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Rethinking Pricing of Visual Assets

[by Jan Klier]

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Cross-post from LinkedIn.

Lots of change is afoot in the world of visual assets, which I consider the umbrella term for still photography and motion imagery.

The still photographers are grappling with an apparent imbalance of supply and demand, competition from ‘everyone is a photographer’, a client base less versed in the business of professional photography, images destined for the web, social media, and more.

The world of motion imagery is going through huge technical changes of its own with new distribution channels, rapid camera innovation to 4K, fundamental changes in lighting technology to LED, and more.

Common to both is rapid technological innovation and much bigger infrastructure investments upfront and to remain current. When in the past there were many project expenses such as film and development, now there are investments for cameras, software, and a multitude of online services.

And both of these worlds are colliding into each other as photographers marginalized in their traditional markets flee to a perceived safety in motion, where not ‘everyone is a film maker’, at least yet. At the same time cameras have become hybrids from DSLRs which can shoot decent video and video cameras that have sensors that allow still images to be extracted that are usable in client work.

Old Traditions

All this change means that many traditional and long accepted business practices are getting upended. One of them being pricing.

Most commercial still photography is produced by a single creative, the photographer. He/she by default owns the copyright and then licenses the use of the image to the client with very specific parameters that cover where, how often, at what size, for how long the image can be used. If the client wants to go beyond that, additional fees are due. And rarely did photographers relinquish the copyright to their photos. Sometimes photographers were able to extract residuals from those images by licensing them as stock or to other clients. In today’s market residuals seem to less of an opportunity.

The price of an image (or actually its usage license) wasn’t determined by what it took to create the image, but rather the value of the image. And the value was directly linked to the impact the image had for the client. Thus an image licensed to a small local business for their collateral brochure would fetch a few hundred dollars, where as the very same image licensed to a national brand for a major billboard campaign would fetch 5 and 6 figure license fees. That has always been a puzzling concept to the new digital generation. But it was enshrined in the industry that in fact the photographer would take a cut of what the image was able to produce for the client. Think of it as an estimated commission.

While there are a few schools of thought on how one arrived at those numbers, essentially the floor was established by the time it took to create the image (day rate). That covered the cost of doing business and basic living expenses of the photographer making it worth to show up. The ceiling was established by industry databases and rate sheets that encoded multiple usage parameters into certain fee ranges. For the more profitable jobs this would add significant profit to the photographer’s bottom line, beyond the cost and basic ‘salary’.

But Times Are Changing

That mechanism of pricing images still exist, though it is receiving more and more pushback. Mostly because it is a theoretical concept that was established by consent from both the photographers and professional art buyers at a time when photographers had significant leverage. Today photographers have almost no leverage left and many art buyers and clients aren’t trained in the art of licensing photography.

The second challenge to this established system is that it required the client to track where images were used to be in compliance with the acquired licensing. When most images would just go to print and physical film was involved, that was relatively easy. Today images are digital files that are copied and stored on servers for everyone’s convenience. Images still go to print, but they also go to the web, social media, email, and a myriad of other places an image can be copied and pasted to in mere seconds. For most companies it is now nearly impossible to track and guarantee that images aren’t used beyond agreed upon licenses parameters. Even if feasible, it would take way too much time and energy in a business climate where we have to ‘do more with less’ and where everything happens in seconds and not days or weeks.

Remember when the lights went out at the Superbowl? The advertising winners were those who had image right for Oreo Cookies that didn’t require them to call the photographer for an additional usage license. It had to happen in 5-10 minutes or the opportunity was gone. In the days of film things never moved that fast.

An additional risk factor for clients trying to comply with usage license limits is web technology. In the old days when usage was limited, the image would simply not be added into additional print runs or the billboard would be replaced with something else. There was a natural end to each image’s use. In the age of the web, that is far from easy. A company can decide to take down the image from the website or end a display ad campaign. But it cannot guarantee that Google didn’t keep a copy, or someone pinned it to their Pinterest board. Once an image has been added to the web, for practical purposes it will live forever.

As a result many companies (and their lawyers) rightfully error on the side of caution and request unlimited usage or even copyright transfer, much to the dismay of many photographers.

Technically the unlimited and exclusive usage would eliminate the risk factors to the client. Copyright transfer does not make it safer. But these days relationships between photographers and clients are more frayed and photographers have less leverage. By the time the client asked for ‘unlimited’ many photographers have seen red, and so the client just goes into safe-mode and makes it an all or nothing deal, take it or leave it. And the photographer often has no choice but to give in due to market conditions.

The Moving and The Still Image

As mentioned above in the world of still photography the photographer is the primary creator and de-facto copyright holder of the image unless he/she explicitly transfers the copyright to the client.

