This Is How The Paparazzi Business Really Works

colleagues at Bloomberg. I agree. I love those episodes and not to sort of speak about how great things are Bloomberg and how great it is here and how great our colleagues are, but it is really remarkable the wide range of backgrounds that people have. Whether we're talking to our colleague who is a cattle farmer or former traders or whatever it is, or the guy who uh is the father of the beige book, it's always interesting. Yeah,

it's a large organization. There's a wide range of experiences, and it seems like a lot of people have very interesting backstories, and we've had some of them on as you just mentioned. But I think I've found the Bloomberg reporter with the most interesting background. Ever. This is going to have to be pretty impressive to be the cow farmer. But I guess cow is our commodity, so I guess maybe it does fit in with the Bloomberg bread and butter coverage. Okay, so what is the background of the

person we are talking to today? Okay, So our guest for today is Eddie van der Vault. He is a medals reporter for US in London, but before he was covering all things metal, he was actually a paparazzi or I guess I should say paparazzo singular. I am very excited about this. First of all, I'm a big fan of Eddie's medals coverage. I love what he talks about

gold because all the crazies are in that market. But I feel like a the paparazzi is one of these things that's ubiquitous in modern life, and we basically know nothing about how the business works. And I imagine there's a lot of interesting lessons we'll learn about risk taking and risk management and all this, and maybe even also digital rights management and intellectual property. So I'm excited about this episode. Okay, Well, we have a lot to cover

in twenty or thirty minutes then. I mean. The great thing about Eddie is that He also looks at the paparazzi business model from an economics perspective. I've spoken to him a little bit about it before, so I think you're really going to enjoy this discussion. Bloomberg's Eddie Vanderwalt, thanks so much for joining us. Tracy, Hi, thank you. I guess the obvious question to begin with is how you got into the business of being a paparazzo in the first place. Yeah, I mean, I stopped off as

a student photographer. The dream was to go photograph elephants in the serengetti, and you know, nobody told me that that people don't pay for pictures of wildlife. And so when I came over to the UK, I kind of I wanted to work in news, and I had a few interviews in the industry, and to be honest, I turned the first time I interviewed it at the company that I worked for, which was called Big Pictures, which

one of the biggest agencies at the time. They've gone under since, but I interviewed there and I had no idea what these guys did. So I walked into the office and everywhere is just pictures of you know, I don't know people in compromising positions, and you could just you just got that got the image immediately that that this was this was their business. Their business was was peparazzi.

And so I was a student when Diana died, and I remember saying to myself, the one job that I would never do in my life, it works a peparazzi photographer. But I got interviewed by a by a South African guy and he offered me the job, and the first time I turned it down, and then a few other things that I tried didn't come off. So he came back to me about a month later and said, look, the guy that we hired at that time didn't work out, but you know, are you up for it? Um? And

then the second time around, I took it. And it just kind of sucks you in, the world sucks you in because the better you get it, the more you the more you know, the characters that work in it, and the backstories and so on. The more you get to know it, as in any industry, the more you become worth. And so it was much easier to get into it than it was to get out of it, to be honest, Eddie, A real quick question that I'm

curious about. Are the ranks of the paparazzi filled with people who once aspired to what maybe other people would use more noble ambitions like photographing wildlife for people who thought they were gonna be war photographers and things like that. No, not really, you don't. You don't see a lot of serious photographer. You see some serious photographers that that that go into that industry, but the photographic skill set that you need isn't as high as it used to be.

