How Do You Determine A Fair Price For Licensing Your Videos And Photos?

How Do You Determine A Fair Price For Licensing Your Videos And Photos?

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...

This image was one of several that I pitched to a Visitors Bureau in Northern Michigan.

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.

Scenarios:

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.

I licensed the above image to a local, independent rock climbing zine for use on social media.

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.

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16 Comments

Ralph Berrett's picture

Really good article. I am going to have to rethink how I calculate my fees. Right now I use this formula shoot Hrs + Computer (editing + post) + Expenses + Usage = Fee.
My personal Hourly rate structure is based off of my local market (other photographers I tend to be higher), graphic designers and difficulty of the assignment.
I am using a simple database program called fotoqute to base Usage cost. So far it has been easy to use and the numbers jive well. Fotoquote http://www.cradocfotosoftware.com/fotoQuote-Pro/

Yes this article is awesome, Thanks!!!

Mike Sanchez's picture

Nice article. Another thing to consider when discussing prices with a client is holding your ground when it comes to your price. Say you come in with a quote of 600$ for a job and the client says they typically pay 200$ and won't budge. You might think I'll take the 200$ because it's better then not taking the job/money, but in the long term your only hurting yourself and the market. Obviously the photographer and client should negotiate to a respectable quote but taking a much lower price can be detrimental. I highly recommend to read Best business practices for photographers by John Harrington. Some of the best pricing advice around!

Chris Adval's picture

"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."

Ins't the photo stock agencies under charge for stock photos to their clients?

Mike Wilkinson's picture

I'm not sure I follow you, but my thinking was that in order to stay competitive, compare the media you're trying to license with content that is already available on stock sites. If there is nothing specific in the media that makes it unique, chances are there is stock media of something very similar... so what is to stop your potential client from just purchasing that stock media, as opposed to licensing yours.

Judy Herrmann's picture

The American Society of Media Photographers (ASMP) also has some great resources that explain both pricing and licensing. Check out the licensing tutorial at http://www.asmp.org/licensing or if you'd rather watch than read, check out the Business as unUsual and Future of Art & Commerce recorded webinars at http://www.asmp.org/webinars

Mike Wilkinson's picture

Comment of the year. That is a fantastic resource. Thanks Judy!!

Chris Blair's picture

Awesome video and great article...thanks for posting!

I second the ASMP resources Judy mentioned above - I've learned so much about pricing from them over the years.

Reid Kimball's picture

Great info Mike. Thanks for taking the time to write this and share your experiences. I think some might want to also factor in how many times they realistically think they can license a non-exclusive piece of work. If I'm only getting 10%, because I am not likely to license it more than once, I'm losing out on being able to recoup my costs in producing that work.

I think the appeal to licensing is that you have many clients paying for a single piece of work and you make your costs back +profit. But if I'm only getting 10% of what it cost to produce, I should just sell the whole thing to the client.

Garth VG's picture

Here is a post I submitted about an article about Artist suing Google for copyright infringement.

So far from what I have read, very few people really understands the value of artwork and the implications that it has on the public at large.

I'm a photographer. Yes I have a website to promote my skills and abilities to interpret a concept and then capture that concept so as to communicate that to others. I'll use a "box'o corn flakes" example. If I create an image of a famous athlete that connects with a large portion of the public, it get pasted on millions of boxes of tasty breakfast food, and the sells of that box'o corn flakes increases greatly(and yes this not conjecture, it's reality) then I, as the artist, have had a direct correlation to the increased sales and profitability of that company. The creator of that artwork should be paid fairly for their ability as in any other profession, creative or otherwise.

Conversely, if I take an images of the a fore mentioned athlete, as a commission, let say for his/her personnel promotion and part of the agreement is that I can use the image on my website for "exposure" and promotion of my business. Then along comes company X searching Google images for pictures of this athlete. Finds my image of him/her, pastes it on those boxes'o corn flakes and claims orphan rights because "...we did our due diligence and could not find the copyright holder…"(this has happened much more then people think. Just search Google on this issue) then the artist is left out in the cold because they don't have the financial resources to pursue a multi year lawsuit against a large corporate entity.

