Licensing Images In Perpetuity Is A Huge Mistake

A reader sent me the following email:

I don’t mean to sound critical of your efforts to inform young photographers of proper business practices by publishing estimates like this one: http://aphotoeditor.com/2015/04/22/pricing-negotiating-studio-portraits-for-a-pharmaceutical-manufacturer/. It’s an important and useful service but, for the sake of myself and my fellow photographers who have to fight the tendency of clients to want more and more rights for less and less money, I have to point out that the licensing of these images in perpetuity without additional fees is a huge mistake and a terrible precedent to set. I have photographed numerous jobs very similar to the one you describe below. My terms, which I have negotiated without the benefit of a rep usually include significant fees to for re-use after one or two years. I am often able to double my fees this way and have not received resistance to that from pharma agencies despite the supposedly humble nature of a very profitable area of business.

This estimate, which gives a lot of rights away for nothing, may well make your photographers popular. Unfortunately, they will probably never own a home, send their kids to college, have decent medical care, or be able to ever retire – some pretty basic expectations, I think. Most responsible reps would agree that one has to make an concerted effort not to give away too much too easily, even in this ultra competitive environment. We have no union to protect us, just common business sense. Giving rights in perpetuity away for free is sort of like “feeding the animals” – they come to expect it.

Here’s an estimate from a similar type of shoot that was three day video and still shoot with a pre-light day.My producer and I planned the shoot out very carefully, provided the client with a lot of great still and video images, and we all worked our asses off for four long days. Most importantly you will also see that I made an additional $14,600 two years after that shoot. That was for another two years of usage and I am eligible to be paid again at the end of those two years. I think that the Wonderful Machine estimate is doing a real disservice to photographers by suggesting that it is fair and necessary to give such broad usage rights away for so little.

I hope this is helpful to you and our fellow photographers. I don’t consider myself a tough negotiator but I estimated this without the benefit of a rep. Any rep will tell you that a certain amount of intelligently applied resistance to client’s pricing pressure is the only way to stay in business. I realize that the photographer described by Wonderful Machine is “up and coming” but that degree of lowballing is terribly shortsighted and even desperate feeling. His fees are way too low when you consider the amount of time and talent required, the associated expenses and responsibilities, and the amount of usage by the pharma industry.

Neat Receipt-$3,400.00 Cash Transportation

Neat Receipt-$14.60 Cash Utilities

There Are 25 Comments On This Article.

  1. Thanks for sharing this, Rob. I totally agree, and we do always fight to restrict the usage as much as the situation/budget will bear, but occasionally, try as we might to negotiate, we’re presented with take it or leave it situations, which we leave up to the photographers to accept or reject. Would the reader be able to share a bit more about the production and how he/she arrived at these fees?

  2. I want to agree with this, but. But we’re in the customer service business – if you want to argue the original estimate was too low, sure, have at it. But if a client says “We want ice cream and if you’re not giving it to us, we’ll get it from person X,” you give them ice cream, priced accordingly. Right?

  3. I agree that it is a mistake. At the same time, agencies are asking for it more and more. See as an example ImageBrief.com, when I joined there were little to no RF requests. Now large known agencies are asking left and right for Royalty Free in Perpetuity for $250 an image. Worse thing is, they find the damn images from Joe or Jane out somewhere in the digital world.

    So how do we compete against this when the big agencies are going after them?

    I shoot mostly for the pharma industry, work has slowed down tremendously do to all this changes! Perpetuity being one!

  4. I am so glad someone pointed this out. I think this site has an amazing opportunity to share the true cost that go into estimating photography. But as the letter states, that estimate does an enormous dis-service to photographers and only further benefits clients and corporations. Creating photographs and then giving away the usage will guarantee a life without results. As the writer states “they will probably never own a home, send their kids to college, have decent medical care, or be able to ever retire” While creating photographs is fun, it is not a game. Take it seriously and plan for the future. You can bet the Phama agencies and corporations are only looking out for themselves.

    aPhotoEditor, you have an opportunity to truly help educate the un-educated. Thank you for that. Please do it responsibly.

