Luminous Landscape Forum
The Art of Photography => The Coffee Corner => Topic started by: Robert Roaldi on December 14, 2009, 03:07:47 pm
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I came across this tidbit (http://www.digitaljournalist.org/issue0912/from-bad-to-worse.html) recently. The second part, concerning Time magazine, I thought was interesting. You have to pay the outfit that contracted you in order to be paid on time. I can see the concept spreading. I may have to pay my employer rent for the use of their desk and chair. Reminds me of coal miners past, where it ended up costing the workers more money to work at the mine than they were being paid, because of their debts at the company store and rent on their company housing.
Our bankers lose our money, we have to bail them out, and they pay themselves bonuses.
It's beautiful, in its own way.
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I came across this tidbit (http://www.digitaljournalist.org/issue0912/from-bad-to-worse.html) recently. The second part, concerning Time magazine, I thought was interesting. You have to pay the outfit that contracted you in order to be paid on time. I can see the concept spreading. I may have to pay my employer rent for the use of their desk and chair. Reminds me of coal miners past, where it ended up costing the workers more money to work at the mine than they were being paid, because of their debts at the company store and rent on their company housing.
Our bankers lose our money, we have to bail them out, and they pay themselves bonuses.
It's beautiful, in its own way.
There's a much to be indignant about in this economy, but this isn't a reason. Not sure what general payment terms are in the US, but thirty days sounds standard. Companies always pay at the last possible moment to maximize interest - the longer you hold on to money, the more interest you accrue. This might sound trivial, but if you hold on to bills for just one more day it can add up to millions on a yearly basis for a moderately sized corporation. Therefore they are actually doing a service by paying early, and thus are well within their rights to charge for such service (IANAL).
I'd like to reiterate that there was no mention anywhere that TIME is charging money to pay freelancers on time, only when they want to be paid faster. If they are breaking payment terms or law, they'll lose in court. This is actually quite a nice gesture in today's economy, as that means a starving freelancer can get paid significantly faster than normally if necessary. Before they would be screwed if they needed the money faster, and at the whims of Accounts Payable department.
It is the height of ignorance that this is taken as a Bad Thing, something which an Evil Corporation is doing to fleece the little man, when truth is exactly the opposite.
Also, I don't see how bankers are relevant to the part about TIME magazine.
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There's a much to be indignant about in this economy, but this isn't a reason. Not sure what general payment terms are in the US, but thirty days sounds standard. Companies always pay at the last possible moment to maximize interest - the longer you hold on to money, the more interest you accrue. This might sound trivial, but if you hold on to bills for just one more day it can add up to millions on a yearly basis for a moderately sized corporation. Therefore they are actually doing a service by paying early, and thus are well within their rights to charge for such service (IANAL).
Reading the article, they're basically saying they'll charge you 1/2 percent to pay on time, or 4 percent to pay early. 30 or 60 days is pretty typical for a lot of industies here, I think. But it seems like really big corporations are notoriously bad about paying on time, and publishing companies are apparently be some of the worst. From what I've heard 6-12 months is not at all unusual for some of these companies. Do you really think that is OK? If so try doing it with your mortgage/rent or car payment and see what happens.
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Reading the article, they're basically saying they'll charge you 1/2 percent to pay on time, or 4 percent to pay early. 30 or 60 days is pretty typical for a lot of industies here, I think. But it seems like really big corporations are notoriously bad about paying on time, and publishing companies are apparently be some of the worst. From what I've heard 6-12 months is not at all unusual for some of these companies. Do you really think that is OK? If so try doing it with your mortgage/rent or car payment and see what happens.
The source article linked to says "But if you want it faster, here is the payment schedule," so you would pay the 0.5% only if you want payment faster than normal.
What you are describing in the latter part of your post is clearly unscrupulous and possibly illegal activity, but which has nothing to do with the article in question. Again: TIME is offering a service to pay early for a fee. If you want to get paid on time, it's full payment. If they don't pay on time, they're breaking a contract, which is a separate matter.
