The Rights Stuff

Many people are intimidated by the concept of negotiating. They think it’s for bankers and union bosses, and involves cigars and a lot of shouting and table thumping. Not so. Negotiating is nothing more than a process whereby two parties with competing, but complementary, interests engage in a process of communication to arrive at a price that’s fair to both parties.

You want to use an image, and the stock agency wants you to use it. That’s complementary. You want to secure the rights for as little as possible, but they want to charge you as much as the market will bear. That’s competing. This article will provide you with the tools to navigate this process calmly and effectively. No cigars and no table thumping.

THE EVOLUTION OF STOCK-PHOTO PRICING
When negotiating a price for a rights-managed image, it’s invaluable to understand the pricing dynamic that’s at play. Know where these prices came from, and you’ll know how to handle the issues that come up when you’re negotiating.

Thirty years ago, high-concept commercial images needed by graphic designers and advertising art directors couldn’t be purchased as stock for two major reasons. No. 1, that type of image is expensive to produce, and the only people willing to go to that expense were large advertisers. No. 2, the model-released images that designers and advertisers needed weren’t available. Hence, the conventional wisdom was that, if you needed a premier quality commercial photo, especially one with models in it, you hired a photographer to shoot it.

But what if you were an art director in Davenport, IA, designing a brochure for a local company? It didn’t make sense to hire a photographer to shoot a $5,000 image for the cover of a brochure whose other costs didn’t amount to more than, say, $2,000. The cost of photography was badly out of proportion to the cost and size of the project itself. All-type solutions, or inexpensive illustrations, were the norm.

Because the pricing of assignment photography was based on the costs of producing the image, irrespective of the scope of its use, an alternative pricing approach was needed to make photography feasible for most designers. That’s where commercial rights-managed stock photography entered the picture. Rather than charging a designer the cost to produce the image, agencies based prices solely upon usage.

A very small project would incur a very small fee. As the size of the project increased, so too would the photo fee, with that fee remaining in proportion to the overall costs of the project. All of a sudden, the client doing a limited-run brochure could use a photograph that had cost thousands of dollars to produce for a few hundred dollars.

The problem, of course, was this: How do you spend $5,000 producing a picture, sell it for, say, $300, and still make a profit? And the answer is: You sell the same picture to more than one user. That’s the financial “engine” of the stock-photography business model.

The good news about this model is that any designer can afford to use high-quality images. The bad news is you don’t get exclusive use. The only way the business model works is if other people purchase the same image.

Therefore, potential conflicts of use can occur. If a picture is used by a real-estate developer in Tampa for a brochure distributed only in Florida, and the same picture is used by a developer in Dallas for distribution in Texas, there’s no problem. But what if both designers were creating ads to run in The New York Times? Both would be embarrassed (or worse).

