Preparing for the inventible requires a lifelong commitment to record keeping, image file organization and editing. At the time of death or when placing an archive into a trust a value must be assigned. It is relatively easy for a fine art appraiser to determine the value of a collection of prints, provided there are auction records, gallery sales and other print sales. Determining the value of the copyrights and their potential to generate licensing income going forward is also not a difficult task for an experienced appraiser providing that key information is available.
The first step in planning for the future of your legacy is to ensure that the archive is organized in a reasonable and understandable form. In addition throughout a photographer’s career, the archive should be culled constantly. Otherwise heirs and anyone who might have to step in should a photographer be incapacitated will have difficulty monetizing the photographs and/or keeping the business running.
I recently had a call from a university in the Northeast seeking my valuation services for a donated photographic archive that they intended to monetize. Since the University planned on licensing the images, they needed a present day valuation of the future licensing income carried forward through the lifetime of the copyrights. Unfortunately they had agreed to accept the entire life’s work without recognizing the costs associated with monetizing a huge library of photos. Only when the first hundred thousand of over 350,000 thousand negs and chromes arrived, did they realize that they were now faced with massive costs unless they could get the photographer to cull his collection to a manageable number.
Licensing and income records for every image in the culled collection along with copyright registrations among other data should always be available and in good order. Last year I was asked to value the intellectual property—the copyrights—associated with the archive of a famous photographer. The first thing I requested was revenue/licensing income for the important photographs in the collection, as licensing data, among other information, enables me to build a net present value of the potential licensing income going forward for the life of the archive. Unfortunately none of the information was readily available. I had to build a database of revenue, available rights and licenses from scattered files, interviews and notes causing me to spend a great deal of time that drove up the cost of the appraisal.
The key information that is required to establish base value of future licensing income from the copyrights associated with an archive for a trust or final net present value for an estate filing is:
- A complete inventory-subject matter, condition, rights available and format of the photographs that have licensed in the past and will likely (not might) be licensed over the lifetime of the copyrights.
- Detailed licensing revenue/terms identified by image if possible
- Profit and Loss statements
- Existing distribution, assignment & restrictive contracts
- Copyright registration records
With the above information in hand, an appraiser is in a position to attach a value to future licensing revenue that an estate can expect to earn over the lifetime of the copyright. This data is made part of an estate valuation or used in estate planning.
Ellen Boughn has spent decades in the image licensing industry. She now owns a professional appraisal and expert witness service. Her clients are law firms large and small that deal with unauthorized use and photographers and estates needing copyright valuation in matters dealing with divorce, sale, estate planning or estate tax issues. She is current with USPAP (Universal Standards of Professional Appraisal Service) Seattle-2008. San Francisco 2013.www.ellenboughn.com & www.photographyexpertconsultant.com
 The copyright statues extend the lifetime of the copyright to 72 years after the death of the photographer but it is a relatively rare photo that will still have licensing value 72 years in the future. So part of the appraiser’s task is to isolate the parts of the collection that will have future value and for how long.