Pricing & Negotiating: Usage Extension of an Existing Lifestyle Library

Jess Dudley, Wonderful Machine

Original Shoot Concept: Real People Lifestyle Library License Extension

Licensing: 1-year extension for 48 images Web Collateral use

Photographer: Established Midwestern portrait, youth culture, and fashion specialist

Client: National For-Profit College

Here’s the quote:

When negotiating a given agreement, one is often faced with the challenge of balancing a client’s budget, their licensing requirements, and the intended use. As you no doubt have experienced, those three don’t often align. And just about as often, the client is resolute on the terms and unwilling to budge on any of those points. However when a negotiating window does open, I’ve found the limitation presenting the greatest upside on the backend is the duration, provided it’s short enough on the front end.

Certainly, there are instances when limiting the scope and image count can present a terrific opportunity for future revenue, and you should always press for limitations on those. But generally speaking, by the time we’re talking with a client, they’ve got a really good idea of how many images they need and how they plan to use them and aren’t likely to be open to limiting either. However, in spite of having a firm grasp on their intended usage, most clients can only anticipate, plan and budget for that use within a relatively short time horizon, typically a year or two. Beyond that, the additional duration they’re requesting is usually for peace of mind and not a concrete intention. This, combined with the facts that new budget is usually made available annually and the staying power of a given set of images is uncertain, clients are occasionally open to limiting the duration of use.

In 2015, I shared a post about a four-day library shoot, including unlimited use of the imagery for about 2.5 years. Just before the license was set to expire, we followed up with the client to see if they were interested in extending the usage. Unlike the initial agreement which included the license to all images, at this point the client was only interested in renewing the licensing to a subset of the library, 48 images, for just one additional year, and for Web Collateral use only.

Normally, we might have discounted the additional year along the same curve that we build out the majority of quotes (a doubling of duration yields a 50% increase in value, ie. 1year = x, 2 years = 1.5x, etc). Usually, that equation is applied on the front end when the value is less-than-certain to all parties. On the back-end, leverage shifts. Now the images are a “known quantity” and have enough value to the client to seek additional use. In this case, the approach we took was to simply prorate based on the original quote and duration, which came to $16,000 per year. Finally, we had to consider the pricing ceiling, which would be the cost to produce a new project substantial enough to generate 48 unique location-specific lifestyle images. It’s safe to say that would be considerably more costly than our re-use quote, so we weren’t in any real jeopardy of the client considering a re-shoot alternative.

Although it is becoming increasingly difficult, limiting licensing is an integral component of a sustainable commercial photography business model and can generate continual opportunities for residual income such as this. So keep pressing for limitations, on every project, and you may be able to generate these opportunities for yourself.

If you have any questions, or if you need help estimating or producing a project, please give us a call at 610.260.0200 or reach out. We’re available to help with any and all pricing and negotiating needs—from small stock sales to large ad campaigns.

Wonderful Machine

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