What Happens When Photography Becomes A Commodity?

by A Photo Editor on September 19, 2012

 I believe much of photography is already a commodity and I plan to speak about it during the ASMP Symposium next Thursday the 27th in New York at the Times Center. The topic for the event (more details here) is “Sustainable Business Models: Issues and Trends Facing Visual Artists” which is a topic I’ve been thinking and writing about since I started this blog. the ASMP goes on to say “the rules of the game have changed and it’s no longer business as usual in today’s crowded visual arts marketplace” which to me leads to an obvious conclusion: photography is a commodity.

Commodification is a scary thought. It means you are competing on price and racing to the bottom.
Ok, so that’s the bad news. But, there’s an upside. Before we get to that, let’s destroy this cliché that I hear all the time how “photographers brought it on”, because they didn’t do something to prevent it. All the bitching and whining about weak willed photographers who wont hold the line and clients who wont pay the fees. Commodification is a natural market process. You cannot stop this.
To see the upside you need to take a more nuanced view of photography. You need to consider photography services a value chain and the act of taking a picture, what I like to call being a “camera operator”, as one part of this value chain. You also need to understand that commodification occurs when the improvements to a product overshoot the needs of the client. Better equipment and techniques matter little to the majority of clients. There will always be exceptions, but sadly, it seems we are all past the point of good enough (even if in some parts of the industry good enough is distirbingly low). Nevertheless, don’t dwell on it. Technology that blew your mind ten years ago is now completely commodified. It can’t be stopped.

The upside is that if you have commodification, somewhere else in the value chain a reciprocal process of de-commoditization is at work. In the book I’m reading now (The Innovator’s Solution) author Clayton M. Christensen goes on to say that “commoditization destroys a company’s ability to capture profits by undermining differentiability, de-commoditization affords opportunities to create and capture potentially enormous wealth.”

You just have to find the spot in the value chain where performance is not yet good enough, where you can differentiate yourself by being better than the others. Exciting, right?
I have lots of thoughts on this that I will get into during the symposium but here’s one simple observation.

Not too long ago your personality mattered little in photography. You could be the most abhorrent dick-wad and land all the work you wanted if your photography was awesome. I see plenty of evidence now that this is not longer possible. An art director I sat on a panel with even said “the top 5 photographers for a car shoot are all qualified to do the job. it comes down to personality as to who will get the job” Personality is one tiny part of the value chain, but it’s now more important than the photography. That’s astounding.

Sad if you enjoy operating cameras, but very exciting if you enjoy the entire value chain of photography services. My favorite photographers to work with have always been the creative problem solvers. Now I can clearly see the de-commodization at work.

Pepsi Final Art

Athletic Shoot for Getty Images.

Perhaps Many Photographers Don’t Understand The Value Of Usage

Sited from A Photo Editor.com By Rob Haggart.

A reader sent me this story, so that it might instill confidence in young photographers like herself. I think you will find that it does that:

I worked with one of the local college’s ex-students on a shoot for a magazine editorial about a year ago. The ex-student lied about having my permission and gave the image to the college, which then used the image on a billboard advertisement that wraps around a 20 story building on a very busy road in the city. It is a recognizable image of mine, and shows the faces of two models from a local agency. It was actually one of the models who spotted it first and I received a very embarrassing phone call from her agent who asked me how that shoot ended up on a billboard.

I went online and researched some suggestions of how I could handle this, but I couldn’t find much available. Crawling through some forums, I found that a few photographers had their images stolen and placed on a billboard, and they charged $500 for the use. The billboard was already up there for 1.5 months and it was supposed to be up there for 3 months total. I called the model agency and they told me that they ended up with $1500 for each girl for a year’s usage. They said that they knew the figure was low, but at least they would receive some pocket money.

I also consulted with a couple of local creative agencies who also offered some advice. They were helpful at first, although once they started talking to the college they decided to back off. I think they probably thought it wasn’t worth it (despite that I offered them the incentive of a commission). They were perhaps scared of losing a potential client over a nobody photographer like me.

