General Guideline / Protocols on Usuage License Renewal

 
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ronald n. tan
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PostPosted: Fri Sep 18, 2009 9:29 pm    Post subject: General Guideline / Protocols on Usuage License Renewal Reply with quote

Hello sirs and ma'ams:

I appear before you all humbled and would appreciate any thoughts and insights regarding usage license renewal.

What is the protocol?

Is there a certain percentage formula? For example, the renewal usage fee for the next year is x % of the original usage fee?

Or is the renewal license fee the same amount as the original usage fee?
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Leslie
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PostPosted: Sun Sep 20, 2009 2:02 pm    Post subject: Reply with quote

There is no logical reason that the same usage should be LESS money. If you combined your fee, take out the creative part and just charge the usage for a re-licensising.
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Ashley
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PostPosted: Sat Mar 27, 2010 1:05 pm    Post subject: Re: General Guideline / Protocols on Usuage License Renewal Reply with quote

ronald n. tan wrote:
Is there a certain percentage formula? For example, the renewal usage fee for the next year is x % of the original usage fee?

Yes.
The Association of Photographers (AOP) give guidelines here - http://www.beyond-the-lens.com - in Chapter 5.
"These are not recommendations, but are provided as guidelines for negotiation based on current trade practice."

This is the system I use when negotiating fees.
It's logical, works well and most clients are happy with this sort thing.

Example based on the Licence fee per image being 100.00
1st Year: 100.00 -0% = 100.00.
2nd Year: 100.00 -25% = 75.00.
3rd Year: 100 -50% = 50.00.
4th Year: 100 -75% = 25.00.
5th Year: 100 -75% = 25.00.

N.B. The AOP's guidelines suggest 2nd year to be 100% of the 1st year fee and 3rd year to be 50% of 1st year fee.
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Last edited by Ashley on Sat Mar 27, 2010 4:55 pm; edited 1 time in total
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Leslie
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PostPosted: Sat Mar 27, 2010 4:43 pm    Post subject: Reply with quote

The system of reducing usage fees over time ONLY makes sense if you billed your creative fee with your usage in a combined fee in the first place. If you separate out your creative fee from your usage, then, logically, the same usage has exactly the same value and cost-- not reduced.

If the client buys a billboard for one year and then at the end of the year wants to buy it again, they will NOT get a discount from the billboard media company. (If they buy two years at the beginning, yes, they will, but not if they buy the space separately as I just described).

If the billboard is the same cost why should the fee to use your image on that billboard be any less than the first year?

-L
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Ashley
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PostPosted: Sat Mar 27, 2010 5:01 pm    Post subject: Reply with quote

Leslie wrote:
The system of reducing usage fees over time ONLY makes sense if you billed your creative fee with your usage in a combined fee in the first place. If you separate out your creative fee from your usage, then, logically, the same usage has exactly the same value and cost-- not reduced.


Would agree.

We only ask people to pay us for the use of our work, which keeps it simple for them to understand - rather than ask them to pay us to do the work and then pay us more for the use it, which I've found most clients don't understand or like the sound of.

So the 1st years use would need to include what we would need to charge to cover our basic production costs - which obviously then each additional years use wouldn't.
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Last edited by Ashley on Sat Jun 21, 2014 12:24 pm; edited 3 times in total
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Ashley
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PostPosted: Sat Mar 27, 2010 5:16 pm    Post subject: Reply with quote

Leslie wrote:
If the billboard is the same cost why should the fee to use your image on that billboard be any less than the first year?


I think the AOP's logic behind such a discount each additional year, is based on the thinking that each additional year, after the 1st & 2nd year, the impact of the image is reduced. So the value to the client, in terms of results, would be reduce... so you give them a discount as a result.

But... as stated in their book: "These are not recommendations, but are provided as guidelines for negotiation based on current trade practice."
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Last edited by Ashley on Fri Feb 18, 2011 10:21 pm; edited 1 time in total
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Mike
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PostPosted: Sat Mar 27, 2010 9:03 pm    Post subject: Reply with quote

Ashley wrote:
Leslie wrote:
If the billboard is the same cost why should the fee to use your image on that billboard be any less than the first year?


I think the AOP's logic behind such a discount each additional year, is based on the thinking that each additional year, after the 1st & 2nd year, the impact of the image is reduced. So the value to the client, in terms of results, would be reduce... so you give them a discount as a result.


