What should you charge? Photographer Jack Reznicki and lawyer Edward Greenberg address this burning question with details on how to handle pricing, licensing, negotiation, bidding, and estimating.
This excerpt from Photographer's Survival Manual is provided courtesy of Lark Books. To purchase the book, visit the Barnes & Noble website.
The hardest part of being a professional photographer isn’t taking a photograph, or deciding which lens to use, how to light, what directions to give the subject, or what props to pick. Nope. The hardest part is figuring out what to charge. There is no set answer, because there are so many factors to weigh in pricing your photography. Your overhead and experience may be two big factors; how difficult the job is to photograph is usually a pretty small factor. Talent, not technical expertise, will always win out. So how do you put a price on your talent?
Pricing Commercial Assignments
Commercial photography is a business-to-business affair, unlike the retail transaction of a wedding or portrait studio. In those cases, the general public can come in and look at a price list; they are buying known quantities for personal use. What matters in commercial photography is determining the appropriate license for an image, based on the client’s usage and period of use. Placing an image in a national consumer magazine like Time is very different than running it in a half-page ad for a trade magazine like Supermarkets Today. The same photograph can cost either $500 or $5,000, depending on the usage.
For example, late into the last century, Jack licensed an image to a small-circulation trade magazine for $500. It was a fair price for that usage, at that time. A few weeks went by, and Jack got a call from someone’s assistant at a major TV network. Someone had seen Jack’s photo from the trade magazine, and decided they absolutely had to have it for an ad that was on a tight deadline. Jack was offered $2,000 on the spot—for the same photo that earned a mere $500 only weeks earlier. You’d think that Jack would have jumped on this higher price, right? Not so fast. This is where it gets interesting, and complicated. “What’s the usage?” Jack asked.
“In TV Guide!” the assistant proudly replied.
Jack’s ears perked up, as TV Guide is one of the highest-circulation magazines in the country, meaning they charge more money per ad space than most any other magazine. After a couple follow-up questions, Jack figured that the TV network was probably paying a six-figure sum for the ad space. At that point, Jack said “No” to the $2,000 offer. Clearly, there was a large enough budget for this ad that Jack deserved a higher price. He quoted $5,000 dollars for the usage.
“But the most we ever paid anyone is $2,500!” exclaimed the excitable assistant.
Suddenly there was more money in the pot that wasn’t there before—as is often the case. Nevertheless, the fact that other photographers had settled too low wasn’t Jack’s problem. There’s a lesson here: Don't fall into the trap of a "take-it-or-leave-it" offer. Be willing to walk away and mean it. Jack wouldn’t have been able to look himself in the mirror, knowing he had undersold himself when they were already spending hundreds of thousands of dollars just for the ad space. Trust us, you’ll never feel terrible about walking away from a bad deal. You might feel bad, but never terrible. And sometimes you even feel downright exuberant to have held your ground.
But it doesn’t end there. About a month later, someone else called asking to license the same image for another national ad. Jack quoted his $5,000, and the client accepted. Done deal. Now understand that if Jack had taken the original $2,500 deal, he wouldn’t have been able to relicense it again during that same period to someone else. For one thing, it’s just not ethical; but more importantly, it would have seriously risked Jack’s reputation. You really don’t want the same image in two national magazines for two different products at the same time (don’t laugh—it’s happened many a time).
So $500 was a fair price, then $2,500 wasn’t fair, and then $5,000 was fair, all for the same image. Makes your head spin, doesn’t it? You have to know your value in the marketplace. You also have to be flexible, of course, but always know what is your floor—what is the price you need to make a living?
Comparative and Competitive Bidding
The previous story concerned an image that Jack had already taken, but plenty of other jobs start when an art buyer or art director calls you with an assignment. In this case, the first thing you want to find out is whether it is a competitive bid or a comparative bid. A competitive bid is just that—the client has competing photographers estimate and bid for the job, based on provided layout and specs. Like jobs for the federal government, the lowest bid usually gets the job.
A comparative bid is different, in that the lowest estimate may not get the job. Art directors may use a comparative bid to see what a project will cost, or to see how different photographers will approach the same project. You should always provide a good, realistic estimate in such cases, mainly because you never know what they’re looking for.
