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Let’s Create a Two-Tier Pricing System for Stock Photography
Posted By Jim Pickerell On April 15, 2010 @ 12:04 am In Stock Art and Photography | 14 Comments
If stock photography as a profession is going to survive, we’re going to have to find a way to develop a two-tier pricing system. One tier would be for commercial use of images and the other for personal and small use.
Microstock sellers have proved in the last few years that there is a huge group of customers out there who use images for personal and very small business uses. They will pay something to use images, just not very much. The problem with microstock sites is not that they sell images to these customers; it is that they sell image files to large commercial users for the same low prices they charge those with small budgets.
Small Use vs. Commercial Use
I don’t think professional photographers can ignore these small and personal users. Given the way the market is currently working, a huge percentage of the customers who formerly purchased their images from professional sources are now turning to the amateurs and the low-priced sources for the images they need.
It seems to me that the key to maximizing revenue from both the personal and commercial customers is to clearly define who qualifies as a small user and price for each group separately. That said, let me make a stab at defining small users:
If we can define such uses precisely and in simple enough terms, I believe we have a chance to develop a sustainable business model that will allow professionals to profit from their efforts.
No matter how well we define “small use,” there will always be some stealing and unauthorized use — maybe a lot of it. But if you get paid for some use, isn’t it better than nothing?
Consider all the people who are paying to use microstock images when, if they worked a little harder, they could probably steal them. The trick is to find the price point where it makes more sense to acquire the image legally than to steal.
Even if we had a very strong copyright law (I’m not holding my breath), it is never going to make economic sense to try to collect from the small user for unauthorized use. Therefore, let’s try to find a price point where it makes more sense for the customers to pay rather than steal, and for photographers to get as much as possible from these users.
The iPod did it with music. It is possible with photography.
On the other hand, it will still be worthwhile to go after a commercial user who uses an image without properly licensing it. PicScout’s  ImageTracker and ImageExchange system will make it very simple for customers to know if they need to license an image, no matter where they happen to find it.
On the commercial side of the business, at least, this will make it much more difficult for image users to claim they couldn’t find the owner or didn’t know they had to license rights.
Defining Small Use
Let me suggest possible definitions for the various small and personal uses.
Personal blog or Web site
Any blog or Web site created for personal use or to promote a small business with fewer than 10 employees. Larger corporations would fall under the “commercial” category and have to pay a higher price for such uses.
Any student use for a report or personal use.
If the image is used in a classroom presentation that is prepared by a single instructor, it falls into this category. However, if the image is used as part of a presentation that is prepared by a large publishing company or school district, it should be licensed as at a commercial textbook/education price.
One of the things to consider here is whether to limit the file size within this definition so the images are only satisfactory for Web, PowerPoint and very small brochure uses. Some religious organizations produce large posters and wall art for their classrooms and maybe it makes sense to charge more in such instances.
This can be a difficult one. Such presentations are used on and off the Web. They are used by large corporations and individuals giving a single presentation to a small group. It may be better to give the corporations a break on this one and say any PowerPoint presentation. It could also be limited to personal use and organizations with fewer then 10 employees. Then require larger organizations to pay a slightly higher fee for their use.
The first instinct is to make images available for the lowest price to registered non-profit organizations. However, we should keep in mind that there are 1.4 million non-profits registered with the IRS. Only about 450,000 of them have enough revenue to require reporting to the IRS, but in 2005, these “reporting organizations” had $1.6 trillion in revenue and $3.4 trillion in assets. Should the big ones get images for the lowest price or should they be charged more?
If such publications are earning revenue through either advertising or subscription, or if they are promoting a product that is sold, should they get images for the lowest price or should they be charged a corporate price?
A large portion of the uses described above can be satisfied by simply limiting the file size delivered. In effect, that is exactly what microstock is doing today.
The difference is that microstock pricing is letting commercial users have the images for the same low prices. Professional photographers would like to see these commercial users pay more, given the value they will receive from using the image.
Personal wall art
There is at least one personal use where a larger file is needed — wall art. The question is whether this kind of use should be encouraged and at what price a file sufficient to make a good quality print should be supplied. A huge number of people buy lithographic prints to decorate their homes and offices. They want one copy, not many. If it were easy for customers to choose from every high resolution image online rather than a limited, edited selection, a lot more images might be licensed. What is a reasonable price?
I’d like the input of Black Star Rising readers on these ideas — and your specific thoughts on what should and shouldn’t be included in the category of “small use.”
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