Valuing Your Images

Posted on 1/29/2009 by Jim Pickerell | Printable Version | Comments (1)

Stock photography producers and sellers have lost sight of how to value their images.

Customers value images based on what they can afford to pay for the right image for a specific project. An image that isn’t quite right, but will do, may have a lower perceived value for the customer than one that is the perfect solution. A given customer may value a specific image at one price if it is to be used in a PowerPoint presentation and a much higher price when used in a print ad. The customer is the driving force in the transaction, and the value he or she places on the image is much more important than any arbitrary value assigned by the photographer.

The trick to successfully pricing a stock usage is finding a price point that makes the customer happy, while providing the maximum revenue possible for the producer. None of the existing stock-photo pricing systems do this effectively.

Establishing a very high price, or a price the photographer would like to get, is not the solution, because many customers who like and really want to use an image will say, “I cannot afford it.” No sale is made. Pricing the image based on its cost of production is also not a solution, because that cost has nothing whatsoever to do with the customer’s perceived value. The customer is who decides whether or not to buy.

Photographers argue that they must recover their costs or they cannot continue to produce. True, but a high price will not necessarily produce high revenue, because sales may be lost. In order to maximize revenue, the photographer must find a balance between price and sales volume. Then the photographer must adjust production costs and overhead to keep them below the revenue likely to be generated.

Establishing a low price that everyone can afford will result in sales—assuming there is no better competing solution to the customer’s problem—but the photographer loses because many customers would have been happy to pay significantly more, given their intended use.

Rights-managed pricing is probably the best solution, because it allows for negotiation. But, typically rights-managed sellers fail to address a significant segment of the market, because they believe their images are “too good” to be used for thousands of small projects. Rights-managed sellers also tend to focus on keeping their images available for exclusive uses, rather than focusing on volume. As a result, sellers hide their images from a significant segment of the market.

Some rights-managed sellers argue that significant labor costs are involved in negotiating a sale; thus, there must be a bottom price below which the producer cannot afford to sell. The solution to this problem is to establish “asking prices” for various uses that will be acceptable to the vast majority of customers. In this way, most sales will be automatic online transactions requiring no human intervention. Prices for each type of use may be regularly adjusted to determine what the market will bear. If the number of buyers for a particular type of use starts to decline, the price may be too high. If no one tries to negotiate, the price is probably too low and deemed fair by everyone. If the economy collapses, it may be necessary to lower certain “asking prices.” It is also possible to stipulate that certain prices for small uses are not negotiable, while prices for larger uses are.

Royalty-free pricing disregards how the customer values the image. It treats all customers and all uses the same. It makes no attempt whatsoever to determine how the image is being used. Adjusting the price based on file size delivered may be viewed as such an attempt; however, file size has absolutely nothing to do with the value a customer places on the image. Pricing based on file size was established when online storage costs were huge and bandwidth was such that delivering large files was time-consuming and costly. This pricing model was designed more to offset the costs and overhead of the agent than to provide additional revenue for the image producer. Today, the reasons for file size-dependent pricing have been eliminated.

Because all customers and uses are equal, and because traditional royalty-free sellers want to aim for more prestigious uses, sellers have priced themselves out of the market for millions of small uses. Microstock chases those small uses by offering much lower royalty-free prices. But because they have agreed to charge everyone the same, an increasing number of commercial customers are able to use images for the same prices as students using them for school reports. Commercial customers who would have gladly paid much more to use an image receive a tremendous break, and the photographer and the selling company lose. To earn more revenue, selling companies increase prices for all customers and eventually price those with smaller budgets out of the market, just as traditional royalty-free did before.

Microstock sellers are happy, as long as they see growth in revenue, but it is never a wise business strategy to leave significant revenue on the table. It is time for all sellers to reevaluate their pricing strategies, if they want maximize revenue and have a healthy supply of quality imagery going forward.

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, 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:  


  • Fred Voetsch Posted Jan 30, 2009
    This article gave me the idea of establishing bids for RM images that would allow an interested buyer to place a custom bid along with pertinent use info and then the photographer/agent could accept/decline or provide a counter-offer.

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