Given the efficiency of the current visual content licensing regime in the UK, we are not convinced that this use of resources would be justified by a commensurate benefit to creators or content users. The Report states that the DCE would be run by private companies and funded through a 'small user charge'. The Government Response further states that "there will of course be costs in setting up the processes and infrastructure required" and that "Government will be looking carefully at what the appropriate roles for itself and of industry partners might be in supporting this work". We are concerned that these costs would add to unnecessary transaction costs for creators, intermediary rights holders and content users without offering them a counter balancing benefit.

6. In summary, we believe that the Report's vision of a fast, reliable and secure licensing process for use of digital content has already been realized by market forces as regards the B2B visual content industry. Whilst the DCE may be of real benefit to other industry sectors such as the music industry (where the myriad of collecting societies and unmanageable levels of consumer piracy are contributing to decline of parts of this market), we believe that, with regard to the licensing aspects of the B2B visual content industry, it is a Government intervention which would be an unnecessary and potentially harmful diversion from the market driven processes of growth and innovation which have proved so successful in this sector. We believe that stakeholders suffer no detriment under the current system in the B2B visual content industry and that the proposed reforms would lead to an unnecessary regulatory burden on the industry.

7. As for other sectors such as music, we would be pleased to be involved with the development of a DCE that might wish to replicate aspects of the established licensing mechanisms in the B2B visual content industry, as well as addressing the first aim of identifying copyright owners. Getty Images also has a sizable business operation devoted to the licensing of music on a B2B basis, and we recognise that this sector currently has more complicated licensing considerations and could benefit from a degree of Government intervention in order to simplify and encourage a more efficient market place.

O rphan works reform and ECLs :

8. We note the Report's proposals that the Government should legislate to establish extended collective licensing for mass licensing of orphan works and a clearance proced ure for use of individual works. We support the policy goal behind these initiatives, namely to ensure that orphan works do not lie negle cted and unused. However, we believe that technology exists which can to a very substantial degree negate the need for these legislative initiatives, i.e. by facilitating the identification of the owners of copyright works .

9. Getty Images recently acquired one of the market leaders in the field of image recognition, a company called PicScout, which already offers an image identification solution called ImageExchange. The PicScout ImageIRC platform (ImageIRC stands for Index, Registry and Connection) has been adopted on a voluntary basis by over two hundred content providers globally which represent, together with the content of Getty Images, over 140 million images . It is the largest image registry anywhere in the world which allows users to identify in real-time, by visual search only, the copyright ownership of any content which has been indexed within its records. We attach a separate note which explains in detail the role which we believe PicScout can play in facilitating the direct licensing process which would very substantial ly negate the need for the legislative initiatives in relation to orphan works an d extended collective licensing (see Annex II) .

10. Getty Images’ representatives attended a meeting on 23rd August 2011, chaired by the IPO, to discuss orphan works reform and ECL schemes. The IPO advised attendees of this meeting that it intends to publish a consultation paper in October 11 on orphan works reform and ECL schemes. Getty Images intends to respond to this consultation paper once published.

Annex I

Overview of the operations and history of Getty Images

1. Getty Images is one of the world’s leading creators and distributors of still imagery, footage and multimedia products, as well as a recognized provider of other forms of premium digital content, including music.  Getty Images serves business customers in more than 100 countries and is the first place creative and media professionals turn to discover, purchase and manage images and other digital content.  Its imagery appears every day in the world’s newspapers, magazines, advertising campaigns, films, television programs, books and Web sites. 

About Getty Images

2. The company has over 8.4 million images available online and a further 70 million images available in its archive collection dating as far back as 1860. Today, each month gettyimages.com serves an average of 7.3 million visits and 4 million unique users in addition to an average of 175 million page views. Nearly 100 percent of the company’s visual content is delivered digitally.

3. Getty Images is the photographic partner and image licensee to world-class organizations such as Sky News, AFP and CNN. The company is also the exclusive partner to more than 40 sports organizations in the world, including the International Olympic Committee, certain English Premier League Clubs, FIFA and the English Football Association.

History

4. Mark Getty and Jonathan Klein founded Getty Images in 1995, as a UK company, with the goal of turning a disjointed and fragmented stock photography market into a thriving, modernized industry able to meet the changing needs of visual communicators. It was the first company to license imagery via the web, moving the entire industry online.

