The State of Business for the Digital Photographer Preparing For 2011

If it were just about money I would have been a lawyer. I know too many photographers who hate what they do or at best they look at it like a 9-5 job. I never want to look at photography as a 9-5 job. I always carry a camera so that when I am inspired I can shoot. It is something I always loved about my mentor, Jay Maisel. You can’t make a great image if you don’t have a camera and I am amazed at how many photographers never have a camera except when they are working. Second, I try and approach every assignment in a way that is different. As a still photographer I want to do more than bring back what you would see if you were standing next to me. My visual philosophy is to produce images that nobody else envisions. I want to bring back images that someone standing next to me would not visualize from my “minds eye”. Color, design, gesture, texture and spontaneity are all key elements in all of my images. In general I am intrigued by the ability to transform what my minds eye sees into planes of color and design. Shooting digitally has improved my craft but it has also has had an impact on my bottom line.

Digital is not cheaper! It is however better, but better for who? The biggest advantage of digital has been convenience and improved quality for our clients but for photographers there is the added job of acting as “The Lab” as well as a dramatic increase in the cost of equipment.

Background

Typically in business it is the seller who sets the price and the buyer who either accepts it or searches elsewhere. For some strange reason this has not been the case for photography. While we as photographers typically own our own business we must acknowledge that for the most part we behave more like artists than like business people. We have relinquished far too much responsibility in guiding the course of our business to our clients.

Unlike most business’s where the seller sets the fee, with photographers it is the client who says how much we can charge for a day’s work, and what they will pay for our expenses. Our clients have largely dictated fees and expenses and for the most part haven’t changed what they pay for decades. When I went into this business in 1978 the going rate paid to photographers from the major publications was the same fee or close to the fee that they pay today, thirty-three years later. In 1978 a photographer might have been able to show a decent profit especially when all of his or her standard equipment cost under $10K. In thirty three years the creative fee for most photographers shooting editorial assignments for magazines for example has increased approximately 14%. During that same period inflation has totaled 80%; and, during that same period the average equipment overhead has risen 1000%. One thousand percent!

According to the Bureau of Labor Statistics, the average wage has increased by approximately fifty percent since 1990. However, most photographers are paid less or the same today than the rate from years ago. Median annual wages of salaried photographers were $29,440 in May 2008. The middle 50 percent earned between $20,620 and $43,530. The lowest 10 percent earned less than $16,920, and the highest 10 percent earned more than $62,430. Median annual wages in the photographic services industry, which employed the largest numbers of salaried photographers, were $26,160.

Photographers held about 152,000 jobs in 2009. More than half were self-employed, a much higher proportion than for most occupations. The industry adds about 17,500 new photographers each year.

When corrected for the rate of inflation the results are even worse. Factoring in that today’s digital camera can cost $7000.00 with a life of three-years verses the film based body costing about $1000.00 two decades ago with a life of at least five years the financial impact is even greater on the photographer. The overall reduction in compensation for digital expenses is dramatically compounded by our 10-fold increase in equipment costs and reduction in the life of the equipment.

Here is a thought. I for example could take out my 30-year-old film camera and compete head to head with my mentor Jay Maisel. The only thing separating us would be talent not technical issue. If the 30 year-old film camera is depreciated over 30 years it has certainly been affordable. With digital my Canon 1DsM11 which cost $5000.00 can’t compete against my Canon 1DsMII1 which cost $7000.00. If I am to compete against my peers, which are simply part of business, I can’t be at a technical disadvantage. If I am to compete against my peers, which is simply part of business, I can’t be at a technical disadvantage.

Our clients today are under pressure to cut expenses. Photography budgets are cut in part because of a misunderstanding stemming from clients understandably believing that simply because there is no film and processing that there are no costs associated with digital.

Today a basic digital set of two professional SLRs, several lenses, dedicated flashes, laptop, desktop computer, card reader, memory cards, color management and processing software, monitor, printers, storage and back up storage, will cost approximately $20,000 to $80,000 or more.

Comparatively, a basic film system would likely cost under $20,000 and would likely remain current and functional for 10 years or longer.

