Stock Photo Pricing is a tricky decision. A lot of photographers undervalue themselves, when it comes to pricing their work..
They just don’t know what to charge for their photos? They are worried that they’re either going to ask for too much and lose a sale, or that they might ask for too little and the buyer will take advantage of them. Either way they are worried they’ll lose money and look a bit stupid. Does that sound familiar? If it does, what follows is a crash course in Stock Photography Pricing that will take the stress out of the process for you.
Rule #1. Smart photographers don’t sell their images, they license them
When you sell an image you are actually giving your customer the permission to use that image in return for a license fee. Usually this is for a single specific use. Usually it is for a fixed period of time or a fixed number of reproductions.
Rule #2. Professional photographers never give up the copyright or ownership of their work
Because you are licensing a single use for a limited time, it’s important to note that the image remains yours and the copyright remains yours. You are allowing the Client to use the image strictly on your terms. You can look at the Photo License as a rental agreement. Just as a car-rental company will tell you where you can go, what you can do and when you have to have the car back, your Photo License tells the Client exactly what they can do with you image and when they have to stop using it.
So How Do You Determine A Price?
The cost to license a photo is generally a product of the value of the use to the Client and the value of the photo in question. The photographer evaluates the value of the use of the specific image to the Client and then determines a fair and reasonable price that covers costs and allows a margin for profit.
This is standard in any business. The operator studies their customer, they assess their product, and they determine a price that covers their costs, delivers value for money to their customer, and leaves them a reasonable profit margin for their efforts. Rights Managed photo pricing is no different EXCEPT the value of a photo depends on how the customer wishes to use it. So based on that, prices to license the same photo will vary depending on the use.
The Value Of The Photo Use To The Client
In simple terms, a photo used on the front cover of a magazine has a higher value to the Client than say a small reproduction in the back of the same magazine The photo on the cover is actually going to help sell the magazine, which is obviously of immediately cash value to the Client. The photo in the back of the magazine still has some value, however it’s size and placement suggests it’s not of overwhelming interest to most of the magazine’s readers, hence it has less value to the Client.
Of course if the same photo was used instead for a double page advertising spread inside the magazine, it would be worth even more to that Client. The advertiser would be paying a premium price for the space, so you can rest assured they selected that particular photo because they believe it will get them the maximum return for their spend.
These are very simplistic examples, however what you need to recognize is that in each of these examples, the photographer isn’t selling the photo … they are selling the less tangible ‘service that photo provides’ the Client.
A lot of photographers find it difficult to justify charging different customers different prices for what they consider the same ‘product’. The key is to remember you aren’t selling a product; you’re selling a service.
You are not selling the photo itself. You are selling the Client the rights to profit from the use of your photo. And since the return to the Client on each use will vary, the purchase price must vary as well.
The value of the photo itself
Every photo has an intrinsic value based on the uniqueness of the content, and the quality of execution. In simple Supply-Demand terms, a great photo of a rare subject is always going to be worth more than a poor shot of a common subject.
A commercial photo also has a residual value, based on it’s freshness. The more exposure an image gets, the less appeal it will hold for future Clients. An example would be if a photo was used internationally for an extensive advertising campaign. Once the image has been seen by millions of people there is little chance that a different Client would ever use it to promote their own product. They wouldn’t want to risk sending a conflicting message to their audience by using a ‘second-hand’ image. It’s easier and safer for the Client to just find another image.
So every time you license an image, it has an impact in the future sales-potential for that image. A textbook publisher in need of a simple illustration probably won’t be too concerned where the image has been used before, or where it might appear in the future, however that usage will become a factor the next time someone considers using the image.
If a Client wants a new image, it doesn’t matter if the previous use was a thumbnail in a textbook or double page spread in Time, they will still consider the image used. Of course there are many situations where previous use isn’t an issue, however when a Client does need an unpublished image they will usually be paying top dollar for it!
So while the temptation might there to write-off smaller sales as insignificant and not worth a lot … that one small sale could disqualify your image from a much larger sale down the track. As a business person you must make sure you are compensated for that at the time.
If you are someone who struggles with the idea of charging different prices for different uses, remember this … If you were to license the best photo you’ve ever taken for a high profile advertising campaign, the future customer pool for that photo is immediately reduced to one. It is highly unlikely that anyone else will ever purchase that image again.
Unless the original Client decides to re-license the image later on, it’s residual value is virtually gone. So your initial license fee should represent your evaluation of the residual value of that image!
The mechanics of stock photography pricing
Rights managed licensing takes into account a lot of factors and can be confusing at first. It’s a whole lot easier if you can remember the following; All the usage factors you are ever going to see come down to one thing … evaluating ‘exposure’. How prominently is the image going to be published and how many people are going to see it.
The books and software and calculator websites will talk about dozens of different factors:
Screen display size
Number of issues
Regional rights vs world rights
Time in use
Placement & positioning
… and a whole lot more.
All they are really asking is how prominently is the image going to be published, and as a factor of that, how many people are going to see the image. And as we’ve already discussed, at the Exposure goes up, the Profit Value to your Client goes up, and the Residual Value of the image goes down, so you charge more. Your price is the product of those elements, applied to the Intrinsic/Residual Value of the image.
Low Exposure X Low Profit Value => Low Impact on Residual Value = Low License Fee
High Exposure X High Profit Value => High Impact on Residual Value = High License Fee
Of course there are any number of degrees for each of these values however the key is not to get caught up in too much detail. When you use the various calculators and print guides, be as accurate as you can however don’t panic if you don’t know a specific detail or the options offered don’t exactly match your usage. In most cases it won’t have a major impact on the final price.
My only other suggestion is to use the Price Calculators often to develop a feel for what different uses are worth before a buyer comes knocking on your door. If you are new to the business a Print Price Guide is highly recommended as well. Most of all, don’t be intimidated by the process. Always value your work and your time. Never give up ownership or copyright and remember, you can always say ‘no thanks’ if the price just isn’t right.