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Don't really know what to think of that. It's common in the US to offer a few percent off for 10 day payment, so those percentages are not unreasonable in that light and there's something to be said for knowing exactly when your cash flow will brighten. And on the net-10 discounts, they often pay at 30+ days anyway while still taking the discount! At least this new scheme has binding ground rules.
It's all part of the trend to make money based on cleverly conceived abstractions, rather than real products and services. You know, like the mortgage and financial instrument thing. The Star Trek Ferengi have meters in their homes that you must pay in order to visit, let's not forget that opportunity. Why not charge per-click on Internet forums?
Have noticed that media companies tend to pay rather glacially. 90 to 120 days is not uncommon for movie production companies, where in response to your reminder notice at 60 days they will send you a letter explaining that they can't pay you until you return your Tax Form 1099 which they unfortunately neglected to send. That's good for at least another 30-60 days in their eyes. Their fault is your fault too, somehow.
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...It is the height of ignorance that this is taken as a Bad Thing, something which an Evil Corporation is doing to fleece the little man...
Amen, brother! These are simply standard payment terms in use in most of the civilized world. The opposite can be equally true: if you are buying something from a company that generally allows you 30 days to pay, they might offer you a discount if you decide to pay early.
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The source article linked to says "But if you want it faster, here is the payment schedule," so you would pay the 0.5% only if you want payment faster than normal.
What you are describing in the latter part of your post is clearly unscrupulous and possibly illegal activity, but which has nothing to do with the article in question. Again: TIME is offering a service to pay early for a fee. If you want to get paid on time, it's full payment. If they don't pay on time, they're breaking a contract, which is a separate matter.
So if net-30 is "early", what exactly is your definition of "one time"? As I mentioned, the publishers can often take several months to a year to pay. If you think that is acceptably prompt payment, you and I have different concepts of timeliness.
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The source article linked to says "But if you want it faster, here is the payment schedule," so you would pay the 0.5% only if you want payment faster than normal.
What you are describing in the latter part of your post is clearly unscrupulous and possibly illegal activity, but which has nothing to do with the article in question. Again: TIME is offering a service to pay early for a fee. If you want to get paid on time, it's full payment. If they don't pay on time, they're breaking a contract, which is a separate matter.
It all depends on what "on time" means. "Net 30 days" is pretty standard, and many companies "agree" to that but then pay in 45-60 days or even more. Offering a discount for early payment is not unusual, for example "Net 30 days, less 1% 15 days." One thing you can be sure of, these companies are not doing this as a service to the freelancer.
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I came across this tidbit (http://www.digitaljournalist.org/issue0912/from-bad-to-worse.html) recently. The second part, concerning Time magazine, I thought was interesting. You have to pay the outfit that contracted you in order to be paid on time. I can see the concept spreading. I may have to pay my employer rent for the use of their desk and chair. Reminds me of coal miners past, where it ended up costing the workers more money to work at the mine than they were being paid, because of their debts at the company store and rent on their company housing.
Our bankers lose our money, we have to bail them out, and they pay themselves bonuses.
It's beautiful, in its own way.
Despite what other posters have remarked, I think this post is completely relevant, not just in part, and that anyone who can imagine the 'offers' fair has perhaps not had to be at the sharp end of this sort of nonsense.
Years ago, when I did advertising photography, many order forms from agencies stipulated that payment would be made at the end of the month following the month of invoice; in reality, one was lucky to receive payment within three months. However, model agencies and labs were willing to give one credit until the end of the month. And who do you think had to fill the gap? Damn right! The photographer. To suggest that the photographer knew what he was getting in to is facetious at best: what else can the man/woman do? Starve? It smacks of the 'offer he can't refuse' and I can almost see a bloody head on the pillow.
In my opinion, it should be legally binding that all invoices be paid within a month of their being tendered. Without that, the weakest links will always have to be the ones to break and go under when enough financial pressure is applied, as it often is. It appears from various reports that government agencies are amongst the worst offenders, even though they sometimes make the politically pleasing sounds to sugggest that things be changed...
