The Future of Pricing Photography

This article was originally published in the 2018 spring issue of Gallerie Magazine.

For decades, wedding and portrait photographers have made money by charging a session fee right off the bat and then by selling multiple copies of photographs created from that session. If you photographed a wedding, besides the proof album and highlight album, you might sell an 8×10 portrait to both sets of parents and perhaps four of the same 5x7s for each set of grandparents. The standard for setting your prices was to mark-up your costs by 4. This worked for many generations of photographers who built sustainable, long-term businesses.

For decades, wedding and portrait photographers have made money by charging a session fee right off the bat and then by selling multiple copies of photographs created from that session. Photo credit: Melissa Welsh

It was the formula I was given early in my career. I used it…but not without question. According to that formula, my prices would be the same as my competition, regardless of how much more, or less experience they had than me (assuming we were selling the same products). This never really sat well with me, but I used it anyway…and like many others, I never felt confident about my prices.

Then came the digital revolution. Times were changing, and clients didn’t want to share images via the wallet photo anymore – they wanted the digital file. The established pros treated digital files like negatives, not giving them away at any cost, while the newer generation was giving them away like candy. Many of us were stuck in the middle…and didn’t know what to do. We hadn’t been around long enough to feel like established pros with a tried-and-true business model. But we also weren’t ready to start giving away our files…because we believed they were truly valuable. Clients were asking for digital files, and we all wanted happy clients…but when we used that 4-times-cost formula to figure out a price for them, it was useless.

The cost of a digital file is 0.

And 0 x 4 is….0.

“Shouldn’t the value of our work increase as we improve?”

As you can imagine, this inspired some bigger questions about pricing. You would hear things like “the value isn’t in the paper” which was understood to mean that clients weren’t buying the paper print – they were buying the image on the paper. It was our talent they were paying for. But yet, we were determining our prices based on the cost of our goods. What about our education? Isn’t that worth something? What about the classes and seminars we attend each year, or our years of experience? Shouldn’t the value of our work increase as we improve?

It was clear what was happening in the industry. There was an entire established generation of photographers who were relying on their traditional business model. Then you had the new generation of photographers who had been learning from each other on-line. They were selling digital files; lots of them without a business strategy or a sustainable pricing formula.

Digital Files - the wallet photo is dead.

Selling digital files; lots of them without a business strategy or a sustainable pricing formula has been a major problem in the photographic industry. Photo credit: Melissa Welsh

The digital age of photography has changed the definition of what it means to be a photographer. Before digital, photographers captured images by “editing” prior to pressing their shutter. Few pros actually processed and printed their own images (this was all done by professional labs), and they didn’t need advanced software training or website expertise. Today, photographers take hundreds or thousands of photos at each session or wedding, and then sit for countless hours processing them on their computers. A professional camera setup used to last a career. Now, our digital SLRs,laptops, websites, and software are all obsolete within a few years.

Simply put: our product had been devalued while our overhead has been magnified. It is no wonder that many photographers who “go pro” are now out of business and that so many seasoned pros abandoned their careers, lamenting the passing of photography’s “golden age”.

What we needed was a new method of pricing our photography. A method of pricing based on intellectual property, not a vendor’s retail price x 4. A method that was simple and consistent, regardless of the type of photography provided. And we needed new business practices to keep up with the changing times.

Making Sense of Pricing Photography

I want to introduce to you a revolutionary method of pricing. In this method, the factors considered are your time, your cost of goods sold (COGS) AND your intellectual property (IP). The method works for stock, assignments, corporate, fine art, weddings, portraits…everything!

TIME + COGS + IP = Sale Price

Your TIME is associated with your hourly billing rate which you get from your Cost of Doing Business. And your COST OF GOODS SOLD (COGS) are determined by your vendors. Your INTELLECTUAL PROPERTY (IP) is determined by your experience in the industry and the size of the file you are selling, which is calculated using the Pixelcents Formula.

The Pixelcents Formula looks like this:

Px length x CPPx = $

Where Px length is the longest side of the file or printed image in pixels, CPPx is the cents per pixel rate the photographer assigns and $ is the price.

The best part is that the Pixelcents formula works when placing a value on a printed image or a digital file – we are no longer dependent on a hard cost.

How the Cents Per Pixel Rate Works

You need to assign yourself a minimum CENTS PER PIXEL RATE to use when deciding what to charge a client for your photograph. Typically, a casual shooter with low overhead and minimal experience would charge less than that the full-time working specialist with a large studio. For clients’ personal use, your Cents per Pixel Rate will be determined by your experience in the industry. For commercial use, the only difference is that a cents-per-pixel range and average is used, depending on what type of client wants to use the photo. The range and averages come from data collected from photography pricing resources from around the world.

In the free app, you can see an example of what an Emerging Pro, Working Pro & a specialist might charge using the different CPPx rates for licensing low and high-res files to their portrait clients. Keep in mind, these suggested rates are just valuing the photographer’s intellectual property. Their TIME and COGS would need to be added if necessary. See the definitions of photographer categories below.

The free price-a-photo app was developed by Melissa Welsh. It gives the photographer the industry low, high and average price for the 18 major photo uses.

 

Photographer Categories:
Emerging: Typically 5 years or less experience in the industry. Still working on developing their style and finding their niche. (suggested CPPx rate of 1 to 4)

Working Pro: 5 years+ experience in the industry, running a part-time or full-time business with overhead costs (insurance, association dues etc.) (suggested CPPx rate of 5 to 10)

Specialist: Recognized as an expert in their field of work. (suggested CPPx rate of 11+) What this method does is give any amateur, student, or emerging pro a baseline to start from. If someone is interested in purchasing their photograph, they know they can start at one cents-per-pixel and move their way up the scale as they develop their craft and gain experience.

 

Best Practices For Digital Files

Now that you know how to figure out the price of your photographic prints and files here are the best practices when selling digital files:

1. Restrict the file size – (Don’t give away the farm – create a digital product line based on your business model)

2. Use an Image Release Form – Indicate the terms of use in a signed release form (just like we’ve been doing in the commercial industry)

3. Watermark or Printmark the files – Always make sure your name is attached to the front of the image (not just in the meta data).

4. Communicate the value to your clients – Here’s an example:

Our digital file collections are one of the most precious items we sell. Once the files are released to you, you are able to share these photos with an unlimited number of people, forever. If you have purchased a print-ready file, you are able to print copies for all of the people in your life whenever you need. As with all of our products, these images grow more valuable as time passes. Please make sure to backup your files.

5. Value your Files Appropriately – Use the Pixel Cents Formula (Px Length x CPPx = $) to figure out how to assign a dollar value to your digital files.

The photography industry has seen some major changes in the past 15 years. There is no question we need to update our business practices, strategies and pricing models to adapt and stay relevant. The Pixelcents method of pricing is a way forward. It is simple, consistent and will build confidence for the next generation of photographers, so they can be compensated fairly for their work. If we can get behind the idea of intellectual property based pricing, then we can ensure the photography industry continues to be a rewarding and sustainable way to make a living.

 

Melissa Welsh is a National Award-Winning Master Photographer, Author and Tech Entrepreneur based on Vancouver Island, Canada. She studied photography in London, Ontario, and has since built a career in lifestyle, portrait and wedding photography. Her company Pixelcents is dedicated to positive change in the photography industry and has helped photographers in 22 countries around the world improve their incomes. She is a fun, free-spirited individual with a deep love for adventure. Her work can be found in private collections around the world as well as in regional, national and international publications.

This article was originally published in the 2018 spring issue of Gallerie Magazine.

 

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