Understanding photography pricing

president_richAHere is the scenario: You are on vacation and take a cool photo of a tourist attraction and post it to your Flickr stream to share with your friends. You recognize that someone someday might be interested in it, so you make sure your photos are listed as “All Rights Reserved” to keep honest people from stealing it. Then one day you get an email: “We like your photo and want to use it for the cover of a book I’m writing. We will give you $100 for it and will need world-wide exclusive rights”.

You think great! Someone wants to buy my photo and it would be cool to say I’ve been published on a book cover and you ship the photo off and get you’re $100.

The problem is the fair market value of this transactions among commercial photographers is $3000 or more. You just gave away your photo for 1/30th of its value to a business that is going to use it to sell their book and market it. When a photo buyer asked for “exclusive” rights, they are buying out your copyright. It is no longer your photo. When the book shows up on Amazon.com your photo will be there. To you, the $100 may seem like a lot but its not. Lets say this book will sell for $30 a copy and they company may sell 50,000 of them. Thats $1.5 Million in sales that your $100 promoted for them … and … you can never use that image again ever. You have to take it down from your flickr site, and any other place where you’ve published it.

Well guess what. The photo buyer had the budget to pay you the full $3000. But they know that there are plenty of non-commercial photographers out there who take excellent photos (and there are many of you, who are hobbyists who are better than paid professionals) that they can get for cheap because you’re not experienced with the photo market.

Why do I bring this up? This happened to me this week. I got offered $100 for a cover of a book and was asked to give up exclusive rights. When I countered with a fair market pricing, they balked and I lost the sale. I certainly could have used $100 in my bank account. My wife isn’t happy with me because I held the line on the pricing. I even priced my buyout pricing for considerably less than $3000 because I wanted to close the deal. I offered them a limited exclusive and a non-exclusive offer that was still priced below fair market value and I lost.

Why? Because the buyer will find someone with as good of a photo who lacks experience in photo pricing and they will get it for $100.

Here are some definiations to help you understand the photo marketplace

Stock Photography
You (or your agency) take photos of things you think might sale, then offere them up. You sell them for less money because you plan to sell the same image multiple times.
Assignment Photography
You take assignments to shoot photos of a subject requested by the buyer. Pricing will vary based on usage. Newspapers may pay $50 an assignment, where a major magazine or ad agency might pay several thousand dollars depending on the usage.
Exclusive Rights
You sell all rights to your photo to someone else. This is call called a buy-out and generally is worth between $2000 and $3000 or more dependind on your clout
Commercial
Commercial photography is simply advertising. Photos sold for add uses generally sell for 4-5 times that of editorial usage.
Editorial
The photo will be used in context with information. Photos that run with news stories in a newspaper or magazine are editorial. Photos that run in an add in the newspaper are commercial. Books are generally considered editorial, however, cover art will be used to advertise the book, so book sales have some commerical aspects.

For what its worth and to help those, this was considered a “Stock” sale. They were asking to buy a photo that I already had shot. There are a lot of low-ball stock agencies out there where hey could pay between $100 and $500 to get a cover photo (btw: The fair market value for a stock photo used for a book cover is around $600 to $1200 for non-exclusive rights), but no stock agency will sell their copyright since they make their money by selling the same image multiple times.

The photo buyer was good, he brought up “paying stock agencies $100” to get you thinking that $100 to you was a good value even though no stock agency would agree to their terms.

“Well you should have just sold it and taken the $100. Are you likely to sell that photo again?” you might be asking.

That’s a good question and one that was running through my mind. But there are two issues: First, it doesn’t try to hurt to get the buyer, who has a deeper budget to come up with a more fair price. You haggle. Secondly and more importantly, it was an attempt to defend the declining commercial photography market. Commercial and editorial photographers who are trying to make photography a full time job cannot compete when buyers knowingly take advantage of photographers that don’t normally sell their works.

I’m trapped in between. I’m no longer trying to earn a living through photography and I could use the money but I feel a moral obligation to hold the line.

