Camera Brands Should Offer Device Installment Plans

Camera Brands Should Offer Device Installment Plans

The photography industry and it’s consumers would both benefit from introducing the predominant mobile phone sales model.

Camera lenses unlike the camera bodies they mount to, are generally considered to be a smart buy.  For a photographer, they represent a long term marriage that will outlive the generations of camera bodies to come, while maintaining strong resale value throughout. On the flip side, the camera’s themselves are more like a short term fling, they never seem to stick around in a photographers bag for very long before being superseded.

Camera companies have a heavy hand in this ritual as every year they look to adopt more and more useful technology in a play to trump their widespread competition. As a result, the time between new releases has shortened as product cycles purposefully quicken. One example is to look at what Sony, a company known for aggressively releasing products over the past few years, has done. Specifically, it’s high resolution purposed stable of a7R mirrorless cameras. The first iteration of these bodies was announced not terribly long ago in October of 2013. Fast forwarding less than two years later in June of 2015, Sony followed with the much improved Sony a7R II. Jump ahead a short while once more to this past October of 2017, and we see the release of the a7R III, which again advanced in many usability respects, and leaped far past its predecessor. That’s three high-resolution camera announcements in less than a five year span. So where does this hyper aggressive release schedule leave the willing consumer? Well if you were for good reason an adopter of all three example Sony models, money in hand with each new release, then there is a solid chance you lost a good bit of money in a flooded used market on the resale end as you desperately attempted to recoup the expense of staying current. On top of the money headache is the resale process itself which is an exhaustive, and anxiety ridden game to play, with each large ticket camera purchase you take to the private resale market full of possible costly pitfalls.

So that brings us to the question, if given the option would you prefer to simply purchase your next DSLR or Mirrorless camera in monthly installments? Installments that are designed to ultimately cater to a photographer friendly turn in at the end, seamlessly easing you directly to the latest model on the market, and avoiding the hassle of a private sale behind. It’s really not as far fetched an idea as you may think. 

Outside of the car industry, there is already precedence set on a smaller priced scale for an industry shifting to this type of purchasing option. The mobile phone industry popularized equipment installment plans some years ago. And the funny thing is the option we have now as photographers to buy outright has always remained in plain sight with any new cellular phone, but when given the option so few customers actually opt to. The vast majority choose to avoid the big hit at the register and finance monthly their phone purchase on a month-to-month basis.

Outside of the phone carriers themselves, hardware Goliath Apple offers the iPhone Upgrade Program; a direct purchasing option to buy their high priced phone hardware in installments with easy upgrade markers set after one year of payments. Camera companies could easily follow a similar installment model, even going as far as to include their respective accidental damage plans like for example Canon’s excellent CarePak Plus, similar to how Apple leverages AppleCare into their program. This way you are almost assured outside of loss or theft to have a working device to hand back in when the time comes to end the lease and upgrade to the new model, keeping you locked in with said brand.

Another trend you see with the major cell phone carriers is additional offerings like free monthly subscriptions to Netflix, HBO, Hulu, and Pandora to name a few. It’s not hard to envision camera brands following this model, and partnering with software companies like Adobe, Luminar, and Phase One as examples to further entice you at checkout, and bring more value to the consumer.

Value on Both Sides

Just like the shift to subscription pricing on software, companies love the steady revenue flow that comes from a large group of photographers all paying in a small amount monthly as opposed to a large stream of revenue shortly after a big launch followed by months of steady decline in revenue. In addition, all of these cameras that photographers turn in via the upgrade process could find renewed value possibly fueling online refurbished inventory, and creating an additional revenue stream for the camera brand. 

On the photographers' end this provides a safe, and dependable place for pro’s and enthusiasts alike to purchase a used previous generation camera, at a heavy discount, and direct from the camera maker themselves as opposed to today’s risky private sale alternatives. As it stands now camera manufacturers are missing this opportunity to build the camera once, but sell it to the marketplace twice.

Image by FOX via Pexels, used under Creative Commons.

But Does the Math Add Up

Now, of course, the monthly expense would have to make sense in order for camera brands to realistically offer this as an attractive solution that the photography market would embrace. Take the Sony Alpha a6500 priced currently at $1,198 as an example camera. As opposed to paying for the camera as you would today in full at checkout, an additional device agreement option for say three years or 36 months would also be available.

By selecting this option you are committing to a monthly payment of $33.28. Once you have completed twelve payments which in this example totals up to $400.00, you could then at your discretion turn the device back in, and upgrade to the hypothetical a6500 replacement. Or simply ignore the latest model, and stay the course till the full balance is paid off, and you own the camera. In addition, if the successor does not launch anytime within the 36-month installment plan, then no harm no foul. As a consumer, you still won by taking advantage of what essentially was no interest financing with optionality.

In Closing

For this to truly become a sensible option we would need to see a shift in camera brands assuring refresh cycles hovering close to two years, or less. And my crude financing example would have to be adjusted to ultimately fit the camera industry, versus being based on the examples we have elsewhere today. But how great it would be to no longer fear purchasing the expensive camera we may need right now, even when it’s dangerously close to it's expiring street date.

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23 Comments

marcus joyce's picture

Who buys your second hand camera you've only paid $400 and had 1 year of use of?

This works for iPhones because millions want cheaper iPhones and will settle for refurbished units... Or *as new*. And typically babied by their owners.

I understand film productions rent their camera gear. And it's smart to rent expensive lenses.

David Moore's picture

Or buy a camera and keep it for a long time and not worry about the wizbang bullcrap the new cameras have. lol

Derrick Ruf's picture

Ha I hear you David, there is zero wrong with holding onto gear for the long haul once it has proven it's worth. Sometimes though self control, and or will power just miserably fails.

