Pricing Online

14

March, 1996 - Recently, we learned that Discovery Online, a service of Discovery Communications
that owns the Discovery Channel has a site that is getting up to 500,000 visits a
month. They purchase photos to use on this site and are offering to pay $30 each
for those images.

In my opinion this is a ridiculously low price and should not be accepted by any photographer.
Unfortunately, many of their stock agencies are allowing their images to be sold
for these low figures. Let me examine how I think we might approach arriving at a reasonable and fair price.

500,000 visits certainly has a relationship, in terms of readership, to distribution
of 500,000 copies of a magazine. When you mail a magazine to a subscriber you have
no way of knowing whether that person ever gets around to opening it.

Consider the number of publications you receive that you never get a chance to open.
I get at least 5, maybe 10, for every one I have a chance to skim. Thus, for a
magazine with 500,000 distribution, maybe no more than 50,000 to 100,000 readers
even look at any of the material inside.

On-line, a hit of the front page means that someone went to the trouble to find that
site, or if you will, pick up the magazine and open it. A visit means they are at
least skimming. So far we have no way of determining how much of the information
they absorb, but we have a much better sense of what is being read -- down to specific
articles, and specific image files opened.

Certainly in terms of readership the number of visits an online publication has is
at least equal to printed copies circulated, if not much higher.

Online publications have production costs, but they have eliminated the costs of paper,
printing and much of the traditional distribution costs.

Pricing

So how do we price on line usages. If a 1/4 page editorial use for a consumer magazine
is worth $330 then we believe the on-line user should be worth at least that much.
If we assume that the on- line "visit" numbers are 5 times more accurate in terms
of actual readership than printed copy circulation figures then 500,000 "visits" would
be equivalent to 2,500,000 magazines distributed.

With on-line there are also various levels of usage. If the picture is used on the
opening page of an on-line magazine we believe the rate should be double the basic
inside use. If the picture is used on a section page as a lead in to several different
articles I believe you should add 50% to the basic price for a picture used to illustrate
an article. Most pictures that illustrate articles will be used less than 1/4 screen
because of the length of time it takes to open large picture files. If the picture is used larger than half screen then add 50% to the basic 1/4 screen price.

For editorial pictures add the factors outlined above to the "Consumer Editorial"
numbers on page 142 in the 1995 edition of Negotiating Stock Photo Prices.

If the on-line use is for advertising, use the "Advertising" numbers on page 132
of NSPP as your basic starting point.

Limiting Time On-Line

In your negotiations be sure to place a limit on the amount of time the picture can
be used. If your basing your price on the number of visits per month then be sure
to limit the use to one month in your invoice. It is quite common, particularly
with editorial material to archive it on line making it available for months, if not years.
The archive may not be viewed as much as current material, but that will vary greatly
from site to site. Expect to receive more if the material is to be archived. If
they are not willing to pay more, insist that it be removed after the initial period.

Be sure to read Ads on the Net story # 15 for one way to find the hits and visits
of various users.

Rules for supplying feedback

Feedback:

Gerard McKee

May, 1996 - Comment: You write about trying to get an accurate count of the number of people
that looked at a specific image. It does not make sense to use site-wide
statistics like number of site vistors or site-hits. It is not necessary
to use these estimates when every web site keeps an exact count of the
number of times each gif file was transferred.

Woody Williams

May 30, 1996 - Comment: Pricing for advertising space in any media bears a relationship
to consumers affected. In traditional media, more copies are
produced because of subscription increases with a consequent
increase in production costs. However, the relationships
proposed in the article of web pricing are ludicrous.