358
E-COMMERCE PRICING
December 4, 2000
Many image sellers believe a fully e-commerce enabled web site is an absolute necessity
in order to license rights to stock photography in the future.
I would like to take a contrarian position.
- Many uses should not be automatically priced, only certain smaller uses.Larger uses
should always be negotiated.
- The best strategy is to provide automatic prices for the high demand print uses, and all
digital uses. Prices for infrequently requested uses like billboards, point of purchase,
posters and greeting cards should only be available through negotiation.
- Don't oversimplify the automatic price schedule.
- Uses where releases may be necessary should be negotiated so the seller can
determine if the proposed use should be allowed. (See Story
355. )
Reasons for limiting automatic prices to small uses.
Stock photo buyers want on-line search and digital delivery. Online pricing is not high
on their priority list. Once the buyer has identified the image picking up the phone
and calling the company handling the rights can be faster and more satisfying than
trying to work through the buying process on their computer.
Many buyers want to be billed rather than paying by credit card. Some want to receive a
single monthly statement rather than separate bills for each individual use. With such
buyers at least one initial telephone call is necessary to carefully qualify the buyer
before allowing uses. With some regular phone calls will also be necessary in order to
collect.
As one on-line user said to The Industry Standard, "Customer service is becomming more
and more important to me. The on-line world is so impersonal. To call and get a
friendly, educated person on the other end of the line, that's great."
Web based businesses will spend an estimated $6.8 billion on customer service in 2000
and it is estimated to reach $20 billion
by 2004.
Many web businesses are discovering that the more they go to fully automatic sales the
more dissatisfied the customer becomes. This requires that the business spend more
money and time developing additional ways of communicating with the customer in order to
quiet their dissatisfaction.
Granted, one of the major areas of dissatisfaction in internet commerce is
unsatisfactory delivery of the product ordered and paid for. The stock photo industry
is unlikely to have this problem because our product is easily delivered on-line. On
the other hand, very few industries have the potential problems with "price" and "rights
purchased" that is inherent to the stock photo industry. Rather than trying to force
this aspect of the transaction into a fully automatic mold, this is where phone
communication can be very useful. Recognize that there will be industries, and certain
types of services, where full e-commerce solutions for all transactions are not suitable.
As Henry R. Autry, CEO of Brigade Solutions points out, "Phone conversations are quick
and provide the human contact that many shoppers consider an essential part of
shopping." Brigade Solutions is a provider of e-mail and chat technology, not a company
one would expect to be promoting old style telephone solutions to selling.
The important thing to recognize as you move to recognize as you mover to automatic
e-commerce transactions is that a huge percentage of your customers may still prefer to
use the phone.
Thus, the fully automatic sales, even when offered, may be a small percent of total
sales.
Pricing Automatic Sales
The prices listed below are for the United States. For sales in other countries
different prices will need to be applied, but the
basic strategy is appropriate.
These prices are primarily are primarily aimed at satisfying the needs of random
visitors who come to the site as a first visit and who will pay for the usage be credit
cards. For clients whose credit has been approved and who will be billed on a monthly
basis a more elaborate price schedule might be devised and even customized to clients
regular type of usage.
There are at least two reasons for such customization. First, the client may have very
unique uses that need to be priced separately from general users. Second, the volume of
sales that the client provides may justify special discounts from the standard pricing.
This is important because the system used for automatic pricing must provided the
capability of customized templates for certain qualified users.
One other most in automatic selling is to attach to every license and prominently
display on-line language that clearly obligates the buyer in the event there is a
misuse. It should say something like, "No model releases or other releases exist for
any Content unless the existence of such release is specified in writing by the Rights
Holder."
PRINT ADVERTISING
These prices are for a single one-time use -- one insertion -- of the photo in any type
of print ad inside a single publication regardless of whether the publication is local,
regional or national.
The price is based on size and circulation. All other uses must be negotiated
Size
|
1/4 Page
|
1/2 Page
|
Circulation
|
|
|
under 5,000
|
360
|
475
|
5,000-10,000
|
400
|
530
|
10,000-20,000
|
440
|
585
|
20,000-50,000
|
520
|
690
|
50,000-100,000
|
605
|
805
|
over 100,000
|
negotiate
|
negotiate
|
BROCHURES
These prices are for a single one-time use -- one insertion -- of the photo in any type of advertising or
promotional brochure regardless of whether it is produced by a public company, a private
organization or a non-profit organization. The price is based on size and circulation.
These prices also apply to catalogs, direct mail inserts, flyers, promo cards, sell
sheets or folders. Other uses must be negotiated. (You may not be able to get the 1/4 page
prices for spot uses, but rather than providing a separate set of lower figures for spot use I
would prefer to negotiate these prices on a case by case basis.)