In the world of motion things are lot more complicated. Few motion images are created by a single person simply due to the complexity of the process. Depending on the size of the production there can be a producer, a director, a director of photography, a camera operator, a gaffer, a sound engineer, an editor, a colorist and possibly many more. All of these have significant and potentially equal impact on the final product behind the camera. No one person is the clear primary creative. Also the person that physically handles the camera, which there may actually be multiple of if a focus puller / assistant camera man is present, may not be the actual creative behind the visual coming out of the camera.

Since copyright has to be attached to a person or entity, the copyright typically stays with the producer or production company as the ultimate owner who funded and assumed all liability for the final product.

In the world of motion there is no equivalent to established usage license rate tables. Prices will vary widely but are ultimately based on the cumulative production cost, which may include creative fees based on the experience level and personal brand of individuals. It’s a matter of negotiation.

As the world of still and motion collide ever more frequently that creates new challenges. Photographers used to usage based pricing and controlling the copyright are suddenly faced with clients used to neither practice. They will hear a simple “we’ve always done it that way”, and that is the end of the conversation. That creates new stress points. What if the client takes that motion product, grabs a few still frames and creates a national ad campaign? As a photographer that may have been a 5 or 6-figure pay day on top of the motion product. With the fixed price for the motion project, there is no leverage, no convention to fall back on. The photographer ends up being the sucker.

We can try to write into the language of the initial contract limitations of the use as we negotiate the price and simply demand a higher price if the client wants fewer limitations. But there is no established practice or tradition to base this on. It will simply come down to negotiation skills and available budgets. We can try to get a sense upfront of what the client may do with it, and price it accordingly. Sometimes we get it right, sometimes we don’t.

Remember Ron Wayne, one of the three founders of Apple? He famously sold his shares in 1976 for $800. Had he held onto them they would be worth $35B today. Sometimes we get it right, sometimes we don’t. You have to do your best and then don’t look back.

The Prix-Fixe World

Where does that leave us?

The demand for flat-fee or project based pricing seems to be increasing. Give me the bottom line number that you will do the work for and give me a visual product that I can do with what I need it for without unnecessary risk or bureaucracy that slows me down. In the world of motion there already is more or less one price based on the production cost and the talent involved.

With no way of predicting what the visual asset (still or motion) will be used for we can not charge the premium the best case may have fetched in days gone by. But we also don’t have to discount it to the minimum they may have paid in return for more limited terms in the past. We have to find that happy medium that guarantees us cost of doing business plus a decent living wage, a medium that we hopefully have the leverage to negotiate and then simply let go of it.

In the old days we may have hit a usage jackpot and nice pay day with some skill and luck. In the new Prix-Fixe world it really comes down to your personal brand and being able to demand a premium in order to have a good pay day. Not unlike actors in feature movies or major names in sports which demand a premium because of their personal brand, not because of some arcane rate table enshrined in customs many moons ago.

The new floor for pricing is what you need to make a living. The new ceiling is what you can demand based on your portfolio and your name.

Playing The Game

We can also take a lesson from some more pragmatic players. Not too long there was a huge controversy over the new contract given to photographers by Time Inc. It shrank the rates and was very unfavorable to photographers compared to what they were used to. Many didn’t sign the new contract and were barred from assignments. And many were livid.

But there were a few that were more pragmatic. They signed the contract. And they made less money on the same line items in the invoice. But they found new line items to add to the invoice such as various expenses. Maybe not everyone may get those expenses signed off on. But if they had a personal brand that mattered to Time Inc. they didn’t have the leverage to circumvent the contract, but they would have gotten those expenses approved and did just fine on the bottom line.

So the losers were not photographers in general, but the losers were those who didn’t have the personal brand nor the mental flexibility to make the new system work for them.

The other playbook readily available comes from the influencer economy of the Web. These days agencies sign models not just because of their face and body, but because of the number of Instagram followers they bring along. Everyone on set has an audience that can extend the reach of the visual product beyond the brand’s native reach. You can increase your bottom line by building a personal brand that allows you to charge a premium for putting your name on the production.

Interestingly enough, the end result is the same. It always comes down to eyeballs. In the old days that billboard that lead to a big pay day had a lot more eyeballs than the small business collateral. In the web economy the creative who bring the bigger audience to the table, either personally or by the talent they include in the project, drives up the eyeball number and can thus demand a higher price.

The take away is that there is much change afoot. Insisting on the status quo or fighting change tends to be a losing battle. But there are always ways to make the new system work by listening and being creative.

After all, we’re in the business of ‘creative’. So let’s be creative not only visually but also how we run our businesses, including how we price our work.

