Opening the Can of Worms

When I was a photography student at RIT there was a nearby highway interchange designed by a transportation-engineering sadist known affectionately as the "can of worms." To navigate this short stretch of road was considered hazardous, at best. Such are discussions of photographers' fees, a path delicately traversed by ASMP, APA, PPA and other photographic organizations. Fear of antitrust issues, underestimating, overestimating and just plain being wrong are all reasons that those far wiser than I am have avoided this issue. But, as the saying goes, fools run where angels fear to tread. So here goes...

An Imperfect Look at Reality

In a brief attempt to add some veracity to the discussion, I interviewed a half-dozen art buyers each at agencies and design firms in key regions across the US (I know, that's hardly a statistically valid sample, but it's a start). They were asked a few simple questions. (A complete discourse on pricing would make a good MBA dissertation, so some more general questions were asked in the interest of brevity.) The questions were, "What is your high, average and low spending for the following for both assignment and stock photography?" 1) Print advertising. 2) Collateral. 3) Direct mail. 4) Online/Web. And 5) Buy out. Just let me summarize by saying that the information was all over the place with dedicated assignments for campaigns running as much as $250,000 at one major agency and as little as $2,000 at another. Stock purchases ranged from a high of $6,000 for a single shot to as low as $2 for a royalty-free shot. But, somewhere in the middle there was some useful information if you can forgive the apples to oranges issues.

Slow Drum Roll: The Results

When it comes to print advertising and collateral, there are still great jobs available, with assignment opportunities up to $150,000. Direct mail buyers also have great assignments, with some being offered as high as $10,800. Stock spending peaked with a high of $11,600 for a complete rights buy out and some companies are spending up to $6000 for print advertising usage.

Stock. It's Everywhere!

Based on my brief discussions with buyers, there are some broad conclusions about the industry and pricing that can be drawn. First and foremost is that stock is everywhere! Just about everyone buys stock for just about every use - from advertising to Web to Collateral - and for applications ranging from "comping" to final reproduction. Agencies that wouldn't look at stock ten years ago are now buying more and more stock and hiring for assignments less. (As if you didn't already know.) Cost pressures, it seems, are largely responsible, dovetailing with the greater selection of available stock images. Royalty free, the shooters' old nemesis, is gaining more of a foothold and appears to be less of a "dirty word" than before - especially for Web use.

The smaller number of assignments that are given out are concentrated between two groups: 1) those photographers who have already established a reputation with agencies (trust) and 2) newcomers who demonstrate something different. The higher-end stock sales often take place when an image is used for comping and the client subsequently likes that specific image and wants the agency to buy it! (A bird in the hand...) Lastly, old pro or newcomer, agencies and design firms don't buy from photographers they don't know. Communication is important, agency turn over high, and the need for regular contact is increasing in a bitterly competitive assignment market.

Aiming Too High is Better Than Too Low

Another issue that became clear is that pricing too low can be the kiss of death. Chances are that if an estimate is too high and the agency, design firm or client wants to work with you, they'll negotiate your rate. If your initial estimate is too low, however, you might never get the chance. Why? First, "lowballing" equates to low trust. Most art buyers simply don't trust photographers who submit estimates that are obviously low. Second, they don't want to establish a precedent that the client might start using as a "baseline" in the future. (In fact, they don't even want a client to know about a too-low estimate and some clients demand to see all the estimates they receive.) Third, the agencies make money based on mark ups and higher fees usually equate to bigger mark-ups.

Too Many Line Items are Better Than Too Few

Inadequate estimates, those with too few line items and too little detail, are also met with suspicion. It's better to list any and all possible expenses - rentals, scouting, post-processing, digital retouching, archiving, assistants, stylist, make up, hair, producer, location fees, food, etc. than to submit a blanket estimate. Giving the buyer a specific line item to negotiate reduces the tendency to negotiate overall. ("Oh, you don't want catering? No problem. We'll take that one out...")

The Bottom Line

  • Most often, neither the lowest nor the highest estimate is the winner. Typically it's one at or just above the average price.
  • There are still a lot of assignments out there at between $10,000 and $20,000 (creative fee plus use) per, if the buyers are to be believed.
  • A good estimate is always one that's sufficient to allow the photographer to produce a great image. That's what creates reputation and repeat business.
  • Being firm doesn't mean being inflexible. When a buyer tells you, "All we can get is $11,500. Can you come down from your estimate of $12,000?" you might want to say yes. When another buyer says "Your estimate is $12,000 but can you do it for $6,000?" you probably want to say "no." Flexibility is an asset. Pricing your work too low is not.
  • If you want to be in the running be certain the buyer knows who you are. Reputation and trust are key. That means you must always be working. If you're not shooting you need to be marketing.

CODB vs. WTMWB

Many organizations, such as the ASMP, suggest looking at creative fees based on your cost of doing business (CODB) plus typical usage rates. The logic in this argument is undeniable. You're engaged in a business and you need to make a profit. In fact, according to the IRS, if you go too long without making a profit you're engaged in a hobby, not a business. Others, particularly newer photographers who are trying to get established, ask themselves "what the market will bear" (WTMWB). In other words, "If I want this assignment how low do I have to go to get it?"

This is a slippery slope and price-cutting has been responsible for much of the deterioration in assignment shooting rates. The reality is, there is always someone who will shoot for less. Always. This is a hard lesson to learn, especially for the younger folks just starting out. The logic is tempting. It goes something like this: "If I can't get the work than I can't possibly make enough and, besides, maybe after I take a lowball assignment they'll give me a better one." Just about every photographer has heard someone say, "Just do us this one as a favor and the next one will be better..." My suggestion when you hear these words is to run as far as you can the other way. It's almost never true! The same guy you shoot for at $500 will find someone else to shoot it at $300 next time. (Likely the high school son of his boss, or her neighbor's nephew.")

Staying Afloat

The history of photography is rife with people "cutting each other's throats." Retailers have been out-discounting each other to the point that there's insufficient margin for them to exist. (How many camera dealers are left in your neighborhood?) Agencies have been selling in-house photography, stock and RF as lower cost alternatives. Worst of all, photographers have been undercutting other photographers as part of their marketing strategy which, in the end, brings everyone down. And while a rising tide may raise all ships, "lowballing" sinks the entire fleet. An effective pricing strategy might just keep your boat afloat.