So here is the comparison:

  • $20,000/10 years = $2,000/year average cost if you’re shooting film
  • $50,000/5 years = $10,000/year average cost for digital

Pricing Digital

While digital may be instantaneous for most amateurs it is anything but instant for a pro concerned with delivering the best file. It is natural for most clients not to understand this. After all everyone today is a photographer. There were nearly as many digital cameras sold in the US last year, as there are citizens. For most folks simply clicking the shutter uploading to Facebook or Shutterfly and ordering prints is all that is necessary. For the pro this is not an option. The best quality files will be obtained by shooting in a raw format, processing the files while applying tone and curve corrections, sharpening and preparing them for output. This takes time and money.

There are several ways to charge for digital:

1) The Prix-Fixed method (better known as “The Fast-Food Full Meal Deal”)

Utilizing this strategy, the photographer charges into one line item, often called a “Digital Production Charge.” This basic charge covers everything and usually is billed as a per day charge. This may include:

  • Equipment charges (cost of the equipment)
  • Digital processing charges (tonal corrections, processing sharpening)
  • Delivery (CD’s, DVD’s or FTP uploading)
  • Archiving (preservation of the files in multiple locations for use later)

2) The à la Carte method (or “Would you like fries and Super size?”)

Utilizing this strategy the photographer itemizes all of the charges. This is a charge for every item. As is the case for a restaurant, à la Carte generally costs a great deal more. Charges may include:

  • Digital Capture charge and or Digital production equipment rentals digital cameras, lenses, lighting
  • Digital Processing fee- raw to usable file format with tonal and curves adjustments with rush charges if needed right away
  • Retouching – dust removal, and image retouching
  • Delivery – CD/DVD/FTP
  • Reference prints and proofs
  • Media Charges (memory cards, micro-drives)
  • Presentation – contact sheets and web galleries
  • CMYK or other conversion – file conversion for job specs
  • Insertion of metadata
  • Archiving

More Responsibility for the Photographer

A client should expect to pay more for digital than they were paying for film but they should also expect more from the photographer. In the dark ages when we shot film, the photographer’s job was simply to get it on film. If it looked good on a light table, with rich saturated color it was done. From that point on it was the clients problem and this led to a general “us against them mentality” which is still pervasive throughout the industry. The relationships that photographers maintain with their clients must change. We are in fact symbiotic with our clients. Where in the past, reproduction was simply a client problem; the advent of digital has taken the responsibility for excellent reproduction to the photographer. We need each other.

Conclusions

It is clear that photographers and those who reproduce our work need to work better together. We are partners and as such we need to develop a collaborative relationship rather than an adversarial one. Photographers must be compensated for their added costs and in turn should be providing better quality images for optimum reproduction faster, which aids the client.

The world economy has benefited in the last few decades, which is a direct contrast to the digital photographer supplying content and witnessing a shrinking of fees and an increase in costs. As a freelancer, I exist only by the value of the intellectual property I produce. If I can’t benefit from the value of being a digital photographer I can’t stay in the marketplace to produce more images, which ultimately enrich our culture. Without a profit I minimize my ability to earn a living from my work and at the worst it removes an incentive to create.

Instead of profiting from the intellectual property we produce, we are crippled by our own intellectual property. This is the exact opposite intent of the copyright law, which was designed to give creators and inventors a chance to benefit from the fruits of their labors. If this trend continues, our ability to survive and the incentive to produce the varied intellectual property from which our country benefits will be greatly hindered.

Photographers have a creative inspiration to share with the world. The visions we develop will quickly fade unless we acknowledge that we must be business people as well as creative people. As the marketplace grows, I believe that it is more important than ever to remember that we, as photographers, are operating a business. The essence of our creative drives is being jeopardized by our inability to educate, participate, and negotiate in the global market. Let’s make some change for 2011.

Learning How to Price Your Assignment Work

One of the most confusing areas for photographers is to figure out  what and how to charge. Photographers generally want to be artists and find the entire aspect of business mystifying and generally something they don’t want to deal with. Here is some advice to help simplify the problems.