A system had to be developed whereby some protection against this sort of competing use could be established, and that’s what rights protection is all about. < p> RIGHTS PROTECTION CUTS BOTH WAYS On one hand, the photo agency is protected against any use other than that which has been specifically purchased by the designer. On the other hand, they may lose out on other opportunities to sell the image. That’s it in a nutshell. When you negotiate a price with a photo agency, that issue will be underpinning all their questions. If they sell you this picture for the use you have in mind, what’s the likelihood that they’re going to have to turn down other sales that would compete with yours? If that likelihood is small, you can and should be able to negotiate a favorable price; if it’s large, you’ll have more difficulty. The more protection against competing usage you need, the more you’re going to pay. If someone else using the same picture in a way that might be a little embarrassing, but not catastrophic, is a potential that you can live with, you need to know that at the outset so you don’t pay for protection you don’t really need. Similarly, if your budget for photography is limited, the negotiating process becomes not a question of how much you have to pay for the rights protection you need, but how much rights protection you can get for your buck. But there are three other things you should know to be a good rights negotiator: 1. Concentrate your buying power. Never underestimate the advantages of being a good customer. If you buy images predominantly over the Internet, make sure the sites you use include a purchase-history page. There are times when you need the agency to work with you on pricing. If you’ve built up your good customer status with an agency by doing business with them on big-budget projects, you should be able to count on them for a little help when you have less money. 2. Buy only the rights you really need. When you place your order, don’t let the agency sell you a five-course meal when all you really want is a tuna sandwich. If the brochure you’re working on will be distributed only in Maryland, don’t pay for national rights. If the ad you’re doing will only appear three times, don’t pay for unlimited insertions. All of this seems obvious, but sometimes you have to be the one to put the brakes on. If you’re being quoted a price that seems too high, make sure the price doesn’t include rights you don’t need. But you must also make sure to buy the rights you do need. If you buy the rights for a brochure with a print run of 5,000 copies, but then print 50,000 copies, you’ve exceeded the copyright license. You’ve left yourself open to a copyright- infringement lawsuit that provides for penalties of up to $150,000 per infringement. The same would be true if you use an image in an ad and purchase rights for three insertions, but then run it four times. But what if you don’t know exactly how the photo will be used yet? Some projects are evolutionary, and what you do with the image later depends on how the project performs in its early stages of distribution. It happens, and that can make your rights purchase tricky. But it will be vastly simplified if you adhere to rule No. 3. 3. Establish the price of future rights upfront. Sometimes it’s hard to have a crystal ball that tells you exactly how your project will evolve, but it’s a mistake to think that it would be easier to come back later to secure additional rights. That down-the-road price might be a lot more than you expect—and a lot more than it would have been if you had established it in the beginning as a “what if?” scenario. For example, say you’re doing a business-to-business ad that will be tested in three publications. If it tests well, you’ll run it 10 more times. If it tests really well, you’ll run it over and over for a year, maybe even two years. If it doesn’t test well, you’ll kill it. OK, right now you only need to acquire the rights for the three test ads, so you do that. The ad tests great. So, you go back to the agency and say, “Now I want to buy unlimited insertions for a period of a year.” Here’s what they know: The ad tested well. The last thing on Earth you want to do is change anything. So the value of the image goes up. In the agency’s defense, it’s possible that one of the reasons—perhaps the major reason—that the ad tested well is the photo. If you’d like to be in a better negotiating position in circumstances like this, you should establish what you will have to pay, if the project expands, up front, before you commit to the picture at all. Any good agency will be willing to make such an up-front commitment for potential future rights, even if it’s just a ballpark figure. It would be unreasonable for you to ask them to commit absolutely and forever, but it’s not unreasonable for you to ask for some “pricing comfort” regarding these rights. What agencies want to knowIf during your negotiation for the use of a rights-managed image you always remember that the agency is concerned with three key questions, you can do two things that will help you. One, you can frame the information you provide optimally, and two, you can volunteer information that they might not be asking for, but that will influence these issues in your favor. How important is the photo to the project? The more important they perceive the photo to be to your project, the higher the fee they’re going to charge. They’re going to ask a lot of seemingly “technical” questions about placement, the size at which the image will be used, and so on, but what they’re really trying to discern is how important this particular image is to the overall project. How important is the project to you (or your client)? The more important they perceive the project to be, to you or your client, the higher the fee they’re going to charge. That’s one of the reasons, for example, that prices for corporate annual reports tend to be high, sometimes out of proportion to the number of copies that will be printed. The photo agency knows that there are few things more important to a company’s executives than their report to shareholders. How important are you to the agency? The more important they perceive you to be to them, the more bargaining power you have. If you’re a frequent stock-image buyer, let them know that. Good customers get good prices.

THE FIVE FACTORS
As we get into the five specific factors that stock agencies consider, keep in mind that those factors are designed to provide answers to the three “umbrella” questions above. Each of these factors can work in your favor if you know how to make them do so.

1. Exposure in the Marketplace
Generally, the more people who’ll see the photograph, the higher the price. This is where all those questions about distribution, print run and number of insertions come from. It’s why, in the case of an ad, the stock agency might want to know the circulation of the magazines the ad will appear in.