I think in the old days when we were shooting on film and people were developing canisters of film in the back of the boots of their cars and that sort of thing, that was different. But nowadays with digital photography and you see the image immediately after you took it. And also the way that you operate, you're you're you're setting up for a specific shot and you take it over and over and over again, particularly at night, so I worked at nights. The guys who work daytime, they're

a completely different breed. And the daytime guys they set up with long lenses, they hide in the bushes and so on. Right, the guys who work nighttime, you would have seen them outside of you know, Joe, I'm sure you go to these kind of, you know, posh restaurants in New York. Tracy, I'm sure you do too, but actually right, but it's a joke, but it might be. But I think that these kind of restaurants are more prevalent and you get more of celebrities hanging out in

New York. So you would see these guys on the pavement and they'd have flash guns and it would be a pack of guys standing together and they're try and get close in. So to answer you a question, no, it's not really. The skill sets not photographic. The skill set is knowing who's famous, knowing who's hot. How how can you going to sell it? What are people's car registration numbers? Right? Those kind of things. That's what you want to know, and that's what makes or breaks a path.

So walk us through the business model. Then you're going out at night, You're sending yourself outside, Um, I don't know, Chipriyani's or something in well, I guess this would be London, and you're waiting for famous people to come out, and how do you actually make money and how do you differentiate yourself from the other photographers who are standing there waiting. Right. So, Tracy,

I've met the two of you. You know you would know I'm not six ft five and you know, in that sort of scrum situation, you want to get to the front, you want to push people out of the way, and it's it's it's a bit of a rough and tumble. I don't know if you if you watch rugby, it's a bit like a rugby scrum, right, Um, you know you're just you're just trying to get to the front, trying to get the picture. And that was never going to be my faulte. So that was never really what

I what I played too. But I think it's interesting to talk about what gives a picture it's worth and what makes it what makes a particular picture valuable because there's a there's a lot of things that play. The first one is how newsworthy the event is. Right, So if we think about celebrities as characters, I almost think of it is a bit like WWF because it's a little bit made up, it's a little bit real, it's a little bit and you've got to know, you know

what it is that that makes this particular person sellable? Right, So you've got. So let's say we talk about the British Royals. If they show up at a red carpet event where they are opening, you know, a new theater or you know, some sort of event that is characteristic of what they would do, that is almost not worth any money, and you almost won't. You might see it in print tomorrow, but it's not going to sell for

a lot of money. Now, if they do something that is out of character or something that they don't want to be seen doing, those pictures are obviously worth a lot more. So it's it's got that story you But the real interesting bit I think is what makes the pictures valuable is not whether it's not so much what the picture is of, it's it's how many people get

the picture. It's the exclusivity. So the market structure is, on the one hand, you've got let's say in London, maybe fifty guys who are doing this right, and you've got about six newspapers or so that would buy the pictures tomorrow morning. So you've got an oligopsony buying the pictures.

And if you if you're fifty guys giving them the same image, they have all of the market power, right, they can buy from any one of you, and somebody might have a slightly different angle or might have a slightly better expression on the face, but essentially you're then

selling a commoditized product. If, however, you are the only one who gets the picture, the power shifts completely because then you're running the monopoly and you've got six buyers who we're going to be competing by selling to a mass audience tomorrow. So that's what you're going for. I almost think of it like, you know, there's this debate about diamonds and water. Why is why is diamonds more

valuable than than water? Well, it's about scarcity, and it's exactly the same there, because if you can manufacture a situation of scarcity, you've got a picture that sells for money. So the way you the macro perspective through which you describe the market is intuitive. A rare photo is better than a normal photo, so it's celebrity doing something unusual is more valuable if you're one of the only people who has the photo, versus if the entire scrum is there,

that's more valuable, and so on. What is the precise mechanism view which the sale is made because it's a quasi auction process. You're describing how is the exact price and deal set? As in most markets, there's there's a conception that in the pepparazzi business that the photographers make a lot of money. There are a handful of guys do well and you know, lift slightly above I don't know the national average, but it's not it's not a business that will make make a lot of money year

in year out, not for the photographers anyway. The guys who make money out of it are the agencies. And so what you would do is you as a photographer would usually have an agent. So my my day usually ended at four am, So four am I would go back home or three am somewhere around that, round about the time that the club's closed. The nightclubs close and people get kicked out. After that, I'll take my last pictures,

head on home and file it to my agent. And the agent um you know, would represent Let's say again, there are about five or so big agencies. The business is consolidated a little bit. I think guys like Getty and Rex and so one have bought up a lot of a lot of other outlets. But basically they would that's when your agent gets to work. Some guy would go and in the pictures for you. He would just

crop it straight and so on, and caption it. And if it's this kind of commoditized picture that everybody else had it was a red carpet event, he would he would just go, he would caption it up, and they would send it out on a newswire essentially on a newswire, and and the newspapers would would be able to look at this, and then they would they would buy it straight off there and and in fact they set the price.

