What’s a fair price for stock photography?

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:

  1. Rational and defendable prices are more important than predictable prices.
  2.  “Make everything as simple as possible, but not simpler.”  Albert Einstein
  3. 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.

Marco | Editor

Editor at large and founder of a bunch of stockphoto businesses

7 thoughts on “What’s a fair price for stock photography?

  • March 17, 2010 at 12:39 pm
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    I cannot tell you how happy it’s made me that someone has dared to mention the idea of speaking to clients about prices. In the ‘olden days’, which as you know is where I spend a lot of my time, this used to happen quite regularly. And in some places it still does.

    Where has this idea come from that all image buyers are essentially the same – wanting the same pictures, having the same budget? Every single one of our clients is different and we deal with them all on an individual basis. We have a broad pricing framework but have the freedom to adapt within this depending on client needs. All manner of factors come into play – size of client’s budget, number of pictures being used, our assessment of the chance of repeat business from this client. Obtaining the best price you can having considered all these factors is part of the skill of the sales exec/researcher and one of the reasons why photographers still put their pictures with an agency rather than selling direct.

    Too many people have been blinded by technology. Just because you can put together an online price guide and e-commerce solution and just because some clients like using this doesn’t mean you have to do it for everyone.

    Negotiating individual price agreements also enables you to talk to your clients and develop those relationships without having to embark on some god-awful pro-active sales campaign. It means you can talk to your clients when they want to talk to you, not when your sales manager tells you it’s time for you to talk to them.

    And then there’s this myth that RM pricing is complicated. Most clients – certainly in the editorial sector – need a variety of prices for standard picture use – usually based on size used on page or rights needed for books, greeting cards and the like. Once you have negotiated and set these prices there’s no need to renegotiate every time you subsequently use a picture. You just refer to the existing price agreement. You may need to review them every year or two but nothing more.

    I suspect part of the reason why RM pricing is preceived as complicated is that picture library staff aren’t trained properly; either that or they are just a human version of the online calculators with no capacity for flexible thinking.

    I’m fortunate to have an insight into this by being married to someone who buys a large number of images from picture libraries. The horror stories I hear do make me fear for the future of the industry. People quoting over £600 for postage stamp size use in a diary; different people from the same company giving quotes for the same usage that are £100s apart; a complete lack of understanding that different products require different pricing; frankly, just an alarming lack of intelligence.

    Picture libraries would do well to address these failings before they start thinking that a new model will solve all their problems.

    Reply
  • March 18, 2010 at 1:56 am
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    I agree with Steve in general but not with some of the specifics. I agree that there is much to be gained by having a conversation with a customer concerning licensing and pricing – when the image and license warrants it. Most day-to-day stock use, however, can be handled most efficiently and provide the greatest overall customer satisfaction when handled online. It’s not uncommon for customers to like their sales rep, but at the same time, not be at all disappointed if they never had to speak to them again.
    In my view, RM is complicated in terms of how it calculates a price. It is impossible for a pricing manager to manage the model to deliver fair and reasonable prices with the right number of options and categories for all pricing occasions. They can only hope to get it right 50% of the time and that’s before considering the impact the overall RM pricing process has on the customer’s perception of the price. The entire burden is placed on the individual delivering the price. To Steve’s point, the individual can make RM simple by using it as a negotiation guide and largely ignoring the specifics of the model’s values and multipliers. For those skilled individuals, it works great.
    For example, Editorial RM agreed rates in the market today have little in common with the official price guide because talented sales reps have done what RM could never do in this area of pricing – make it easy for the customer to get the right license (with all the specific rights an editorial customer needs) at the right price (a high volume, low, predictable price.) Unfortunately, this pricing strategy leads to exactly what Steve’s wife finds when she doesn’t speak to the right sales rep – uncontrolled, arbitrary and disparate pricing that has little to do with the image or her specific licensing needs. In addition, it’s the highest cost way to deliver the service.
    To a customer, RM is complicated relative to RF/Micro (which is by far the dominant model in the market.) That’s not to say a customer can’t answer the questions and manage the rights over time – it’s just much more complicated than RF.

    Reply
    • March 23, 2010 at 1:05 am
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      Glen,

      I have had a number of one-on-one pricing discussions with customers in a variety of retail environments over the past 40 years, many thousands of them in fact. My experience is that pricing is only one of the criteria used, and usually it is not the most important one. Sure some customers are entirely driven by price and they are off at the free sites and microstock sites comparing images to save 50¢ here, a $1 there. Why do so many people buy their coffee everyday at Starbucks? Is it the best coffee or the best price? Probably not, but it is consistent and convenient, apparently two things that are more important to those customers than price or quality. I don’t believe that any image has an intrinsic value, even if available in large quantities that does not automatically make it worth only a low price. It is not because my image of an American flag is so special, it is only because a customer thinks it is. Those customers who don’t care about the image (nearly any American flag image will do) or those ultra-price sensitive customers will have an easy time finding what they need. Strangely, those customers wanting a unique American flag image will have a much harder time finding theirs because they have to look at so many to find the one they want. What I am saying is that not all American flag images are automatically worth $5. On the other side, even a very rare image will not be worth a high price to all customers. What if you had the very first image ever taken of an American flag? Or what about the very last photograph taken of the American flag on top of the Twin Towers just as they fell? Those would be very rare, yet unless your customer has a need for those particular images, they are worth nothing to them. If all customers were only interested in price, then all customers would go first to the free sites and then to microstock sites. That is not the case. Some customers even specify “No royalty-free or no microstock images” in their requests.

