Suppose you want to change jobs from a safe, salaried support role to a sales job based on commission. Such images are like a stock: their value varies based on a particular photographer getting the right shot at the right time. If a celebrity stops being interesting or popular, the value of these pictures decreases. What a celebrity does today – whether she spends time with A-list or D-list friends, for example – determines how much the paparazzi earn that week. The paparazzi face lots of idiosyncratic risk.
Idiosyncratic risk is risk that applies only to one individual stock or asset. Suppose Facebook changes management the future of the company is unclear, and the price of the stock might drop based on factors unique to Facebook that don’t impact any other stock. Not surprisingly, Baez employs risk strategies in his craft similar to what people use in financial markets.įinancial economists separate risk into two broad categories: the first is idiosyncratic risk, or the risk unique to a particular asset. Seeing a celebrity often happens by chance, which is exactly part of the reason why Baez’s income is so volatile. Now, getting a rare exclusive shot is necessary to earn big money. Gone are the days when many could count on a six-figure income. That means an exclusive “Just Like Us” photo that would have fetched $5,000 to $15,000 before, now pays only $5 or $10. As a result, paparazzi are paid a small fraction of the subscription fee how much depends on how many of their pictures are used each month. Instead of making magazines pay per photo, they offered a subscription service: publishers could use as many photos as they wanted to fulfill the greater demand for cheaper shots. Photo agencies began to consolidate or go out of business, and the remaining ones changed their business model. Digital media increased the demand for celebrity photographs but decreased the price media companies were willing to pay for them. The global financial crisis and the rise of online media finally killed the gold rush. Grossman urged everyone to take a coordinated step back, pay less for pictures, and not break laws or put themselves or others in danger to get the shot, but it didn’t work. The gold rush era brought about gold rush mentality, with many new photographers flocking to the industry, willing to break laws and giving paparazzi an even worse reputation for going too far and harassing celebrities and even their young children. The more senior, skilled, and talented paparazzi command better terms, which often includes exclusively selling their pictures to just one agency.Īlthough the price of a photograph depended on what the celebrity was doing and whether it was an exclusive, at the gold rush peak, an exclusive “Just Like Us” picture would typically fetch $5,000 to $15,000. A paparazzo receives anywhere between 20% and 70% of the royalties the picture earns, depending on the photographer and the deal he or she negotiated with the agency. But Grossman didn’t work with paparazzi directly instead, a photographer like Baez sells his pictures to an agency that has the relationship with photo editors like Grossman. These fortunes are determined by a handful of people like Peter Grossman, the photo editor at Us Weekly from 2003 to 2017.
His success balances his training and knowledge of celebrities with the crushing awareness that his earnings are remarkably variable and unpredictable. Most pictures aren’t worth much, but a shot of a new baby, a celebrity kissing a new paramour, or a wedding can change fortunes overnight.īut Baez’s income is not dependably constant. Often, the tips are from the celebrities themselves via social media: looking to build a following, they alert the public (mostly directed at photographers) about their movements, or their publicist will call an agency to dispatch a photographer. Camera in hand, he’s witnessed the fallout of extramarital affairs, new babies, deaths, new love and breakups of some of New York’s most famous residents.įor paparazzi like Baez, earning a living requires an encyclopedic knowledge of where famous people live in New York, as well as a network of drivers, and shop and restaurant workers who call in tips when they spot celebrities in the vicinity. Santiago Baez has been a paparazzo since the early 1990s.
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