PS: My intent with this post wasn’t to dig up lots of facts and make arguments about specific details. I would much rather see our industries have more constructive and open conversations about how to best handle this change in ways that makes us valuable to our clients and us happy with the life we are living as creatives.

Jan Klier is a New York based fashion photographer and director of photography. His work can be viewed at janklier.com and motion.janklier.com.

By admin | Posted: May 16th, 2016 | 3 comments

Resumé of Failures

[by Barry Schwartz]

Barry Schwartz

Photographer, writer, educator

barry@barryschwartz.com

RESUMÉ OF FAILURES
(General Principles Edition, Photography)

“Most of what I try fails, but these failures are often invisible, while the successes are visible. I have noticed that this sometimes gives others the impression that most things work out for me. As a result, they are more likely to attribute their own failures to themselves, rather than the fact that the world is stochastic, applications are crapshoots, and selection committees and referees have bad days. This CV of Failures is an attempt to balance the record and provide some perspective.”

                                                                    - Johannes Haushofer, “CV OF FAILURES”

 Assignments and commissions I did not get

2004-Present

Projects where I gave ballpark pricing on the first phone call, despite the warning voice in my head screaming “It’s a losing proposition!”  (Number of these incidents has been redacted.)

2004-Present

Projects I priced too low so it looked like I didn’t know what I was doing.  (Number of these incidents has been redacted.)

2004-Present

Projects I priced too high because I was tired of pricing myself too low. (Number of these incidents has been redacted.)

2004-Present

Negotiations where I knew while preparing an estimate that I had been assigned the role of “beard” by the art buyers because they had already decided to hire someone else, but had to prove due diligence to their bosses by having me bid anyway as one of three bidders. I tell myself these interludes are opportunities to perfect my negotiating techniques, and, hey, there was at least one other person who was never going to get the job, either.  So at least I learned something or made a good connection.  At least, that’s what I tell myself.

Projects I contracted for but should never have done

2004-Present

Gigs where I knew there was not enough money in the project, but convinced myself they would be painless, easy-to-accomplish, and go quickly.  (Hah!)

2004-Present

Gigs where the clients seemed not to know very much about how the photo or design process worked, but where I convinced myself they could be educated and in the end would be easy to work with anyway.  (Hah! Hah!)

2004-Present

Projects with a graphics / branding / advertising agency where I assumed because they’d done this before they knew what they were doing and could insulate me from their own client who was mostly clueless, but despite all that we would produce great work and make good money. (Oy.)

Documents that were really not very good

2004-Present

Estimates and contracts that were confusing, too long, and contained legalistic language that even scared the hell out of me. And where the type on the Terms & Conditions page was so tiny you needed an electron microscope to read it.

2004-Present

Emails whose tone was too casual or too businesslike for the recipient.  And too long.  Much too long.  No, really, seriously, they just went on and on and on and on.  You know?

Personal projects not done so they’re not on my website to inspire clients to hire me

2004-Present

I’m not going there.

Meta-Failures

2004-Present

Failing to remember I’ve learned more from my failures than my successes; and, hey, I’m only human so I should just chill and give myself a break. Anyway, most people never see my disasters because I successfully keep them hidden, so, really, what’s the problem?

(Based on Johannes Haushofer’s “CV Of FAILURES”.  He’s an assistant professor of psychology and public affairs at Princeton University. See for yourself: https://www.princeton.edu/haushofer/Johannes_Haushofer_CV_of_Failures.pdf)

Barry Schwartz is a photographer, educator, and writer in Los Angeles and San Francisco.

By Barry Schwartz | Posted: May 12th, 2016 | No comments
Get Connected

How Your Portfolio Edit Can Support or Tank Your Brand

[by Carolyn Potts]

Show too much=Risk being forgettable.

You probably know by now that your brand is way more than your logo. It’s visual consistency throughout your online and offline presence.

Think of Apple. One of the most iconic brands we know and probably the most widely-used example in discussions about branding excellence. If you had to assign three words to describe Apple’s brand values, you might say: clean, fresh, simple. From their stores to packaging to product design every user experience is consistent with those brand values.

Consider if they changed their website’s background to black.
Or their typography to a serif font.
Or didn’t have retail clerks dressed in simple, branded t-shirts.

Providing customers with consistency leads to feelings of security. Humans are hard-wired to avoid the unknown. That’s actually one of the reasons why it’s so hard to land a new client. (But that’s the subject for another article…)

One of the biggest mistakes I see photographers make when it comes to their branding, is they show way too much content. They also tend to segment work into categories that are not aligned with clients’ needs. It does not help a prospective client know who and what you are–or more importantly remember you!–when you show a bit of this and a bit of that and a some of this and some of that and boatload of this stuff, too. For those that remember late-night TV infomercials, it’s like you’re trying to be the Ginsu knife of photographers. “But wait! There’s more!”

