The Business of Photography

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The Business of Photography

110 Usage Rates - What Are They

There are two popular ways for charging for commercial, advertising, editorial and corporate photography: first, by the hour or project based on time and skill; second, based on licensing the use of the photograph.

Many photographers charge using a combination of both, or they might charge by the hour for one job and by the photo for another. It depends on the job.

Charging By The Hour

However, if you charge by the hour, clients basically believe they are purchasing a service and the result of that service is their's to keep. If you employ a carpenter to build you a shed, you get to keep the shed. Many clients like to think they get to keep the photos as well and, if you charge by the hour it makes it a lot harder to limit what the clients do with those photos, even if you own the copyright. Copyright is one thing, but the whole nature of the contract is skewed against you earning anything more than the hourly rate.

The same argument can be applied when you charge by the photo. Although we probably work out the per-photo charge based on the amount of time we think it will take, the client pays per photograph. Do they get to use that photo for evermore?

Charging by the hour, by the photo or by the project will pay you for materials, your time and a profit margin, but if at the end of the shoot the photos are handed over to the client for use without restriction, it is unlikely you can continue to benefit from your work.

In some situations with basic bread and butter work, clients might insist on owning copyright and having unlimited rights to use the photographs you have created for them. There's nothing wrong with accepting work on this basis, but you should do so being aware of what could happen.

Problems Arising

For instance, if a simple brochure shot ends up as the cornerstone of an international advertising campaign, the client can benefit exponentially (because of the power of the photograph), while the photographer is stuck with a small flat fee.

An example. You are commissioned to shoot a simple portrait shot for small DL size brochures. The client is a national finance company, but you're just working for the local office. It's a half day shoot and, along with materials and post-production, you charge $1000.

However, the model is particularly appealing and the way you have lit the shot sparks a chord with the finance company's clients. The brochure is a huge success. It is used around the country by six other offices and then becomes the feature image in a national print and television campaign. The advertising agency loves you because it's making a killing with the client.

How could you share in these profits?

Licensing Your Work

The answer is to license your photograph, not sell it. Instead of doing a half day shoot (time-based) and charging for materials, charge a fee to create the photograph (a per-shot rate) and then license the photo to be used.

In the earlier situation, you might charge $500 for the photography and $500 for the licence to use the photograph on the brochure for one year. If the client wants to use the photograph for longer, or for other media (such as posters, point of sale, direct mail, packaging, television, internet), then a further fee is payable.

This can be difficult to negotiate. It is more common to work this way in advertising, less common in general commercial and corporate work. However, some photographers only work this way, most work this way when it is appropriate for the job and the client, but in times of economic downturn, it can be a hard ask.

Nevertheless, it's important to understand that some photographers charge this way and, after the photo has been used for the stipulated time-period, get to charge clients a further fee when the photo continues to be used or if it's used in a new context, media or geographic area. Time, territory, usage.

Licence Fees

How much is this further fee? As you might expect, a client will be cautious about signing an open ended agreement. If the photo was simply fantastic you could in theory hold them to ransom over future usage - no one would be happy with this sort of arrangement. The better solution is to let your client know how much they are going to pay in the future at the time they commission the photograph.

The way The Association of Photographers (UK) has suggested to its members to handle usage is based on a Basic Usage Rate (BUR). Each photograph is given a BUR on the original estimate. In the above example, the BUR would be $500 (the value of the original licence). Included with this BUR is, say, the right for the client to use the photograph for one year, within Australia, on two media, say a brochure and the internet.
Note the BUR gives the client the right to use the photo for a specified time, in a specified geographic area, and in specified ways (media placement).
If after a year the client wants to use the photo for another year, a further licence would be paid equivalent to 100% of the BUR. This generates a further $500 for the photographer.

Then, if the photo were required for a third year, the licence fee might drop to 50% of the BUR - $250 more for the photographer. The more successful and useful the photograph is for the client, the more the client pays the photographer.

If in the first year the client also wanted to use the photo in an advertisement, then for a single additional media use in the same market the extra licence fee might be 50% BUR for one year in Australia. To use the photo in New Zealand, a smaller market than Australia, the licence fee might also be 50% BUR ($250) for one year and one media, or for worldwide use the licence fee might be 500% BUR ($2500).

To sell all uses in all markets (but not the copyright) for one year - an unrestricted arrangement so the client doesn't have to keep coming back to the photographer - the fee might be 750% BUR.

Making It Work

For photographers who think this approach could never work for them, take a look at most wedding and portrait photographers who do exactly this. They own the photographs and the clients come to them when they want a print. It's a form of licencing.

No one else in the world gives away their intellectual property (IP), why should photographers. We are creating images with value. Think like this and you are half way there!

Two points must be made. First, when licensing the images, the client must know up front what the extra usage is going to cost based on a simple system you have worked out.

And second, the accompanying BUR figures (at the bottom of the page) are just a suggestion that has been based on The Association of Photographers (UK) publication, Beyond The Lens and adapted for the Australian market. The table is of moderate use and way too complicated to show a client, but it gives you an idea of how you should be thinking when dealing with your licences.

It's totally up to individual photographers to decide on the ‘multiples' to be applied, but using the BUR principle is a practical method of determining usage fees in advance.

So if you're not licensing your work now, how do you put it in place?

One way is to introduce it to new clients. New clients have no preconceived expectations of how you do business.

I can remember years ago a wedding photographer being asked by an advertising agency to do a job and asking to be paid up front. The agency did, much to the surprise of many advertising photographers who were regularly waiting 120 days to be paid by the same agency.

New client, new relationship, start it with a licence agreement - that agreement can always be generous in its terms while you yourself come to grips with the concept.

If you have been dealing with a client for a long time and nothing has been said about licensing or copyright, it may be best not to rock the boat. If there is no paperwork, then you own the copyright, even if you don't restrict the way this client uses your photographs.

(It's also important to licence the photos rather than sell them because after the client has used the photos it might do nothing with them at all - and if you don't own them, you can't do anything with them either!)

Or if you did want to introduce the concept of licensing to an existing client, then by starting with generous terms they are less likely to take fright and move to another photographer.


Get It In Writing

Licensing is a great concept for photographers, but it must be in writing.

You can't turn around to existing clients and introduce licensing on jobs you've already started or completed.

Licensing has to be negotiated up front - the client needs to know what he or she is entitled to do before they agree to the work. This is only fair.
Our job, as photographers, is to walk the tightrope between charging too much and too little. Making the most out of licensing is definitely a skill that takes time to learn. A bit like photography.

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