Paparazzi Delay People Mag. iPad App

More than a dozen of the photo agencies that supply celebrity snapshots from the paparazzi are banding together to withhold their prized product unless it can get additional compensation from People magazine, resulting in the postponement of its iPad app.

While the standoff centers on one publication for now, just about any other brand that makes photos of the rich and famous their stock in trade is watching nervously from the sidelines. Whatever deal they strike could set the terms of trade for the industry going forward.

A People spokeswoman refused to comment beyond offering the following statement: "The People iPad application launch date has absolutely nothing to do with photo agencies."

Executives at People's parent company, Time Inc., had made known their intent to launch the brand's iPad extension in early August. Time has been one of the more aggressive publishing companies looking to make its mark on iPad and has already deployed other major brands including Sports Illustrated and Fortune.

Time insiders acknowledged that reaching agreement with the agencies is a pressing issue. But one exec familiar with People's iPad development blamed the delay on continued fine-tuning of the product, not the agency negotiations, and that early August was always a "soft" deadline.

Time hasn't specified what exactly People's iPad will offer, but those in the know say photos will be a core component of what is expected to be a $4.99 product.

Photo agencies are keeping a strong interest in the iPad because while online usage of their snapshots commands a fraction of what their fees earn from print usage, they recognize the potential for the tablet market to be a game-changer.

Update on Thursday, August 19, 2010 at 10:39AM by Rick C.Limpert

Update- Checking the app store this morning, I do see the People Magazine app available for download.  Although you will have to buy each individual issue you want to read.