  5. Pigs get fed. Hogs get slaughtered.

    To all the young photographers out there, decide for yourself if $12,000 in fees for 6 (admittedly simple) photos shot in one day is “way too low.”

    To the anonymous emailer. Its not the 90s anymore man. If you haven’t figured out how to run a more lean business, you’re going to start losing way more work to “up and coming” guys like this who carry less overhead, are probably more talented, and are definitely more efficient than any of the old heads still hanging around trying to milk every possible penny out of their clients.

    • Calm down there Mike. Let’s examine who is really exploiting who before accusing the victim. Do you really believe Fortune 500 global corporations are being exploited by photographers? If so, then I’m guessing you’ll be cheering for the winner of the race to the bottom.

  6. 8,400K per day, 2 year global usage – that’s good, especially that they came back to you for seconds! Awesome!

    But to be fair, respectively, there are too many questions here to consider that estimate on WM I saw lowballing by any means.

    What did you have to do logistically, and what creative humps did you have to jump to pull off your project? You also ran video – another set of skills, learning curve is steep –

    This cat was offered 12K to take some pictures of people on white. Not to downplay the whole “white seamless” thing, but I’m sure other people, or location photographers will agree with me that photographing people on white – as compared to other projects that have a wider much wider scope in strategy, we’ll it’s a bit easier on the ol’ brain. Which of
    course that has to play into the fee structure somewhat, I know it does for me!

    The most important thing I see here though is that they said they only had 40K to spend –

    Easy, walk backwards right, what’s that leave you for fee / usage? Since there’s not not much we can do with production costs once we have it, what’s that leave you left over? There you have it.

    You’re 28 years old, you’ve been assisting for 5 years, and you finally are hanging your shingle out as a pro. One year has passed, you’re scratching by because any of the money you do make you dump right back into your business, your only jobs have been editorial – when is it going to change? Then this comes along…. It’s a joyous moment. There’s so much flux with todays budgets, etc – Each project comes with a different hat – nothing is in stone -every single one.

    I agree with you that that fee for unlimited licensing is a bit low if this is for “big pharma” – But we just don’t know the whole story behind it and for that – you can’t say it’s lowballing.

    Depending on an outline of that “whole story” – I’d have totally done that job, and I’m 45, not struggling.

  7. Chris Lake

    I suspect classifying accepting $13,500 for a day of shooting people on white as a “huge mistake” would ruffle the feathers of those who must show up for “real jobs” to make a living.
    I understand the poster’s point, but the fact of the matter is that sometimes clients really do have a budget and must answer to lawyers and bean counters who have zero patience or inclination to “be educated” about usage rights. There are some jobs that are just there “as-is,” take it or leave it. They don’t give a crap about your “vision” and will easily find someone else with an octabank and white sweep. We don’t live in a perfect world. Maybe this guy really needed the money. Is he supposed to walk away and feed his family with his principles? Photographers work at many different levels, and what strikes one as a “desperate” fee might mean a couple months of survival for another – or, by the way, a significant part of his kid’s college education if invested early. Just saying…

  8. This is fantastic and a far more realistic estimate for the job. I have consistently been frustrated by the estimates that Wonderful Machine provides. I love their transparency and willing to share, but I feel like their numbers are continuously low.

    And thanks Rob, for posting this. I’m surprised the comments are overflowing. Is this an uncomfortable silence?

  9. While I agree that perpetual licenses might mean leaving money on the table in the future, the Wonderful Machine post does say, “The client type (big pharma company) and their need for perpetual use of all images captured definitely pushed the value up.” If the client asks for it, then in my mind I need to figure out a way to give it to them. if the price I come up with to do so makes them balk, then I’m happy to lower the price in exchange for a shorter term. But I’m not going to refuse to bid on a job just because the client wants perpetual use.

    Andrew
    http://subtlelightphoto.com

  10. That’s a very useful counter point. But I wonder if “Any rep will tell you that a certain amount of intelligently applied resistance to client’s pricing pressure is the only way to stay in business.” is exactly what was happening when the rep negotiated perpetuity; that the client wanted to come down a great deal in fees and the perpetuity of the usage is what kept the fees at what they were.

