“Image First” Hybrid Model Part II
In the last article I proposed that the stock photography industry will continue to slip into the lowest possible price levels unless the pricing models evolve. The “Image First” Hybrid pricing model is a single model that replaces RM and RF/Micro. The important element is that it delivers the simplest possible pricing experience by changing licensing options depending on the image. I showed how it could work for two extreme examples and demonstrated how it could deliver licenses that are as simple as possible while providing flexibility to accommodate everything for the most basic image to the rarest image. In this article, I’ll suggest how the concept can be expanded to images of all types.
First, an observation: Under today’s models the image plays a relatively small role in determining the price. Images are ingested, assigned a collection and placed in the archive. During that process resources are used to edit, keyword, retouch, caption and add other meta-data to the image (note that this occurs in micro also – the burden is simply on the photographer.) Very little thought is put into pricing the image. The end result is that price can only be described as an afterthought.
A more customer focused approach would be to put the most effort in areas that matter most to customers. Obviously, customers are looking for the right image – more specifically, the right image, at the right price. In fact, at some point, all of the efforts related to the creation, acquisition, marketing and sale of an image come to focus on the price. It is the one thing that every customer is guaranteed to experience. And what do customers usually say when they see the price based on the current models? “I don’t understand how you determine prices or why so many images are the same price”, “I don’t know why you’re asking me that but it seems like the more questions I answer, the higher the price goes”, “I don’t know what file size I need. Why should it matter?”, “Those prices don’t apply to me. I have a special rate.”
[It’s worth mentioning at this point that many have attempted to compare the pricing/purchase process of stock photography to the processes used by airlines or department stores or on-line retailers peddling electronics or software sellers or book stores or libraries. All the analogies fall short in some way and usually lead management to conclude entirely the wrong things. The most useful view to take is that of the stock photography customer. Focusing on the experience of your customers and the unique challenges they face in working with stock photography will allow you to frame the pricing issues and focus on the things that matter. Leave the review of Harvard Business Cases or the pointless discussions around what works in some other industry to the executive consultants and the CxO’s of the stock agencies.]
Focusing on the customer does not mean you fall over and allow the customers to dictate a price or a sales rep who claims to know the customer take control of your strategic direction through custom pricing. It means you deliver value that matters and defend that value. It’s called Value Based Pricing and drives you to make meaningful decisions around price structure, competitive differentiation, product/service options and value propositions.
The “Image First” Hybrid model delivers value based pricing by recognizing the image should drive the price, not the model. It replaces the concept of different models or artificial constructs that don’t mean anything to customers with a straightforward method of licensing a creative asset “…as simple as possible, but not simpler.”
A key element of the model is the Price Tier. Pricing tiers do three things:
- They set the number of model variations
- When integrated with the customer experience, they influence and help to set price expectations
- They provide a useful basis upon which to create agreed rates, subscriptions or whatever ad hoc high-volume negotiation may be necessary.
The Price Tiers themselves are functional in nature and readily understandable. Their names are not particularly creative or memorable and should be clearly described as price tiers, not “quality” tiers. Why? Stock customers will react negatively to names that attempt to overtly dictate image quality with names like “good” or “best” or “worth it” or “cheap.” Quality is defined in many ways by customers. Sometimes it means creative execution and other times it simply means pixel resolution. At the end of the day, the customer is looking for the right image at the right price. Keep it simple and let the name of the price tier simply indicate price.
The “Image First” Hybrid model has the following price tier names:
- Premium Price
- Standard Price
- Value Price
- Micro Price
[For an industry that prides itself on creativity, this list is not inspiring. In fact, for photographer advocates and industry insiders, it may seem down-right boring. However, to someone who actually buys stock photography, it makes sense, it doesn’t get in their way and that’s what matters. Find a way to creatively implement them in the user experience. There’s no need to creatively name them.]
Once an image is assigned a Price Tier, it simply needs to be assigned to a collection to drive it to a final price within the price tier and give it whatever creative spin a collection has the potential to provide.
Below is a pricing grid: Images are assigned a single collection and every collection belongs to a single price tier. Pricing/licensing options change based on the price tier and the price is as simple as it can be and upfront. Creating an effective user interface for the price tiers allows Micro Price images to coexist with Premium Price images.
Next time: Image lifecycle management and how the “Image First” Hybrid model could change the industry.
About the Author
Glen O Connor has been responsible for pricing 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