And often you don't hear how much you're gonna get paid for a picture until after it was after it was in the publication, right, you have no bargaining power there. But if you had exclusivity, the situation is obviously very different. Then your agent would get to work. He would call up the various news desks. He wouldn't necessarily in the first instance, show them the pictures. He would just say, look,

we have this set of pictures. Are you interested? And it's it's actually quite interesting how that pans out, because sometimes now it can take a whole news cycle, right, so so so they would hear early in the morning what you had yesterday where you got last night, so the pictures won't get to the newspaper until the following day. In the interim, he's had a discussion with various news desks saying, this is what we have. So so I've often asked the question, why don't these guys just go

and published, you know, the news anyway? Say, look, you know, ex celebrity got caught with a girl that he shouldn't have been with, or with a guy who shouldn't have been with or whatever. But the reason they don't is because, if you're looking at it from a game theory perspective, is because these are not one off games, right, So that kind of forces it's the idea of honor amongst thieves.

If if we were going to play this game once and these guys and you just kind of, you know, had a one off picture that you're going to sell to them, and they broke the news anyway, without you selling the picture to them, they could, you know, they could walk away and nothing's lost. But because I'm going to keep bringing them new pictures, they won't cheat on the game as it were. I love that we're talking

about game theory in the context of paparazzi. But any you mentioned earlier this notion that a exclusive photo of photo that no one else had would be worth more than a commoditized one. In economics we talk all about you know, supply and demand driving price. Was there, ever, the temptation to create artificial scarcity for a photo? And

is that even possible? Right? Exactly, it does happen. So the temptation is if if you're two photographers turning up at the same you stumble on the same exclusive or on the same picture. If you were to both sell that picture and send it to separate agencies, we would go from a picture that sells for tens of thousands of pounds to a picture that sells for you know, twenty thirty forty pounds tomorrow. So the temptation is always to work together. And again it's because these are not

people that are that inherently trust one another. It's just is it works in their favor by game theory, repeat games and all of that stuff to file their pictures together, and they often do. You will often see either the two photographers would decide on their own two submit via the same agency and split the money, or if they don't have, if they don't both have relationship with the same agency, for the agencies to sell the picture together. I want to go back to something that you said

early on because I don't want to forget it. It reminds me of a recent episode. We were talking to Cameron christ here and he was talking about the scrum in the Chicago trading pits and the importance of size in that sort of jost and you mentioned in one of your early answers that you're not all that tall.

I am curious about some of the other attributes of really good paparazzi, the degree to which sort of physicality really matters in either being big enough to push people out of the way or small enough to slide through

crowds to get that perfect shot. Yeah. Absolutely. I listened to that episode and it was It was one of my favorites because because I remember while I was working, I used to think this, what I do feels a lot like that kind of business, right, and so definitely, but more than being big, what matters is being able to recognize faces at a distance, so good eyesight, but also just knowing that the people the individuals very well, so that that matters more because it's one thing to

push somebody out of the way, but it's a lot easier to just be there first, right because the other guy, you know, he may or may not be able to push out of the way. So but I think I think those are the key the key attributes. And for me, what's why I always think that this wasn't such a huge jump to wide of financial markets from the from the Parati business is that it is about information and