When an art director calls you for a job—whoopee! First and foremost, before you get too excited about the project, get that person’s name and phone number. Have them spell their name if you’re not sure. Then get the names of the agency, design firm, company, whatever.
Next, find out how they found you. Your promos? An ad in a photographer’s catalog? Your website? A recommendation from another art director? That is valuable information as to what is working well for you. At this point, don’t try to sell yourself even more, as photographers tend to do. Just listen and try to figure out what they really want. Pay attention. Ask them about the shot they have in mind. How do they see the image? Can they send you a JPEG or PDF of the ad? Are you the only photographer they’re talking to or is this a competitive bid? A comparative bid? What is their schedule? Is there a specific deadline? Clarify as much as you can, but don’t say anything definite concerning your idea for the shot until you get a “whole picture” of what’s involved.
Then, of course, you have to find out the specific usage. Without that you can’t give an estimate of what you will charge. Trade ad or national ad? North America or worldwide? Billboards, POS (point of sale), or brochures? And also how long? Six months? Two years? Unlimited?
If you can get them to give you a price upfront, all the better. Sometimes that can become a game of Go Fish, where the first person to say a price loses . . .
“What’s the budget you have in mind?”
“Well, we don’t know. What do you think it will cost?”
“What kind of production values are you looking for? Big production with lots of props, or something simpler?”
“Well, do you have a ballpark for the high end and the low end?”
“Well, we can do it several ways. But before we make the calls to models, model makers, hair, and makeup, we can get more accurate numbers for you to pass on to your client if we know the scope. We wouldn’t want to find pitfalls later and have to raise the price.”
You get the idea. The last sentence is especially good, as it puts the onus on the art director to give you an idea as to what they want. Since Jack photographs people—usually models—he likes to shift the discussion to the fact that he can't get the model prices for the estimate until he gets the exact usage, as that will directly affect the model pricing. Whatever you do, never give a ballpark number. In fact, you shouldn’t quote any price right away. The best thing to do is hang up the phone and really give it some thought—even if they gave you a price upfront. $100,000 might sound fantastic at first, but if you crunch the numbers and find out that it would cost $98,000 to produce, then you might be better off flipping hamburgers for the amount of time and work involved. Besides, they hardly ever give you the real budget at first. Who would? If you can meet their initial budget, great; but if not, be truthful with your numbers. You’d be amazed at how often they can find the extra money.
Another reason to carefully think out a project is that it’s not always just the bottom line, but rather how you present your estimate. Compare these two estimates:
Fee = $15,000
Expenses = $60,000
Total = $75,000
Fee = $15,000
Producer = $6,000
Digital charges = $2,500
Equipment rental = $8,250
Hair and makeup = $2,400
Model maker to make special prop = $9,525
Baby wrangler = $1,250
Stylist = $5,500
Props = $800
Wardrobe = $1,500
Assistants for lighting = $800
Assistants on set = $2,400
Transportation and shipping = $3,500
Catering = $1,250
Models (billed direct to agency) = $22,450
(And so on and so on. You get the idea)
Total = $83,125
Now, if you were an art director and had to decide between these two estimates, and your own job depended on you making sensible, secure decisions for your clients, which photographer would you feel more comfortable with and confident in? In order to protect your job and provide the client with a good product, you’ll be more inclined to go with the more detailed estimate because it shows where the money is going and what the photographer is thinking.
A Great Phone Call
One of Jack’s best assignments in recent years was a bid for a pharmaceutical ad of kids. His agent found out later that, initially, the client had had a “choice” photographer already picked and Jack was the second choice. But Jack ended up getting the job. How? A five-minute phone call.
Jack called the art director, as he usually does, to speak creatively about the job. The art director was a simple and quiet person, and let Jack go on and on about how he envisioned images for the ad. “Bright images, well lit, but still with a direction to the light. A simple set, not seamless paper. Yadda, yadda yadda.” The art director didn’t say much, and at first Jack figured he hadn’t connected with him and didn’t expect to get the job.
However, it turns out that when the “choice” photographer called the art director, he basically said, “So . . . what do you want?” He didn’t have a vision to share, and he didn’t make the art director confident at all. So Jack ended up getting the job, even though price didn’t come into play at all. What mattered was that Jack had real input and a better idea of how to produce the job.
