thinking about creative fee pricing
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mark lindsey
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PostPosted: Thu Oct 12, 2006 8:48 pm    Post subject: thinking about creative fee pricing Reply with quote

I was just thinking about Leslie's article about sliding percentages for pricing usage.

I was wondering why we ( as in national organizations such as apa and asmp) can't form the same type of structure for creative fees? A sliding percentage to cover the range of experience, difficulty or even the amount of creative input required by the photographer. All of this being based on the media buy just like the usage model?

If it's all based on percentages would this get under the legal restrictions?

any input will be helpful to us all I think....
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Leslie
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PostPosted: Thu Oct 12, 2006 11:32 pm    Post subject: Reply with quote

Setting the creative fees would be definitely price fixing and illegal.

The thing about leaving them variable and using the percentage based system for usage is that creative fees are generally much lower than usage fees (except for the very top shooters or extremely low usage) and they do not vary as widely. The difference between a creative fee of $1500 and $2500 isn't much when the usage is $10,000 more.

Also, I think leaving the creative fees variable will keep the feds off the price fixing hunt--they can be whatever anyone (theoretically) wants them to be.

Besides, creativity is not standardizeable whereas usage is usage. An image by Annie L. should, in "my" system, get the same usage fees as an image by me, but the creative fees would be quite different.

And, since so many photographers short themselves on usage, not the basic creative fee, this is a way to get total fees higher across the board.

-L
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mark lindsey
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PostPosted: Thu Oct 12, 2006 11:49 pm    Post subject: Reply with quote

OK, so here is what I don't get. If creative fees are almost always much smaller than usage fees then why are so many photographers so resistant to discussing them in detail?

I can't seem to even get the local photographers to discuss this with me. There has to be a better way for photographers to understand what they should be charging for creative fees. The best I can come up with so far is 10 year old apa info or very generalized info in books.

The worst part is knowing that without this information I will either be laughed out of the clients office, or be branded forever as the lowballer to go to when you don't want to pay anyone what the job's worth.
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Leslie
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PostPosted: Thu Oct 12, 2006 11:55 pm    Post subject: Reply with quote

Stop worrying about what others' creative fees are. It really should make little to no difference what they are billing. As long as your usage fees are not too low (and if they're percentage based, you'll be fine) there's little chance of you lowballing by accident.

Set your own creative fee based on your CODB and a factor for the creativity/signature style potential of each shoot. For example, if your CODB is $1000, you can set your minimum creative fee at $1200 (to give you a bit more) for stuff anyone could shoot. If the project is something requiring your signature style, make it $2500 or more if you want.

All of those are NOT including usage, of course.

-Leslie
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mark lindsey
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PostPosted: Fri Oct 13, 2006 12:04 am    Post subject: Reply with quote

thank you leslie, that's the first time anyone has given me any kind of numbers at all. I do understand that my own codb will be different from what you have stated, but at least it gives me somthing to start with in formulating my own fees.

again thanks
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Frank Nagy
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PostPosted: Sun Aug 24, 2008 12:20 am    Post subject: Reply with quote

Mark,

Don't underestimate your CODB! which by my last recollection (as things that computers do for me now) is based on the # of realistic days of shooting jobs (50 -100 per year?) lets say 50, divided into the yearly total of all your expenses (rent, equip- computers, software, and other items purchased or rented), cost of electricity etc. insurance, a small salary for yourself, taxes, and an amount for savings? A wise old school photog that I was assisting for once told me when I asked him, how he determines "creative fee or Photographers Fee" and usage. The min. he would take was his cost of doing business based on X number of days billable and estimated plus 30 % for expansion and "upgrades", his usage fee was based on how much it was worth to the buyer, their ability to pay and their realistic goals of the finished product. If it was a small company with a low budget and low expectations and limited usage doing it themselves , then the usage fee was significantly lower ( fair value for fair pricing ), but his CODB had to be always covered, the only exception was the work he did for real charities, but even then his hard costs always had to be covered.

