Another view on Hybrid Pricing models.In a recent article you proposed a hybrid pricing model based on a set of customer focused principals. It’s a great start to the discussion and I’d like to throw in my two cents.
What’s remarkable about the stock photography is how much change it has undergone in the last 20 years in almost every aspect of its creation and distribution except pricing. Even the exploding growth of Microstock has been under an RF pricing model with simply very low prices. Being a former industry employee, I have my own view on what has prevented the pricing models of the industry from evolving but one thing is certain, unless a change is made, the industry will continue to slip into the lowest common denominator (micro pricing.)
Your proposed open source model is a great start. I would suggest there are a few additional things to consider:
- Rational and defendable prices are more important than predictable prices.
- “Make everything as simple as possible, but not simpler.” Albert Einstein
- It’s about the image – not the pricing model
A new pricing model should strive to influence and meet a customer’s expectations on what represents a fair price. For this reason, the pricing model that could replace both RM and RF should not be a static grid of options with interchangeable values. It should represent what we know about the art of photography – every image is different.
Let’s consider two extreme examples:
First, an American Flag, blue field and stripes waving: This is an extremely popular image and there are thousands available in all licensing models. The huge supply of this image in every imaginable viewpoint puts almost every image in the category at a low value. The price should be low and the model should be ultra simple: $10 or less for any file size.
I can hear it now (because I used to hear it every day.) The photographer champions and the photographers will moan that their American Flag is worth soooo much more and someone will be willing to pay much more because the price is a small fraction of their overall production budget and they have the historical sales data to prove it. While passionate, they are misguided. There are always a few suckers who mistakenly grossly overpay despite much cheaper substitutes but the return on an image like this and the customer’s willingness to come back will always favor the high volume, low price approach (for this type of image.) In addition, there’s much more to strategic pricing than how the price compares to associated costs.
Second, a brilliantly executed rare image of a rock icon: Obviously this is an image that need not be given away in the name of volume. Even the RM pricing model is not a good guide for pricing as there is often much to be gained through a sales discovery process. In this case, a simple list of major uses could suffice to deliver the right price or frame a discussion. Obviously, above the line, high profile uses would cost thousands while editorial uses may only be a few hundred. I would suggest most, if not all, of the broad advertising uses would not be priced and require an experienced sales rep to settle on a fair price.
Here’s a very simple example of the “Image First Hybrid Model” under these two extreme examples:
Next topics: How to handle pricing for everything between the mundane to the rare, manage pricing through an image life cycle and integrate the pricing model with the user experience.
About the Author
Glen O Connor has been responsible for pricng at both Getty Images and Corbis, working on regular tactical pricing updates on the basis of usage data and long term pricing strategy. He now works at AT&T.