Figuring out a fair rate for providing photography or video services can be a slippery slope, filled with pitfalls if you happen to price yourself incorrectly. But what's more complicated than setting a rate for services is how to approach setting a rate for someone who wants to license a piece of work you've already created. In this post I'll share my insight on the factors I look at, and my rationale for determining a fair fee for video and photo licensing.
I recently wrote a post about how I turned a personal project into paid work, and part of that story included how I was able to license some of my previously created videos. There were a number of questions in the comments about how I determined what a fair rate was for a fee. I've put together this post with information on the factors I use to determine what I should charge someone to use a photo or video I created.
A video that I've shared often with others, and that I reference from time to time is a great starter to figuring out your cost of doing business, and therefore your rate. The discusion on licesning starts at around the ten-minute mark, if you want to skip right to that part. Give it a look, this entire video is well worth a watch:
I do mostly video projects for clients, so when the work is done, they typically own the final edited piece. That meant I never had to deal with licensing videos or photos for a long time. I got my first taste of it though, when I shot images of ice climbers in Michigan last winter for a personal project. Once the shoot was done, I contacted a local photographer and got the names of a few clients who might want to license the images, so I had to come up with rates.
I had no idea where to start, so I reached out to some photographer friends of mine who license photos regularly, and asked them how they determine their licensing rates. What I came away with was very helpful, but a bit complex at the same time. I continute to learn more every time I license a photo or video.
Disclaimer - this is by no means the only way to figure these costs, this is just what I've looked to in the past. Keep in mind that most of the media I've licensed is outdoor/landscape images and videos, and one or two short business promos. If you have some other suggestions for licensing different types of projects, please leave a comment!
The factors I came up with for determining a licensing fee included any or all of the following;
a) who the company or individual is (fortune 500, independent producer, NPO, small business, etc)
b) the reach of the media (one small photo in an online ad vs ten billboards and print magazine ads, etc)
c) the usage (single use online, unlimited use in print, exclusive, non-exclusive, etc)
d) the duration (1 year, in perpetuity, or anything in between)
e) what it cost me to produce the media (typically my day rate, plus any extra production expenses to complete the work being licensed)
As suggested in the Adorama video above, you could inquire as to the total media buy for that campaign, and base your fee off that using a sliding scale... That's not something I've dealt with personally, but it sounds like a good approach for certain situations.
Understanding the answers to all of the above factors has led to me to determine rates for licensing my work. As you can imagine, each and every client, video/photo, and request is different, so the fee is different every time as well.
One a side note, I've learned from speaking with photographers who regularly license work to magazines, is that the pay really isn't worth it. This could be the subject of another article altogether, but I've heard from several notable outdoor adventure shooters that even a cover image was only earning them about $200-$400. When you consider the time and effort put in to create those visuals, and the cost of the gear used, it's kind of depressing that the rates are not more...
In general, I heard from several photographers that as a rule of thumb they just use a percentage of their day rate that was needed to shoot a single image that is being requested, going with something like 10-20% of their day rate, depending on the factors listed above. So for the sake of explaining this better, here are some mock situations.
1) You shot a photo of mountain biker riding a popular trail. A regional magazine wants to use it on a half page, to complement a small article about the area. They distribute 50,000 magazines, and need just single use rights, print only, non-exclusive. If it were me, I would go with something like 10% of my day rate, and offer them use on social media for another 5%. If my day rate + production cost for that was $1,000, then I would ask for $100-$150.
2) You shot a beautiful landscape image of a forest in Kentucky. The Kentucky State Tourism Department contacts you and wants to use the image in various parts of their campaign, including social media, websites, and various print features, exclusive for 1 year. They also want the right to use the image in perpetuity. I'd either charge them my full day rate + production costs (let's say around $2,000) or a licensing fee of 10% of their media buy (let's assume $20,000) so $2,000.
3) A company wants to license a video you previously created. The video is a montage of clips from a large archeological ruin site, and people visiting that site. It includes timelapses and multiple areas that were shot over the course of 3 days. You then edited the footage down to a 2 minute video with music. The National Ruin Society (made up) wants to host this video on their website to promote it, trying to get more people to go to that area. They will use it for three years, and only on their website, non-exclusive to them. If it cost me $1000/day to shoot, and then I spent 10 hours editing it at $50 an hour, it's $3500, plus $500 for other expenses like music, then the total becomes $4,000. I'd charge a 20% fee for the video, or $800.
Some of you might think this is way too much, or not nearly enough. And you might be right. These are just the ways that I've learned to price myself, and it won't necessarily work for everyone or anyone else... The hope is though, that you can find some information that you can apply to your own business models and make better estimates and cost justifications.
A big part of determining a rate can also come from your particular market, and/or how the client in question normally works. I'll use a recent example to explain...
I was approached by a news outlet/magazine who wanted a video of mine for their website. They wanted to host it themselves on their own video channel, and offered to link back to my site in the description. I replied that if they want my video to host, that costs a licensing fee (I'll lose all the views if they host it, otherwise if they embed my personal video, I'd offer a lower rate.) The news outlet replied and said that they typically don't pay anyone, which blew me away since they have many other videos (better than any of mine) hosted on their channel. They wanted an older documentary that I produced, which already had made the rounds online, but was otherwise just sitting there and not doing anything for me.
I could tell that getting any money out of them would be like squeezing water out of a rock, so I gave them a low quote because I figured something like 20% would make them laugh and move on. The production cost of the documentary was around $5,000, so 20% would have been $1000. I instead quoted 8%, which would still net me some dough and I felt that it was more reasonable for them to afford. They came back and said in the past they have paid a flat $200. I took it. I think I should have got a little more, but for the video they wanted, it's not a big deal, and $200 is better than nothing for a project that was just sitting there. The point is, they don't get views and clicks and sell ads for web pages, that have MY videos, without paying something for it.
So to summarize, every situation is different, but for a clip, I'd start at about 10-20% your day rate for that shot. For a full production, 10-20% of the total cost of the production. For more ideas as to what you might be able to charge for a clip, just look at stock clip sites and their rate structures.
Again, this is what I've learned from licensing just a handful of photos and video projects. I'd love to hear what some other video producers have been able to work out for licensing deals with their productions.