Size
|
1/4 Page
|
1/2 Page
|
Circulation
|
|
|
under 5,000
|
345
|
430
|
5,000-10,000
|
375
|
470
|
10,000-20,000
|
410
|
510
|
20,000-50,000
|
460
|
575
|
50,000-100,000
|
525
|
655
|
100,000-250,000
|
605
|
755
|
over 250,000
|
negotiate
|
negotiate
|
NEWSPAPER ADVERTISING
These prices are for a single one-time use -- one insertion -- of the photo in any type of print ad in a
single newspaper regardless of whether the publication is local, regional or national.
The price is based on size and circulation. All other uses must be negotiated
Size
|
1/4 Page
|
1/2 Page
|
Circulation
|
|
|
under 50,000
|
350
|
455
|
50,000-100,000
|
405
|
525
|
100,000-250,000 |
465 |
605 |
250,000-500,000 |
535 |
695 |
500,000-1 million |
615 |
800 |
over 1 million |
negotiate |
negotiate |
WEB
There are a wide variety of ways that images can be used on the web. Thus, any effort to simplify pricing for the
web runs the risk of giving away a lot of very valuable uses for much too low a price. On the other hand we must
recognize that the competition is offering unlimited web use, of any type for a single fixed price. We also
recognize that the file size needed for any use on the web is very small and thus it is impossible to segregate web
uses based on file sizes alone.
The following are some of the different web uses our agency has encountered. The image is used in a brochure and
also on the web. It is used on the Home Page and repeated on many inside pages. There are different values if it
is used by an educational organization compared with a small business or a major corporation. It is used in a banner
by a major insurance company, but only for 30 days and also used 1/2 screen on several secondary pages. The image
is used in packaging and also used on the home page of a web site for one year.
The image used by Fortune 500 company (major traffic site) for one year and other image used by the same type of
company but on a password protected site with limited viewership. We've had an image used by major advertising
agency to promote their business. Another image used by a major car manufacturer. One image was used in a corporate
annual report and was also posted on-line.
The image is used within a montage. An image is used on a VISA card which is promoted on-line. What's the value of the
on-line part of the usage? An image used in an on-line promotion for Lipton/Wishbone salad dressing, but it will only
appear on the site one day a week for six months. Is this six months of use or 26 days?
An image appears in a PDF version of a catalog that will be available through a web site. An image is used on an
on-line button. The image is used as a spot icon on many pages, or as a ghosted background. Thus, it is obvious that
in any "web pricing structure" a variety of different types of usage must be dealt with.
Considerations
The prices below are for publication on a single page on a single site. Use of the same picture on multiple pages on
a site, or in any type of collateral print use, must be negotiated.
There are four different factors are considered.
- First, is the page Personal, Editorial or Commercial.
- Second, is this a Secondary page on the site, a page thatLeads a Section, or the Primary Home Page.
- Third, duration is considered.
- Fourth, size on the screen.
Personal
Sites created by any type of business organization, association, non-profit organization or educational organization
do not qualify as personal. No product or service can be offered either for a fee, or as a free gift, on a personal
web site.
I recommend a single rate $75 for a personal web page for a 1 year license. (PhotoDisc is selling this use for
$29.95 and EyeWire is selling web use for $39.00)
Education & Commercial
The prices below in the Editorial and Commercial/Advertising categories are based on the the following conditions:
- Image Size -- The prices below are for images used 1/4 screen or smaller. Any larger usage must be negotiated.
The vast majority of web uses are 1/4 screen or smaller.
- Single Page -- These prices are for publication on a single page in a single location. It the image is on multiple
pages the usage must be negotiated.
- Section Leaders -- Many sites are divided into many sections. The first page of each of these sections is a much
more important placement than other secondary pages within the section. We designate these pages as "Leading"
pages. They are not as important as the primary home page which is like the cover on a magazine. Think of these
leading pages as "chapter openers" of a book.
- Banners -- All banners fall in the commercial rate category.
Editorial - For uses 1/4 screen or less
|
Seconday |
Leading |
Home |
less 1 month |
135 |
170 |
270 |
1 to 6 months |
175 |
220 |
350 |
6 mos. to year |
216 |
270 |
432 |
1 yr. to 2 yrs |
270 |
337 |
540 |
more than 2 yrs |
negotiate |
negotiate |
negotiate |
Commercial/Advertising - For uses 1/4 screen or less
|
Seconday |
Leading |
Home |
Banner |
less 1 month |
375 |
450 |
525 |
600 |
1 to 6 months |
450 |
540 |
630 |
720 |
6 mos. to year |
525 |
630 |
735 |
840 |
1 yr. to 2 yrs |
600 |
720 |
840 |
960 |
more than 2 yrs |
negotiate |
negotiate |
negotiate |
negotiate |
The following are factors to consider for negotiation when the usage is larger than 1/4 page. For uses up to 1/2
page uses multiply the rate above by 1.3. For uses between 1/2 and full page multiply by 1.6.
