Comments on: Rational pricing

By: Paul Benjamin

Paul Benjamin — Sun, 13 Sep 2009 00:23:00 +0000

“So why is it that so many other consultants are recommending putting the usage and creative fee into a combined fee. Is it due to the fact that the usage fee will typically be higher than the creative fee”

It’s more likely to muddy the waters and have a higher starting point when talking about residuals, at least that is what I’ve heard…

By: info

info — Sat, 12 Sep 2009 19:18:42 +0000

Matthew: I think that most people, including other consultants and even buyers, are not looking outside of what has been done to find solutions. It is very easy to say “We haven’t done it this way” as an excuse for not trying something new. What I am proposing would be a big change for the industry–both sides–but I think it will make things better in the long run.

As for my surveys of buyers, they are pretty equally split on preferring combined or split and many don’t care one way or the other as long as you can defend the pricing.

Best–
L

By: Matthew Brush

Matthew Brush — Sat, 12 Sep 2009 18:45:36 +0000

Great info Leslie. So why is it that so many other consultants are recommending putting the usage and creative fee into a combined fee. Is it due to the fact that the usage fee will typically be higher than the creative fee, therefore, causing an upset reaction to the the client/agencies? Ex: Client says “why am I paying three times the price to use the image, compared to what I’m paying to create the image.”

Sure a lot of clients simply just don’t get it, then there’s a few that do. I’ve tried both methods in my estimate and I get less opposition or questioning from the client if I combine usage and creative. But then if they ask what usage would cost in the future to re-license, it’s harder for them to understand, because like you said, the client doesn’t want to pay for re-creating, thus a percentage figure is the way to go about it. But then what’s an accurate percentage of a combined fee for re-licensing? 60%? 75%? 80%? Who knows? I honestly don’t know.

Usage calculated as a % against the Media Buy is also difficult because like you also said, the agencies don’t always know of the Media Buy, and now some agencies aren’t even handling the Media Buy. Pricing photography still seems to be a grey area, and I wish that there was some standardization, but unfortunately it doesn’t look like it’ll ever be that way.

Have you talked to various Art Buyers to find out how they prefer to see the estimates? Creative / Usage combined vs. Broken out fees?

It would be great to get some more insight as to what is the preferred method from AB’s.

Great post Leslie