"Nowadays people know the price of everything and the value of nothing." - Oscar Wilde 1891

Large corporate entities understand the value of artist works. If not, they would not spend billions of dollars on it otherwise. They have also come to realize, very early in the game, that if you can get the milk for free, why pay for it. Hence, the subsequent devaluation of artist in our society. Even worst, if you give your art away for the quaint and novel idea that you can brag to everyone that your "picture" is on that "box'o corn flakes", well that's just plain ignorance on your part.

Creatives are slowly coming into the light about the "exposure myth". Yes, exposure is crucial to the success of anyone in business large or small. But, what trumps exposure is value.

I personally know a graphic artist that can take you to any hardware store and point to his designs that he created over 20 years ago. They are still in use today. Yes, he was paid for it, but the point here is, his original artwork has served that company for over 20 years now. It's value is apparent.

What is not apparent was 5 years he spent homeless on the street. What I'm saying is that if he was treated right and had a fair usage agreement concerning his artwork, maybe, just maybe, he would not had to endure a homeless status.

So in short, licencing fees are about the value they bring to the campaign, product, or client. Not an arbitray percentage tacked on to get a few extra bucks. Your artwork has value beyond the production costs. Just something to think about.

Jeff McCollough's picture

"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."

Forgive me for being stupid but, if it cost you $5000 to film the documentary and you licensed it to them for just $200? So you made nothing, blew money?

This is a really good article! I am trying to soak up as much info on this topic as I can. I was recently contacted by someone that wants to use some of my footage for a new TV show that will air on a well known TV Cable Network. I've never licensed any of my video work before and I want to make sure I am making the right decisions about the whole license agreement and setting a reasonable fee.

doug mazell's picture

I'm looking some help in determining a price for a stock photo license. This image was licensed by one of my stock agencies which is now out of business. The company wants to buy an additional license and contacted me direct this time. This is for a text book - all rights (non exclusive) for thirty years - 1/2 page.

Just looking for a ball park to start with. Thanks!

Doug

OK - I'm a couple of years late, but I just found this article and saw a few red flags.

First, thanks for posting. It's great to have as many resources and perspectives as possible on this for everyone to learn from. I would like to add a couple of points that are relevant to anyone seeking to make a full-time profession from their work.

First, offering "in perpetuity" licensing, I've found, is only a good idea when you're shooting something that has virtually no potential of future income for you from this current, or future, clients. Most clients really have no need whatsoever for "in perpetuity" anyway - just as clients should have no need for RAW files if you're doing your job well. Many clients are simply trained to ask for everything, regardless of its actual usefulness, as part of the negotiating game, or because someone told them they should. I run into them often and have a near-perfect track record of calmly and logically explaining why what they need and what they are asking for are not the same thing. Images organically age-out of relevance for a number of reasons, and they age even faster for a commercial client (landscapes are the potential exception, depending on the quality/resolution of the original).

Instead, limiting the duration of your license (even if you say 10 years) leaves you in the driver's seat for future negotiations/assignments. If nothing else, you have a reason to reach out to the client again some day to check-in, have additional leverage on future work, and can simply keep the lid on a potential Pandora's box of questionable image uses that could result from a client with such sweeping usage rights as "forever".

And FINALLY, though you did mention factoring the customer's ad buy to calculate your licensing rate, adding "in perpetuity" (which means "forever") language to your licensing terms makes that calculation virtually impossible. You'll never know if Bowling Green will become the next Seattle, or if you're images will be used someday to wrap a World Cup stadium. While some small Chamber of Commerce might have pretty finite possibilities in their marketing, giving a State Tourism Bureau the right to use your image forever, and in any way they like, simply leaves money on the table and sets a precedent for the client when they talk to you next, or the next aspiring pro after you. If we expect less, we will get less. Every. Time.

Again, thanks for sharing. Good info in there!

I have sold quite a few images to tv networks this year, it’s always some independent photo researcher who tries to low ball you but i stick firm. My rates are $750 for one image or a bulk package from $3000. My photos are from the 90’s and I’m not underselling myself. Those who undersell their images for peanuts i hope you go broke and move somewhere far away!