There are two primary factors that should be considered when quoting a price for textbook use: image size (1/4, 1/2 or full page) and size of the print run.

Image size

In the past, the more prominently an image was displayed, the higher was the price charged for its use. Increasingly, publishers are asking for one price to cover any image size, and the publisher typically expects to pay the 1/4 page price and get all the additional benefit. Image creators should attempt to get the higher price whenever possible. Table 1 presents a baseline for pricing various sizes at a minimum press run of 40,000 books.

Print run

The second factor that affects image price is the number of copies the publisher is authorized to produce. Publishers produce many auxiliary products, such as teacher's editions, study editions and CD-ROM, Internet or intranet (limited access) versions to support the main book product. Previously, each of these products warranted a separate fee negotiation, but today it is more common to count a copy of each of these versions as a single copy of the textbook by the same title.

Online copies.  In some cases, the publisher will want to make a certain number of password-protected copies of the book available online. As far as image use is concerned, an online copy in such cases equals a printed copy in terms of counting distribution. So if publisher distributes 80,000 printed copies and 20,000 online copies, the total circulation is 100,000.

Using multiples. Table 2 provides multiples of the base rate to be used for circulations that are either larger or smaller than 40,000 copies. It is common today for publishers to ask for the right to print 500,000 or 1,000,000 books over a 10-year period.

Are these circulation multiples too high?Some argue that based on current practices the factors for larger circulations shown in Table 2 are too high. In fact, these factors still give the publishers a very favorable break on the price for large circulations. We encourage you to use these factors when calculating your initial offering price and negotiate later, if necessary.

Notes

• Duration of use. Some sellers believe a higher fee should be charged for each additional year of publication rights the customer is given. However, time is irrelevant when talking about book publishing—in contrast to advertising, where time is a factor. With textbooks, if a license authorizes a print run of 500,000 copies, whether or not the publisher prints them all in the first year or takes 10 years to reach that number is immaterial. However, when the publisher is ready to print the five-hundred-and-first copy, a new license is needed to cover the additional use.
• Written agreement. Invoices should be very specific about rights granted and reserved. Specifically, phrasing to include is: “all other rights reserved.”

Other Pricing Factors To Consider

• Double page: full-page X 2 (add 100%)
• Chapter opener: base rate X 1.25 (add 25%)
• Multiple uses (e.g., same image used smaller in the Table of Contents):
  first use rate X .7 (deduct 30%) PLUS first use fee
• Wrap-around cover: cover rate X 1.5 (add 50%)
• Back cover: cover rate X .75 (deduct 25%)
• Dust jacket (in addition to cover): cover rate X .5 (deduct 50%)
• Composite cover (multiple images used):
  – if images are 1/4-page: cover rate X .65 (deduct 35%)
  – if images are 1/2-page: cover rate X .8 (deduct 20%)
  
  
  Covers in general may command even higher prices than those that can be calculated using these guidelines, because the photo selected is obviously much more important and critical to the success of the publication than a photo that is only being used at 1/4-page size on the inside of the same book.

Languages, geographic distribution and world rights

The prices presented here are base rates for North American English-language rights only. Historically, additional fees have been charged for also printing in other languages and distributing it in countries other than the U.S. However, we believe pricing should be based solely on the number of copies printed, and not on languages or countries where a book is distributed. If you are asked to quote by language or publication in more than one country, use these guidelines:

• Additional languages: Add 25% per language to English-language rate
• World rights (one edition, one language): base rate X 2 (add 100%)
• World rights (one edition, multiple languages): base rate X 3 (add 200%)

Negotiating tips

• Determining what constitutes a new book. It is becoming common practice for publishers to take different chapters out of several existing books and create a new textbook. This does not fall under the common “90% revision” standards, because it is an entirely new textbook. Full fees should be charged.
• Planning in advance. It is to the publisher's advantage to anticipate the total press urn and purchase all the rights they need initially. Currently, publishers often ask for press runs of 500,000 or 1 million to cover any possible eventuality but often do not want to pay an appropriately higher price for this additional circulation.
• Using volume discounts is appropriate for both textbooks and encyclopedias; however, this is not automatic.
• Considering consumer pricing. It may not result in a higher image price, but it might be a good idea to inquire about the retail price of the book and, using the anticipated print run, projecting the publisher’s gross income. A rule of thumb is that publishers should expect to pay 10% of the gross receipts for creative content, including the text and the photos. If you have an idea of how many images are used in total, you can extrapolate the per-image budget. This may put in perspective the amount of money the publishing company will make vs. what it is willing to pay for images.

Reuse and revision

Historically, any change of the textbook’s copy and photos exceeding 10% is considered a new edition that warrants an entirely new fee, unless the initial agreement anticipates and accounts for such changes. Today, it makes more sense to allow any type of use that is related to a specific title, so long as each use is counted toward the total number of uses authorized in the license. This is simpler than the old method and provides even more justification for higher multiples of the base rate for higher circulations than those proposed above.