5. Some key acquisitions:

- March 1995, Tony Stone Images acquired

- April 1996, Fabulous Footage, Hulton Deutsch acquired

- July 1997, Energy Film Library acquired

- Feb 1998, Allsport acquired, Photodisc acquired

- August 1999, EyeWire, Online USA acquired

- Oct 1999, Newsmakers acquired

- Nov 1999, Image Bank acquired

- March 2000, VCG acquired

- May 2004, e-Lance media acquired

- July 2004, Image.net acquired

- Oct 2004, Sport Image acquired

- Feb 2006, iStockphoto acquired

- June 2007, Pump Audio digital music provider acquired

- Feb 2008, Hellman and Freidman acquires Getty Images for $2.4 billion

Products and Services

6. As described below, Getty Images offers its customers an extremely broad range of licensing options in order to meet their diverse needs with regard to pricing, nature and variety of content required, intended usage, contractual flexibility, levels of legal protection etc.

7. www.gettyimages.com: One of the world's most powerful distribution platforms, gettyimages.com enables professionals to search, purchase and download the finest photography, illustration, film and editorial images; commission world-class assignment photography; and efficiently create, manage, share and distribute marketing materials - all in one place. Getty Images’ extensive image and stock illustration offering spans everything from conceptual rights-managed and royalty-free creative images to up-to-the-minute editorial coverage – including news , sport and celebrity photos – and timeless vintage photography . ( Rights-managed (RM) image licensing is based on usage, and pricing is calculated once the customer has provided usage specifications. These images are from our premier collections and offer highly stylized images with high production value – some can be licensed with exclusive rights. Royalty-free (RF) licensing is based on size, and pricing is available as soon as the image(s) is/are selected . Royalty-free means it is an unlimited-use licence, i.e. the customer does not have to pay any additional royalties for successive uses of a product.)

8. www.iStockphoto.com : Getty Images also owns iStockphoto which is the web's original source for user-generated, royalty-free stock photos , illustrations , video , audio and Error! Hyperlink reference not valid.Error! Hyperlink reference not valid.oto.com) . iStockphoto offer s millions of images with low price points for use by a wide range of customers including designer s , advertiser s , entrepreneur s and blogger s for use in marketing and personal projects.

9. www.thinkstockphotos.com Thinkstock is our royalty-free imagery subscription product which offers customers affordable access to premium, professional and user-generated imagery all in one place. It provides customers with access to millions of royalty-free photos and vector illustrations selected from leading image collections owned by Getty Images . Thinkstock offers customers subscription or image pack plans ; the former permits customers to download a certain number of images per month for an agreed monthly fee, whilst the latter permits the customers to download a specified number of images within a twelve month period for an agreed fee (the latter option offer customers greater flexibility as to how and when images are downloaded ) . All plans come with broad global usage rights and access to a constant supply of new content.

Creative

10. The success of Getty Images depends on a true partnership with the photographers, musicians and filmmakers whose work it markets to a truly global audience.

11. The company has strong partnerships with 2000-3000 of the best creative photographers around the world, who are regular contributors to the Getty Images creative service. In addition, it can call upon several thousand more for ad hoc projects. It has over 5 million creative images available online on gettyimages.com and over 7 million on thinkstockphotos.com . On average Getty Images adds more than 40,000 creative images to its database each month from approximately 200 contributing image partners.

Film

12. With one of the world’s largest collections of top-quality film footage, Getty Images is the only place to find best-of-breed film collections in both rights-managed and royalty-free, offering customers commercial-quality footage to produce creative and original work. It holds over 100,000 film clips across all its collections, the equivalent of 45,000 hours of footage, which would take more than five years of continuous viewing to watch. Plus, it adds 1000 new film clips every month.

Editorial

13. With approximately 125 staff photographers worldwide, 24x7 picture desks in London, New York and Sydney and 7 million editorial images available, Getty Images’ editorial service covers all major events around the globe. It posts over 13,000 images every day and its aim is to go far beyond the confines of traditional photojournalism to capture images that tell stories other providers often miss. The company’s editorial photographers are subject-matter specialists with years of experience, not generalists -- a distinction that ensures its images capture defining moments with a unique perspective.

Music

14. Getty Images music licensing business allows customers to license pre-cleared, original professional quality music to enhance their broadcast, film, video, advertising and online projects. The service is based on the assets of Pump Audio, a leading provider of quality independent music to content creators around the world acquired by Getty Images in June 2007.

15. The service gives customers direct access to more than 20,000 original tracks by some of the world’s best independent artists and bands for use in broadcast and film production, advertising and other media projects. The service offers a powerful, one-stop solution for our customers and for the growing 'new breed' of content creators that need music every day in order to be creative. The aim is to make it easier and more affordable for customers to license music for commercial use, while allowing artists to retain ownership of and profit from their music.

