Giving Creators Control Of Pricing

Posted on 1/11/2012 by Jim Pickerell | Printable Version | Comments (2)

After reading my story on “Who Controls The Price” Terri Petrie of asked, “How could a stock agency allow for more creator control of prices?”

I’ll offer some suggestions, but I have no illusions that any of them will be adopted.

Step 1 – The first step would be for stock agencies to post list prices on their web sites and hold to those prices for all uses for every customer. That would enable photographers to know the prices that will be charged for certain uses. Photographers who think the prices are too low can stop submitting to the agency.

    In the event that the there were prices on the web site for ¼ page use of $440 for 50,000 circulation and $540 for 100,000 circulation, and the customer had a planned circulation of 75,000 the agent would be allowed the flexibility of negotiating a proportional price between the two listed numbers, but nothing else.

    In the event that the customer still wanted to use the image, but couldn’t afford the quoted price and made a counter offer, the agent would be required to check with the photographer to get “authorization” to charge a lower price. If the photographer wants to allow the use at a lower price, that’s fine. The photographer is in control. With today’s communications there are very few situations where customers must make a quick decision and can’t wait for the agent to check with the photographer.
    If a particular photographer travels a lot and tends to be unreachable for long periods of time he can delegate more negotiating flexibility to the agent, but each represented photographer should have the option to make decisions about the prices charged for his or her images.
Step 2 - – Some customers will ask, “What about volume discounts? Shouldn’t volume users be entitled to better prices because they spend more money with the company?”

    The agency can post on its web site a list of standard price breaks that are offered.  Customers who want to take advantage of such breaks must deposit a certain amount up front to be drawn on for future uses. The greater the amount deposited the more the discount. All customers are treated equally depending on the amount deposited.

    There are several things that bother me about the way traditional agencies apply discounts.  Often customers get a fixed low price regardless of how the image is used. In addition it is believed that often these discounts are not applied equally depending on the size of the guaranteed payment. And finally, the degree of discount is totally hidden from the image creator.
Note, microstock distributors license rights using models very similar to steps 1 and 2. Customers are racing to the microstock sites to buy images using this list price model. Annually, microstock distributors license rights to 75 to 100 times as many images as are licensed as RM.

Step 3 – Some photographers will want higher prices than others for certain images and certain uses.

    In order to do that the agency could create several collections at different price points. To understand how this might work we need to go to microstock again and specifically iStockphoto. iStock has 5 different collections – unlimited, exclusive, exclusive+, Vetta and The Agency Collection (TAC). Each of these collections is at a different price point. In some cases contributors can choose the collection where they want their images to appear. In other cases agency editors choose the images for particular collections.

    While prices in these RM collections are based on file size delivered, it would not be that hard to use a similar strategy when the prices are based on usage type and circulation. It would be a simple matter of establishing a base price and set up a series of percentage increases for other levels of value. For example have levels A, B, C, D and E with A being the base price. The base price would be established by the agency and adjusted from time to time as seems appropriate to market conditions. Whenever a customer puts an image in a lightbox it would be locked in at that day’s price. If the price is adjusted at a later date the customer’s price would not be affected.

    To give photographers maximum control each should be allowed to choose the pricing level for their images. The most photographer friendly system would supply individual photographers with their own unique access code that allows them to go to the site at any time and adjust the price level either globally for their entire collection, or for an individual image number. In nearly all cases individual photographers will have some images that should be priced higher than others.
The danger with such a system is that many photographers will tend to price their images too high compared to what the market will bear. As a result both the photographer and the agency will lose sales. Most photographers believe that their images are worth more than what the market is willing to pay. Photographers need to recognize that the cost to produce a stock image has very little to do with its real value to any given customer. Value is based on how the client intends to use the image and the importance of having the specific image rather than something similar that is available at a better price.
Eventually, most photographers will learn that if they want to license rights to their images they must price them at a level that a reasonable number of customers (maybe not all) are willing to pay for such usages.

The only ways this system could work is if the images offered are so unique that no real replacement is available anywhere else, or if most image marketing organizations were willing to adopt it. Otherwise everyone else will be undercutting those attempting to hold the line on pricing.

At a conference about 25 years ago Henry Scanlon of Comstock was asked, “How do you decide what to charge for a use?” I’ve never forgot his answer. He said, “I want to find out what the customer has to spend on the project and then get all of it!!” Sounds like a good philosophy, but it means that everything is always negotiable.

Negotiation is killing the business. Once there is choice and customers figure out how to play the game it means you’ll always be discounting your price because no price is so low that you’ll say NO.

Copyright © 2012 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


  • Charles Cecil Posted Jan 11, 2012
    Jim: One small wrinkle on your proposals would be simply to allow the photographer to set a minimum price below which no sale of any image from that photographer would be permitted. One agency that has my material has made a number of sales at prices so low I considered them practically an insult, and I would rather have forgone the sale than have it proceed at that price. The agency reminded me, of course, that our agreement gives it the right to set prices. Chuck Cecil/Cecil Images

  • Leslie Hughes Posted Jan 11, 2012
    Jim -Pricing is so tough. We launched a sales services organization last year and are providing direct sales support to a number of agencies. We see first hand how the market has changed.

    Sellers want to get as high a price and as many sales as possible. However many licensing companies are not negotiating and just drop prices so they don't lose the job. In focusing on volume, they have to keep costs low, service is reduced and the cycle goes. Partly, co.s don't have the manpower or really know how to determine when and how to keep the prices high. Others list higher prices online but are known for dropping significantly offline.

    But a core issue is training so that sales people know how to handle jobs that go offline. The consumption of images is actually probably at an all time high but the fast paced change means that what the client is willing to accept has broadened. Often what is "good enough" is what they will accept even if they like another image better. This is different from the days when the image itself was foremost. We still find that the more unique content is, the more we can hold to high prices. We also find the end user and the use itself is key. Certain segments have the budgets and use them. Recently we have seen quite a few sales with very high price per image points (5K and up). But these are worked out with the client, with the understanding of the use, and the specific needs.

    Finally - one last issue. I was surprised that some companies are allowing distribution partners to work through other distribution partners or networks. This means there could be 4 or more parties splitting the license fee. That will make even a decent number look pretty small.

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