You may say “But what about Apple?? They’re a computer company that sells phones, and music, and watches, and tablets. And next year they may sell TVs and cars!! Isn’t that the same as a photographer showing cars and food and weddings and landscapes and head shots and travel photos??”

No. Those “brand extensions” align with Apple’s core brand of developing the very best technology products that will delight and serve your digital lifestyle. If they started selling running shoes and chef knives and make-up (products that are probably used by many, many of their customers) how would you feel about their brand?

There is a way to show that you are more than a one-trick pony–that you can shoot many things that your client needs– but it requires first asking yourself “Who are my ideal clients? What are their primary needs? How can I best show them what they need to see to get them in the door the first time so that I can up-sell them later?”  When you edit your portfolio with those answers in mind, your brand becomes more memorable to your prospects. You will attract the clients who want and need you because you’re meeting their needs first.

Carolyn Potts, international photography marketing consultant, speaker and former photo rep, provides talented and proactive photographers with portfolio edits and marketing strategies designed to help them get more work. Find her at www.cpotts.com https://www.facebook.com/CarolynPottsCreativeConsultant and Google +

By Carolyn Potts | Posted: May 9th, 2016 | No comments

Paperwork Share

[by Jenna Close]

Paperwork shares are a great resource, but sometimes I wish I could see real-world examples of how and why photographers made mistakes. So, below you will find an actual job from early in my career illustrating some of the ways I screwed up my estimate.

Brief:

Creative action & lifestyle images of subjects interacting with portable storage units. 5-7 final images, from a selection of around 30 variations (per location). Client will be responsible for shoot locations, Photographer will assist in finding talent.

Locations: 5 separate locations depicting target demographics: military housing, suburban house, city apartment, city house, college apartment

Talent per location:

Military: male and female couple, male in fatigues

Suburban: mother and children

City apartment: single male of race other than Caucasian

City house: young couple, male and female

College apartment: single female, college age or a little older, ethnic look preferred

Fees: $6800

this includes:

photographer + assistant

client website for final image selection

retouch and post-production on all final selections (up to 35 images)

FTP delivery of high res final selects

unlimited lifetime usage for Client & all Client franchises

Rights Granted:

Unlimited lifetime usage for Client & all Client franchises. Photographer may use images for promotion (print and web) without prior consent from client.

Total estimated costs: $6800

Let’s take a look at some of the mistakes I made here:

First, the Fee is too low for the overall scope of the job. One of the main things I didn’t account for was TIME. Time finding models, time driving to and from 5 different locations, time scouting, time involved in file handling, web gallery uploading and post production of around 35 images.

The estimate wasn’t detailed enough to protect me from differences in expectations of what I was to do. Scouting the locations prior to shooting was vital, and I set it up here so that I had to eat the cost of time and mileage. Next, I simply listed post-production without setting parameters for what that meant. I was thinking basic color correction, cleaning up a few things here or there. The client had something else in mind and so I spent several days in photoshop patching dried grass, removing wrinkles from the covers they put over the boxes and seriously cleaning up the locations (cars, fire hydrants, gum on the sidewalks, etc). If I had communicated clearly what my post-production expectations were ahead of time we could have had that conversation and come to a better arrangement before it was too late.

We had agreed that the models would be found through friends, not modeling agencies. However, I didn’t account for the fact that I felt my friends should be paid for their time. And I did pay them, but it came out of my pocket, not the Client’s. I also didn’t account for any specialized clothing, such as the fatigues, which I ended up purchasing myself.

I didn’t limit the usage, even a little bit. About a month after this job was wrapped I was driving down the highway and saw one of the photos on a billboard. It made me think about the value I had brought to the Client vs what I had charged for usage. The Client had every right to use that image on the billboard because I had failed to protect myself in the contract.

I think it’s also useful to examine why this happened:

I was a fairly inexperienced photographer at the time and $6800 was a lot of money to me. But even so, I had made better choices on other estimates during that same period. The real issue was that this was the first national, recognizable brand I had engaged with. I wanted the job for a lot of different reasons, income included, but more so because I believed it would elevate my status as a marketable photographer. I felt it would take my client list to a new level. I became afraid that putting my foot down would immediately scare them off, and I didn’t separate the emotions I was having from the hard facts of engaging in sustainable business practices.

Did I get the job? Yes. And I will never forget it as a prime example of lessons learned the hard way.

Jenna Close has made mistakes before and will make them again. The important part is to learn, teach others and move forward. She can be found at p2photography.net.

By Jenna Close | Posted: April 25th, 2016 | No comments

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