A wise and gracious dude that I had the privilege of knowing, tried to live by some of that advice and I am still here after all these years, doing something I love and making a living at it without becoming a "bottom feeder"

Certain ethics are still essential in this world, and I am glad to see that many businesses are starting to realize that.
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Pjwarneka
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PostPosted: Fri Sep 05, 2008 8:35 pm    Post subject: Reply with quote

Leslie wrote:
Stop worrying about what others' creative fees are. It really should make little to no difference what they are billing. As long as your usage fees are not too low (and if they're percentage based, you'll be fine) there's little chance of you lowballing by accident.......

-Leslie


Leslie, From this older post, you mention " as long as your usage fees are not to low..." What methods are used to determine what your fees should be? What do you recommend using ?

if it is software, and everybody uses the same program isn't that a form of price fixing? < devil's advocate---sorry..

Thanks,

Patrick
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dougphoto
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PostPosted: Sun Sep 07, 2008 6:16 pm    Post subject: Reply with quote

Personally I've struggled with the same thing as well, when I charge what I think I should I loose the gig or go through many rounds of emails to get to a price. Lately I've been using John harringtings pricing structure he has on his site a starting point for my estimates, that way at least I know I'm not going crazy high or low.
http://www.johnharrington.com/dc-photographer-pricing/index.shtml
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Gordon Moat
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PostPosted: Sun Sep 07, 2008 7:34 pm    Post subject: Reply with quote

I think the percentage of placement (media buy) method is very straight forward, and eliminates much confusion. Usually this would be 3% to 5% of placement, calculated over the time of usage. However, I think this method does not work as well with web placement, since the rates are all over the place. The other downside is that if (for example) magazines drop page rates, then what you charge for licensing decreases with that magazine placement.

http://www.fotoquote.com is a survey based listing of typical rates for many types of image usage. This is another approach, though it might be low for some larger usages. Compare to the percentage method on each quote, and then choose a balance that fits your proposal. The idea is that the images have a value dependent upon how they are used to promote the product/service of a company.
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Leslie
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PostPosted: Mon Sep 08, 2008 3:28 am    Post subject: Reply with quote

Pjwarneka wrote:
Leslie wrote:
Stop worrying about what others' creative fees are. It really should make little to no difference what they are billing. As long as your usage fees are not too low (and if they're percentage based, you'll be fine) there's little chance of you lowballing by accident.......

-Leslie


Leslie, From this older post, you mention " as long as your usage fees are not to low..." What methods are used to determine what your fees should be? What do you recommend using ?

if it is software, and everybody uses the same program isn't that a form of price fixing? < devil's advocate---sorry..

Thanks,

Patrick


You are confusing USAGE fees with CREATIVE fees. They are two separate entities in my pricing theory. Creative fee is what you charge to create the image (NOT production costs--I mean the creativity and thought and expertise and artistry you bring to making the image); Usage fee is what you charge the client for the license to reproduce what you shoot.

If you base your imaginary minimum Creative Fee on your CODB for the time require for the shoot, your business will stay in the black. Your Usage Fee then becomes profit which you can re-invest into your business and/or sock away for crappy economic times when the phone doesn't ring.

Hope that helps--
Leslie

P.S. Doug--John's fees are very, very low for advertising projects. I would not go by them, especially for anything non-local. His experience is more editorial and corporate.
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lacunha
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PostPosted: Tue Sep 09, 2008 8:42 pm    Post subject: Reply with quote

Heres a link to a cost of doing business calculator. Its intended for photojournalists but its close. Give it a shot, you might be surprised.
https://www.nppa.org/professional_development/business_practices/cdb/cdbcalc.cfm
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Brent Ward
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PostPosted: Tue Sep 09, 2008 8:43 pm    Post subject: Reply with quote

lacunha wrote:
Heres a link to a cost of doing business calculator. Its intended for photojournalists but its close. Give it a shot, you might be surprised.
https://www.nppa.org/professional_development/business_practices/cdb/cdbcalc.cfm


This is a great calculator for CODB. I used it to determine my base creative fee.
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Pjwarneka
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PostPosted: Thu Sep 11, 2008 3:19 pm    Post subject: Reply with quote

Leslie and everybody,

I read your post. I have used the CODB software before. I figured my cost and I figure in a creation fee. I feel somewhat confident with those 2 things.

