Pricing help - Involves travel, exclusivity, and unlimited rights

First, sorry for the long post...

 

I have the opportunity to shoot some advertisements for a land

development company. My friend recently became their marketing

director.

 

The company has been using a local landscape photographer. For $1700

per quarter, he would provide 500 images on CD. The company would

then choose 5-6 images to be used in national or local

advertisements. Images such as a sunrise over a mountain and such -

showing the beauty of the areas the company is selling houses in. In

addition to the $1700 the photographer received, he would receive an

additional licensing fee for each image selected, depending on it's

usage. I know he received $1500 for the rights for one photo used in

a national (but pretty specialized and small) publication.

 

My friend does not like the photographer's style, but loves my

photos and would like to give me a try. One problem lies in that the

office manager for the company was handling the marketing before my

friend was hired. She unknowingly used one of the low-res sample

images from the photographer's CD in an advertisement. The

photographer then came across the ad, and the company ended up

having to spend their entire second quarter photography budget to

keep him happy. So my friend is looking to get the photography done

for a lower "day" rate but with higher licensing fees.

 

Since I am not a professional, I would be willing to do the shoot

for near cost. The shoot would entail a seven hour drive in each

direction, a hotel stay, and maybe 1-3 days for the actual shooting.

My friend has a vision for what she wants in the ads and she is

looking for between 5-10 shots. So I am envisioning 5-10 rolls of

film. Honestly, I would be willing to do the shoot for 37.5 cents

per mile, meals, hotel, and costs.

 

But how do I decide the pricing on licensing fees? I know they will

be looking for exclusive, unlimited rights. The only thing I will be

able to use the shots for again is to promote my own work. I don't

even know where to begin on deciding on a price.

 

FYI, the company's marketing budget for this property is about

$500,000 per year, with most of that going to paying publishers for

ad space. Also, I will need to get myself a tax ID number in order

to get paid, so I will also have those fees.

 

Also, please keep in mind that I am not a pro, though I would like

to be one day. I would like my pricing to be set accordingly. I have

seen so many answers in these pricing questions where a seasoned pro

advises not to give up exclusivity for less than $30 million. Ok,

you can see I'm exaggerating, but I'm sure you get my point.

 

Thanks in advance for the help...

Gary, I lay no claim to be qualified to answer this but I do have a couple of serious suggestions to make.

 

(1) Do not drop the quarterly charge any lower than you have to. Having artificially inflated licensing fees may look fine at the outset but all kinds of things could lead to those not materialising whereas the quarterly billing is money you can depend on. High licensing fees may make it tempting for someone (perhaps your friend's replacement down the road) to license elsewhere.

 

(2) It sounds as though the quarterly charge is a short-term issue (they have blown the second quarter budget...) and if this is the case just agree with them that each quarter will be billed in arrears so the second quarter will not fall due until July. From what you say that's not a problem for you and it doesn't sound like it will be a problem for them.

 

(3) Don't undersell yourself. If your work meets their standards they will pay the "going rate" and ask you to keep producing. If your work is not up to standard they will hire someone else, however low your pricing. With something like this any decisions will be based on the WORK not on the price.

 

(4) Keep in mind that whatever price-level you establish going into this will be VERY difficult to increase down the road. People get used to things and justifying an increase is never easy and there is always the fear that they will go find someone else.

 

Please understand that I am not advocating that you try to stick 100% to the old formula. Maybe you need to back off from the $1700/quarter but I would urge you to back off as little as possible and try to deal with the short-term situation with a short-term fix.

 

Just my 2C....or was it 4?

 

Neil

I'm sure you are a fine photographer. But ask yourself: Can I produce great pictures

relaibly and on command? That is the difference between a fine amateur

photographer and a fine professional photographer. professionals get paid to bring

back pictures, not excuses. As long as you can do that you'll do fine.<P><I>My

friend has a vision for what she wants in the ads and she is looking for between 5-10

shots. So I am envisioning 5-10 rolls of film.</I><P>A real world perspective: more

likely you'll need to shoot somewhere between 25 and 100 rolls to be able to give

them what they want. <P>

<I>The shoot would entail a seven hour drive in each direction, a hotel stay, and

maybe 1-3 days for the actual shooting.</I><P>

For every day of shooting figure 2 to 3 days of pre and post production work. (yes,

really -- and that is a realistic minimum. You may also have to deal with bad weather

-- or course okay weather but bad light because the horizon is cloudy at dawn or

dusk when you have the best light.<P>

A reasonable portion of a marketing budget for this type of property is about 5-10%.

