EXCLUSIVE: People Magazine iPad App Delayed By Paparazzi
The publishing world’s headlong rush to Apple’s iPad has hit a big hitch.
More than a dozen of the photo agencies that supply celebrity snapshots from the paparazzi are banding together to withhold their prized product unless it can get additional compensation from People magazine, resulting in the postponement of its iPad app.
While the standoff centers on one publication for now, just about any other brand that makes photos of the rich and famous their stock in trade is watching nervously from the sidelines. Whatever deal they strike could set the terms of trade for the industry going forward.
And while talks have been civil, there could be trouble ahead if progress isn’t made at negotiations scheduled for Thursday at the Time-Life building in New York.
“I do think it’s an important moment as far as the photo-agency business model,” said Jill Stempel, New York bureau chief for World Entertainment News Network, which on Tuesday was considering joining the agency alliance. “We need to take a stand.”
A People spokeswoman refused to comment beyond offering the following statement: “The People iPad application launch date has absolutely nothing to do with photo agencies.”
Executives at People’s parent company, Time Inc., had made known their intent to launch the brand’s iPad extension in early August. Time has been one of the more aggressive publishing companies looking to make its mark on iPad and has already deployed other major brands including Sports Illustrated and Fortune.
Time insiders acknowledged that reaching agreement with the agencies is a pressing issue. But one exec familiar with People’s iPad development blamed the delay on continued fine-tuning of the product, not the agency negotiations, and that early August was always a “soft” deadline.
Time hasn’t specified what exactly People’s iPad will offer, but those in the know say photos will be a core component of what is expected to be a $4.99 product.
Photo agencies are taking a keen interest in the iPad because while online usage of their snapshots commands a fraction of what their fees earn from print usage, they recognize the potential for the tablet market to be a game-changer.
“They realized that in most cases People.com was not making ad revenue or subscription money off extended use of their photos,” said Brandy Navarre, vp at X17, a photo agency that plans to negotiate separately from its unified front of competitors. “But when you’re talking about paid apps supplemented by advertisements, that’s something different altogether.”
Those familiar with discussions say People wants to use photos on the iPad for free, arguing that the app essentially replicates the print product. That negotiation stance has led to the inevitable escalation of posturing: If you don’t pay us extra for iPad, agencies argue, you can’t use our pictures, which spurs threats of keeping rogue agencies out of the print edition on which the lion’s share of revenue is gleaned.
The iPad standoff is no isolated conflict between the photo agencies and publishers. The agencies already are resentful of steep cuts in photo fees the magazines demanded when the recession hit and drained their advertising revenue, which in turn shrunk the number of pages on which they could place photos.
People also is arguing that photo use on the iPad is essentially a marketing tool because there’s a clause in overall licensing agreements that allows for promotional repurposing. That’s what People argued when it turned around and sold photos in an affiliate deal with MySpace several years ago, further enraging some agencies.