Pricing Online

Posted on 3/1/1996 by Jim Pickerell | Printable Version | Comments (0)

14

Pricing Online Uses



March, 1996 - Recently, we learned that Discovery Online, a service of Discovery Communications
that owns the Discovery Channel has a site that is getting up to 500,000 visits a
month. They purchase photos to use on this site and are offering to pay $30 each
for those images.



In my opinion this is a ridiculously low price and should not be accepted by any photographer.
Unfortunately, many of their stock agencies are allowing their images to be sold
for these low figures. Let me examine how I think we might approach arriving at a reasonable and fair price.


500,000 visits certainly has a relationship, in terms of readership, to distribution
of 500,000 copies of a magazine. When you mail a magazine to a subscriber you have
no way of knowing whether that person ever gets around to opening it.



Consider the number of publications you receive that you never get a chance to open.
I get at least 5, maybe 10, for every one I have a chance to skim. Thus, for a
magazine with 500,000 distribution, maybe no more than 50,000 to 100,000 readers
even look at any of the material inside.



On-line, a hit of the front page means that someone went to the trouble to find that
site, or if you will, pick up the magazine and open it. A visit means they are at
least skimming. So far we have no way of determining how much of the information
they absorb, but we have a much better sense of what is being read -- down to specific
articles, and specific image files opened.



Certainly in terms of readership the number of visits an online publication has is
at least equal to printed copies circulated, if not much higher.



Online publications have production costs, but they have eliminated the costs of paper,
printing and much of the traditional distribution costs.






Pricing



So how do we price on line usages. If a 1/4 page editorial use for a consumer magazine
is worth $330 then we believe the on-line user should be worth at least that much.
If we assume that the on- line "visit" numbers are 5 times more accurate in terms
of actual readership than printed copy circulation figures then 500,000 "visits" would
be equivalent to 2,500,000 magazines distributed.



With on-line there are also various levels of usage. If the picture is used on the
opening page of an on-line magazine we believe the rate should be double the basic
inside use. If the picture is used on a section page as a lead in to several different
articles I believe you should add 50% to the basic price for a picture used to illustrate
an article. Most pictures that illustrate articles will be used less than 1/4 screen
because of the length of time it takes to open large picture files. If the picture is used larger than half screen then add 50% to the basic 1/4 screen price.



For editorial pictures add the factors outlined above to the "Consumer Editorial"
numbers on page 142 in the 1995 edition of Negotiating Stock Photo Prices.




If the on-line use is for advertising, use the "Advertising" numbers on page 132
of NSPP as your basic starting point.






Limiting Time On-Line



In your negotiations be sure to place a limit on the amount of time the picture can
be used. If your basing your price on the number of visits per month then be sure
to limit the use to one month in your invoice. It is quite common, particularly
with editorial material to archive it on line making it available for months, if not years.
The archive may not be viewed as much as current material, but that will vary greatly
from site to site. Expect to receive more if the material is to be archived. If
they are not willing to pay more, insist that it be removed after the initial period.




Be sure to read Ads on the Net story # 15 for one way to find the hits and visits
of various users.






Rules for supplying feedback







Feedback:


Jim Pickerell



Update



April, 1996 - I just talked to Smithsonian Magazine and they are in the planning stages of putting
a site on-line. Among other things they are trying to develop some standards for
what they will deliver to their programers in the way of file size. Their programers
are asking for a 300dpi file (and no file size specified). Then the programer can sample
the file down to what they eventually decide they need.



Call me paranoid, but I am very uncomfortable about providing a programer with any
more file than he or she actually needs. I can see Smithsonian sending the same
300dpi files they use for separations in the magazine to their outside consultant
programers. These files will be several megabytes in size for even a small image. What kind
of control do they have over the other uses the programers might make of the images?
Do the programers have any understanding of the rights purchased, or of copyright
in general?



I'm sure other publications are doing the same thing. We as photographers need to
come up with some specifications for maximum file size (before compression) that
can be used at these online sites and a recommended file size for delivery. If the
image is used large they should pay more money.



Smithsonian is offering photographers an on-line portfolio in lieu of a usage fee
while they try to grow the site. A lot of unsuspecting photographers, who are unsophisticated
about what is possible in the digital environment, are going to give away a lot of images on these portfolio offerings.



Suggestions are welcome.






Gerard McKee


May, 1996 - Comment: You write about trying to get an accurate count of the number of people
that looked at a specific image. It does not make sense to use site-wide
statistics like number of site vistors or site-hits. It is not necessary
to use these estimates when every web site keeps an exact count of the
number of times each gif file was transferred.

A better way is to price based on hits for EACH FILE and then charge based
on that number.

A fair price is in the neighborhood of 1 to 3 cents per hit. So, for
instance if a particular file was transferred 10,000 times in a given month,
at 2 cents per view it would earn $200 for that month.

This also makes it unnecessary to price according to location on the page
because presumably the title page will have the file displayed more times
than an inside page.

It also makes it unnecessary to specify a time limit, because as long as your
picture is getting hits, you will get paid, so let them have the file
forever.

There are details to work out. One, if a picture is used on more than one
page, most browsers will cache the file obviating the need to transfer
it each time. They will also probably be a need for some filtering so that
hits on a particular file can't be pumped up.

Also, I am not making this all up. I have been getting paid according to
a similar scheme for a couple of years now on one of the big online services.
At this time I have about 2000 pictures that are licensed on one service.






Woody Williams


May 30, 1996 - Comment: Pricing for advertising space in any media bears a relationship
to consumers affected. In traditional media, more copies are
produced because of subscription increases with a consequent
increase in production costs. However, the relationships
proposed in the article of web pricing are ludicrous.

Hits or visits to a site is a meaningful number; just how
meaningful is yet to be seen. The terms distribution,
circulation and subscriptions have carefully defined meanings.
None of those definitions relates directly to "hits," or to a
basis for costing stock photo use on the web.

A new media creates new definitions. Research by accredited
professionals is underway to measure and define the web. We
can all benefit from this process.

In the interum, cool heads must prevail. Rational assesments
will produce better long term results than paranoid dithering
in areas requiring exceptional training and expertise.


Copyright © 1996 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 301-251-0720, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, 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: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

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