CD-ROM
These prices are for a single one-time electronic use of the photo
in a compilation of text, images, graphics, video, etc. with read only memory. A
distinction is made as to whether the disc is for educational purposes, or whether it is
for a commercial or promotional product. All other uses must be negotiated. The license
is for 2 years reproduction of discs. A new license is required after two years even if all
copies originally licensed have not been produced. All other uses must be negotiated.
|
Educational |
Promotional |
under 20,000 |
150 |
300 |
20,001-40,000 |
180 |
560 |
40,001-80,000 |
215 |
430 |
80,001-120,000 |
255 |
510 |
over 120,000 |
negotiate |
negotiate |
ELECTRONIC KIOSK
These prices are for a single one-time use of the photo in a kiosk or other device that
permits viewing, but no downloading or printing of the image. Price is based on the
number of device locations. The license is for one year usage.
1 to 5 |
250 |
5 to 20 |
300 |
20 to 50 |
400 |
50 to 100 |
525 |
100 to 200 |
600 |
over 200 |
negotiate |
TELEVISION - Editorial Use
This is for editorial use on TV only. All commercial or advertising uses on TV must be
negotiated. A distinction in price is made between Educational TV and Commercial TV.
If the image appears two or more times in the same segment each appearance is counted as
a showing. If the same piece is repeated at several different times during the day or
other time period each repeat is counted as a showing. (In a negotiated situation the
length of time (number of seconds) the image is on the screen might be a factor to
consider, but as a practical matter this time will in most cases be two or three
seconds.) All other TV uses must be negotiated
|
educational |
commercial |
one showing |
250 |
325 |
2 - 5 showings |
300 |
390 |
6 - 10 showings |
360 |
470 |
11 - 20 showings |
430 |
560 |
More than 20 showings |
negotiate |
negotiate |
PROJECTION (Power Point)
These prices are for use of a photo in any projection or power point presentation. The
price is based on the number of times the presentation is shown to various audiences.
Slight modifications can be made to the presentation and they will be counted as
additional showings rather than a totally new presentation.
All other uses must be negotiated
1 - 5 showings |
150 |
6 - 10 showings |
200 |
More than 10 showings |
negotiate |
MAGAZINE - Editorial
These prices are for a single one-time editorial use of the photo in one magazine
regardless of whether the publication is local, regional, trade or national. The price
is based on size and circulation. All other uses must be negotiated
Size |
Spot |
1/4 Page |
1/2 Page |
Circulation |
|
|
|
under 20,000 |
220 |
245 |
355 |
20,000-50,000 |
245 |
275 |
400 |
50,000-100,000 |
275 |
305 |
445 |
100,000-250,000 |
305 |
340 |
495 |
250,000-500,000 |
340 |
380 |
550 |
500,000-1 million |
380 |
425 |
615 |
over 1 million |
negotiate |
negotiate |
negotiate |
NEWSPAPER - Editorial
These prices are for a single one-time editorial use -- one insertion -- of the photo in any newspaper
regardless of whether the publication is local, regional or national. The price is
based on size and circulation. All other uses must be negotiated
Size |
1/4 Page |
1/2 Page |
Circulation |
|
|
under 50,000 |
150 |
190 |
50,000-100,000 |
190 |
240 |
100,000-250,000 |
225 |
280 |
250,000-500,000 |
260 |
320 |
500,000-1 million |
300 |
350 |
over 1 million |
negotiate |
negotiate |
BOOKS
These prices are for a single one-time use of the photo in any textbook, tradebook or
encyclopedia. A teachers manual is a separate book. Prices are based on the total
circulation in all languages. Additional fees are not charged for separate languages.
The price is based on size and circulation. Larger uses and chapter openers must be
negotiated. All other uses, including reprints, must be negotiated.
Size |
1/4 Page |
1/2 Page |
Circulation |
|
|
under 10,000 |
175 |
205 |
10,000-20,000 |
200 |
235 |
20,000-40,000 |
220 |
260 |
40,000-70,000 |
255 |
300 |
70,000-100,000 |
320 |
375 |
100,000-150,000 |
385 |
450 |
over 150,000 |
negotiate |
negotiate |