Do Production Costs Dictate Price?

Posted on 3/27/2009 by Jim Pickerell | Printable Version | Comments (3)

Recently, the owner of a top microstock portal claimed that the cost of creating an image should dictate its initial price. However, this is not what happens---at either his agency, other microstocks or among traditional agencies. It is time to let go of the fiction that image pricing has anything to do with production costs.

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Copyright © 2009 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 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

Alan Bailey Posted Mar 27, 2009
As the owner of an agency/producton house, I always thought your point of view was obvious. Microstock is a pure numbers game just like RF. It may cost me $200 to get one image out the door and into the channel, while it costs $15 to do the same thing with a different image. The customer dictates whether my efforts are valid in his choice to purchase either image.

At the moment, the only universal mechanism to dictate value/price of images lies with whether I place an image in RM, RF or microstock.

And to your point, photographers will only put images into microstock or any other model if the return makes it worth their effort and cost. It may take a year or two, but the microstock model will sort itself out. A lot of photographers are putting a lot of time and effort into images that will not make a good return on micro (of course, the inverse is also true).

Steve Pigeon / Masterfile Posted Mar 27, 2009
You're absolutely right, Jim. The only workable business model where a user pays proportionate to the cost of creating an image is assignment photography. A stock licensing model that tried to scale prices according to production costs would be doomed from the start. Clients are not interested in what it costs to make a stock image - they are only interested in what it costs to use it. And that price is dictated by supply and demand.

Bill Brooks Posted Mar 27, 2009
Jim I agree with everything you say above, except your continued use of the word "agent" instead of "archives" is driving me up the wall.

With the advent of the internet, 10 years ago, PACA changed the first "A" its name from "Agency" to "Archive". At that time most PACA members removed the agent terminology from their photographer's contracts. An agent is legally required to always act in the best interests of the photographers it represents. Today I often hear photographers still refer to their image libraries as "agent". The image seller is not an "agent" to the photographer, no more than a grocery store is an agent to the farmer. The sooner photographers stop thinking of their picture archives as their agent, the better they will understand their business.

It would be a small step for you, and a giant leap for photographer's thinking, if as a matter of style, you dropped the word "agent" and started using words like "picture archive".

There are other words you could use, but lets not go there.

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