      Why do customers shop with any particular business then? Think about how you shop. Don’t you go to some stores because they are convenient? Or you like the people you interact with? Or you like their website or what their business stands for? Or their perceived quality, reliability, and honesty. Sure price enters into it, but it is not even the most important thing for many or most customers. Pricing is a very complicated issue with many psychological factors to be considered. Trying to simplify it is a noble goal and one we should pursue, but those who are only familiar with technology and not customers, photography, or negotiation who try to simplify pricing too much will end up leaving money on the table. It seems in those cases that it is usually the photographer who loses out in the end and not the stock distributor.

      John G. Blair
      Chairman, Picade, LLC, a photographer-owned stock and assignment agency
      John G. Blair studio

      Reply
      • March 24, 2010 at 5:44 am
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        In part II, I suggest that the most important view to take is that of the customer. I believe applying a complex pricing model like RM to mundane imagery is not a customer focused approach. I believe it will drive customers to shop elsewhere in today’s competitive environment.
        At the end of the day, it’s about making smart business decisions for your business. For some, RM makes sense and represents the best way to extract the most from the next sale. The issue is whether you’ll get the opportunity to make that next sale.

        The most common search filter customers use when searching for commercial imagery on the major web sites: “unclicking” RM.
        It’s getting more difficult. Customers are now going to microstock first not just because it’s the cheapest but because they find what they need, it’s hassle free and fast.
        What’s an industry to do? Retreat to RM? Make their photographer roster even more exclusive? Offer huge discounts off regular prices? Proactively reach out to every customer with a sales pitch?
        …Or find new ways to work with customers that makes their experience better.
        Eliminating RM for all but a small % of imagery is the right first step.

        Reply
  • March 18, 2010 at 11:14 am
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    I wonder if part of the problem is people’s definition of ‘stock’. To my mind, 4Corners works in the stock photography business because we are generally licencing single images from our collection rather than doing commission or assignment work. But we are certainly not a ‘stock library’ as that phrase is generally understood.

    Because our work is high quality, exclusive and all RM I think it makes it much easier for us to work to this RM price model – clients expect to have to speak to us, to negotiate, to check rights availability in order to obtain the kind of images we produce. No doubt you’re right, Glen, to say that the majority of non-editorial clients looking for standard stock images do prefer to keep everything quick, simple and online. That’s not really a market we sell into.

    It’s interesting that you put the blame for ‘uncontrolled, arbitrary and disparate pricing’ on the pricing model rather than the people using it so badly. It’s not RM’s fault that libraries don’t see fit to train their staff properly any more.

    This goes to the heart of a previous discussion on this board – bringing sales staff in from outside the industry. There has been so much emphasis on sales in recent years that people have forgotten (a) that they are selling a creative product, not washing machines and (b) that you need to have an understanding of the people you are selling to.

    It’s not just people from outside the industry, there are plenty of clueless insiders too. But the trend has been to import sales strategies that are totally inappropriate to this very unique industry. We have lost the connection with the clients (certainly within editorial) and that’s at the root of the problem.

    There used to be a constant stream of people leaving picture libraries to work on newspaper and magazine picture desks (and a few coming back the other way). Picture libraries were seen as breeding grounds for the desks. The great advantage of this was that, apart from ensuring a vibrant job market, the people buying the pictures understood how the people selling them worked and vice versa.

    I sense that this is happening less and less. And part of the reason must be that picture libraries are bringing in sales people who want to do just that – sell. They have no desire to work with the actual images on the client side and therefore have no interest in or understanding of how their clients work.

    Reply
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  • March 19, 2010 at 6:06 pm
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    OK – I agree with Steve more than I first thought
    RM like pricing can live only if 1.) only applied to Premium images 2.) the RM price model is not online and 3.) you know what you’re talking about. The model I’m proposing handles these images by not delivering a price on-line and forcing a phone call.

    The problem comes in when you don’t do those three things. You end-up delivering to customers (whether on-line or through a sales rep) uncontrolled, arbitrary and disparate pricing.
    I take it for granted that the major stock agencies will never have adequate training for sales reps and will continue to apply RM pricing to way too many images – unless they adopt a new model.

    4Corners has great imagery and, it sounds like, a level of volume that allows them to provide a high level of service. The 4Corners model works and they no doubt have a satisfied and loyal customer base. The rest of industry can’t say the same thing.

    …However, I wonder if 4Corners could extend the life of some of their imagery and perhaps expand their library by providing simple, upfront prices for some of their imagery.
    Steve, perhaps you should ask a few of your customers? That may help you understand their comfort with you current pricing model.
    (by the way, that’s really the only way to ask a customer about pricing – give them alternatives and trade-offs)

    Reply

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