Bespoke Products

16. Getty Images Photo Assignments Getty Images full-service photography department has a global network of several hundred photographers who bring their style, expertise and inspiration to any genre of assignment photography. The tailored image service provides excellence at every phase, from conception to completion, including professional and personalized creative direction, production, and project and budget management.

17. Getty Images Media Management Services The on-demand digital asset management (DAM) service efficiently streamlines the creation, management and distribution of digital assets and marketing materials, using a centralized library to store materials and tools for uploading, managing and publishing approved assets. Business users can easily and quickly access, browse, search and download the assets they need. A flexible permission system ensures that users have the correct brand assets.

18. Media Manager Hosted and managed by Getty Images, Media Manager is browser-based, configured with web-based forms, and requires no software or hardware. When done successfully, digital asset management yields dramatic savings in operating costs, improves brand consistency, reduces technology burden and more.

Annex II

1. Getty Images recently acquired PicScout which is a market leader in the field of image recognition technology and the creator of a platform called ImageIRC™.

2. As discussed above, t he PicScout ImageIRC platform has been adopted on a voluntary basis globally by over two hundred content providers which represent, together with the content of Getty Images, over 140 million images .

3. This content has been provided voluntarily by various types of visual artists such as direct photographers, stock photo libraries and heritage societies such as the V&A museum .

4. The ImageIRC platform has been well received by organizations such CEPIC, BAPLA and PACA from the visual art industry .

5. PicScout’s Image Exchange service offers a business solution to identifying copyright ownership of visual content based on the Image IRC Platform. As explained above, u sers of the Image Exchange service can identify in real-time, by visual search only, the copyright ownership of any content which has been indexed within the PicScout ImageIRC .

6. Over 3 0,000 different users across the world currently use Image Exchange with over 10,000 doing so on a daily basis. New users can download a free add-on to their browser (Internet Explorer, FireFox, Chrome and Safari) from www.picscout.com which allows them to use the Image Exchange service.

Applications of the Image Exchange service

7. We believe that the Image Exchange service has several applications which would be of direct benefit to the initiatives proposed by the Hargreaves Review. In particular:

§ We believe that the Image Exchange service, to a very substantial degree, can negate the need for the legislative initiatives in relation to orphan works and extended collective licensing, i.e. by facilitating the identification of the owners of copyright works and thus facilitating the direct licensing process;

§ To the extent that legislative initiatives in relation to orphan works and extended collective licensing are ultimately implemented, the Image Exchange service can form an important part of a ‘diligent search’ function to be undertaken by would-be licensees who wish take advantage of any extended collective licensing schemes and/or schemes for use of individual orpha n works which may be introduced;

§ In the event that the DCE is ultimately established and applied to the B2B visual content industry (for reasons given above, we do not think that such a development is necessary or beneficial) the Image Exchange Service would be able to assist with providing the DCE with image matching capabilities.

PicScout ImageIRC Services

8. We propose continuing to make PicScout’s ImageIRC index generally available for use within the visual content industry in accordance with the following commercial principles:

a. The following services, which facilitate the diligent search process, would be made generally available free of charge:

i. Registration of images within the PicScout ImageIRC platform by rights’ holders;

ii. Access to a destination webpage where anyone may search for the copyright owner of images stored within the PicScout ImageIRC platform;

iii. Download of PicScout Image Exchange software to a browser which enables the user to search for the copyright owner of images stored within the PicScout ImageIRC platform;

b. Rights holders would be given the option to withdraw images at any time from the PicScout ImageIRC (entities such as photo agencies, which submit images on behalf of the copyright owner, would be permitted to grant the copyright holder the right to withdraw the images at any time);

c. No licensing by PicScout of the images supplied to the PicScout ImageIRC save where the persons/companies which upload the images have authorised such licensing (such authorisation to be entirely at the discretion of those uploading the images);

d. PicScout would randomize ImageIRC search results, and would not provide preferential treatment for content owned or represented by Getty Images.

Government support

9. With regard to possible Government support for the PicScout ImageIRC platform, we would propose that this may take the form of legislation in this area (or any subsequent code of good practice) defining use of the ImageIRC platform (and any similar technology which may be developed) as a necessary part of completion of a ‘diligent search’ function to be undertaken by prospective licensees who wish to benefit from extended collective licensing schemes and/or schemes for use of individual orphan works.

5 September 2011