Saturday, May 17, 2008

In My Opinion: Photography Usage Fees

When should you ask for photography usage fees for the use of images you have shot? First, i am not referring to stock photographs, rather images you have shot on assignment. Usage fees for stock photo images are a different ballgame. As a stock photographer, you produce images at your own expense (most of the time) and when someone wants to use or publish that image, you are paid a usage (aka, license fee) in exchange for the clients right to use the image(s). There are occasions when photographers shooting on assignment charge usage fees above and beyond the assignment or shooting fees. When should you charge these fees or actually, when CAN you charge usage fees?

I decided to write this post and give My Opinion on the subject after I was contacted by a former student of mine whom I will call 'Bob.' Bob took a commercial photography course from me last year. He is I believe in high tech and has a great paying job and job security, but his passion is photography and working as a pro is the mission he is on. As a part time educator, I am happy to help him. Bob has the motivation and passion to make it and he will, it will just take some time. He is doing all the right things from continuing to educate himself and to also study the business, attend ASMP meetings, and correspond with working pros.

Bob was thrilled when he got in touch with me a week ago. He had done some photography on spec for an area hotel and they liked the work so much they asked for an estimate to shoot the rest of the hotel. He was ecstatic! Bob worked up a bid based on all that he had learned and sent it to me for advice. Unfortunately I was overseas and could not reply before he sent it to the client. The client received his bid and pretty much said that the costs were out of their budget. Bob understandably was disappointed. When you are starting your photography business, all clients are good clients and you need each and everyone of them!

Bob based his estimate on what he has learned about the business from other pros and from the ASMP pdf Guide to Working with an Assignment Photographer. This is an excellent publication and a great guide for understanding business practices for assignment photographers. This publication gives an excellent overview of Usage Fees for images taken on assignment and other general business practices.

Bobs estimate was rejected due to the price. He had a $1200 per day shooting estimate which is competitive in many markets. He also was charging $250 per day for the use of his lights, $100 per day for a second digital camera for backup, meals, mileage, 1 day of travel @ $600, $2 for each digital image capture, and another $250 for image optimization. These assignment and misc fees totaled just under $3000. Then there is the quote for usage fees which based on the clients use of a lobby kiosk and the website was another $5000.

Bob has done everything right in his thinking of how to handle a project like this and the items he should be charging for. The problem is that this is not a reality for a client like this or in today's hyper-competitive markets. Let me say again: usage fees are a good thing and should be charged, but only when you have a client who expects to pay those, otherwise you quickly price yourself out of the assignment.

Like any business, no matter what it is, you must qualify your clients. Some clients will understand the concept behind usage fees and others will totally not get it. When I work the local markets I am often competing against a lot of photographers and I can guarantee that most of them will not charge usage fees just to get the job. When I work on a national account and get the assignment because they want me to do it, I start right off asking what the usage is going to be and I work up anywhere from an additional 50% to 200% above the assignment fees. I call it the big leagues and the clients in the big leagues understand usage fees. They pay you a creative fee (assignment fee) and then additional fees based on how the image will be used. A national campaign brings the client much more value from your creative work than a smaller or local campaign so fees will be higher.

So what types of clients can you charge usage for? I would say any client willing to agree and pay it. Now the hard part is determining who will pay it and who will not and I feel after 28 years in the biz, I have developed a good instinct on who I can bring the subject up with and whom I cannot. In this image here I was contacted by the owner of a venetian plaster business. The company had one employee, the self employed owner, and he decided to run an ad in a local homes magazine in a town of 50K. He called another photographer and got a day rate that was reasonable for the area, but a quote of several thousand more dollars in usage fees. The client called me. Here is a client who does not get it and rather than going and learning about usage, they call the next photographer. If the first photographer would have qualified the client he would have understood that this is a client is clueless to the concept of usage fees, and would have had the job.