Rob C
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Most commenters here are conflating two different things: TIME Inc. offering early payment for a fee, and media companies in general paying late as a matter of course. Assuming TIME pays on time they are clearly and without question offering a win-win deal for those who want to be paid earlier than the quite standard thirty days.
Just because there are (other) companies out there abusing the client relationship doesn't mean every company is. There are plenty of companies out there who pay later than expected and they should change their ways. I just find it mind boggling that people are attacking TIME for charging for something which has tangible monetary value for both parties involved as if making money is a curse word, and making wild accusations just because of some bad apples in the industry.
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... anyone who can imagine the 'offers' fair...
I do not think that I (or others) made any comments about fairness, just stated the fact that these are standard payment terms. Such terms are just tools (of the trade) and as such tend to be mostly neutral and can cut both ways (i.e., work in your favor, like when you are given thirty days to pay your bills). In other words, these are just "rules of the game", and as such, and as in any game, they can be bent, stretched, used and misused, etc. For instance, you can pay your dentist's (or your lab's) bill late too. Whenever there is a system, there is a way to play that system too.
In my opinion, it should be legally binding that all invoices be paid within a month of their being tendered..
Well... it already is. Once the terms of payment are over, you are legally entitled to start a collection process. Whether it is reasonable or practical to do so, it is a subject of a completely different analysis. But legally binding it already is.
However, if your intention was to argue that life is not fair, I would then completely agree with you.
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I do not think that I (or others) made any comments about fairness, just stated the fact that these are standard payment terms. Such terms are just tools (of the trade) and as such tend to be mostly neutral and can cut both ways (i.e., work in your favor, like when you are given thirty days to pay your bills). In other words, these are just "rules of the game", and as such, and as in any game, they can be bent, stretched, used and misused, etc. For instance, you can pay your dentist's (or your lab's) bill late too. Whenever there is a system, there is a way to play that system too.
Well... it already is. Once the terms of payment are over, you are legally entitled to start a collection process. Whether it is reasonable or practical to do so, it is a subject of a completely different analysis. But legally binding it already is.
However, if your intention was to argue that life is not fair, I would then completely agree with you.
Okay, let's be as precise as you wish: 'fair' in my use of the word within the context of my post refers to the concept of honest treatment without the pressure on you of manipulation of the value of your contribution - the job you did. You invoice for two hundred you should get two hundred if your invoice is correct. You should not then be stuck in the face with a delightful little touch of positive extortion masquerading as a helping hand whilst really a hand inside your wallet. Therein lies the perceived lack of 'fair' play, the delicate little touch of the financial bully preying/fishing on your possible desperation for funds.
As for playing the late-payment game too, I don't hold with that either. I think it is wrong to hold out on people when their job is done to satisfaction, dentist or not (just as long as they don't casually leave their M9 or S2 lying about the surgery as a slap in the face...).
As for life not being fair - well, life and business are not always in tune anyway, but life is sometimes very sweet and sometimes very harsh. Business seems to me to be mainly pretty brutal. In fact, it is sometimes business that takes the pleasure out of professional photography almost as much as it can be the vehicle for putting it in.
Whether fair or not, life is, at the very least, complicated!
;-)
Rob C
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Most commenters here are conflating two different things: TIME Inc. offering early payment for a fee, and media companies in general paying late as a matter of course. Assuming TIME pays on time they are clearly and without question offering a win-win deal for those who want to be paid earlier than the quite standard thirty days.
Just because there are (other) companies out there abusing the client relationship doesn't mean every company is. There are plenty of companies out there who pay later than expected and they should change their ways. I just find it mind boggling that people are attacking TIME for charging for something which has tangible monetary value for both parties involved as if making money is a curse word, and making wild accusations just because of some bad apples in the industry.
I don't know specifics about how TIME pays. But if they want to charge a fee to pay in 25 days (keep in mind that's 25 days after the invoice is improved, which could itself be a month after the invoice was submitted), how long do you think they're going to take to pay if you don't agree to the fee?
