The Cost Of Producing Stock

Posted on 2/5/2014 by Jim Pickerell | Printable Version | Comments (1)

A couple weeks ago I proposed an adjustment to current agency pricing strategies that offers the potential to get higher prices for the images in greatest demand and still make large quantities of excellent images available to customers who can’t afford the best. (See “Solving The Problem Of Too Many Images”) Some subscribers thought I should also factor in production costs. Here's my response.

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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:  


  • Tom Zimberoff"The agencies believe there will always be enough amateurs producing images that will satisfy the needs of their customers." Your comment, Jim, is certainly not the view of photo buyers. And by "buyers," I do not mean plumbers, dentists, bloggers, and designers looking to fill up Web sites with cheap content; but Ad agencies, Corporate communicators, Editorial media, and Small business (doing more than a $3M run rate).

    On the next issue you raised, cost of production, you wrote, "As far back as I can remember stock agencies have never taken the costs of producing images into account." Well, of course, that's because they had no direct data connection—and still do not have—with creators, say, in the cloud by which they could factor in creative costs balanced with buyer budgets utilizing predictive data analytics. Even so, the incumbent distributors deliberately chose, years ago, to serve only buyers—consumers at that—by employing low prices and volume sales. The photographers' costs were not only purposefully ignored but they, themselves, were cut out of the value chain. That was a business decision, not an unexpected result. Anyway, today, technologically, there is no difficulty at all in factoring in production costs into stock photo sales. Only the will to do so is lacking. Despite your saying, "That kind of communication between producer and the person negotiating the rights no longer exists. And, it cannot be reestablished in the high volume, time sensitive, Internet sales environment," is simply not true. It's quite straightforward to accomplish—transaction by transaction in real time.

    Finally, FotoQuote is likely the singularly most pernicious, dead weight on prices because it's based on guesses. Okay call it a survey. However:

    ? Surveys do not always account for more than a basic usage fee, yet there are usually additional kinds of fees and costs to consider in the bottom-line price of a photo shoot.

    ? Surveys can be skewed by the number of respondents, which may include only a small percentage of those photographers who were actually polled.

    ? The survey respondents from one regional market may outnumber those in another. If you’re not given that information, the survey will be tainted and misleading, because what might be a tantalizingly high fee in Schenectady might be low by New York City standards.

    ? Surveys become out of date as quickly as prices are susceptible to change.

    ? Buyers use survey results to keep a cap on usage fees.

    ? Finally, surveys do not single out photographers who have used best practices to determine pricing and profit structures. Consequently, any carelessness on the part of the respondents (especially the fewer there are) will lead to artificial prices, whether biased on the low side or the high side. You have no way of knowing how many, if any, of the respondents regularly mark up their billed expenses, let alone whether they billed any expenses at all. And you have no idea what their actual costs are. Posted on Feb 8, 2014

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