it is all about knowing. So I talked about getting to know the registration numbers for cars because I worked with Kate Moss a lot and with Amy Winehous a lot, not worked with, but you know, photographed Amy Winehouse and Kate Moss a lot. And knowing where they live, knowing what times they go out, knowing what cars they drive, and getting to know the drivers, and getting to go know the guys at the nightclub, and being willing to

pay for information and those sorts of things. I think in this grum situation, it matters being big, and it matters getting close up and so on, but you almost want to win before you get there. That's funny. It's it's almost like like being at an investment bank and being able to see client flows and having that edge

in making your own trading decisions. I'm curious, you know, we're talking about a business model that I imagine changed quite a lot, maybe over the time that you were working, but certainly then nowadays everyone has their own digital camera via their phones, for instance, how has the business model changed either while you were working um in it or

since then. I trained on film photography and I joined when digital photography was just kind of you know, in the early early two thousands, just this digital photography was really taking off and was good enough to be used at that level, and I think that that made it that had a huge impact because it it really lowered the h skill set that you that you had to have to get into the industry. But but you're right, it's not just that, it's it's it's the publication models

has changed completely. Once a picture has been placed on a website, once it's gone and everybody else on the web can tweet that picture they downloaded straight away, They don't, you know, repeat sales have fallen off a cliff, and it it has forced the industy to consolidate a lot, you know, so you've you've seen a lot of agencies either go under or sell out to the big guys or so on. Yeah, definitely, the industry is is still

struggling to catch up with it. But that's made having exclusivity even more important because you cannot bank on those repeat sales. I know, in the old days, they were the older guys, I used to think of their picture library, you know, as their retirement policy, because the pictures would keep paying. Like it's a lot like the like the music industry, Your your backlog of of works will keep selling. But nowadays that's just no longer the case. You just

don't see people coming back and buying those those old images. Eddie. I don't know if it was a slip, but you talked about working with Amy Winehouse and then you said, oh, we didn't really work together. You took Now what I meant was so, But I wondered when I heard that about the symbiotic relationship between the paparazzi and a celebrities. So, you know, the sort of cliche is that the celebrities try to avoid the paparati, but obviously the paparazi are

key to bolstering their um, their celebrities. So I'm curious about the degree to which you start to establish a rapport relationship or with the people that you cover. Right, Yeah, it's it's it's quite interesting, actually, I mean it is. It's a bit like like wrestling or or a pantomime was something where the pepparazzi play the villain, play the bad guy. But but it is absolutely symbiotic, and very often the information about where the celebrity is going to

be comes from the celebrity. Very often the celebrity that would tip you off, right, and you kind of get three kind of strata of people that you that you deal with in the industry, and the guys at the bottom will come out of a nightclub and they will spot you and they will come over to you and they will try and strike up a conversation and try and get you to photo raft them. And that's fine, and you'll do it, and you know, and you'll submit it.

You know, you're not going to sell a picture, but they because they're building a brand, they are they will pose, They will pose kisses for you. They will do anything that you'd like them to do. If they then a couple of years later, they've made it and people know who they are, and and then they completely shun you. They're almost a little bit nasty when they when they when they're in front of you, because they want to

show that they do not need you, right. And then the complete A listers, the Madonnas of this world and so on, they're completely professional. They see it as a part of their job. They will come out of the other the night the nightclub or wherever it is, and they will look straight down the camera at you, but they won't engage with you. They won't do anything that they weren't going to do anyway. They would just carry on with their business, almost as if you weren't there.

