Strategy for Use-Based Pricing Misunderstood

Posted on 8/5/2010 by Jim Pickerell | Printable Version | Comments (3)

When I was recently interviewed by Photonetcast, it became clear that my position on the best strategy for licensing rights to images is misunderstood, so it is time for another explanation. Granted, my position is radical, so bear with me.

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Copyright © Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.

Comments

Mark Turner Posted Aug 5, 2010
While your proposal to eliminate exclusive licenses is a bit radical, it's one I can live with. I've sold exactly one exclusive license since 1995 and that was at the height of the internet boom.

What particularly concerns me is the low-price part of the market. It costs me just as much to create, market, and deliver an image for a $10, $100, or $1000 license fee. I just don't want to bother with the $10 fees because my time is worth more than that. I license images direct from my office and through three agencies. Those agencies would make more money, along with me, if they said "no" to very low cost licenses. I wonder how they can even cover their overhead on some of the licenses that appear on my statements. What's the transaction cost for online delivery of an image when the fee collected is less than $5?

John Harris Posted Aug 6, 2010
Quite so Mark- I'm not at all convinced that the Wal-Marts of photography have themselves made money out of "buying market share" with ever lowering prices. The business model undermines the content.

Jim Pickerell Posted Aug 6, 2010
Mark and John you're not looking at the statistics. There is nothing wrong with the low priced segment if you sell enough volume at a low enough transaction cost to make up for it. The Internet and web transactions have dramatically reduced transaction costs to the point that they are negligible.

As Tom Grill says in his article "50 X $200 = 200 X $50" (http://www.selling-stock.com/ViewArticle.aspx?id=d6d8c5b4-fa73-4aab-96a4-bb728df5f047). What he should have said is "20 X $250 = 1,000 X $5" because that is closer to the actual sales ratios when you compare moderately successful RM shooters with moderately successful microstock shooters today.

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