So I spoke with the college directly and they asked me to come in to discuss this and negotiate a pay-out. I didn’t want to go in – I couldn’t see a reason to apart from them using this opportunity to intimidate me. They were a little manipulative over the phone, suggesting that my photograph would potentially be featured there for 12 months and it would be great exposure for me if I didn’t charge too much. I offered them $1500 per month, which they thought was ridiculous (I thought what they paid the model agency was ridiculous!). They told me the billboard space was only costing them $2700 per month. So I said I’d seek further advice and come back with a figure. They were desperate to get me to come in.

After much research, I found that it’s tricky to put a price on usage. I found the best advice to be 10 – 30% of the marketing budget (from small to large scale). In this scenario, they hadn’t commissioned this shoot and it wasn’t just about using my image, it was also the humiliation I went through explaining to my team members (particularly the model agency) how the image got into the advertiser’s hands. It also concerns the disassociation of my image to me (now known as the face of that college and it impacts my professionalism – even the creative agency that I sought advice from assumed I stupidly gave the files to the college (I had given them to the ex-student to use for his portfolio).

So I went with my gut instinct, and ended up charging them a figure that I thought was fair. I wrote them a letter a week later, explaining my situation, the inconvenience this has caused me, my humiliation to those involved, and that I thought after all this the figure was fair. I stuck with this:
2.5 months and they take the image down – $1500 per month = $3750
3 months – $1500 per month, $4500
12 months – $1250 per month, $15000

In the end, they decided they wanted my image for 12 months. After a few emails back and forth, I ended up settling on $9000. That’s ok, it’s a little less than what I was asking for but it’s a little more than 30% of their budget for the billboard space, I didn’t want to pursue this any further so I was happy to settle on that. They even offered me the incentive for future work with them.

After a google search, it seems like this problem occurs often and perhaps many photographers don’t understand the value of usage.

Photo Biz: Do Your CODB to Create Your Pricing

Being in business as a photographer, you have to know your CODB, because that’s how you set your Baseline Creative Fee (BCF). If you take jobs that are below your CODB, you are operating at a loss. You should also do your CODB every year to make sure you’re staying on track and to set sales goals.

In a very simple formula, this is how you calculate your CODB:

(YOUR SALARY + YOUR EXPENSES) ÷ SHOOT DAYS PER YEAR = DAILY CODB

Fortunately, there’s an easy way to calculate your CODB and it takes less than 30 minutes to do. You will need two things: Your Profit & Loss Statement from last year and NPPA’s Online CODB Calculator. If you use accounting software like Quickbooks (PC / Mac) or AccountEdge (Mac), it’s really easy to generate you P&L report. Make one and print it off. Then click over to NPPA’s Online CODB Calculator.

For this exercise, I’m using some numbers that I would consider to be average for an emerging photographer in a medium market (i.e. not NYC or LA) and is making a living solely from their photography. This photographer wants to make $50,000 a year, has a small office, no employees, no family to support, and someone who shoots a mix of editorial, commercial and stock. Let’s assume they will shoot 50 billable days in a year (that’s around 4 shoots a month). Here’s how there CODB breaks out. Note: CODB should be calculated on business expenses, not shoot expenses. So leave out any reimbursed expenses like assistants, travel, food, etc.

Click to Enlarge

If we plug these numbers into our formula, it looks like this:

($50,000 + $44,930) ÷ 50 = $1,798.60

$1,800 is their CODB. So, if this photographer shoots any job that pays less than $1,800, they are losing money. Pure and Simple.

So, now that we know the photographer’s CODB, here are some methods to create a fee structure.

Creating a Fee Structure Based on CODB

It’s been my experience that every assignment is different and your fees need to flexible to accommodate the needs of the job and your client’s budget. I have found three good ways to create your creative fee:

1. A Day Rate
2. A Sliding Scale Per Shot Rate
3. A Project Rate

There’s no one way that works better than another. If the number of shots is very specific, a per shot rate works best. If the number of shots is unknown, but you’re going to be on location for 10 days, then a day rate is more suited. If the shoot is documentary style project where you’ll be shooting a small number of times over various weeks, then a project rate makes more sense.