So far we’ve talked about pricing for only commercial work—basically business-to-business situations. There also exists a vast universe of “retail” photography, or as it's aptly called in Europe, “social photography.” This encompasses weddings, portraits, school graduations, sports teams, and anything else wherein a photographer is selling (whoops) licensing their work to the public.
The best pricing information for this type of work, by far, is through Professional Photographers of America (PPA). They are the largest photographer trade association in the world, with over 25,000 members, and they have a benchmark survey that they have compiled over many years and continually update. This survey is only available to PPA members, and if you’re a professional photographer working in the arena of retail photography, it makes a lot of sense to join—not just for the survey, but also to be covered with their unique indemnity insurance.
PPA’s website (www.ppa.com) explains the benchmark survey as follows:
“By definition, a benchmark is ‘a standard by which something can be measured or judged.’ Professional Photographers of America’s Benchmark Survey is a financial snapshot of the photography industry. Its findings will allow studio owners to compare their financial operations to other studios of similar sales level or years in business as well as assess their productivity against overall industry averages and 'best-performance' studios. It also validates the industry standards for financial management and accounting.”
The PPA Benchmark Survey is also geographical, so you are comparing New York apples to New York apples and California oranges to California oranges. This is great, as retail pricing can be extremely region-sensitive. Their pricing survey can even bore down to individual cities, not just large state areas.
PPA is also good at making sure you know what business licenses you need, what taxes you need to pay, and various other financial considerations. When you have a retail photo business, it’s vital that you learn how to evaluate all your true costs. Too many photographers jump into this type of work, assuming that what they charge for their photography is what they make. “Wow, a thousand dollars for photographing a wedding on the weekend! That’s more than I make at my ‘real’ 40-hour-a-week job!” Thinking that all that money goes directly into your pocket will get you an express ticket to the poor house. PPA’s great instructors, like the fabulous Ann Monteith, are excellent at pointing out that you have to take into account all sorts of hidden and true costs.
You may quickly discover that the 6-hour wedding shoot is just the tip of your time involvement. There is also the time spent working out a shot list with the bride, prepping your equipment, getting to and from the event, editing (where many photographers find out just how few hours there are in a day), meeting with the bride again, designing and laying out the wedding book, dealing with the printer, and so on. And that’s not to mention the task of dealing with a “Bridezilla.” Even normal, well-adjusted, good-humored brides will still take up a lot of your time. Having a Bridezilla on your case is like spending time in another dimension.
So, pricing retail photography—or any photography, for that matter—is not just about coming up with a price that sounds good. You have to evaluate your true overhead expenses, capital expenses, general expenses, and cost of sales; and you also need to decide whether you are doing cost-based, competitive-based, or demand-based pricing of your photography. Some of that will depend on where your studio is located—in a storefront or out of your home? What are the buying patterns in your community? Some parts of the country have a rich tradition of having an annual family portrait done with very large prints, and in some areas a family portrait is a rare occurrence. Wedding traditions in one part of the country are strange customs in another. If you want to have long-term success in a retail-type business, you need as much information on your clientele as possible.
Getting that information from a non-profit trade association like PPA, whose entire purpose is to help their members, is a great start for any photographer. There are also a bunch of for-profit photographer organizations in the retail photography world. We would advise you to be careful when dealing with these, as they are mainly interested in making a profit from their members and not as much for their members.
How big is licensing? Well, licensing the rights to dead celebrities—"delebs" in the trade—is almost a billion-dollar-a-year industry. And that’s the dead ones like John Wayne, James Dean, Marilyn Monroe, Elvis, and Albert Einstein. OK, Elvis I get, but Albert Einstein? Yes, they trademarked him and if you want to use Einstein commercially, you need to license it. The army of lawyers looking after the intellectual property which includes the “right of publicity” of these dead celebrities are very aggressive in protecting those rights. Licensing for the rights to use these images or likenesses are, in most cases, earning even more than these people made during their living and breathing days. Can you say, "happy estates"?
To Facebook, Tweet, chat, or blog? That is the question. No matter which you choose, the answer remains: Proceed with extreme caution.
