Reasonable Pricing For Textbook Use

Posted on 12/13/2007 by Jim Pickerell | Printable Version | Comments (5)

A couple weeks ago I complained that our industry has established ridiculous price multipliers for book use when large circulations are compared to small ones. So I was asked to supply an answer.

In reviewing current list prices for textbook use at some of the major Web portals, it is clear that almost everyone uses a multiple of approximately two times for print runs of 1,000,000, compared to what they charge for 50,000 print runs. It can be argued that this ratio is roughly the same for brochure and advertising use, and thus a similar fee structure for books is justified. However, books are a product. If a publishing company sells 20 times more books than it sold previously, it will earn approximately 20 times more money.

Also, in the book publishing industry there has been the historic practice of charging 75% of the initial fee for the second 40,000 press run, and paying authors a royalty per-book sold. Therefore, when establishing fees for textbook use, I believe there is justification for using a different strategy, with less discounting for additional copies.

The figures in the chart below compare major portal fees for 1/4 page usage with 50,000 and 1,000,000 circulations. When there is a figure to the left of the dollar figure, that is the price charged in pounds or euros in the respective countries. If there was no dollar figure on the Web site, I used the current exchange rate of the local currency to calculate the dollars. In some cases, the companies provided both local currency and dollar figures, but those dollar figures were not always based on the current exchange rates.

    50,000  

1,000,000

  50,000  

1,000,000

    1 Country   1Country   World   World
UK Only

 

 

 

 

 

 

 

 

JupiterImages  

$395

 

$395

       
Masterfile  

$310

 

$510

 

$310

 

$510

Corbis

£100

$206

 

£308

$634

 
Alamy

£95

$165

£135

$235

£180

$315

£255

$445

Topfoto

£65

$134

£120

$247

£100

$206

£175

$360

Getty

£58

$119

 

£87

$179

 
         
US Only        
Corbis  

$325

 

$625

 

$490

 

$940

Masterfile  

$310

 

$510

 

$310

 

$510

Getty  

$290

 

$290

 

$290

 

$290

JupiterImages  

$265

 

$265

   
Alamy

£125

$220

£175

$305

£180

$315

£255

$445

                 
Germany Only                
BVPA

€ 90

$131

€ 165

$240

       
Corbis

€ 105

$153

€ 210

$306

       
An industry-wide adjustment in the escalators might be viewed as price fixing, but given the wide variations in base prices for 50,000 circulations, it would seem that such a charge would be difficult to sustain.

My Recommendations

I recommend establishing a base price for a circulation of 40,000 and using the following multiples of this figure to calculate prices for all other circulations. I am not recommending a specific base price, but simply suggesting how fees should be adjusted for larger or smaller circulations.

  Multiple

10,000

0.7

20,000

0.85

Base Price

 

80,000

1.4

120,000

1.85

250,000

2.7

500,000

3.65

750,000

4.65

1,000,000

5.7

1,250,000

6.8

1,500,000

8

These multiples are likely to produce prices higher than current prices for large circulations, but they are still more than fair to publishers, when considering the additional revenue such a large number of books will generate. If we in the stock photo industry can adopt such business practices, we will have taken a giant step in the right direction. This in no way prevents Getty from setting its base price at half of what Corbis charges and 28% below Alamy's, but at least it should make the prices charged for larger circulations more reasonable.Trade Association Involvement

It would be useful if professional trade associations, speaking on behalf of all image providers, and in their role of recommending fair business practices, could raise the issue of unfair multiples with publishers. Obviously, publishers would like to maintain existing or lower prices. Offering an alternative plan might at least open the door to negotiations..

Associations might be able to act in this manner because they would only be talking about the multiplier principle without referring to base prices or any actual prices. Based on such discussions, they could then make recommendations to their members without in any way requiring members to use any specified multiplier.

It is worth noting that in Germany, the photographers association BVPA is able to publish an annual list of "customary fees for the picture market" that has become a useful tool for agencies, photographers and picture buyers.


Copyright © 2007 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.  

Comments

  • Mark Turner Posted Dec 14, 2007
    The current nearly-flat pricing from the major distributors for textbook use you report clearly doesn't make sense for the photographer/licensor. I'm curious how you arrived at your multipliers. I checked my copy of FotoQuote, which uses calculated multipliers, and found that your factors generate considerably larger numbers at every step. That's not necessarily a bad thing for the seller, but might entail some additional re-education for the publishers.

    In our current image-saturated market, how realistic is it to implement a new and higher-cost pricing structure?

  • Janis Daemmrich Posted Dec 14, 2007
    Jim, do you know of any textbook publishers who are paying anywhere near what you suggest? We get complaints when we bill 2X the base price. Although we get paid, some of our textbook clients tell us we're very expensive and that they're less likely to look at Bob's images because of our high prices.

  • Roger Ressmeyer Posted Dec 15, 2007
    Between 1985 and 1995, when I sold my Starlight Photo Agency to Corbis, we never once licensed a single image for any use for less than $2500. Textbook covers paid $2K and up; full page and chapter openers were $500 minimum. At that time, we felt Jim's pricing was way low!

    High prices are totally sustainable when you have imagery that isn't easy to replicate, which is most textbook imagery. Despite the proliferation of imagery, much higher pricers are supportable and warranted. Market leader Apple set the price for personal use of one song at nearly $1! Market leaders Getty, Corbis and Jupiter -- Getty in particular since I believe they have half the market -- are leaving a fortune on the table, IMHO. That's not in the best interests of the shareholders at all. A sustainable business model requires keeping the artists healthy, too.

  • Roger Ressmeyer Posted Dec 15, 2007
    Ooops, first sentence should read "less than $250" not $2500. I wish!

  • Roger Ressmeyer Posted Dec 15, 2007
    P.S. Kudos to Jim Pickerell for this piece, it's right on. Disclosure: My company www.sciencefaction.net represents some of Jim's work.

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