On LinkedIn’s ASMP group James Cavanaugh outlined the following client request, “A client wants you to create photographs that they can use on social network sites so they can "go viral" to promote their company. It means potentially countless people may use your copyrighted work,” and he asked “How would you approach such a request?”
Here’s my answer.
Handle the job as an all-rights assignment. Forget about copyright. Make sure you earn enough from the assignment to cover your costs, overhead and profit. Don't worry about or expect to earn anything from residuals. But, also retain the right to license other non-exclusive rights to use the images.
There is no way we will ever control the use of imagery made available on social network sites. So stop agonizing over trying to do so and accept the fact that we have had a paradigm shift in our industry. Adapt to the new realities. It is also highly unlikely that anyone will be able to guarantee that your name will be attached to a social network use so don’t discount your price based on some imagined promotional value.
You have two choices. Either establish a fee that makes it worthwhile to produce the images without any hope of residuals, or refuse to do the job. Do not factor in, in any way, a potential value for residual use of the images.
There is a simple formula for calculating what the fee should be. First look at all your overhead expenses to operate your business, not counting expenses specifically applicable to shooting various jobs. Assume $75,000. Then add on what you need in take home pay, before taxes. Assume another $75,000. Thus, the jobs you produce need to generate $150,000 annually. Now, estimate how many jobs you will be able to do in a year given the pre and post production time and the marketing time involved with each one. Let’s say 100. Divide the number of jobs into the total you need to produce and you get an average of $1,500, per job. You should charge that fee per job, plus all the expenses related to the particular job. (Obviously, you should insert your own numbers. They may be higher or lower than the ones I’ve listed.)
Some jobs will take a lot longer than others. If the job is not going to take much time you might want to charge less, but when thinking about time involved don’t forget pre and post production time, waiting time and travel. For those jobs that take a lot longer, or are a lot more complicated, you obviously want to charge a lot more than $1,500. In some cases you will want to take into account the value the customer will receive from using the images produced and add appropriate fees. (For example, charge more if the images are to be used in a major ad.)
If the original customer is paying the full cost of producing the image, why did I say in the beginning “retain the right to license other non-exclusive rights to use the image”? There may be other opportunities to license rights to the images produced despite the wide distribution the images will receive through social networking. Just don’t count on such additional uses. Someone may need a large file for a poster, a billboard or an ad. You can license a non-exclusive use for such a purpose. You can place the images into an online database where customers may find them easily. They will pay to use such images, even when the images are also available for free on a lot of social network sites because the customer doesn’t know about such sites, or can’t find the image on them easily.
Keep in mind that there are some images on microstock sites that have been downloaded more than 16,000 times - at microstock prices. Certainly, those images have been used occasionally on social network sites and your customers could find and use them without paying. But, despite this fact 16,000 customers have been willing to pay something to use these images. The main reason they are willing to pay is that they are able to find the right image easily. But when they buy rather than steal the image creator benefits. There is a good chance that any image you post on a microstock site will never earn more than a few dollars, but whatever it earns is additional profit – icing on the cake – because you have already been fully compensated in the first instance for the cost of producing the images.
Regardless of whether or not you try in some way to generate residual sales, the important thing is to not depend, in any way, on such income to support your business or your lifestyle.