Standardized pricing

I think photography should have standardized usage licensing prices.

*gasp*

Yes, I really wrote that and I really mean it. And yes, it will tick off some photographers (and certain consultants) and they are entitled to their opinions. In fact, I welcome an open and respectful dialogue on this topic.

Here’s why I think this is a good idea and how it would work.

Very much like music licensing, standardized usage licensing prices would take the burden of one major aspect of pricing off the shoulders of creatives…on both sides of the equation. In smaller agencies and businesses, the buyers of photography often are creatives themselves and they aren’t really trained or qualified to negotiate fees the way professional art buyers are. Photographers hate the voodoo of usage pricing. So, standardizing the usage license prices would make that part of the business so much easier for everyone involved.

This is logical because the usage value of any image can be effectively quantified and is exactly the same regardless of the image. X usage = $Y; N usage = $Q.

Please note that I said the usage value, not the entire value of an image being used.

Think about it…a $2 million media buy will have exactly the same reach regardless of whether the image used in it is shot by Annie L. or me. The same number of magazines will run the same size ad, etc. The same potential eyeballs will be looking at the campaign.

Now, a client would be an idiot to hire me to shoot anything because I’m not a photographer and Annie L. can make an infinitely better and more effective image for their campaign. And that difference would be reflected in the Creative Fee we would each list on our estimates.

Creative Fees would remain completely up to the photographer. Each photographer would be free to set her/his own prices based on the complexity/creativity of the project, time required, and the name value of the photographer, etc. So my estimate for the hypothetical project listed above would list a low Creative Fee whereas Annie L. would surely have a very high one.

But the Usage Licensing Fee would be identical.

In most cases, a standardized Usage Licensing Fee will be higher than what the majority of photographers have been charging for that usage. It will raise the income for a large number of photographers and it will significantly reduce the effectiveness of lowballers. Here’s why.

The Creative Fee for most photographers will be a smaller part of the total set of fees on any estimate so when one photographer charges 50% of the creative fee of another photographer, in the whole estimate that difference will be reduced to a much smaller percentage difference. For example, let’s say Photographer A estimates $10K Creative Fee and Photographer B estimates $5K. The Usage Licensing Fee is a standardized percentage of the media buy (let say 3% for this example) and the media buy is $2 Million. That makes the Usage Licensing Fee $60K. So the fees for A are a total of $70K and for B they are $65K…a difference of less than 8%.

I think standardizing Usage Licensing Fees would not only help the lower and mid-level photographers, it would not in any way penalize the high-end photographers. They could still charge a high Creative Fee (as they should!) and they would still get projects based on their name value, etc.

Frankly, I can’t see a significant downside to such a system. The argument that clients will expect re-licensing to be a percentage of the original usage price does not hold up because usage is usage is usage. Of course the original Creative Fee would not get repeated for a re-licensing, but if the usage is the same as the original usage, then the Usage Licensing Fee will be 100% of that original Usage Licensing Fee.

And that, in my book, is fair.

5 Responses to “Standardized pricing”

  1. Bruce DeBoer Says:

    I’ll go as far as agreeing that there should be a minimum, just as there is “scale” in the music industry.

    There has been talk of a photo union ever since I first left school – 1980. No chance – I wouldn’t even waist more than the time it takes me to type this comment on trying to form one.

  2. Alan Farkas Says:

    I totally agree particularly with the current state of the biz, $1 stock sales, free flkr pics and every new 5D owner. I hope that many are paying attention to and learning from the writers strike, but I think many (most even?) are clueless to the parallel.

    As far as I know we independent shooters can’t organize according to the fed even if we wanted to. I know ASMP attempted years back. Isn’t there some way around this? How do NFL free agents get unionize? Base minimum salary for a rookie is $300,000, 16 games year- that’s a $18,750 day rate.

  3. John Fowler Says:

    But don’t the pricing guides such as FotoQuote already t\ke this idea as far as it may be legally taken, at least in the US?

  4. Martha Retallick Says:

    Good post, Leslie. And, in the spirit of your latest podcast, it’s time to Do Something.

  5. Chris Hollo Says:

    I totally agree. I have always thought that realtors have it right with their standard 3% (on each side of the sale) realty fees. I realize that usage licensing is infinitely more complicated than realty fees, but having a set of standards that new photographers or less experienced photographers could use, would help them avoid drastically underbidding jobs in the hope of getting hired. Nice one Leslie….