How to use this factor to your advantage:
The fewer people who see the photograph, the lower the price. The agency is interested in knowing how much exposure the photo will receive. You are interested in letting them know how little it will receive. “Yes, but. . .” is the most important tool in your arsenal.

Is the distribution of your brochure national? “Yes, but it will only be distributed to plumbers and only for two weeks.” Will you be running this ad for a year? “Yes, but it will only be inserted twice in a magazine aimed at left-handed brain surgeons.”

The agency will ask broad questions. You want to proactively supply the details that reduce the implications of a simple “yes” or “no” answer. Don’t wait for them to ask you for it. Volunteer any information that works in your favor. One caveat: Don’t distort the information in a way that would result in a fundamental untruth about how the picture will be used. When we’re dealing with photos, we’re dealing with copyrights, and it’s legally mandatory that you obtain the rights you need, framed within an accurate description of your usage.

2. Role of the Image
How large (or small) a role does the photo play in the project you’re developing? Cover photos cost more than interior photos. Ads in which the photo is the major visual cost more than when the photo plays a minor role. Why should size be such a factor, really? Either you’re using the picture or not, right? Well, its a way of determining how important the image is to the project. Images used large or on a cover are assumed to be more important to you than images used small or inside. The more important the agency figures the image is to you, the more they’re going to charge.

How to use this factor to your advantage:
Don’t forget: “Yes, but. . .” Will the image be used full-page? “Yes, but it will be a background with many other images superimposed on top of it. You’ll hardly see it.” Is this the major visual in your ad? “Yes, but I am cropping into a small portion of the sky and using only that.” Don’t veer from the truth, but do volunteer any information that reduces the agency’s notion of the importance this image plays in your project, if, indeed, that’s the case.

3. Past Prices for Similar Images
Once the stock agent has a clear understanding of how important the photo is to the project and how important the project might be, he sets a price based upon the past experience of the agency with similar projects and usages. What prices have previous clients with similar projects been willing to pay?

How to use this factor to your advantage:
The key word here is similar. No two jobs are exactly alike. There are literally thousands of permutations, and, in at least some respects, your project is unique. So, the first thing to do is make sure that the price you’re given is based on your particular project, with all its unique characteristics, not on a pricing-chart category. Remember, too, that the agency is focused on the prices they’ve received for similar projects in the past. You should point out the prices you’ve paid for similar photos.

4. How many photos are you purchasing?
This is why it’s important to concentrate your buying power. If you’re using more than one stock image in your project, and you buy them all from one agency, you should get a better price than if you were purchasing just one. This is a controversial issue among photographers represented by agencies.They feel that quantity discounts demean the inherent value of the work. Whether that’s true or not, the fact is that you will, or should, get a favorable price if you’re purchasing multiple images at the same time from the same agency.

How to use this factor to your advantage:
No. 1, if you’re using several images from the agency you’re negotiating with, but you aren’t getting favorable treatment for doing so, have alternative images in mind from other agencies, and let the agent know.

No. 2, the next best thing to buying several images on this project, is buying more images on another project. If you have something in the works, and you’re considering purchasing those images from this same agency, let them know.

5. How many times have you purchased in the past?
Good customers get good prices. Make sure the agencies you buy from have systems in place to keep track of your purchasing history.

How to use this factor to your advantage:
If the agency isn’t aware of your purchasing history, make them aware of it. Suppose you haven’t done much—or any—business with the photo agency in the past, but your client has. Mention it. Or suppose you’ve recently switched companies and, while you haven’t done business with this photo agency in your current position, you did do so in the past. Mention it.

Finally, remember that stock-agency reps are interested in obtaining sufficient information so they don’t undercharge you. You should be interested in volunteering information so they don’t overcharge you.

We’re not trying to teach you how to cheat the agency; we’re just trying to make sure you’re operating on a level playing field. The price for your project should be fair to you, to the agency and to the photographer they’re representing. And it should be based on all relevant factors.

As you proceed through the process, bear that fact in mind. Know that the agency’s trying to gauge the photo’s worth to you, and make the five factors work to your advantage—fair and square.

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