Two-Tier Pricing System Allows Pros To Capitalize on Small Uses

Posted on 3/22/2010 by Jim Pickerell | Printable Version | Comments (5)

If stock photography as a profession is going to survive, we are going to have to find a way to develop a two-tier pricing system. One tier would be for commercial use of images, and the other for personal and small use.

In the last few years, microstock sellers have proven that a huge group of customers licenses images for their own purposes and very small uses. They will pay something to use images, just not much. The problem with microstock is not that it makes images accessible to these customers, it is that microstock also offers the same image files to commercial users for the same prices they charge those with small budgets.

I don’t think professional photographers can ignore these small and personal image users. Given the way the market is currently working, a huge percentage of the customers who formerly purchased images from professional sources are now turning to the amateur and the low-priced sources for their needs. The key to maximizing revenue from both the personal and commercial customers is to clearly define who qualifies as a small user and price for each group separately.

Possible definitions for small and personal uses include:

  • Personal blog
  • Student reports
  • Classroom presentations
  • PowerPoint presentations
  • Religious organizations
  • Non-profit organizations
  • Ezine
  • Personal Wall Art

If we can define such uses precisely and in simple enough terms, we may have a chance of developing a sustainable business model that will allow professionals to profit from their efforts.

No matter how well we define a “small use,” there will be some unauthorized uses and straightforward theft—maybe even a lot of it. But, if you get paid for some uses, is that not better than nothing? Consider all the people who are paying to use microstock images when, if they worked a little harder, they could probably steal them. The trick is to find the price point where it makes more sense to acquire the image legally than to steal.

Even if we have a very strong copyright law—and do not hold your breath—it is never going to make economic sense to try to collect from the small user for an unauthorized use. Therefore, it makes sense to find a price point where it makes more sense for customers to pay rather than steal.

The iPod did it with music. It is possible with photography. 

On the other hand, it will still be worthwhile to go after a commercial user who uses an image without properly licensing it. PicScout’s ( ImageTracker and ImageExchange system will make it very simple for customers to know if they need to license an image, no matter where they happen to find it. On the commercial side of the business, at least, this will make it much more difficult for image users to claim they couldn’t find the owner or didn’t know they had to license rights.

Defining small and personal uses

Personal blog, website, or personal electronic device: Any blog or Web site created for personal use or to promote a small business with fewer than 10 employees; any use on a personal electronic device. Larger corporations would fall under the “commercial” category and be required to pay a higher price for such uses.

Student reports: Any student use (a school project or personal).

Classroom presentations: A use in a classroom presentation prepared by a single instructor. If the image is used as part of a presentation prepared by a large publishing company or a school district, the use should be licensed at a commercial textbook/education price.

Religious organizations: One of the things to consider here is whether to limit the file size within this definition so the images are only satisfactory for Web, PowerPoint and very small brochure uses. Some religious organizations produce large posters and wall art for their classrooms, where it may make sense to charge more.

Input on this idea, along with specifics as to what should and should not be included in the category of small and personal uses, is welcome and appreciated. Can you think of additional user groups or different ways to segment them?

PowerPoint presentations: This can be a difficult decision. Such presentations are used on and off the Web, by large corporations and individuals giving a single presentation to a small group. On one hand, it may be better to give the corporations a break on this one and say any PowerPoint presentation rather than trying to define the size or importance of the use. Alternatively, image uses could be limited to personal use and organizations with fewer then 10 employees, while larger organizations would need to pay a slightly higher fee. A separate price should be established for major publishing companies that prepare PowerPoint presentations for sale to school systems all over the world. Should a church with a staff of 150 that uses hundreds of images in PowerPoint presentations be treated as a corporation or should all church-related activity be accorded the lowest price?