Seems to me that if the images is strong enough for the client to use year after year the value to them is increasing as the image becomes closely associated with the client or the value remains the same, not decreasing. If by some odd reason they want to use it for 5 or 10 years you could get down to being paid almost nothing.... Shocked
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Ashley
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PostPosted: Sat Mar 27, 2010 10:26 pm    Post subject: Reply with quote

Mike wrote:
Seems to me that if the images is strong enough for the client to use year after year the value to them is increasing as the image becomes closely associated with the client or the value remains the same, not decreasing. If by some odd reason they want to use it for 5 or 10 years you could get down to being paid almost nothing.... Shocked


"These are not recommendations, but are provided as guidelines for negotiation based on current trade practice."
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Last edited by Ashley on Fri Feb 18, 2011 10:21 pm; edited 1 time in total
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Mike
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PostPosted: Sun Mar 28, 2010 1:47 am    Post subject: Reply with quote

Ashley wrote:


"These are not recommendations, but are provided as guidelines for negotiation based on current trade practice."

So if you feel strongly enough about the value of your images Mike, then it's 100% your call - to negotiate the fee based on what you believe is a fair price.

As for the Period of use, according to the AOP, the normal commercial value of an image is about 5 years.
"Each year up to a 5 year shelf life" is their words.
Again, it's just a guideline based on current trade practice - which you may find useful.

I personally find these guidelines very helpful when negotiating a fee - beats plucking numbers out of the air and / or guessing - when talking to a client.

How you use this information is 100% up to you.

Added Note: The AOP are based in London, so their guidelines are mainly aimed at Photographers based in the UK & Ireland, who seek guidance.


Of course it is 100% up to me or whomever to decide how to use this information, that's the nature of the internet, take a look at a bunch of information from various sources and pick and choose what works for you.
My usual work has a shelf life of 3 years so I don't really have to deal with this exact situation. Although one image I shot in 1984 is still being used, and I am not getting paid as I was young and stupid....

I know this is a rare event but if an image became iconic like the photo of the guy on the Folger's coffee label it would not make sense to get 25% of the usage fees when the client's brand is built around the image... I'm just askin...
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Ashley
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PostPosted: Sun Mar 28, 2010 11:22 am    Post subject: Reply with quote

Mike wrote:
Although one image I shot in 1984 is still being used, and I am not getting paid as I was young and stupid....

I know this is a rare event but if an image became iconic like the photo of the guy on the Folger's coffee label it would not make sense to get 25% of the usage fees when the client's brand is built around the image... I'm just askin...

Hindsight is 20/20.

Plus, are you talking about negotiating the fee and deal here before you are given the opportunity to create the image or our you talking about negotiating the fee and deal here after you have already created an image that they want to use ?
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Last edited by Ashley on Mon Apr 07, 2014 7:25 am; edited 1 time in total
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shanekislack
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PostPosted: Sun Mar 28, 2010 10:57 pm    Post subject: Reply with quote

Ashley, I agree that an image will not have the same impact on the public as it did when it was first shot. So in that, you are correct in that it should be valued less...in that regard only.

However, everything I've read points to an additional consideration. The client needs an image for an additional amount of time. And since they used your image before...they need YOUR image again. You are the only one that can provide that image and that image is the only one they want to use. There is value in that. Now, no one here would condone screwing a client because you've got them by the balls, but I think most would agree that the value of that particular image, since it is a one of a kind, makes up for any lost impact it would have. So it would be a wash.
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Ashley
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PostPosted: Sat Jun 21, 2014 12:41 pm    Post subject: Reply with quote

shanekislack wrote:
However, everything I've read points to an additional consideration. The client needs an image for an additional amount of time. And since they used your image before...they need YOUR image again. You are the only one that can provide that image and that image is the only one they want to use. There is value in that. Now, no one here would condone screwing a client because you've got them by the balls, but I think most would agree that the value of that particular image, since it is a one of a kind, makes up for any lost impact it would have. So it would be a wash.

I know it's been a while but I just wanted to reply to this:

I would agree with you, however, the Licence fee for the 1st years use or for the 1st use of your work, would normally need to include your basic production costs; whereas, the Licence fee for each additional years use or for the additional use of your work, would not need to include these costs.

So one would therefore normally charge less for the 'additional use' of your work as a result.

Plus if they agreed to pay for 10 years use today, rather than for 1 years use at a time over the next 10 years - then again, would normally give them a discount as a result.
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