Often, when publishers want to reuse a picture several years after the original use, they will send a notice asking to be invoiced for 75% of the original fee (or a 25% discount). In fact, it should be 75% of the current fee, which is probably somewhat higher.

An additional press run of the same book in the same quantity after one year is 75% of the current fee (25% discount).

Encyclopedia

The printed encyclopedia is practically dead. Virtually all encyclopedias are now being distributed electronically on CD-ROM or online. In the event that there is a print use, the price should be 15% higher than the textbook rate.

Picture books

The per-image fees for picture books are usually much lower than for textbook uses, although the pictures often tend to be used large. From an economic point of view, a photographer should only consider participating in a picture book if he or she is able to provide all the pictures for the book and it is determined that the book will be an aid in marketing the photographer’s other work. Even then, such books may not be cost-effective.

The average fee in the vast majority of picture books sold at retail ranges from $75 to $200, regardless of the size the image is used. Some books with corporate or government sponsorship may pay more, but such situations are rare.

Book Publishing in Transition

Originally written in 2007, this article provided background for negotiations.

The book publishing industry has changed dramatically in the last decade, and the stock-photo industry has struggled to keep up with those changes. The biggest problem has been in establishing reasonable prices for increased circulation.

As late as the early 1990s, most textbook license requests were for 1/4 page under 40,000 print runs. The 1995 edition of Negotiating Stock Photo Prices listed the price for this usage at $200. Back then, it was also common to get reuse fees when a book was put back on press for a new print run. Re-use fees were 75% of the “current” fee for the same usage, not 75% of the lower initial fee charged.

At that time, getting a picture accepted for printing in a popular book was like an annuity. Every year or so, the photographer received a request to re-license the image for another printing. Photographers were willing to license the initial use for relatively small fee compared to other uses, since they would make money on future re-uses.

For example, I shot a picture of H.R. Haldeman as he was being sworn in during the Watergate hearings. This picture was used in a history textbook, and the book was reprinted many times. I received seven or eight fees over more than a decade.

Then digital printing arrived. Suddenly, short-run books were economic to produce. Custom changes and a variety of variations of a single basic title became common. That caused publishers to want rights upfront to print lots of versions of a title, including electronic versions, without having to re-license each time.

Consequently, we started seeing requests for licenses of 500,000; 1,000,000 and 1.5 million. Nothing wrong with that in principle, but what should the fee be?

One approach: a $200 fee for 40,000 would be $0.005 per book. Multiply that by the number of books, say 80,000, and you get $400. Give a little discount for the second 40,000 and make it $350 for a total of 80,000 books. That’s basically the 75% reuse fee that sellers were getting before.

But when the press run goes to 400,000 using this strategy the fee for that use would be $2,000 and even if we knock off 25% for reuses that is $1,500. Seems like a lot of money. But not really, if we compare it to what the fee would be for ten 40,000 print runs two decades ago. We’re not touching cost of living increases here.

It is also important to remember that these big circulation licenses are usually for 10-year periods, and the price publishers charge for books is likely to rise significantly during that period. According to the Bureau of Labor Statistics Producer Price Index, between 1994 and 2004, the wholesale prices of textbooks jumped 62%. Gross revenue in 2005 for elementary, high school and higher education books sold in the U.S. was around $10 billion and growing at a rate of around 4% per year, according to the Association of American Publishers.

The National Association of College Stores says the average price of a new textbook in 2006 was $53, but some books are priced over $100. There is a real disconnect between what books cost and the amount photographers are being paid for the pictures included.

There is plenty of justification for charging higher fees for images used in books, but unfortunately, individual sellers are fighting the trends established by the major stock agencies. Fearful that they would lose the volume of sales that major publisher provide, and more worried about immediate cash flow than the long term value of what they are selling, the agencies have been willing to cut prices and allow the publishers to distribute huge numbers of copies of a book for very little additional cost above the basic 40,000 price.

To a certain extent this is also because of the huge volume of images now available for publishers to choose from. If they can’t find a suitable image at the price they want to pay from one source they can probably go somewhere else and find something similar.

However, sometimes the image supplier does have some leverage, particularly if he is not dependent on a huge volume of sales from a given publisher. Sometimes the image will fulfill the publisher’s needs uniquely well and the picture researcher knows there isn’t an adequate substitute. In such case they are often willing to settle for a higher price, but the seller won’t know if this is one of those situations unless he asks for the higher price in the first place.

When the image has been published once and the publisher wants to make a large reuse he will often settle for a high price rather than go back and find a different image and go through all the approval process.

Some people will argue that the prices and the multiples for large circulation listed in the charts above are way out of line with what many publishers today would like to pay. But they are reasonable based on what publishers were paying a decade or more ago.

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.

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.

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.

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

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.

I do not know of anyone who is getting these figures now, but Corbis’ list prices are not that far off — assuming they actually charge the prices listed on their Web site. No one will ever get such prices if someone doesn’t ask. Publishers will always say your prices are too high. They always want to pay less.

The best time to establish a better price is when you have a picture they really need and can’t get anywhere else. At the very least, arguing that circulation should have a more direct relationship to price should result in somewhat higher prices.