Never post your complaints about jobs or business situations to the Internet. Clients do have ears and eyes, and can be extra touchy. There is no such thing as privacy on the Internet—even on a private, password-access site. If you can type it, it can be copied and passed around. Once posted, that information is out there, and trying to get it back is like trying to stuff toothpaste back into the tube. Ain’t gonna happen. There are tons of stories about “private” conversations becoming viral, or just being passed on to the wrong person. If you aren’t willing to shout it on a soapbox, with a megaphone on Main Street at noon, then don’t type it out on a keyboard. What you might say on Main St. with a megaphone is actually less damaging than anything you say in a chat room or in a blog. That stuff on the Internet is forever. Even after you take it down, it can still exist somewhere.
Comments made on the Internet are not confidential and are routinely discoverable in litigation. That means that you and/or the website can be forced to provide copies of your posts in pre-trial document production by the courts. There is no dance or excuse to avoid this. And if you try claiming First Amendment rights, you will just give the court a chuckle or maybe even a good laugh. This also means that anyone who has seen or read the post can willingly testify and/or turn over copies of the posts to the lawyers; or, if necessary, any such person can be forced via subpoena to produce the posts and/or testify as to what they contained. Recently, an increasing number of people have been sued for libel, product or trade disparagement, etc. because of statements they posted online. Why run the risk of making your bank account disappear and the lawyers rich?
Generally, the conversations listed below are confidential and privileged by state law. There are some states that specifically grant additional confidential privileges to discussions with therapists, counselors, and so on. Some conversations are privileged only because a specific court order may make them so.
- Spouses speaking to each other within the confines of marriage
- Statements and conversations including, but not limited to, formal confession, between a “real” rabbi, priest, imam, minister, etc. and a layperson who is confiding in such a clergyman
- Conversations between an attorney and a client (even if the lawyer has not been formally retained)
- Conversations between a doctor and a patient
- A formal written contract—such as a CIA contract with an operative—and confidentiality agreements
There are simply no laws that render posts in chat rooms confidential. We can’t emphasize that enough. To illustrate, here's a common scenario: A photographer seeks pricing guidance on chat board. The post typically reads something like the following:
"I did a job for the XYZ Shoe Company. The usage was for in-store/point-of-purchase only, in their 10 company-owned stores, for one year. The job went well and I got paid. About a month later they called me and requested additional usage in non-company-owned stores that will now be selling XYZ shoes, and/or they now want to extend the original usage to 5 years. I want to charge $X,XXX for the new license, but am afraid that price is too high and they won't go for it (or that price is too low and I deserve more). What should I charge and how should I handle this? I don't want to alienate the client because I want more work from them, but I need the money real bad as business has been very slow. Any suggestions on how I should proceed?"
Since it’s rarely a good negotiating tactic to tell the other side how much money you really want—much less that you desperately need their money or their business—this poster unintentionally did the next worst thing. They made it public. So after receiving many well-intentioned suggestions from fellow shooters, the photographer approached the client with their refined strategy all planned out.
As Gomer Pyle used to say, "Surprise, surprise, surprise!” XYZ Shoes knew exactly what the shooter was going to ask for—as they too had a computer hooked up to the Internet. When contacted, they promptly offered the photographer half of what he was asking, on a take-it-or-leave-it basis. They further advised the photographer that if the offer were not acceptable, they would do a new shoot with another photographer. By posting his pricing question on the Internet, the photographer was handing over his playbook on a silver platter. These posts are not secret, confidential, or privileged—nor is readership confined to altruistic fellow photographers.
Faced with the challenging and confusing array of pricing elements, how does a photographer determine a licensing fee that is a win/win for both parties in the negotiation?
Today we have software. FotoQuote is the most extensive and comprehensive pricing software available. Their prices are also based on feedback from photographers actively using their program, so it’s kept up-to-date and realistic in today’s marketplace. FotoQuote give you a range of prices for a particular usage, and also considers production value, signed model releases, and other factors. This can be especially helpful when an art director calls you for the 12th time, requesting a new estimate based on new circumstances or a new usage request.
Warning! Do not be a prisoner to the so-called pricing boundaries set by any pricing software. What you charge is ultimately determined by you and you alone. As many of Ed’s clients—including Jack—often do, you may even elect to distinguish yourself from your competitors by charging more than they do. Remember, many clients equate price with quality. High price = High quality. Low price, well you get the idea. Logical or not, it’s real life.