<I>You may also have to deal with bad weather -- or course okay weather but bad

light because the horizon is cloudy at dawn or dusk when you have the best light.

</I><P>This should have read: <P>You may also have to deal with bad weather --

or

WORSE okay weather but bad light because the horizon is cloudy at dawn or dusk

when you have the best light.

Since this is a substantial deal that has a good chance to

materialize, maybe it would be worth using a professional pricing

service such as d-65.com

Am pressed for time so need to keep answers brief.

 

If you want to be a professional, Act like one. This is even more important when working for / with a "friend".

 

Why should you bear the weight of the Office managers screw-up?

 

Charge day rates for travel days and shoot days, plus all expenses. You can apply that toward future licensing.

 

Land developers make huge profits. Many pros will earn 25-50K from these clients.

 

If you want to set a good tone, emphasize PROFESSIONAL. Set your terms and stick to them. Deliver top quality work that makes them say WOW. If you can only produce work that makes your client say, "These are nice" - you haven't done your job.

 

Ellis is exactly right; Don't undersell yourself. Most wannabees are happy to get what they are offered, not what they are worth. Once you accept jobs at cost, it will be next to impossible to raise the bar up to what professional standards are or should be.

 

My advice. Proceeed with caution.

 

If you have any doubts about your ability to produce fully professional work, from estimates, to images, to invoices, you should walk away. Think about who will bear the brunt of a job not done to expectation - it won't be you, but your friend who will be swimming in the hot water, and any poor performance on your part will directly impact him in a very negative way.

 

If you are confident in your ability to produce what the client wants, then today is the day to become professional - not "After you've helped this client out by allowing yourself to be taken advantage of because your friends office manager messed up-

 

Hope that's worth a wooden nickel....

 

Best of luck.

 

Gary Crabbe

 

Enlightened Images

 

http://www.enlightphot.com

Gary, I was wondering if you will be willing to explain why you feel this way?

 

"Since I am not a professional, I would be willing to do the shoot for near cost"

 

"I would be willing to do the shoot for 37.5 cents per mile, meals, hotel, and costs."

<p><i>Gary, I was wondering if you will be willing to explain why you feel this way?</p><p>

"Since I am not a professional, I would be willing to do the shoot for near cost" </p><p>

 

"I would be willing to do the shoot for 37.5 cents per mile, meals, hotel, and costs."

 

</i></p><p>I would be willing to go and take the shots for this amount. I am 95% confident that I can get the exact shots they are looking for, but there is still that 5% doubt. I figure with a pricing structure of cost plus licensing, I am being paid on a performance basis. If everything works out, they will be happy with the shots and I will be nicely compensated after the licensing fees. If everything does not work out OK, at least they will only be out the costs and I will be out nothing but will have gained some experience. As Ellis said, weather can play a factor. But since I am not a professional photographer, I cannot devote an unlimited amount of time to this shoot. I will be using vacation days (and it is a resort-type of town, so it will be nice to get away for a few days) from my real job.</p><p>I know that many (all) of you who have been doing this for a living for a while will say "don't take the job unless you are 100% sure you can provide the shots" and "charge a full amount now because you won't be able to raise prices later", but I have a different take. Surely at some point in your careers you were just starting out and were NOT sure you could get the shots, even if there was no reason to not be sure. And I have no problem while I have a day job with being paid for performance. They know I am not a professional, so I would be fooling no one merely by charging professional level day rates. However, if I perform like a professional (which, as I kinda said, I think I would), then I would like to be paid like a professional, which would come from the licensing fees.</p><p>Also, I think a few of you misunderstood the arrangement with the current photographer. He gets paid $1700 per quarter to provide 500 images in a quarter. He can take them all in one day, or over the full 3 months. He is local to the development, so he can do this on his spare time. I would be getting paid to provide images for 5-10 specific ads. 5-10 pictures, that's all they want. That is about all they use of the other photographer's shots, but he takes whatever shots he wants and must provide a full 500 varied images. To get those 500, he might shoot 200 rolls of film (or he could shoot digital, I don't know). So it's not like he's getting $1700 for limited work. My work would be limited.</p><p>Surely you all got your start somewhere, and surely you charge more now than you did when you were starting out, after accounting for inflation.</p><p>I appreciate all of the advice given here, and I am taking it to heart, but there is also a benefit to me by charging a small amount to take the images - less pressure. I know the company will only be out a small amount of money if, by my own fault or not, they do not get the shots they want. They'll be able to chalk it up to taking a chance on young up 'n comer. And, without more experience under my belt, I think I would perform better with less pressure. It's like when I go somewhere scenic with my wife vs. when I go alone. I ALWAYS get better pictures alone because I don't have her over my shoulder making noises as she tries to rush me, i.e. less pressure. Less pressure = better images at this point.</p><p>But I also know that in my day job, I thrive on pressure because I have the experience, so in the long run, the pressure of being a photographer doesn't scare me. Just now, while my experience level is so low, does the bother me. Surely you pros must have felt the same way when you were starting out...</p><p>With all of the advice, no one has really answered my main question, other than someone mentioning d-65.com and Ellis saying 5-10% of the budget (I wish I could figure that amount out Ellis, but there is no current budget lined up for these specific ads. I just know that the entire marketing budget for the year for this development is $500K). So if someone could tell me how they structure their fees for exclusive usage rights (so much money for every X number distributed of 1/4 page ads (or 1/2 page or full page of a newspaper the size of NY Times or a magazine)), that would be REALLY helpful.</p><p>I know a lot of you will ask me what I think they're worth, but that's just the whole problem - I have no idea what something like this SHOULD be worth. I have absolutely no idea what the going rate is. I have been at the point where $20-$50 for one of my pictures is great. Everything I've sold so far has been for framing for personal use, and always to a friend or acquaintance of a friend, so I have no basis for setting a price for this kind of work.</p><p>Thanks for reading and all your help, as usual.</p>