But they're also they're also a lot more polite than you, than than the than the the kind of mid tier. It's it's really interesting to see to see how people's reactions change with time. It's the smile right at the long end and the short end there's a positive interaction and its belly of the curve where you have the sort of right right right Eddie. I have to ask, was there ever a photo that you took that you

felt guilty about for the do you know? For the most part, no, so I kind of see it as for the most part, most people sign up for this right and they actively seek fame. You know, there are a lot of good places in London that you could go out and have dinner and not be photographed by the paparazzi. And there are a handful of places that you know, you're definitely going to go and be photographed if you if you come out, there's going to be pops outside. So I always use the example of Sting

right Sting. You know, the musician, I never saw him working in London all the time that I was here. He never showed up anywhere, and yet if he wants publicity, you know, he could have it at a drop of a hat. But there's one caveat There's two groups that did make me queasy, So not so much an individual picture, but two groups that I didn't like photographing, and that is the children of of the famous and royalty, because both of those groups have no choice, have no power

over this, They cannot walk away from this. The royalty see this as a as a part of their job. But I always felt sympathy because I thought, you know, there's a lot of jobs that I in the world that I wouldn't do. And they've got one that they cannot walk away from. For instance, Prince Harry, he doesn't like being in front of the camera. It winds him up and you can see it. Okay, well, then let's talk about the flip side. So what was your proudest

photograph or proudest moment in your paparat. Well we talked about Amy winehows I loved spending time there and Amy I don't think a lot of people know this, but she used to work for a for an agency that sold pictures matrix. I think she did, and she knew exactly how to play the game. So she had a boyfriend.

His name was Blake, and he was in prison for a while, and she would come to the door to greet you know, the neighborhood kids who bang on the door, and she would she would turn up with a with a with a brooch or something in her hair that would show you know that that had Blake's name in it in a heart shape, something like that. Just visualizing

a storyline. At one point, she was cleaning up her life, so she would come to the door with a with a vacuum cleaner, you know, throwing out an old vacuum cleaner, but it really visualized this idea of her trying to clean up her life. Um, you know, we all know how that ended, and it was very sad, but just the time spent out there, you felt a lot more like you were working with her. She was given a lot more back and she was incredibly good at it. So that's definitely some of the some of the stuff

that I was proud of. Random aside here, remember how she in addition to her boyfriend named Blake, she had another guy friend who wasn't her boyfriend, who was also named Blake. Yeah, I went to high school with that Blake. Really, he was a friend of my sister's in Vermont. So I randomly have a connection to one of the two Blake, well the other I mean I never saw. I never saw Blake. We called him Blake one and Blake two, and never really met the first Blake, the one that

was imprisoned. But but I met Blake two, and he was he was a nice used to hang out at my house when I was a teenage. That's fantastic. But you know, I mean that whole crowd around her, they were decent, down to earth people that happened to be famous. It was, it was, it was fantastic. All right, Well, Eddie, it's been really great to listen to your stories and learn a little bit about the business model of the paparazzi.

That's Eddie undervaulved Bloomberg's Medals reporter. Thank you so much, guys, Thank you, Thanks Eddie. That was great. So Joe, I found that conversation really entertaining, and I'm now trying to think of ways that i can accessorize my outfits to visualize my personal storyline and got some paparazzi interested if anyone could pull that off. Tracy, I know that it's you.

I feel like that conversation as well. And I guess I would say every story or every career or whatever, there's always some economics markets parallel that you can draw, right. But I was actually I thought that the connection was

more in depth than I even was expecting. Whether it was the auction slash market structure of how the photos are sold, whether it was the repeat game theory of the relationship between the agency and the producers, whether it was you know, as I put it, the smile in terms of where on the curve and who's nice to you. There's just a lot of really interesting lessons there. Mm hmm. Yeah, the smile was a good analogy. I like that. It is a really fascinating dynamic because you think of paparazzi,

they're these really competitive guys. Obviously the business is really competitive, really intense. But even there you can find instances of economic cooperation. So maybe that proves uh that, um, some economic models work. I guess there is hope after all. That's right, Okay, Well, on that happy note, this has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway and you can follow me on Twitter at Tracy

Alloway and I'm Joe Wisn't all. You could follow me on Twitter at the Stalwart, and you can follow Eddie on Twitter at ed Vanderwald. And you should follow our producer to foror Foreheads at foreheads T, as well as the Bloomberg head of podcast, Francesco Levie at Francesca Today. Thanks for listening.