The first issue to consider is if you want to price by the hour or by usage. While both of these methods are used by photographers, a time based solution is counterproductive for everyone involved. If you ask most clients what they think is the ideal photographer, they will respond that the ideal photographer is the one who can do a do a good job and do it quickly. Rarely do clients actually want a photographer who says they will take a long time to do anything. Yet, if one prices based on time, the person who takes the longest makes the most money. The photographer who is the ideal person for the job who shows up and does a fantastic job in a hurry is paid the least. This is counterproductive to everyone involved. The photographer who does the best job makes the least. The client is also faced with the reality that if the photographer is paid more to go slow, they will inevitably waste time. The second problem with a time based solution is that there is no benefit of doing a really good job. For example if you are told by a client that they want one image for a brochure and you shoot for 5 hours at a set fee you receive no added benefit if the client loves what you do and uses 10 images with one on the cover of the brochure. The only advantage to a price by the hour solution is that it is easy to determine a fee but there is absolutely no reward for quality.

A better solution is to price yourself based on usage. If you are hired to produce one image for a brochure and you end up doing a fantastic job, in less time than predicted, this system rewards the photographer for their efforts. Here is a suggested system to help determine fees for based on usage.

1) Base Rate and Overhead
The very first suggestion is for every photographer to figure out their actual overhead to determine a base fee to start with. To many photographers don’t account or know their own cost of doing business and this is critical. It is safe to assume that someone in Omaha, Nebraska may have a different overhead than someone in NYC. Once the overhead is determined a base fee can be established and usage can be added on to this to determine a final fee. Most photographers are shocked when they actually sit down and figure out their overhead or actual cost of doing business. Here are some of the expenses to analyze when determining cost of doing business.

  • Office Studio Rent
  • Telephone – fax / pager / cell
  • Advertising-Promotion -ads/ printing / mailings / web sites – design + hosting / mailing lists
  • Equipment-computers/ cameras
  • Subscriptions / dues / insurance – business / workers comp / disability
  • Healthcare
  • Professional Services – legal / accounting/ tax prep
  • Utilities
  • Repair
  • Car + Truck Expenses
  • Office Supplies
  • Photography Supplies -non-billable (film tests, expendables)
  • Postage / Shipping
  • Office person / Payroll expense
  • Retirement Account

Once these costs are known you have a base rate which covers your actual fee for doing business and this is a good starting point to use as a base rate.

2) Usage
The second component to understand is how to apply usage. Many photographers fail to get enough information from a client in order to fairly determine usage. Simply knowing that the image will be used in a brochure for example does not provide adequate information. The following information will help a photographer determine a fair usage fee. Those questions include:

  • TYPE OF RIGHTS – Advertising, editorial, advertorial, electronic
  • MEDIA RIGHTS – consumer print, advertorial ,consumer Print, trade, print advertising, annual report, brochure, newsletter, single sheet, billboard, public transit, trade show, book Inside, magazine, electronic, book, AV presentation, website, TV editorial, TV advertising, layout comp
  • LANGUAGE – English, Other
  • GEOGRAPHICAL – US, North America, Europe, Asia, World etc.
  • QUANTITY – 1000, 5000, 25,000 etc.
  • DURATION – one day, one month, one year etc.
  • SIZE – 1/4 page, 1/2 page, cover, etc.

Each of these components help to determine value and thus usage. These fees can be added to a base fee to determine an overall fee which truly accounts for a fee based on usage. This system is fair to both the photographer and the client.

Learning How to Price Your Stock Images

So you want to be a stock photographer…
Stock photography can be very labor intensive and it may take years before it is profitable but it can be a fantastic way of turning your energy and love into cash.

It seems that everyplace I go I am asked questions about becoming a stock photographer. People assume that they have talent and they have been to cool places so there must be a world out there just waiting to buy their images. The truth of the matter, there is a world of folk waiting to license photographs but becoming a stock photographer is anything but easy.