    As an up-and-coming photographer myself, I find the opacity of the bidding process incredibly stressful, so any and all views on the how-tos are so useful.

  11. I think this is a great response to this ever increasing issue. I am also an emerging up and coming photographer and doing my best to estimate jobs with 1, 2, or 3 year use. If a time frame is not specified I assume it’s one year and price it accordingly.

    When people push back I often explain it’s in their favor to create new artwork often since it keeps the brand fresh and relevant. Some get it but some don’t.

    • Thanks, Rob. This has sparked an awesome conversation.

      Any response from the reader who submitted this estimate? It would be great if he/she could shed a little more light on the concept, production and negotiations.

      Thanks,

      Jess

  12. We need to start seriously and openly discussing agency markups on production – something I suspect a lot of young and maybe even older photographers to be unaware of.

    I’m still pretty new to the ad agency game, so I decided to interview agency Art Directors, etc…. What I’ve recently come to learn is that just about every agency producing a photo shoot or television spot tends to mark the production up – as much as 20%. That makes me wonder with these agency bidding situations – is the budget already set and the agency just looking for the photographer who will allow the agency the largest possible markup? To say the least, I’ve become much more suspicious of this possibility, especially now that local and regional agencies are increasingly trying to cash in on production work by opening their own production departments. I highly doubt the artists working in these departments are getting paid the license fee the agency is surely charging the client. At the end of the day, a lot of agencies are struggling, and increasingly getting into whatever it is they can find that makes money – and media license fees are probably smack dab in their sights. Is the future working directly with clients and bypassing the agencies? It might be.

    • Making grand generalizations that every agency marks up productions is not only incorrect but makes paranoid photographers even MORE paranoid. Since you are new to the agency game, let me give you a little history. 20 years ago, agencies didn’t get paid fees for concepting, they got paid when a client bought a shoot or a TV spot on…the mark up. Today, fee structures are built into client contracts and agencies have to squeeze pretty tight just to get a budget to produce a shoot. Here is a another more accurate generalization, most Art Directors don’t know the first thing about how jobs get billed. True, agencies (and clients) and bringing production in-house. It’s cheaper, more efficient and allows more oversight and control in many cases. Of course photographers bypass agencies direct to clients all the time. Do the legwork, find out who the CMO is and start working the phone. Hopefully they won’t just hire their cousin who has a camera to shoot the job you bid on. The struggle for rights control is on-going and the market will likely determine the outcome. Right now, usage rights are going the way of video. Photographers getting into the motion game are learning quickly that production savvy agencies and clients are used to owning their footage and don’t see any reason to change. Usage rights are not a god given right of every photographer. Get them while you can but in this age where every Instagrammer is your competition, you might have to be the one who adapts to survive.

    • Agencies aren’t going anywhere. Sure, they’ll change as everything does, but many clients just don’t have the need or means to hire the level of creative they can get from agencies.

      No doubt that many clients see agency fees as a big thing to cut from their budgets. But they return because direct client work tends to be very dull and poor executed. Good luck getting that marketing assistant to understand why no, you can’t shoot 5 locations in a day.

  13. As a filmmaker who occasionally shoots stills along with video I find these articles intriguing. There is no licensing for video. Everything is in perpetuity, including the stills I shoot AND the stills they pull from the video. At the end of the shoot I hand over a hard drive of footage with no idea what other projects the client may use the footage for, no opportunity to delete bad takes or color correct the footage. This seems anathema to stills guys but de rigeur for video. As more still photographers add motion to their capabilities I wonder, have you guys had luck getting the client to pay license fees for video? Do you do a license fee for stills but a perpetuity deal for video?

  14. How are talent agencies getting affected by these demands for all rights? I know they operate in a manner that is very similar to photographers – use based pricing.