OK - I'm back and have a bit more time, so I'll give this a go.

 

The "Standard" stock industry pricing guidelines for calculating use fees are done by taking a particular use, and adding a percentage based for both unlimited use, and again for exclusive use.

 

First thing you need to know is what is the most prominent use they'll make of the image?

 

For an example, if a company came to me and said SHOOT (Your) Job, and they said they do a bunch of direct mail cards, a couple trade shows, and a bunch or regional trade and lifestyle magazines and an unknown number of Double page ads in a national lifestyle magazine with a circulation of 400,000. To me the latter is the most prominent use, and would be where I start basing fees, with ad ins for the other uses.

 

Now it's not uncommon for large companies that do prominent national ads to pay upwards of $10K/yr just for ad use.

 

Lets say a DP spread ad, single insert in nat'l consumer mag is $3,062.50 (Based on FP use @ $1,750.00 + 75% for DP use)

Round that down to $3K.

 

Take $3K + 200% for 12 mo/ unlimited use = $9,000.00

Add in an extra 100% of the base for exclusive use and your at $12K

 

That's just for unlimited national ad use.

 

Now, Figure out a commercial day rate, lets say, $1,500.00 / day.

Travel & weather at 50%

(2) travel Days = $1,500.00

(1) Shoot Day = $1,500.00

 

 

$25.00 per roll of film x ((40 rolls minimum)

 

Cleaned, sized, targeted, and profiled scans should be billed individually. Check Editorial Photographers web site for Digital Rate info. Extra charge for burning scans to CD. Average is around $25.00 per image for standard work. Extra PS work billed at $75.00 - $150.00 an hour.

 

So Creative services fee - Pay for your time and work $3000.00

Use, $9,000.00 unlimited non-exclusive.

Production, film, travel expenses etc, will probably be another $2,500.00

 

Total so far, (1) image, unlimited Ad use for one year billed at $14.5K for non-exclusive or $17.5K for exclusive use.

 

From there, you can negotiate up or down for including additional images and / or rights.

 

 

 

So, if you want to be a professional, this client could / should pay $10-20K.

 

The question you need to ask yourself is how much of that $10 - $20,000.00 do you want to throw in the trash can and never see so you can:

 

(a) help out your friend.

(b) Make your friends boss feel better about her mistake.

© do the job for cost.

(d) - you really don't need or want the money anyway. You just would like to see your work published.

 

Now granted, if this is just a small regional company, I might consider rounding down on these numbers between 20% and 35%. Again, How much money (value) do you want to give away?

 

Hope that's worth a crisp $20.00 bill.

 

 

 

 

Best wishes,

 

 

Gary Crabbe

 

Enlightened Images

 

http://www.enlightphoto.com

Gary-- Nobody with any true artistic sense is EVER 100 percent certain that he or she can do the job. The fact that you know what failure looks like probably makes you a better photographer than most of the people who actually DO feel 100 percent confident, since they often don't know the difference between good images and mediocre ones.

 

Just think of it this way-- suppose you get paid as much as the other guy. If you feel that you have failed to get images as good as you want them to be, YOU HAVE THE FUNDS TO GO BACK OUT THERE AND SHOOT THINGS AGAIN! Re-shoots are part of the business, and are built-into a pro's pricing structure. CHARGE ENOUGH TO DO THE DAMNED SHOOT! If you don't, eventually you'll feel taken advantage of and get bitter. Your photography will suffer.

