Use Pricing: What The Industry Needs

Posted on 8/4/2011 by Jim Pickerell | Printable Version | Comments (5)

It’s time to institute a new pricing model. In the ‘80s the only pricing model was Rights Managed (RM), but the term itself wasn’t even invented until the ‘90s. Back then every price was based on usage and there was no other option. In the early ‘90s Royalty Free (RF) was introduced. In the early 2000s microstock came into existence. Now, it is time to introduce a fourth model which I will call Use Pricing (UP). The following would be some of the characteristics of Use Pricing.

UP Characteristics

    1 – UP prices will be based on how images are used.
    2 – They will be the exact prices listed in the online pricing calculator of the particular distributor or agency. No negotiations or discounts.  

    3 – Each image provider would be allowed to convert up to 10% of his or her RM images to UP pricing.
    4 – Anyone designating an RM images as UP would be required to agree by contract that the same image would not be made available as RM anywhere else. Images that appear on other sites would have to be licensed based on the actual numbers reflected in that site’s calculator.  
    5 – Any image designated as UP can be moved back to RM after having been available for UP licensing for at least 6 months.
Distributor Implementation

This pricing system would be very easy for agencies and image distributors to implement. Nearly all agencies and distributors have online pricing calculators. They would not need to change or adjust their prices. In the event that a customer’s use were to fall between two uses outlined in the calculator the distributor’s sales force would be authorized to negotiate a slightly different price. However, under no condition could the selling price be lower that the lowest number in the range.

For example, a customer might want to want to print a picture ¼ page, inside in a brochure with a print run of 75,000 copies and no electronic distribution. The prices listed in the template might be $820 for 50,000 and $945 for 100,000. The distributor’s sales staff would be authorized to negotiate a price between $820 and $945 prices, but under no condition could it be lower than $820.

In cases of multiple different uses each use would be priced separately using the calculator and then added together. There will be no discounts for multiple uses.

The distributor may adjust its template at any time to levels it believes are appropriate, but all customers will be treated equally. There will be no discounts based on the overall volume use of particular customers. At any time image creators may go to the pricing calculator and determine what the distributor is actually charging for various image uses.

Distributors would need to set up a system that makes it possible for image creators to review their RM images online and click a check box on the ones they want to move to the UP licensing strategy. The system should tell them how many they have chosen and the number remaining to reach 10% of their collection. The system should also record the upload date so image creators can know when it is possible to move the image back to RM if they are not satisfied with the UP results.

Distributors will need to consider the kind of preferences they give UP images in the search-return-order (SRO). It will be to the distributor’s advantage to get a significant number of the higher priced images near the top of the SRO. But they will also have to determine the proper balance of RM and RF images in order to provide customers with lower priced options. It will undoubtedly take some months to develop an effective algorithm.

Distributor Advantages

With this system distributors should be able to charge more for certain uses and in the long run earn more money. It is unlikely that the distributor will lose sales given that only a small percentage of the images it represents are priced higher. The distributor would still have a huge number of choices at the lower RM and RF price points to offer to customers. When customers can’t afford the higher priced UP images it will be easy for them to find a lower priced alternative.

On most sites customers already find images at a number of different price points and with different rights attached. Adding one more variation shouldn’t be a major problem for most customers.

Many specialists will no longer consider putting their images into agency or distributor collections because they fear their images will be licensed to volume users at very low prices. The UP pricing strategy would eliminate that problem and make it possible for o agencies to attract some very high quality imagery.

Image Creators Control Their Images

Many image creators have become very dissatisfied with the low prices they are receiving for many of the uses of their images. They argue that the costs of creating certain images are so high they can no longer afford to produce. This is certainly not true of all imagery, but it is true of some subject matter. The UP pricing strategy gives these creators more control over how their work will be priced and will encourage many experienced pros to renew production.

One of the things that has been bothering image creators for a while is that the pricing schedules on sites like Getty, Corbis, Alamy and others have very little relation to the fees being charged customers. UP might force these distributors to develop more realistic online pricing calculators. In one recent situation when a photographer used the online calculator to price a use she came up with a fee of $1855. The distributor actually charged $110 for the use. Mostly, what creators are asking is for distributors to establish realistic pricing schedules and stick to them for at least some of the images they are licensing.

Choosing Images For The UP Upgrade

Image creators will need to carefully consider which images they want to upgrade to UP. While UP images will earn much more when they are licensed they will probably be licensed significantly fewer times. Considering the very high percentage of sales that are currently below $100 it is hard to tell how many of those customers can afford to pay more for a better image, or one that is very specific to their needs.

A good starting point may be to upgrade a lot of the images that have already been licensed as RM. Someone liked them enough to purchase. Others may like them as well.  But just because an image has been used extensively for low prices doesn’t necessarily mean the price should be raised. If the subject is a couple-on-the-beach the creator should think carefully about the number of other images illustrating this same theme and concept that will be available at much lower prices. Is there something so unique and compelling about the photographer’s image that anyone who can afford the price will feel compelled to use it rather than a cheaper image?

On the other hand, if the subject is indigenous peoples in the Artic, a subject in relatively low demand, but costly to produce, UP may make sense. Anyone who really needs that type of image may simply have to pay more to get it. Just yesterday I saw some fantastic pictures of Anna’s hummingbird chicks. There are limited choices out there of that subject matter and it takes an expert to produce quality images of this subject. Anyone who needs that subject matter should be paying top dollar.

It is entirely possible that many photographers will find that they will actually earn less money be limiting there sales to UP prices than they would if they continued to license their images as RM, and allow their inclusion in bulk deals..

More On The Name

Use Pricing may not be the right name for this pricing strategy. I also considered Fixed Pricing (FP) and Non-negotiable Pricing (NN), but neither seemed exactly right. I’m open to other names. I do feel that the shorthand needs to be two letters so it relates to RM and RF.

What are your thoughts?

Copyright © 2011 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:  


  • Paul Melcher Posted Aug 4, 2011
    The intention is beautiful. However, it is not very customer friendly and would require website development cost that most agencies would not take on.
    I remain convince that RM pricing's future is online and tied to traffic data.

  • Roger Ressmeyer Posted Aug 4, 2011
    Good work Jim. It certainly is a quagmire the way it is. I urge you to keep pushing your ideas.

  • Bryan Alexander Posted Aug 5, 2011
    There are some sound ideas in here but the thought of 90% of our collection being included in a Premium deal, doesn't make it tempting to sign up to, as we don't have images that sell by volume. Something is needed to make spending money on taking pictures a worthwhile investment again.

  • Jim Pickerell Posted Aug 5, 2011
    Consider that of all the images in you collection probably no more than 10% (I suspect a lot less) ever sell. With careful editing, and particularly when you have long experience of knowing what sells, you ought to be able to put most of your best sellers into the UP collection. It is not a perfect solution, but it should work for most photographers. The downside of not going with a company like Getty, Corbis or Alamy is that a lot of potential customers will never find your images.

  • Bryan Alexander Posted Aug 6, 2011
    Because buyers use our collection for the images they can't find elsewhere, the ones they choose are often surprising. I can tell you the strongest images that will sell for magazine stories but not with any certainty the ones that book publishers will chose, and that is after 40 years in the business. Hence my hesitation. Although there is the consideration that "..a lot of potential customers will never find your images" if enough find it and pay a little more, we could be earning enough to continue!

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