First lets examine what constitutes stock photography. Stock photography is by definition existing photography available to buyers for their specific needs. The photographs become a commodity available through either an individual photographer or through a stock agency. Under most circumstances the images are actually not sold but are leased with a licensing agreement but some images are sold with extended or even unlimited usage.

Rights Protected Vs. Royalty Free

Rights protected images are licensed for a specific period of time and for a specific application, which is negotiated in advance. The reason one would use rights protected imagery is to prevent competitors from using the same image in the same marketplace. Only after the prescribed period has elapsed is the image free to be licensed for another application. Another option is purchasing complete exclusivity for a period of time where the image is licensed to only one client and no one else. In this case, the fee would be considerably higher as the image is taken out of circulation until that license has elapsed.

In contrast, royalty free stock photography gives the image buyer the option to use the image in as many ways as desired while only paying one fee.

Where Is Stock Photography Applicable?

Today stock photography is applicable in every conceivable market, which utilizes photography. It is routinely used in advertising, editorial, brochures, multimedia, catalogs, annual reports, record albums, television commercials, posters, calendars, greeting cards, credit cards, AV shows, and it is widely used on the web. The market for stock photography is expanding at a rapid pace with new uses every day.

How Is Stock Photography Produced?

Stock photographs are produced in two basic ways. Photographers retain rights to the images they produce on assignment for clients and turn those images into stock photography or they actually fund elaborate productions to generate images specifically for stock.

What Are the Basic Benefits of Stock Photography?

WYSIWYG or what you see is what you get. In traditional assignment photography a photographer is hired to illustrate an idea or capture some event. There is a creative fee to pay, which can be in the thousands per day, and there are expenses including: travel, assistants, film & processing, talent, stylists etc. The cost can be downright prohibitive and there are NO GUARANTEES. Stock photography offers the guarantee. The user can see the image without paying for the cost of the whole shoot.

The other big benefit of stock photography is the ability for an end user to see images fast and in some cases immediately. For today’s fast paced society many times there is simply no time to wait for a particular image to be photographed and stock offers that solution.

For the photographer the benefits of stock photography are enormous. Over time many images will generate far more income than did the actual assignment. Many images have a long lifetime and will generate income for years to come. A decent collection can not only double a photographers annual income but can also continue to generate income even after he or she is retired.

What Are the Pitfalls of Stock Photography?

For the client the biggest pitfall to stock photography is that the images may not be exclusive to them and in fact may very well have been published many times before. It is possible to buy stock images with exclusivity but the cost is far greater and may or may not be available for a specific image.

For the photographer there are several issues, which become pitfalls with regard to stock photography. If the photographer sells through an agency it usually takes months after a sale before the photographer gets paid. There is also the basic fact that most agencies take 50% on a stock photography sale and more if the image is sold overseas through a sub agent. There is a great deal of time spent getting images ready for sale including captioning, categorizing, key wording etc. If the photographer produces images specifically for stock there are no guarantees the images will ever be sold and it might take years just to receive enough income to cover your expenses.

What Constitutes a Good Stock Photograph?

Ahh, this is the magic question. The whole idea of shooting stock is to make money; so deciding what and what not to shoot is something that needs to be given serious consideration. If you intend stock photography to be a profit-making venture then you need to think carefully about the type of things you photograph, otherwise you will end up investing a lot of time and money with no return. First consider the type of pictures you take and how commercial they are. It’s almost impossible to look at a selection of stock images and say which ones are going to be best sellers, but you can pretty much guarantee that some subjects will sell . Landscapes and travel are highly popular subjects, but you have to have something really special or different. I always like to say bring back fantastic images from regular places or bring back regular images from a fantastic place. Subjects like science, business, medical, lifestyle and concepts tend to generate much higher fees. There are far fewer photographer shooting such subjects, and access for some of these may be tough, so competition is less. Cost effectiveness should also be given serious consideration if you see stock as a long-term investment. Yes, taking pictures in Antarctica for example may seem idyllic, but if it uses up your capital for the rest of the year you may very well end up idyllic and in the poorhouse.

