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SUPERSTOCK LAUNCHES EXPRESS PRICING
January 7, 2000
In an effort to make the process of purchasing stock more hassle-free for
the buyer SuperStock has instituted a new pricing strategy they call
Express Pricing.
According to Gary Elsner, new President and CEO of SuperStock, "Express
Pricing combines the best of both worlds -- the fixed pricing and liberal
terms that make royalty-free attractive, plus the rights protection,
personal service and high-quality imagery of a stock photo agency."
SuperStock set out to develop a marketing strategy that would
differentiate them from the rest of the players in the industry. Express
Pricing was the result. They have established a list of just 18 prices
that cover the most popular stock photo usages. They believe clients
will use Express Pricing for 80% of the images they license.
SuperStock will launch a new print catalog, a major advertising campaign
and an updated 30,000 image web site at www.superstockimages.com in
January.
Price Schedules
ADVERTISING & PROMOTIONAL USE
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Duration of License
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Collateral: Brochure, direct mail piece, annual report, etc.
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Inside Use
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$ 350
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One Year
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Cover Use
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$ 750
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One Year
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Magazine Advertising, consumer or trade
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1 to 4 insertions
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$ 750
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One Year
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5 to 12 insertions
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$1500
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One Year
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Newspaper Advertising
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1 to 4 insertions
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$ 600
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One Year
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5 to 12 insertions
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$1200
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One Year
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Web Site
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$ 325
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One Year
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Billboard
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$ 800
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One Year
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Point of Purchase
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$ 450
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One Year
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TV Commercial
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$ 850
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One Year
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EDITORIAL USE
Book, text and trade
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Inside use
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$ 135
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One Edition
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Magazine and other pubs
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Inside use
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$ 125
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One Issue (print or electronic) |
Editorial Programming |
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$ 175 |
Life of Show |
Editorial CD |
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$ 75 |
One Edition |
MISCELLANEOUS
Credit or Phone Card |
$ 700 |
Three Years |
Display or Mural |
$ 400 |
Three Years |
Packaging |
$ 750 |
Three Years |
Multimedia Presentation |
$ 125 |
One Year |
Digital Delivery Fees
File sizes based on 300 dpi. Digital files are delivered as either
uncompressed TIFFs on CDs via courier or
compressed JPEGs via on-line download.
Reproduction Uncompressed Compressed
Size TIFF JPEG Price
Half page,9"x6" 20 MB 5 MB $ 40
Full page, 9"x12" 40 MB 10 MB $ 80
Two page, 18"x12" 80 MB 20 MB $120
Terms
Licenses are for the period of time designated for the use category.
Licenses are for U.S. distribution only (except Web usage). Licenses are
non-exclusive. No limitations on size or print run. The basic license
fee provides film only. Express shipping charges for film and/or CDs is
additional.
Custom Options
While the above prices cover the majority of uses SuperStock will also
offer custom pricing. Volume discounts will be available, and if someone
has a particularly small use, or a small circulation SuperStock will be
willing to negotiate lower prices. For additional fees buyers can also
purchase Limited Use or Exclusive licenses. Multiple uses and
International uses will be priced separately.
Express Pricing will be launched in North America immediately and they
expect to launch it in their other wholly owned offices around the world
in February.
Positioning In The Market
Superstock has attempted to position their pricing between Royalty Free
and the prices offered by the traditional Stock Agencies. This
positioning enables them to offer RP services at close to RF prices.
They believe buyers use RF because of the "simplified process" of
licensing, not because of price. With EP SuperStock has tried to
simplify the purchase of Rights Protected images and provide a very broad
license.
SuperStock has a clear understanding of what the RF buyers are looking
for having been a principle supplier of images to EyeWire which was sold
last summer to Getty Images. SuperStock's goal is to take back business
they have lost to RF.
EP offers the simplicity of RF prices, and as a traditional agency
SuperStock is able to provide several add on services that RF can never
offer. These include:
New Leadership
In December, Gary Elsner was named President and CEO at SuperStock by the
company's former co-presidents, Jim Ong and Bill Beermann. The agency,
headquartered in Jacksonville, Florida represents hundreds of
photographers, artists, archives, museums and special collections from
around the world.
Beermann and Ong have now assumed the role of co-chairmen, turning over
the company's day-to-day operations to Elsner. Elsner was VP of Sales at
FPG for over 32 years and left that company a little over a year ago.
SuperStock offers three distinct collections of images, each with its own
catalog line: The Portfolio Collection of Contemporary Photography,
Vintage and Historical Images, and Art Images, Classic and Contemporary
Art and Illustration.
Elsner's role at SuperStock will be to work with the executive management
team to reposition the company to effectively compete in the evolving
visual content industry. He will also oversee the complete digital
conversion of SuperStock's image archive, as well as the implementation
of a state-of-the-art e-commerce web site.
In announcing his appointment Ong explained, "Elsner's appointment is
the first step in the company's plans to pursue a new direction for the
next millennium." And Beermann added, "He will provide the vision and
momentum that SuperStock needs to fulfill its strategic mission."
Comparisons
For the most part Superstock's Express Prices are not that far out of
line with standard industry rates for 1/4 page uses for small
circulations. Where the differences become marked are when the image is
used 1/2 or full page, or when the print runs are very high.
For example when we compare "Express Prices" with those in Negotiating
Stock Photo Prices for brochures we find that $350 is about the right
price for 1/4 page use with 20,000 circulation. There are a many uses at
this small size and print run, but, NSPP says a full page picture in a
large press run brochure is worth $1,925. SuperStock will give up that
use for $350. This pricing is better than royalty free, but not much.