  15. Robin Hood

    First mistake is dealing with Wonderful Machine. They “represent” about 750 photographers at present. I suspect few are actually getting work but, they’ve created a wonderful business model where you feel left out of the cool kids club if you don’t join up. Wonderful Cash Machine for the owners, not so much the photographers

    Second mistake is joining Image Brief. Yes, have seen the same rubbish rates from “A huge International Agency” looking for a “three armed woman on a Pantone 243 background looking slightly left while grimacing towards the 16.4 inches of copy space to the left of her head and wearing a pink Japanese Army uniform circa 1941” certainly the kind of image we all have “in stock”.

    They’re asking for these rates and rights because they can get them. Easily. Bottom line is, if you’re paying to play, paying to submit, paying to belong, shooting stock or shooting spec, you’re part of the problem not part of the solution. What photography needs right now is about 1 million fewer photographers (or guys with cameras) and a union, guild etc to enforce minimum pricing.

    • Photographers are not organizable under a union. Every time a photographer says this, I always imagine a CEO telling another CEO “we need a union for CEO’s”. Never gonna happen. You own a business – and if you are really successful in this business, employ other people. Unions are for employee’s – if one ever came to be in this industry, YOU are the one it would likely target. The fact that so many photographers can’t grasp this simple reality only illuminates the bigger issue: failure to understand the most basic aspects of business.

      • Robin Hood

        Chris,

        Are your comments directed at me? Are you implying I “fail to grasp the most basic aspects of business”? If so, I’m afraid you’re quite wrong. I have a Masters in Business and a couple undergraduate degrees (including one in industrial relations). I’ve also run a couple successful businesses over the past 20 years. Enough of my resume but, if your comments are directed to me, I think I do in fact have a better than average grasp and your comment in general is pretty broad.

        I do believe you are right though in that photogs can’t actually organize a union. Though, to be honest, I’m not sure why, independent tradespeople such as electricians, plumbers, etc etc all do, even when they operate their own business. I suspect this is because these are recognized trades and photography is not so the government is reluctant to let just anyone create a union.

        Regardless, I spoke too vaguely in my original comments anyway. A union wouldn’t be the correct structure for myriad reasons, more of an association or a guild similar to SAG or the Directors Guild or a governing body like medical practitioners operate under. They’re not perfect either but, something that enforces minimum standards (and fees) and seeks to become the central certifying body for professional photography. A high bar to be sure but, some sort of solution is getting near crucially needed if we are to preserve photography as a viable business.

        Supply has far outstripped demand and the number of people with cameras who are desperate to become photographers or, worse still, the number who are happy to “support their hobby” with a few micro stock pennies, don’t realize they’re doing two things, making the owners of stock portals fabulously wealthy and destroying the chance that it will be possible for any single photographer to make a sustainable living again. Shutterstock is now a public company so, have a look at their most recent financials to get a sense of how much money they are making for their shareholders (of which I’m one). Compare that to the few hundred bucks a year or less that the vast majority of contributors actually get. Crowdsourcing takes money from the crowd and gives it to the 1%ers and the buyers get their fix of cheap goods with little thought to the consequences. Further, stock agencies and companies that pretend to be your agent or spec stock entities are all peddling a dream. The imply is that if you don’t play with them, you’ll miss out on the possibility of a big sale or that you’re not really in the game and too many people are falling for it. You can’t build a career on the hopes you’ll win a lottery every month.

        Want some real business advice? The best way to make money in photography is to sell stuff to photographers who think they need it to make their business successful.

  16. Robin Hood

    Sorry, one other thing, your comment about a CEO’s union is wrong for a couple reasons, one, there are a number of associations dedicated solely to CEO’s that meet regularly and there are a huge number of high level opportunities (Davos being significant) where top CEO’s meet and discuss strategy to their mutual benefit.

    Rest assured, CEO’s are very well organized and, unlike photographers, they seek to charge the maximum possible for their product while paying as little as possible for their inputs.

    Photography is an input cost…….

  17. Who gives their clients photo rights for in perpetuity. You’d have to have no business sense to do this. I didn’t read the entire original article but if that’s the case it’s a photographer or rep who has no idea what they are doing. You NEVER give all your rights away. Any experienced rep will tell you that. What you do is license your images for a time definitive time period.