Trying to judge when an image is a good stock picture is one of the toughest things in the world. I for example have a photograph of a staircase shot on the way to a class I was teaching, which is nothing more than an orange staircase. For some reason this image keeps selling over and over again and I still don’t consider it a fantastic image. On the other hand I have an image of an absolutely gorgeous mixed race boy who was a Gap model and the image is one of my least selling images of all time. My suggestion is to shoot everything, carrying a camera with you at all times. Shoot first and try and license later.

What else Constitutes a Good Stock Photograph?

RELEASES, RELEASES, RELEASES. We live in a litigious society and if you are going to license stock photographs you are going to need to make sure that you have model releases for all identifiable people and property releases for all identifiable property including things like dogs and cats. Having a release will make the images worth more money and in many cases is the decision maker for licensing or not licensing an image.

Where to and How to License

Probably the best way to license stock is through an agent or stock agency. Most operate along similar lines – photographers submit work on a regular basis, it is edited, marketed and distributed. The two largest agencies in the world are Corbis and Getty and both produce slick catalogs and have vast distribution around the world using the web and agents. The agency takes a 50% to 70% from all sales and the photographer gets the rest. The most important thing to bear in mind is that stock photography should be thought of as a long-term investment. I have several thousand images with different agents around the world and now get a nice monthly sum, but it took years to build up this collection.

Many would-be contributors think that all they have to do is send off their latest batch of pictures then sit back and wait for the money. Unfortunately, it isn’t quite that simple. Many agencies aren’t even accepting new photographers and the ones that are accepting new photographers are really looking for the crème of the crop. When a new photographer joins an agency it could take many months before their work is even online. After that it can also take one, perhaps two years for the images to start selling. It is vitally important to keep on submitting new work and building the collection because your odds of licensing are directly attributable to the amount of images you have in a collection. ?Ultimately, stock photography is a numbers game – the more pictures you have with the agency, the more sales you will likely make. ? At the top end of the market there are some talented photographers who earn enormous sums of money from just a handful of shots. It’s not uncommon for certain images in a stock catalogue to sell perhaps 100 times over two or three years and gross$ 50,000 or more. Recently one agency licensed one image for $230,000 but for the vast majority of photographers stock photography is not nearly so lucrative. The cost of the equipment is high and there are many, many stock images in the market.

Can You License Yourself?

Yes. I license a great deal of my work through my own website and there are other resources like collectives and co-op’s where photographers can license work. The benefit of licensing yourself is the control and typically the price of the license is higher for an individual in part because there is no split but it is tough to get the distribution and marketing power that an agency has.

Tips to make your images more valuable as stock:

  • Make sure the images are technically good.
    There is no such thing as almost sharp. Stock photographs have to be technically perfect. Take the time to honestly look at your images before trying to place them as stock. If they have flaws they won’t sell.
  • It’s a numbers game
    Assuming you can take sharp, well composed, strong images, the more pictures you have on a site, the more money you will make. Keep working at building the collection.
  • Don’t let rejection stop you
    Just because one site turns down your images does not mean another one will. Don’t take picture rejection personally. Find out why a picture was rejected, learn from the mistakes but understand licensing images is very subjective and one persons rejection is another person’s perfection.
  • Upload to multiple sites
    Unless you are going the exclusive route, find several good sites and upload to all of them. It will dramatically increase your potential sales because it increases your distribution.
  • Use IPTC to add Captions, headlines, keywords, descriptions, and titles to your images
    Information is everything and I can’t stress how important it is to caption your images and use keywords to further describe the images.
  • Keywords are key
    Take the time to do the best job you can keywording your pictures. The keywords are how a potential buyer finds your pictures. The best keyword in the world will not make you a cent if you do not keyword it so the person that might want your picture can find it. It is not fun, but it is worth the effort. When keywording don’t forget about both Subject Keywords like Who, what, when, where, why, but also Concept Keywords like love or happiness. This is critically important for advertising sales.
  • GET RELEASES
    Model and property releases are absolutely critical.

For additional information about pricing and digital workflow: http://www.d65.com



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