Kirk Darling's picture

There's nothing easy about setting up and managing installment plans, and it would definitely increase the cost of the products. Everyone knows iPhones are overpriced for what you get in them--Apple successfully markets panache.

From a business point of view, leasing might make some sense if, in fact, we actually wore cameras out or if cameras became truly obsolete within that short amount of time.

But, frankly, they don't. "Obsolete" or "worn out" would mean for a businessperson "no longer making money." That's usually not the case with camera upgrades. Rarely is each successive model going to make a photographer more money.

When I went from a Canon 20D to a Canon 5D, it also finally allowed me to retire my Mamiya RZ67 medium format film cameras. That meant I could shoot for large wall portraits on EVERY job rather than the ones I judged likely clients.

For that reason, the Canon 5D paid for itself within 60 days. That was a good upgrade. I've made several upgrades since then, but those were always for incremental improvements, and I could well have sat out a model or two with no effect to my bottom line.

Derrick Ruf's picture

Appreciate the thoughts on this, no argument from me, this hypothetical is more for the upgrade hungry folks out there. Some people will drive a new car off the lot every year, not because their last car stopped working, but more so just because they can.

Samuel Masini's picture

Well I guess those who can afford a new camera each year just for the sake of it woudn't need to worry about installment plans. I would only consider installment plans if I was better off with my money somewhere else generating a higher interest rate, otherwise I would just pay off whatever I'm buying outright.

I think the most important part has not been discussed... the fact that phones are tied in to a service. I don't know what goes on behind the scenes with Apple and cell service providers but obviously the mark-up's are high enough to allow the "marriage" to work. When you buy a camera there are zero "service" dollars coming in.

In addition, due to lower margins you will presumably never see the camera company's themselves offering the financing. Almost guaranteed financing would be provided by an outside source at an unrealistic interest rate as there is no "security" on the asset (meaning the camera) as people could just stop paying and continue to use the camera unlike a cell phone where the service can be stopped.

Also, as someone else mentioned the quantity sold in the market place has a huge part in a program as you described. Units sold in the camera world can't compare to millions of cell phones.

Many strange things happen in the world but my bet is the camera company's will never offer a program as you described it.

David Pavlich's picture

Far and away, the best explanation why this sort of service won't work for cameras. I might add that DSLR sales have shown a steady downward sales trend and mirror less have been level or shown a slight rise in sales. And this is due to the phone/camera.

The phone/camera, at least with today's technology, won't replace the real camera for enthusiasts and pros in the near future. It's the entry level cameras that take the hit from phones. But, the enthusiast/pro market is just not large enough to warrant this sort of "copy the phone" marketing.

Are you sure that camera is a phone and not operator's network equipment?

William Murray's picture

From the perspective of the industry, the provision of credit will increase cash flow, profitibility, and exposure to risk if correct lending principles are not applied.

From a consumer perspective, poor people making consumer purchases taking on credit is (almost always) stupid, but highly attractive.

From an economic perspective, such rapid economic growth has only been possible by the provision of credit.

From an environmental perspective, economic growth has only been possible because we externalise our inputs and outputs. So what the hell ever, the world is already drowing in our worthless crap.

Tony Clark's picture

I bought my first medium format camera, a Mamiya 645 Pro through their lease program and bought it outright at the end of the lease. Since then, I haven’t purchased a new DSLR but find clean, low mileage bodies and they’ve paid for themselves in a shorter period of time. I don’t need the latest gear, I just need it to work. I currently own a Canon 1Dx and the 1Ds3 has been relegated to the backup role. I can only imagine someone getting into a lease, it breaks and they can’t afford to fix it or is stolen and they don’t have insurance or the cash flow to replace it.

Derrick Ruf's picture

Tony thanks for sharing your experience with a previous camera lease. I hear you on the camera possibly breaking, in my hypothetical I would attach the respective camera brands accidental damage coverage for the length of the installment. This would hopefully insure a good working camera gets turned in. As far as stolen, I would say whether you buy something outright or choose to lease, that mishap would pretty much suck to have happen either way.

Michael Comeau's picture

This is why credit cards exist.

This is why savings accounts exist.

Installment payment plans are already offered via many online shopping websites, typically via their branded credit cards (ie Amazon, Adorama).

Nooooo. If you can't afford to buy it you can't afford it. We have a stupid system in this country in which the credit card companies have convinced us that we don't need to save, if we want something just get it on credit. I save up and pay for all my stuff with actual money.

Christian Berens's picture

EXACTLY my thoughts! Don't spend like you're in Congress #DaveRamsey

David Wo's picture

I absolutely agree. The other option for people who “need” better gear is to just rent it when you actually need it. As a bonus you get to see what that new gear will actually do for you.

There are already several companies advertising camera bodies to me as 'rent to own' (usually at a significant markup over the retail price of the body - 30% or so), I don't think there's any need for the manufacturers to do anything else

Errr it's called "Finance" (payment plan), a lot of retailers in the UK already offer this, that's basically all you're doing when you take out a phone contract there's just the added in Network plan. It even comes with the high interest rates when you get a camera or lens on finance. I don't think it's the place for the manufacturer to offer this in the same way a lot of phone manufacturers don't. The risk is passed onto the retailer as to whether the customer will default or keep up with payments.

Lee Stirling's picture

If such an installment pricing plan and equipment turn-in program existed, what's the incentive for anyone to buy a brand new camera ever again if they can get their hands on gently used cameras that were turned in after 1 year of monthly payments? Not like the discounts would be very steep on such equipment, but every little bit helps.

This becomes uninteresting when Sony finally hits the plateau on a7-series development?

Jarrett Rathert's picture

Most box stores already offer in store financing. sooooo...... kind of a moot point?