 

Back when I left studio managing and went out on my own, I was comparing my work to $5,000-dollar-a-day shooters, like the ones I worked for. It turned out I was far better than 90% of the shooters who were calling themselves professional photographers, but because I didn't feel I was as good as my former employers, I took a lot of jobs exactly like the one you are being offered, for cheap money, being told, "It will lead to a lot more work for you down the road." It was ALWAYS B.S. Always. No exceptions. And not because the person who made the promise wasn't sincere.

 

Here's an example of what can happen, very similar to your situation:

 

Another shooter had done some very junky headshots for a company directory and brochure project. He had been paid well, and there wasn't much money in the budget to fix things. They called me in, and my work easily blew away that of the first photographer. People were actually stunned at how I made them look. I was paid only about a quarter as much, but hey, I was told that a lot more work would come my way in six months when some money was freed up for the promotional budget. Sounded great, right?

 

Five months later the company was bought out, and none of my contacts were in any power positions to get me work with the company that bought them. They couldn't even get me an appointment with the art people at the new company. The new owner's brother-in-law was their photographer.

 

Now, remember how you said a new office manager came in and accidentally used that other photographer's image in an ad, which blew their budget and left them little money to pay you? What happens if your friend gets fired or moves to another job? What happens if somebody higher-up in the organization decides to use somebody else's work after you've busted yourself? You've basically done a boatload of work on spec and won't make anything, and your images won't get used. If you sign an exclusive agreement with them, you won't even be able to sell your work as stock.

 

You'd be amazed at what can happen in this business, especially at the bottom end. Once an art-director friend of mine used several of my images in ads for a development company. He got laid off and it took me an entire year to get any money at all out of the ad agency, and I had to settle for about half because they went out of business before they could pay all of it.

 

You kid yourself now that you don't care if you get paid, that you are happy for the experience and the possibility of getting some good exposure for your work, but lemme tell you, there's a very good chance that the experience you get won't be good and your exposure could end up being nil.

 

If your images are as good as you assume they are, then you are worth getting paid as much as the other guy. If your images are not as good as you assume they are, then your friend may have very little intention of using them.

 

Get the money up front. Tell them the can pay you next quarter, and then take the use fees out of what they give you up front (say they pay you $5,000, and then they get up to $3,000 of use fees deducted). In the long run it's cheaper for them, and more secure for you. They can't reasonably turn such a deal down. If they do, you'll know that they have no intention of being reasonable.

 

I will say it again, of all the future work that was promised me if I cleaned up after another photographer for a dirt-cheap fee, none--and I mean absolutely NONE--of it ever materialized. Never. Ever.

 

But the people I hold the line with on my fees almost always come back.

 

Bill C.

Bill:

 

AWESOME reply. Right on the $$$$ Money - 100% complete agreement on all counts.

 

I've had to reshoot on 2 or 3 assignments, and it's the toughest thing in the world to look your client in the eye and say "I didn't get it". But what makes a true professional is the ability to recognize, admit, and correct mistakes in a completely upfront, honest, no-excuses, no BS manner.

 

I also have NEVER EVER EVER in 13 years had the promise of more work materialize from a client that didn't or wouldn't pay full value for the work up front. Oddly, Repeat jobs come from Exactly the clients who know and value working with (and paying) professionals. The rest, are just waiting to jump from sucker to sucker, so much so that now I just visualize them all as carrying a fishing pole, trolling for the next hungry fish. The motto being, "why pay for quality when we can skimp and get 'good-enough'?" Learning to spot and avoid these types of clients will save many a photographer lots of future grief...

 

Again, great post!

 

Gary Crabbe

Gary-- And I'll tell you that I've copied your post down and stuck it in my "studies of pricing and negotiation" folder! Great info, and many thanks for passing all that along. -Bill C.

I, too, am copying this thread for future reference. The responses here are some of the most useful, based in reality comments I've read about this subject in a long time. Thanks to all. If I may make one comment (that may have been obvious, but nonetheless is important)- you absolutely must have a contract signed for this shoot, with clear terms and conditions.

$1,700.00 = $6,800.00 x yr. + right fees. That doesn't pay for the camera and normal wear and tear of car and equipment.

 

Since I have been shooting for more than 17 yrs., my own photos don't impress me too much, but people love them over so many others.

 

So on big contracts like these ones, I would make sure that if I get a contract for a year, being professional or not, I would make sure at least I am making more than $40,000.00 yr.

 

School is expensive, being chased by a bear is too.