Using the example photographer’s CODB of $1800, your Baseline Creative Fee (BCF) would be:

1. $1800/day
2. $450/shot*
3. $1800+/- project

The day rate is pretty straight forward. You shoot three days, you charge for three days. The project rate is trickier to figure out because you have to predict how much time you will spend doing the project. Make sure you get as much info before you start shooting. *The per shot rate would get very expensive if you did 20 shots in a day. So, that’s why I do that on a sliding scale:

	Price Each	Rounded	Range
1-3 Shots	$450.00	$450	$450	$1,350
4-9 Shots	$315.00	$325	$1,300	$2,925
10-14 Shots	$252.00	$250	$2,500	$3,500
15-20 Shots	$226.80	$225	$3,375	$4,500
21+ Shots	$204.12	$200	$4,200+

Using any one of these methods is how you create your Baseline Creative Fee (BCF).

Baseline Creative Fee + Usage Fees

I like to think of the BCF as your local rate. The usage included with that rate would be something like the following:

Use in any marketing materials distributed to a targeted audience. Includes use in printed brochure, catalog, annual report, public relations and sales material. Also includes electronic (PDF) versions of the original printed uses. Use in any web and electronic media for advertising and promotional purposes including website, web banner ad, promotional email and mobile ad.

Side note: check out PLUS Packs if you need help writing your usage terms.

The usage above is basically everything a local client is going to use your photos for. If they do advertising as well, you may want to charge a little more, like 10%.

There are four basic types of clients: Local, Regional, National, and Global. Here’s how I would handle the usage fee markups based on a BCF of $1,800.

• Local Web & Marketing Usage: $1,800
• Local Ad, Web, & Marketing Usage: $1,800 x 1.1 = $1,980
• Regional Web & Marketing Usage: $1,800 x 2 = $3,600
• Regional Ad, Web & Marketing Usage: $3,600 x 1.5 = $5,400
• National Web & Marketing: $1,800 x 10 = $18,000
• National Ad, Web & Marketing Usage: $18,000 x 1.5 = $27,000
• Global Web & Marketing: $1,800 x 20 = $36,000
• Global Ad, Web & Marketing Usage: $36,000 x 1.5 = $54,000

So, there it is in a nutshell. Please remember, this is a guide and it’s more to illustrate that doing your Cost of Doing Business is vitally important to being in business. Use this example as a way to wrap your brain around what your creative fee should be and why it costs more for Pepsi to use your photos than it does for the local mom & pop shop. There’s always room to negotiate, too. Don’t live and die by these numbers.

I will say that ever since I standardized my pricing, I’ve gotten more jobs that pay better. It’s also made creating estimates a lot easier, because I charge what I need to charge to stay in business. I also feel good about passing on jobs that don’t pay my CODB, because that gives me time to market to jobs that will pay 10 or 20 times my CODB.

(YOUR SALARY + YOUR EXPENSES) ÷ SHOOT DAYS PER YEAR = DAILY CODB

Lincoln Barbour has a great post on Cost of Doing Business for Photographers.

Being in business as a photographer, you have to know your CODB, because that’s how you set your Baseline Creative Fee (BCF). If you take jobs that are below your CODB, you are operating at a loss. You should also do your CODB every year to make sure you’re staying on track and to set sales goals.

In a very simple formula, this is how you calculate your CODB:

(YOUR SALARY + YOUR EXPENSES) ÷ SHOOT DAYS PER YEAR = DAILY CODB

Fortunately, there’s an easy way to calculate your CODB and it takes less than 30 minutes to do. You will need two things: Your Profit & Loss Statement from last year and NPPA’s Online CODB Calculator. If you use accounting software like Quickbooks (PC / Mac) or AccountEdge (Mac), it’s really easy to generate you P&L report. Make one and print it off. Then click over to NPPA’s Online CODB Calculator.