If you are intersted in learning more about pricing your photos, check out:

What should I do? What would you have done? Leave a comment below and leave me your thoughts?

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8 Comments

  1. Linda
    Aug 22nd 10:35pm

    Can you explain why buying prints after a pro photo shoot is so expensive? I feel like I already paid an arm for the shooting time, and the prints cost two legs.

  2. Aug 23rd 7:39am

    Hi Linda, this has inspired me to write a part 2 of this (pricing from the buyer’s side..) which I will try to do today. But the short answer is the three-Tee’s: Time, Talent and Taxes.

  3. Aug 23rd 8:42am

    Great article Rob – thanks for posting.

  4. Aug 23rd 9:13pm

    Excellent information. i would add integrity to your list even though it does not start with a t. the seller needs to keep theirs and the buyer needs to improve theirs!

  5. Aug 25th 11:52am

    I would have, in no case ever, given up rights to the photo. That’s just not what I’m interested in. I am, however, not in the photo business (anymore) so I have that luxury.

    That’s said, depending on use, I have no qualms about giving away shots (limited or one-time use) for free or for trivial amounts (yes $100 is a trivial amount). I’ve had several of my Flickr photos used — with my permission and my attribution — by various online sites for free. Meh, I figure, those are mostly (relatively) low traffic sites that may not be here next year.

    Now, as you point out, a book cover is a different thing. Yes, they did have a $3000 budget and you did the right thing by telling them to pay up or hit the road.

    I’d have offered them a non-exclusive rate in the $600-$1000 range (with attribution) and not cared a whit if they accepted or not.

  6. Jim
    Nov 7th 8:15pm

    Rob, great explanation and example, my friend. I would not have expected you to do otherwise – you have always maintained your integrity the whole time I have known you. It’s hard sometimes for others (spouses, etc) to understand such things but she knows who you are and loves you for it so it’s all good.

    I would do the same thing you did, but I am sure my “break-point” would be much lower than yours, but that’s about right because the quality of my shots are mech lower than yours. 🙂

    One thing to always remember, amigo, GKMF.

  7. Jun 24th 8:45am

    I would have, in no case ever, given up rights to the photo. That’s just not what I’m interested in. I am, however, not in the photo business (anymore) so I have that luxury.

    That’s said, depending on use, I have no qualms about giving away shots (limited or one-time use) for free or for trivial amounts (yes $100 is a trivial amount). I’ve had several of my Flickr photos used — with my permission and my attribution — by various online sites for free. Meh, I figure, those are mostly (relatively) low traffic sites that may not be here next year.

    Now, as you point out, a book cover is a different thing. Yes, they did have a $3000 budget and you did the right thing by telling them to pay up or hit the road.

    I’d have offered them a non-exclusive rate in the $600-$1000 range (with attribution) and not cared a whit if they accepted or not.

  8. Larry
    Oct 15th 3:12pm

    Maybe I can help you understand some things from the printing perspective. Publishing, like photography has changed — there are similarities. Just like there are perhaps millions of photographs that people can access for little money, there are hundreds of thousands of books in a market where more and more people are getting their content for free.

    In publishing, current estimates suggest that commercially successful publishing companies succeed on one out of 20 books and lose money on the rest. The booksellers – now Amazon, etc., require in many cases a 50% discount on books–thus they can take half your revenue. There are now hundreds if not thousands of self-publishing options — and those people often sell 100 or less books. It’s a savage business. Noting like it was a decade ago and it bears no resemblance at all to what it was two decades ago.

    When I worked for a large international publishing company, at one time we sold 5000 copies of a book without breaking a sweat. Over a 20 year period that number became more like 300 with an average marketing cost of $30 a book. We published a hundred books a year –many of them new editions of standards — and showed a profit on perhaps a dozen. Our percentages were that high because we were publishing the same successful books updated. Almost no new books made money.

    We had a staff of desktop designers and they were charged with producing cover designs. Thus, the company really didn’t budget for additional art that would be required for covers. That’s a real problem with some large companies – all their money is in the bureaucracy stream and spending a few dollars out of pocket is next impossible. I think you will find that sometimes when someone is coming to you, they are working for someone else and the budget may be going to them.