Maybe I am missing it, but Usage fees still throw me. (make up any scenerio) 1 photo for a magazine ad for 1 year usage or a photo for a billboard, whatever. like it was posted before is charging 3-5% of the placement $$ a good rule of thumb? is there a book that has general rates to start with? I have Johns H's book , just looking for more info.


I will re-read the thread, to see what i missed.
Thanks in advance.
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Leslie
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PostPosted: Thu Sep 11, 2008 3:35 pm    Post subject: Reply with quote

Unfortunately, there are no rules or real guidelines. It's illegal for the pro groups to set prices or even offer guidelines, so everyone is left to do the best that we can.

Many people hate the percentage method, but I really feel that in today's changing marketplace, it is arguable the most equitable and certainly is logical. Also, since so many photographers underprice (severely!) advertising usage rates, this system will increase fees for many, many more than it might lower.

I have a percentage breakdown in my first book as well, but if you have John's book, it's close enough so you don't need to get mine. I just don't like the prices he lists on his website--those tend to be way too low for advertising (funny--they don't match up with what he says in the book, but I think those he posts online are just "guestimates").

I do discuss pricing in some of my Creative Lube podcasts...I think around #10 or so (free, but donations are happily accepted!).

Good luck!
Leslie
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Pjwarneka
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PostPosted: Thu Sep 11, 2008 8:38 pm    Post subject: Reply with quote

Leslie,
Thank you, and thank you for everything you have posted in the last few years.....
I signed up on you email list.

I guess I need to figure out most of the possible factors that go into usage and take it from there.

Best,

Patrick
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Ashley
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PostPosted: Sat Mar 27, 2010 7:20 pm    Post subject: Reply with quote

Leslie wrote:

You are confusing USAGE fees with CREATIVE fees. They are two separate entities in my pricing theory. Creative fee is what you charge to create the image (NOT production costs--I mean the creativity and thought and expertise and artistry you bring to making the image); Usage fee is what you charge the client for the license to reproduce what you shoot.


I'm confused !!
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Last edited by Ashley on Tue May 18, 2010 3:03 pm; edited 1 time in total
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Leslie
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PostPosted: Sun Mar 28, 2010 4:06 pm    Post subject: Reply with quote

The entity that commissions the work pays the creative fee, just like they pay the production costs. And, of course, the license fee for the use.

If, later, another entity wishes to license the image (stock, essentially), they pay only the license fee.
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Ashley
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PostPosted: Sun Mar 28, 2010 4:15 pm    Post subject: Reply with quote

Leslie wrote:
The entity that commissions the work pays the creative fee, just like they pay the production costs. And, of course, the license fee for the use.

Leslie - are you talking about your images here or are you talking about their images here ?
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Leslie
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PostPosted: Sun Mar 28, 2010 4:26 pm    Post subject: Reply with quote

The images are (almost) always the photographer's. The copyright rests in the author of the images and that is the photographer, unless the photographer is an employee (a real employee) or agrees to assign the copyright or signs a WMFH agreement before the shoot.
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Ashley
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PostPosted: Sun Mar 28, 2010 7:07 pm    Post subject: Reply with quote

I fully understand that Leslie - but I personally found it hard to explain to clients, so as they would understand it.

So I just ask people to pay me for the use of my work, rather than to do the work for them.
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Last edited by Ashley on Sun Apr 06, 2014 9:12 am; edited 2 times in total
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