Not only discussing how to calculate it but also how to base your fees on it. Go here to read the post.

How Long Until Pinterest Is Sued Into Oblivion Like Napster?

Pinterest, the hot new social sharing platform has a serious problem when it comes to the medium it’s designed to share. Despite careful wording on their about page that you agree not to post, upload, publish, submit, provide access to or transmit any content that infringes, misappropriates or violates a third party’s copyright… many (most) of the images on the site do just that. Several lawyers have weighed in on the controversy advising:

“…you should never pin an image on Pinterest for which you don’t own the copyright interest or for which you have not obtained a license from the copyright owner.”

– Jonathan Pink, a California-based intellectual property lawyer with Bryan Cave LLP via, WSJ.

Federal copyright laws give the author of any copyrighted work (which includes photographs and copyright attaches automatically as soon as the work is created) the sole and exclusive right to publish and reproduce such work. So, basically, when you see a photograph that you love, you do not have any right to publish or reproduce that photograph unless you took the photo or got consent from the photographer to use the photo.

…in my humble opinion, the only “safe” conclusion here, for me, is to either get off of Pinterest or pin only your own work or work you have a license to use.

– Kirsten Kowalski via, ddkportraits.com

If that’s not enough, Pinterest CEO and co-founder Ben Silbermann has completely deleted his boards: http://pinterest.com/ben/ even though he was named #2 in a list of 21 must follow Pinterest users on mashable.com.

On the flip side we have a very exciting way to share photography that some photographers like:

Photographers need to look beyond their own nose when it comes to social media web sites and copyright concerns. I’ve written about a fair number of photography rights grabs here on my blog and there have certainly been cases where there have been egregious violations of copyright that photographers should have been concerned about. By and large Pinterest has not proven to me they fit in that category. In addition social media web sites and the Internet as a whole are great tools to be exploited by photographers. Don’t be afraid of having your work seen. If you look beyond your own nose you’ll see these new tools and sites can be creatively applied to enhance your business versus kill it. Being creative isn’t just about taking photos its about creatively enabling your work to be found.

– Jim M. Goldstein via, Pinterest – Seeing beyond your own nose

I even have it on good authority that top creative directors are actively pinning and competing to have the most creative boards. My source tells me that it’s not impossible to imagine a future where your pin board is part of your resume.

So, I agree that there’s potential here to make a great service for sharing, driving traffic to, and bookmarking photographers. But they just haven’t figured out how to do it without running afoul of copyright laws.

Then there’s the separate matter of their heinous terms:

We may, in our sole discretion, permit Members to post, upload, publish, submit or transmit Member Content. By making available any Member Content through the Site, Application or Services, you hereby grant to Cold Brew Labs a worldwide, irrevocable, perpetual, non-exclusive, transferable, royalty-free license, with the right to sublicense, to use, copy, adapt, modify, distribute, license, sell, transfer, publicly display, publicly perform, transmit, stream, broadcast, access, view, and otherwise exploit such Member Content only on, through or by means of the Site, Application or Services. Cold Brew Labs does not claim any ownership rights in any such Member Content and nothing in these Terms will be deemed to restrict any rights that you may have to use and exploit any such Member Content.

Facebook has similar terms:

For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

And so does Twitter:

By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).

My prediction is that before they get sued into oblivion they will figure out a reasonable way to get it to work. But for those who think whiny photographers or outdated copyright laws are to blame, I’ll leave you with one last set of quotes to chew on:

For the first 1,500 years of the last two millennia, man was generally poor. Though there were empires and kingdoms, the gross world product (GWP) was largely flat. For generations, people did not experience any major change in their living standards.

And then something changed: the Western world introduced stronger property rights, including intellectual property rights, which allowed people to pursue new ideas, firm in the knowledge that success could bring financial rewards.

Today, all of the contemporary advanced economies have strong property rights, and data shows a strong correlation between property rights, productivity, living standards and innovation.

via Ndubuisi Ekekwe – Harvard Business Review.