    Outside of perhaps NY, a free lance cover designer may be getting $500-1000 to come up with a cover unless they are high end designer — there are not many of those. It’s a little like a lawyer I know who tells me has no problem billing out at $200 an hour. It is however difficult finding someone to bill. I suspect there are a lot of high end book designers doing something else to make a living.

    At one time we paid $50,000 for a book design and typesetting, the same treatment today can be had for under $1000.

    Regardless of how they use your photo, a freelance designer might be spending many hours on the cover. I think you’re postings are looking at charges for photo use as if the photo itself is the finished product. That’s not the case.

    I’ve published a few books with photographs and paid a little less than $1000 for the photographs used in both. Cover photographs came from an organization that is historical in nature and I was charged roughly $100 for the photos used for the cover. Charges for photos for internal pages ranged from $20-$40 for historical photos and twice that for photos from a news agency. I didn’t care about exclusivity because the cover design did not simply take the image and slap it on a cover – it was cropped and framed with type, etc. My designer worked very hard once we decided on the photo.

    For my first book, my press run was 1000 and I ended up giving 500 books away to stir up publicity. My production costs and design costs ran roughly 25% of my retail price, but keep in mind that the the resellers will give me nothing close to 100% of the retail price. My royalty rate is 15%. I paid a few thousand for my web site and pay several hundred to keep it running each year. My accountant charges a few hundred dollars a month. Obviously there are many other costs involved as well. When I had to reprint my first book I had not made enough revenue from book sales (notice I am saying revenue not profit) to pay for the second printing. In over two years, every check I have written represents a greater amount than what I have made because I have made no profit – none – zero. I hope what everyone says about it taking three years to make a profit is right, because I’m getting close that time.

    All three of the books I have published are critical successes–excellent reviews, TV and radio exposure–none have sold 1000 copies yet. My latest work in progress shows some promise to be a financial success, but it’s hard to say. This time out though I decided to print 3000 and have a cheaper cost per copy. It will help when retailers want such a high percentage of my retail price. My designer came up with three cover designs – our standard — using three stock photos–costing him about $50 on subscription. All three could compete with anything you’d see in a bookstore. But when I was researching the book topic I came across a photograph that was used in a college paper that I thought was more on-point. I think the chances of this photograph being picked up any place else with payment to the photographer are 1 in 100. It’s an odd shot that is specific to my subject – not a very common one. I contacted the photographer and expressed my interest. Maybe he has read your blog or articles dealing with the topic similarly because his price is right in the ballpark with what you are suggesting. But if I paid his price, I’d be paying him more than my cover designer, more than book designer and more than myself to date. I bring this up because I think you might want to look hard at your potential client before you play hard ball with him or her. For every publishing company that is rolling in the dough, there are probably 500 trying to make it. If I was going to Annie Liebovitz asking for an image for a cover that’s one thing, but I liked a photo that I saw in a college online newspaper that I was willing to pay $200 to use — nonexclusive.

    It’s a terrible time for a lot of people these days. Please don’t think that everyone who comes to you is trying to make a living at your expense. I think that if I could have succeeded in getting the photograph in question, and the book was wildly successful, it would generate more business for the photographer, but who knows.

    Under the circumstances mentioned above, would you pay the photographer the rate you suggest if you were in the same situation? I should also tell you I am no rank amateur at publishing, I was in the business for over 30 years.

    On my first book, in addition to the photographs that I paid for, I used a few photographs from a very excellent photographer who I think is exceptional. I love his stuff. He is a personal friend of my authors and he gave me a couple photographs at my author’s request. I feature his name prominently in my book and added his site to my web page link page where I get 300+ hits a week. I have also used his name in tens of thousands of emails and thousands of letters that I have sent out. I suspect that his work has now received several thousand sets of eyes that he would not otherwise have had. Whether it has made an difference in his business, I can not say, but it was what I could do. In my business, that’s what we do – we do what we can do.

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