With advertising uses $750 is about right for a single 1/4 page insertion
with a million circulation. I assume that buyers will lower circulations
will push for lower prices and get them. For a single full page use in a
major large circulation publication NSPP recommends a fee of over $3,000.
For a single full page ad insertion in a major newspaper like USA Today
NSPP recommends a fee of $1,580 which is probably low considering that
the fee paid to the publication for the insertion is over $200,000.
Nevertheless, SuperStock will only ask $600 for that use and allow up to
12 insertions of the same ad for $1,200.
Elsner says the prices are only "slightly" lower than the average prices
SuperStock has been getting for these uses. This would indicate that
SuperStock has already been giving away larger sized uses (1/2 and full
page) and larger press runs for the price of small press runs in their
price book.
We have indications that a number of other agencies have been doing the
same thing, but this is the first public acknowledgment of this fact.
Most agencies do not report the size of the usage or the circulation
figures on their sales reports. As a result photographers have no way of
telling whether the fee they are being paid is for a 1/4 page use, or
full page; for 10,000 or a million circulation.
SuperStock photographers have reported a fall off in royalties in the
past year and Elsner acknowledges that SuperStock's gross income was
"down a bit" in the 1999 fiscal year that ended in June when compared
with the previous fiscal year. But, he says sales have now "turned the
corner" and are moving back up.
Elsner points out that SuperStock is the first agency to have a published
price list. Every other agency has a price book, often with prices that
haven't been changed in years, and they "negotiate down" from the prices
in their book.
Will These Prices Reduce Negotiations?
I don't think so. Buyers will say:
- "I don't need a year license, I'm only going to use the picture
one time; give me a discount."
- "That's your price for full page use, but I'm going to use the
picture small; give me a discount."
- "That's your price for unlimited point-of-purchase and we are only
going to be using the picture in 5 locations; give me a discount."
- "That's your price for some major advertiser with a print runs in
the millions. We will only be printing 10,000; give me a discount."
- "Our TV commercial will only be used for a month, not a year; give
me a discount."
- "That's your price for a chapter opener in a book, but we will only
be using the picture 1/4 page; give me a discount."
- "That's your price for a major web site making bundles off of
banner ads. We don't have any banner ads; give me a discount."
- "That's your price to putting the picture on 100 billboards. We're
only going to put it on two; give me a discount."
Delivery Fees
Delivery fees, which according to Elsner are priced basically at costs,
and which will not be shared with the photographers, will become a
significant part of SuperStock's gross revenues. For example, if they
make a $350 brochure sale - $175 of which goes to the photographer and
$175 which they keep - and deliver a 10MB compressed image to the client,
SuperStock gets to keep almost 60% of the transaction fee and almost 20%
of that fee was for delivery.
If they make a textbook sale for $135 and charge $80 for digital delivery
the total fee to the buyer is $215. The photographer gets $67.50 and
SuperStock gets $147.50, or almost 70% of the total transaction fee.
Elsner believes that down the road clients will expect these digital
delivery fees to be rolled into the usage fee. At that point the
photographer's percentage would be figured on all the fees charged the
client. But, the major question will be whether the agency will be able
to raise the overall fee enough to cover their costs.
In recent years major sellers have shown little taste for raising fees in
spite of rising costs of production and distribution.
Will This Strategy Work?
The important question for everyone to consider is will lower prices and
a moving away from pricing-based-on-usage enable SuperStock, or any other
agency, to capture enough additional market share to offset the lower
prices.
The buzzword, not only in our industry, but in everything connected with
the internet, is "eyeballs." Do anything you have to do to make more
sales -- and it doesn't matter how much money you lose. However, if you
read the reports out of Wall Street some are beginning to question this
mantra, and beginning, again, to talk about profits.
If Wall Street starts putting their money where the "profits" are,
instead of where the "eyeballs" are, our industry, like many others,
could see some major shifts.
Feedback:
George
SuperStock rarley pays 50% of the gross fee. Where you
said the photographer will receive $67.50 for a
$135 sale will not happen in most cases. It will
more than likely be $40.50 or $33.75 an important
distinction between SuperStock and many other
agencies.
Feedback:
Ben D'Andrea, COO, Zephyr Images
Jim....we'd like to point out that Zephyr Images has already
rolled out it's "Express Request" program via it's website at
zephyrimages.com. Both NY and CA offices report increased sales
activity based on this client-driven pricing feature.
It is still too early to draw any conclusions as to it's
long-term effectiveness.
Thanks for the great, timely information you provide to all
of us in the industry.
Feedback:
Gary Elsner
Thank you for publish the article on my taking the SuperStock position and of
course Express Pricing. The article was well done and for the most part a fair
presentation of the facts. If SS is successful at taking market share from RF
and TS segments of the market, I believe we will have accomplished a win
situation for our photographers as well as SS.
There are many business elements of EP that you didn't get. If we succeed in
increasing the number of units substantially, I very much believe the overall
effect will in fact be to raise SS's average price for the various use
categories. I might also add that as I compare SS's traditional price list with
those available to me, I find that SS is very much in the upper tiers on most
use categories.
In any event, I very much care about how this will effect our photographer and
will be watching that closely. Without ample "product" no marketing strategy is
going to be successful.
The fact of the matter is when clients tell us things like: "It is about time
someone smartened up and considered the client", you know you are on the right
track.