Nike was a huge client of mine in the 90's and i shot about 1.2 million shoes for them (really rough guess), actually I just shot a lot of shoes until they opened their own in-house studio. Usage fees, at least while I was working for them, would not be considered in any form no matter what. I am not saying this is official policy, it is more that the photo director was looking for the best price. I am not talking about their ad campaigns shot through their ad agency, rather working client direct. The photo production line of shooting shoes. If I wanted the work, the images were theirs.

This tear sheet is from a shoot for a highly visible manufacturer of outdoor products. when I had my initial meeting with the ad agency, they told me right off the bat they wanted a 2 year usage. I gave them a quote to shoot the job and also a usage fee on top. No problem, they get it.

Renting your equipment or charging the client to use your camera and lights to shoot the job??? This is recommended by the pro organizations, yet I know very few photographers who can get away with this. If you need your car fixed, are you using that full service shop or are you considering the mechanic who needs to rent space and tools to fix your car? Remember: as much as we want to be paid for our creativity, we are in the service business and with all the competition, those who provide the best service for the best price are the ones to prosper.

I am by no means trashing the idea of usage fees, we need to charge for them when we can. The real point is the reality that they are not easy to get in today's market and you really have to qualify the client to determine if they understand and would pay it. Otherwise, it is very easy to price yourself out of some good assignments.

That's My Opinion!


shiv said...

that cleared quite few things out,thanks..!
but i usually always end up under-quoting so as to not lose the job,it'l take time to develop that know-how i presume...

Michelle said...

I work for an audit firm that specializes in working with nonprofits. We need to get some professional head shots for our company website. The photographer that we have gotten a quote from is going to charge us usage fees for each photograph that we put on our site. These fees renew every three years. Is this typical? We are a small firm in Tucson, AZ with only 10 employees.
Any feedback would be greatly appreciated.

Charlie Borland said...

This is common and also silly for a project like this. I can only assume that the photographer is really busy, and does not have an issue with appeasing clients. I also charge usage fees when I find a client who gets it, but not in a situation like this. I have had clients flat out tell me if I want the job they can use pictures as they wish and If I disagree they will hire someone else. For portraits, who cares about usage fees?

Candice said...

I find this very confusing. Why can't you just educate the client about usage rights?

How do you decide how much to charge if you don't follow industry standards?


contact said...

Hello Charlie,

thank you for your very valuable information. Where would I find photography usage guidelines? I'm
asking actual $$ numbers to calculate
the right amount of usage fee.

Thank you.
Avinash Pandey

lapetitephoto said...

Any client can claim they don't know anything about Usage Fees, because they don't want to pay for it. Although I agree to a certain extent your arguments regarding those that know and don't know, and not losing the job,etc., I do thin that the reality is, if we pander to this mentality we devalue our work and our right to license our intellectual property. I see your in the US, do you have anything like CAPIC in Canada, an organization that creates industry standards for things like Usage Fees? I think we should be giving lectures to business grads in Advertising and Marketing on Usage Fees and Intellectual Property Rights. Moreover, we should be trying to get that an industry standard. Otherwise, hire a student.

avinashphoto said...

"La petite photo"you have good points regarding usage.
After over 25 years in photography business I still constantly have to educate my clients about usage fees.
In reality I'm up front with a structure of my photography cost proposal.
Some clients just don't want to pay that extra money. Well, they are not worth receiving our professional services.

I get calls like saying "we are just a start-up company and we will use it only on the World Wide Web" etc...
WWW is instant International distribution and not just a small publication in our local news-paper.
If we want to make our living from what we like to do and honor our work, we need to ask for proper compensation!!
I don't know of any organization like CAPIC in US but I was member of one in Germany.
A legal organization who sets usage fee standards and supports the visual creator/creations would be good to have in the US.


Ashley Morrison said...

Interesting - because I don't ask people to hire me to do the work for them, I just ask them to pay me for this instead: - because that's all that most people are really interested in, i.e. what they will actually get for their money at the end of the day.

In other words, it's all about the value to them, rather than about the value to me - because beforehand, I'm just agreeing to provide them with some images to use, which I will own after I have created them... which is usually before they have paid me for anything.

So it's all about the usage, as far as I'm concerned, as that is what will determine the true value to them.