GM, the company that has borrowed billion of dollars from the US government, are now sneakily using commercials artists as their banks as well. They have officially stopped paying advances for photoshoot: "The new terms say GM will "typically" pay ad agencies within 60 to 75 days of an invoice, who will then pay the photographer (or "vendor")"
Oh gee, I can lend GM a buttload of interest free cash right as they're on the brink of dying? Where do I sign up? They're asking commercials artists (directors and photographers) to pay for the production out of pocket, with no advance for expenses, basically bankrolling the project for the client. I'd sooner lend a shop-o-holic my credit card.
Matt Miller, president/CEO of the Association of Independent Commercial Producers (AICP), told Shootonline: in "Brother, Can You Spare 60 Days?"
"... while it might seem simplistic, we thought it was important to explain to everybody the basics of good business, that cash flow is essential and you have to make sure that you stay solvent. Otherwise you can jeopardize not only your company but the entire business. Labor costs have to be paid in a timely manner and other costs cannot be strung out. For production companies fronting large sums of money, what's worse than getting one GM job is to get two."
It is not just GM doing this now, even Omnicom passes the buck: It has been brought to the attention of the American Society of Media Photographers (ASMP) that the Omnicom Group, the world’s largest advertising agency holding company, has changed its terms and conditions in an effort to limit their agency liability and in so doing transfer that liability to independent photographers and producers. Basically, by disclosing their agency status and for whom they are acting, the advertising agency is only liable to the extent that their client has specifically paid them for any amounts payable to you. Additionally, ASMP has been informed that reps are being told that there will no longer be any advances on assignments.
We're used to it, sure we've all seen these types of offers like the "funny because it's true" take found on Craigslist: If you jump through the numerous demoralizing and moronic hoops we set before you while being dramatically under compensated we will surely spread the word to our other parasitic merchant contemporaries that you are willing to be treated like a sucker. - and with orphan works, and rights grabs becoming more common, suddenly mom's advice about getting a "real job" at a bank seems solid. Except of course for minor detail that it is those top people who worked at banks that mucked up the economy to begin with. Producing something for pay just doesn't pay. Watch as more clients rush to use creative commons licensed Flickr images because "They're free", forgetting that the image is but one part of the work that you pay a professional photographer for. Pro people have model releases, duh.
If all this is happening to production houses and photographers, ad agencies are not immune. While the bigwigs such as Omnicom can try and pass the buck, where does it leave smaller agencies who work on the crumbs falling off the big pie? Not to mention it does not bode well for individual creatives, how many can an agency afford to keep on and where will the ones let go, go?
Do you know what a bad contract looks like? This is a great example, with highlighted suggestions for change.