My proposed new pricing strategy can best be described as a Modified Rights Ready (MRR) model. It uses some of the basics of RR as designed by Getty Images, but overcomes many of the problems with Getty's model. In an effort to achieve maximum simplicity, Getty lumped different types of uses into a single category and ignored important categories at the low end. I have broadened the number of categories to 16.
To provide a single price for any use within a category Getty was forced to pick an average price that gives away far too many large uses for prices that are dramatically discounted from previous RM prices. I have solved this problem with a simple sliding scale within each category that makes it possible to charge more for large uses than Getty's RR strategy allows.
The sliding scale makes it possible for customers with relatively small planned uses to afford MRR images. With Getty's RR strategy, these customers are forced to go elsewhere for the images they need.
MRR also makes it possible to sell RM images to microstock users. According to my estimates, approximately 3% of the total images licensed in 2007 will be RM, while well over 90% will be microstock. With this model, RM sellers can penetrate the microstock market and still maintain prices for commercial use at current levels. This is accomplished by tightly defining the types of use that qualify for low prices.
For RF and microstock sellers, MRR takes into account the value received by the customer, enables them to get better prices for commercial uses and a better understanding of the customer's intended use. While the price structure is slightly more complex than the current RF and microstock strategies, it is much simpler than RM and offers a greater degree of variability than RR.
With MRR, all images are available for any type of use rather than the choice being limited by the pricing model. This may not be important to commercial customers, but price currently locks most microstock users out of access to RM and traditional RF images.
The 16 basic categories of use include eight Commercial categories: Print Advertising, Printed Marketing Material, Outdoor Advertising, Indoor Advertising, Product and Packaging, Web and Electronic and All Commercial Uses. In the Editorial area, there are three separate use categories, including: Inside Magazines or Newspapers, Inside Books, and Web/Electronic/Broadcast use. Finally, there are five other use categories that include: Internal Company, Non-Profit, Educational, Personal and Other.
With one click, customers can any one of the 15 categories and get a definition of the uses allowed and a price for unlimited use for a single project. One more click gives the customer a breakdown of prices for different circulations within the category. Thus, with two clicks, the customer can easily get a price for virtually any use. (Prices for the Other category will need to be negotiated, but these uses represent no more than a fraction of 1% of total uses.)
Personal use, Educational and Non-Profit customers will benefit from having a larger selection of images, and commercial customers will get slightly better prices for most uses. Granted, a small percentage of commercial customers using microstock images will have to pay more.
This strategy focuses on pricing simplicity without forcing equality between personal use and all types of commercial use. Customers aren't demanding that every user be treated equally, but want a process that makes it easy to determine a price. Some argue that commercial customers often don't know exactly how they will use an image when they begin the purchase process. Sometimes a customer may not know whether the image will fit into a layout as a quarter or full page, and the exact number of copies to be printed. But I believe every customer will know the category where their usage fits and that's all they need to get a price.
Usage licenses are tied to a specific client and end use. The model focuses on delivering customers with the best image for their particular needs at a reasonable price for value received.
MRR benefits sellers using all the current pricing strategies - RM, RR, RF, and microstock. It benefits customers by giving them one simple, universal pricing model for all images rather than several different choices, each with a limited selection of images. Individual sellers would still be able to adjust the prices within their MRR model.
Finally, an important reason for considering MRR is the indications that there will be a decline in the use of print and TV as advertising mediums and a dramatic increase in Web uses. Unfortunately, with the present systems, we have very little idea as to which images are being used on the Web and how often. MRR gives us the opportunity to track that and to make timely adjustments as the uses change.
MRR Prices gives suggested prices for various circulations in the 15 categories.