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... manipulation of the value of your contribution - the job you did. You invoice for two hundred you should get two hundred if your invoice is correct...
There is no manipulation... if your invoice is correct, you will get your two hundred. Period. Yes, you will get it in contractually-specified time (usually thirty days), and that agreed-upon period is as much part of the contractual relationship as are those two hundred. When you signed the contract, the price was specified, as were the payment terms. You agreed to both. And if you think the agreed two hundred are fair, so is the thirty-day payment period. What TIME is offering is a favor: if you want it sooner, it is only fair to pay for it, as money has a time value (i.e., two hundred today is not the same as two hundred a month or a year later).
If one reads the original article (http://gawker.com/5418425/time-inc-will-pa...for-the-service (http://gawker.com/5418425/time-inc-will-pay-you-promptly-if-you-pay-them-for-the-service)), here is what it says (from the horse's mouth, i.e., tipster's):
... If you choose to actually get all the money Time Inc. owes you, our tipster says, you usually get it within a month. But if you want it faster, here is the payment schedule...
So, what exactly seems to be the problem here?
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I don't know specifics about how TIME pays. But if they want to charge a fee to pay in 25 days (keep in mind that's 25 days after the invoice is improved, which could itself be a month after the invoice was submitted), how long do you think they're going to take to pay if you don't agree to the fee?
30 days appears to be the standard terms in the US, which is around the same as it is in some countries in Europe and elsewhere. I don't know what your expectations are, but B2B is not instant cash business, it's invoiced.
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There is no manipulation... if your invoice is correct, you will get your two hundred. Period. Yes, you will get it in contractually-specified time (usually thirty days), and that agreed-upon period is as much part of the contractual relationship as are those two hundred. When you signed the contract, the price was specified, as were the payment terms. You agreed to both. And if you think the agreed two hundred are fair, so is the thirty-day payment period. What TIME is offering is a favor: if you want it sooner, it is only fair to pay for it, as money has a time value (i.e., two hundred today is not the same as two hundred a month or a year later).
If one reads the original article (http://gawker.com/5418425/time-inc-will-pa...for-the-service (http://gawker.com/5418425/time-inc-will-pay-you-promptly-if-you-pay-them-for-the-service)), here is what it says (from the horse's mouth, i.e., tipster's):
So, what exactly seems to be the problem here?
As I tried to explain: there is something unpleasant about using large business bank accounts (and muscle) in talking the supplier out of getting the full whack; yes there is no obligation to accept the offer, but the problem is that the offer of quick payment, if it can be made, should be incorporated from the start as a standard of payment, and not offered as some sort of additional 'kindness at a price' from the client. If you can pay promptly then why not just pay up and look good all the time? Of course I understand the money/bank/interest quotient, but in today's climate at the very least, where interest is close enough to zero and work short, then when better a time to pay bills promptly and keep the money in circulation, particularly that of the little man who needs it most?
Well maybe I expect too much from people. I can live with that.
Rob C
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Of course I understand the money/bank/interest quotient, but in today's climate at the very least, where interest is close enough to zero and work short, then when better a time to pay bills promptly and keep the money in circulation, particularly that of the little man who needs it most?
Let's look at the impact this would have. Time Warner Inc had revenue of $47B (http://finance.aol.com/financials/time-warner-inc/twx/nys/income-statement) in FY08. Let's err on the side of caution and use 5% annual interest rate, much lower than what they can get even in these days (TWX don't run their business on savings accounts). If they paid every bill one day earlier than necessary with 5% interest rate for an entire year, that would yield:
$46,000,000,000 * 5% / [360 days] = $6,388,888
Not even Time Warner would give away six point four million dollars, especially in today's climate. To keep things in context, that's the budget of a small Hollywood film, which would employ hundreds of those "little men" for months just to make the film, including the on-set still photographer, and provide work for the thousands who work in distribution, screening, concessions, DVD/BD pressing, sales, advertising, critique, etc.
And let's not forget (once again) that thirty days has been the standard payment terms in B2B transactions for generations.
