Pricing
After publishing my article on a Two-Tier Pricing System I’ve had a
series of discussions with several photographers. There seems to be some
general misunderstanding as to why I think such a system is in the best
interest of all photographers regardless of whether they currently
license their work as rights-managed (RM), traditional royalty-free (RF)
or Microstock. Two-Tiers is not just another pricing model. The
whole purpose is so all images can be made available to all customers
at appropriate prices depending on how the customer intends to use the
image.
What an image is worth to a customer depends entirely on the customer's intended use. The size of the file delivered has very little to do with how an image might be used, or the value the customer will receive from using it. Granted, there are limits as to how a very small file can be used. But, there are many ways that a medium-size file can be used, with widely varying values. The biggest problem with royalty-free licensing, and particularly with microstock, is not that it prices certain uses very low, but that the system of pricing by file size has tried to ignore use in an effort to achieve simplicity.
One of the key things to understand about stock photography is why some customers are willing to pay more than others to use an image.
In response to "Use-Based Pricing: Corbis Moves in Right Direction," Jain Lemos said: "I am not convinced that the rights-managed model should disappear entirely, and promoting that idea too soon could have a negative impact that Corbis and others don't intend. Perhaps rights-managed and [traditional] royalty-free are going away on their own, but they have worked well for many years, and I'd hate to see the baby thrown out with the bath!"
How to create estimates that get the job and build your business.
For much of the past decade, textbook publishers have licensed rights to print a minimum number of copies of the books they published and proceeded to greatly exceed the authorized press run, without informing the content creators. Only recently have photographers become aware of this problem, which we covered last month. Here is a summary of the settled and pending actions.
The following are some principles that apply all types of stock photo sales. The base numbers on the pricing schedules on this site are average rates for one-time, non-exclusive use of a single image by the smallest of companies, and assuming that the image has no unique factors that would make it more valuable. These numbers are equal to U.S. dollars and are reasonable rates for commercial use of the average professionally produced stock image. Other currencies should adjust accordingly. Photographer should be aware of the existence of similar microstock images that might fulfill the customer's requirements if exclusivity is not an issue for the customer. In such cases the photographer may find it necessary to negotiate a lower fee.
In most industries the manufacturer sets the price for his products
based on his manufacturing costs. Of course if he sets his price too
high consumers won't buy. Therefore, he certainly has to be sensitive
to consumer demand.
As prices for stock photo uses drop, the joke has been that pretty soon, publishers will start asking photographers to pay for publication of pictures. That idea may not be as ludicrous as it sounds.
Market value for most products depends on how they are used---the value the customer receives. The distinguishing factor is often between
renting and
buying a product: from DVDs to photo equipment, renting based on value received is a very common practice, which has been all but eroded in the photo industry with the proliferation of microstock.
How long will it take before traditional prices drop to microstock levels? If Alamy's sales are any indication, microstock sellers might not be cannibalizing traditional sales in terms of number of units licensed, but they certainly are cannibalizing revenue as traditional sellers fight to compete.
In 2006 I examined many of the factors that are impacting on stock photo market and leading to price declines. There were also a number of factors leading to declining sales volumes to traditional customers. These include the general demand for printed products, the tendency to use images multiple times but only pay once, trends in book publishing, postage costs, crowdsourcing of images and various types of guerrilla advertising. Since that time the situation has become worse.
Leading traditional and microstock photographers and agency owners share their views on selling the same images at different prices.
The industry needs a new pricing model. The models we have include rights-managed, royalty-free, subscription, microstock and rights-ready, which is about to become extinct. What is needed is use-based pricing, or UBP.
This story deals with a number of things that need to be considered when negotiating. It includes a discussion of how to deal with multiple of a single image in multiple publications, or many insertions in a single publication. There is a discussion of buyouts, discounting where there are multiple images licensed in a single sale, reuse and revision and minimum price. Finally there is a checklist of things to consider when negotiating.
Whenever you get a request for a buyout of an images the first thing to do is clarify what the clients means by “buyout”. More often than not, when the client uses gthe term “buyout” their definition is very different from the photographer's.
This article discusses pricing strategies and provides suggested prices for licensing images for Trade Show and Powerpoint uses.
This story provides a schedule that is useful when establishing a price for editorial usage in newspapers. Prices should be based on the size of usage on the page and the circulation of the publication. While these prices are reasonable, many struggling publications refuse to pay these rates.
This article provides strategies and prices for licensing images for calendar and greeting card uses.
This article provides information on prices non-publications advertising uses such as: billboards, point-of-purchase banners or murals, electronic displays, transit and airline posters, bus kiosks, transit and taxi cards.
Pricing rights-managed web uses has become very difficult in the last few years due to the availability of microstock at extremely low prices. Currently, web uses represent a far bigger share of the market than print uses and the proportional web share seems likely to continue to grow as the print declines.
This article provides prices for use of images on Educational and Retail Posters. For more information about educational uses see Stock Photo Prices - Textbooks, JHP2067
Newspaper advertising rates are based on how broadly the ad is used, not whether the publication is characterized as National, Regional or Local. National publications tend to be toward smaller circulations. Based on this theory, ads in National publications will tend to be priced higher than those in Regional or Trade publications. This story provides suggested prices.
One of the most difficult uses to price is public relations. The client who wants to buy a picture for PR use wants to allow magazines and newspapers unlimited use of that picture forever, completely free of charge. This article will provide you with some things to think about before licensing rights to a stock photo for PR use.
When magazines do a favorable story on a company or product, the company often requests reprints of the story to use in marketing and public relations. These reprints often have great value for the company because they represent an independent point of view.