Non-profit organizations: The first instinct is to make images available for the lowest price to all registered non-profit organizations. However, we should keep in mind that there are 1.4 million non-profits registered with the U.S. Internal Revenue Service. Only about 450,000 of them earn enough revenue to require reporting to the IRS, but in 2005, these “reporting organizations” had $1.6 trillion in revenue and $3.4 trillion in assets. The top 10 of these include: American Red Cross, YMCA of the USA, United Jewish Communities, Catholic Charities USA, The Salvation Army, Goodwill Industries International, Memorial Sloan-Kettering Cancer Center, Boys & Girls Clubs of America, Habitat for Humanity International and Boy Scouts of America. Should the big ones get images for the lowest price, or should they be charged more?

Ezine: If such publications are earning revenue through either advertising or subscription, or if they are promoting a product that is sold, should they get images for the lowest price or should they be charged a corporate price?

One way to draw a distinction between some of the uses described above and commercial uses is to limit the file size delivered. In effect, that is exactly what microstock is doing today. However, that is not a perfect solution, and as we can see, microstock pricing allows commercial users that should be paying more to legally use images for the same low prices as personal users. Professional photographers would like to see these commercial users pay more given the value they will receive from using the image.

Personal wall art: There is at least one personal use where a larger file is needed, and the question is whether this kind of use should be encouraged and at what price a file sufficient to make a good quality print should be supplied. A huge number of people buy lithographic prints to decorate their homes and offices. They want one copy, not many. If it were easy for customers to choose from every high resolution image online rather than a limited, edited selection—and the price were right—a lot more images might be licensed for this purpose. Considering what photographers receive when they license rights to a publishers to print and distribute lithographic prints of there work, what is a reasonable price for the right to make a single print of an image when the customer will also be absorbing all the costs of having the print made?           

Input on this idea, along with specifics as to what should and should not be included in the category of small and personal uses, is welcome and appreciated. Can you think of additional user groups or different ways to segment them?

Copyright © 2010 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:  


  • Maggie Hunt Posted Mar 23, 2010
    This is a well-thought out and potentially viable concept. The biggest issue would be ensuring compliance - which could probably be achieved via PicScout and others (although there is a cost). In a way, Getty's $5 licenses are already offering this option. Worth exploring further.

  • John Harris Posted Mar 23, 2010
    We sell quite a lot to non-profit (and some religious ) organisations at NUJ rates from the UK - they pay for their electricity etc and can pay for pictures, so it would be quite wrong to undermine the position.

  • Jim Pickerell Posted Mar 23, 2010
    What are NUJ rates? Certainly, the purpose of this suggestion is not to undermine rates. There can also be a variety of rates for non-profits depending on size of the organization. The trick is in figuring out how to define the breakdowns.

  • Mark Turner Posted Mar 23, 2010
    The overall concept is good, but as we know the devil is in the details. Here are some suggestions ...

    Personal blogs ... limit to individuals or locally-oriented business less than 5 employees.

    Non-profits ... substantial discount only available to those with low employee costs, meaning those that are primarily volunteer-run. I'm willing to make great deals also with groups that I personally believe in, but that's hard to do through automated systems so I'd err on the side of higher prices unless they can prove they deserve otherwise.

    Powerpoint presentations ... if for individual use before small audiences then that's a microstock use, but if its anything corporate then it wouldn't qualify.

    Personal wall art ... I don't see selling rights for this through an online venue. To me, this is a photographer-direct product that is sold ready to hang at a substantial price. It doesn't belong in your grouping at all.

    Ezine ... with the expected rise in electronic publishing coming with the iPad I think we need to be very careful here. Circulation should be the major factor, just as it is with licensing for print magazines.

  • Jim Pickerell Posted Mar 24, 2010

    Thanks for the comments. Very useful. As to powerpoint presentations, what about use of a powerpoint on a web site where it is hard to anticipate the audience size? And what is a reasonable corporate price? What would you charge my church which has an audience of about 2,500 for each presentation?

    As you say the devil is in the details but under no condition do I think we want to get into negotiating such uses because the time taken to negotiate will make it impractical to make any small sale. If we're going to get into negotiation I think the minimum fee has to be in the $50 to $100 range to make the effort worthwhile.

    I may have not made it clear that I think the prices for each of these groups should vary and maybe there should be some divisions within certain groups like powerpoint.

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