Creating A Downward Spiral
[By Steve Whittaker]
Recently, I visited several web sites of photographers who are fairly new to the field of Architectural Photography. Several were members of the ASMP Architectural list serve and I noticed that they had listed their fee structures on their web sites.
In several cases, their fees reflected values that were available to clients from the 70′s and 80′s day rates. In some cases, they were including the ownership of the intellectual property. My concern is a downward spiral of pricing. By listing their prices and with their competition under pricing them on their own web sites just to stay competitive. Have they factored their personal and business expenses?
This action can cause unreasonable expectations on the part of potential clients
who are looking for breaks in a tough economy. In addition, these actions can set an unreasonable precedent with new marketing or photography coordinators. For the photographers who are offering these low fees, are they setting themselves up for long-term failure and a very short career?
Questions:
#1:Can they cover their true cost of doing business, their living expenses and their cost of equipment replacement?
#2: Are they creating a profit basis, where they might create retirement reserve?
#3: Are they leaving prospective clients with a lasting impression of a low budget photographer getting stuck with low budget assignments in the future?
#4: Can they escape that reputation, once they are established as low budget photographers?
#5.How long can a photographer sustain a business when they are losing money and draining their savings?
#6. Is the photographer loosing the ability to negotiate stronger license?
It’s important to create a higher standard in our industry and profession. During tough economic times, the temptation to charge below your true profit margin just to get the assignment is there. Downward pressure is very real. Especially if the client keeps demanding more each time, pays less and the precedent is set for future expectations
It might seem practical to charge less for that one assignment just to generate enough income to pay immediate bills. By taking a loss and not charging for the true value of that assignment and the licensing potential, you are hurting yourself in the short and long term.
At the same time, when you are charging just enough to clear a profit without leaving room for that margin of error, or not covering your true expenses, eventually your ability to remain in business will fail.
Posting your fees on your site can be a positive approach if they are realistic but if not, you are potentially damaging your long term reputation and you may be setting an unrealistic value of the true value of your images and for future licensing.
4 Responses to 'Creating A Downward Spiral'
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Appreciate your insight. I do not have fees listed on my site, though it does seem challenging during these economic times. Instead of under-charging, I’ve looked to other ways to generate income, and have been successful. Thanks. . .Karen
Posting your fees also takes away negotiating leverage. The first rule in business is never to disclose your prices until you’ve secured a potential client’s business. The goal should be to engage someone in conversation, sell yourself and then talk fees. Even when I get an email asking what my prices are, I pick up the phone and call.
Bravo!! Thanks for voicing this, Steve.
For those who haven’t seen it, NPPA’s “Cost of Doing Business Calculator” is a great resource: http://www.nppa.org/professional_development/business_practices/cdb/index.html
And ASMP’s “Commissioning Architectural Photography” is one of my favorite pitches on need and value of licensing: http://www.asmp.org/pdfs/AIA_ASMP_BestPractices.pdf
I only wish their were a guide more specifically tailored to the hospitality industry. The rights sought there are huge, and growing fast, and I find myself in quite a quandary.
I shoot luxury villas in Bali for hospitality marketing. While the top end here has been somewhat shielded from global woes, I’m really feeling the pressure on distribution these days. Everyone wants photos going viral, and they get mad (yes, mad!) when you put a price on it that comes anywhere close to true value. What’s more, with the movement toward tablet-based magazines, books, etc., digital distribution (even of not-so-hi-res images) pretty much opens the flood gates in a very hard-to-control fashion.
Whereas my pricing used to be steeper for worldwide magazine rights than it was for web distribution, I’m feeling now that should really be reversed. Web advertising is steep. Why shouldn’t commercial content be right up there as well.
Stranded way out here on this little isle — far away from all the excitement of SB mtgs — I’d be really curious to know what “real world” hospitality shooters think of all this.
Thanks again, Steve!
Djuna Ivereigh
Bali, Indonesia
Photography reminds me of the recording industry 10 years ago. They had big studios of equipment where many high paid professionals met to produce music tracks. I pointed out to a friend of mine in that business that technology means soon they won’t have to be in a studio and many more people can do it themselves so why have those centralized buildings and professionals? He’s not in that business any more because he said it happened just like I said. When technology makes what you do available to the masses, don’t expect your profession to stay the same. imo, You’re next, photographers.