There's much more to this than the above back-of-the-envelope calculation of course, but this gives an idea of the magnitude of paying early.
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What to say? You can work out all the figures you like and prove almost anything that takes your fancy, but the truth ever remains the same: the wee guy get's screwed.
I can see that the concept of morality is foreign to some who are in this 'chat' so what's the point in my continuing with it? None.
Rob C
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Folks supporting this kind of corporate backhand masquerading as something of value would help themselves by researching Stockholm syndrome
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I can see that the concept of morality is foreign to some who are in this 'chat' so what's the point in my continuing with it? None.
Same can be said about basic business tenets.
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Folks supporting this kind of corporate backhand masquerading as something of value would help themselves by researching Stockholm syndrome
Folks opposing this kind of corporate "backhand" "masquerading" as something of value would help themselves by researching economics 101.
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Not even Time Warner would give away six point four million dollars, especially in today's climate. To keep things in context, that's the budget of a small Hollywood film, which would employ hundreds of those "little men" for months just to make the film, including the on-set still photographer, and provide work for the thousands who work in distribution, screening, concessions, DVD/BD pressing, sales, advertising, critique, etc..
OT but $6 million will not buy you much of a movie; back in 2006 the average Hollywood movie cost about 10x that amount (per MPAA). These days a modestly budgeted Hollywood movie (e.g. District 9) will cost around $30 million.
Of course, there are the surprise extremely low budget hits like Paranormal Activity - cost $35K and has grossed over $140 million worldwide. But these definitely the rare exceptions.
To further put $6 million into perspective, this will buy you approximately 2 episodes of an U.S. prime time drama.
Paul
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... I can see that the concept of morality is foreign to some who are in this 'chat' ...
Speaking about morality... I do not know why, but it reminds me of the old saying:
"If you are not a socialist by the time you are 30, you have no heart... if you are still a socialist after 30, you have no brain."
Apparently, some in this 'chat' are still very young at heart
P.S. Nothing personal... purely for rhetorical purposes
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Most commenters here are conflating two different things: TIME Inc. offering early payment for a fee, and media companies in general paying late as a matter of course. Assuming TIME pays on time they are clearly and without question offering a win-win deal for those who want to be paid earlier than the quite standard thirty days.
Just because there are (other) companies out there abusing the client relationship doesn't mean every company is. There are plenty of companies out there who pay later than expected and they should change their ways. I just find it mind boggling that people are attacking TIME for charging for something which has tangible monetary value for both parties involved as if making money is a curse word, and making wild accusations just because of some bad apples in the industry.
Well said.
Perhaps people need to learn to make better decisions with regard to extending credit in the first place. Providing goods or services on credit without first determining the buyers willingness and ability to pay as agreed is poor business practice. When in doubt about a buyer's ability or willingness to pay at all, demand payment up front or don't make the sale. And if you have reason to believe that you will get paid, but late, charge extra and offer a discount to pay early (here is that "time value of money" thing again). Use a buyer's level of creditworthiness as a tool in determining how much business you want to do with that particular buyer, if any, and under what conditions.
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OT but $6 million will not buy you much of a movie; back in 2006 the average Hollywood movie cost about 10x that amount (per MPAA). These days a modestly budgeted Hollywood movie (e.g. District 9) will cost around $30 million.
Of course, there are the surprise extremely low budget hits like Paranormal Activity - cost $35K and has grossed over $140 million worldwide. But these definitely the rare exceptions.
To further put $6 million into perspective, this will buy you approximately 2 episodes of an U.S. prime time drama.
Paul
6 mill......per day Paul.
So, acorrding to your 10x rule of thumb, within 2 working weeks they can make a movie. Thats 26 movies a year.
Now, if each movie made 20% on the investments (and i recon that's been conservative), then every 2 weeks a futher $1,200,000 profit is made.
So, now every 50 days, or 10 weeks, they can make another movie. So, then every year they can make 26 initial movies and then another 5 on the interest earned.
31 movies - that's a lot of jobs.