Balancing rates and rights is no easy task for most photographers.
When it comes to the business of image making, many photographers are short-sighted. They focus intently on the creative or logistical challenges of the assignment, but are fuzzy on its financial details. While skimming quickly over the fine print on a purchase order, they fail to realize that the primary goal of negotiating is not to win the immediate assignment. Instead, it is to win the respect of the client with whom a long-term relationship will result in job after job for years to come.
To do this, you must find a solution that satisfies the needs of both your business and theirs. Then make darn sure that you create powerful images. Your photographs must not only satisfy the requirements of the project at hand, but also be versatile enough to inspire the client to license the images for additional usage, and to present stock usage opportunities after the initial usage period expires. What’s the nine-letter key to success? N-E-G-O-T-I-A-T-E.
Setting rates and rights Negotiations can take a toll on client relationships. Photographers should supervise the negotiating process while allowing their reps to talk money with the client. Photographers without reps should avoid talking money with the art director (who is the photographer’s creative partner) and instead conduct negotiations with the art buyer whenever possible.
Never back down on your fees without justification. You can lower expenses on request, as long as you don’t sacrifice production value. But don’t drop your fees without a corresponding reduction in usage rights, or some other concession on the part of the client. Such alternative concessions might include a larger advance, payment on delivery, a credit line on the ads, and so on.
Day rates and buyouts. Don’t use these terms in your business. They are ambiguous and can lead to misunderstandings that can harm your client relationships. If a client requests your day rate, explain that your fees are based on the scope of the usage license they will need for the photographs, with only a small consideration given to the hours, minutes or days required to complete the assignment. When a client asks for a buyout, explain that you don’t use the term "buyout" when licensing rights, because it can be ambiguous. You will get no complaints, as long as you provide an acceptable alternative. Ask the client what usage rights they would like to license. If they are using the term "buyout" to indicate that they would like to license unlimited media usage for unlimited time, spell that out and quote an appropriate fee.
Bids vs. estimates. When your client asks for an "estimate," you estimate the fees and expenses (with markup, if allowed) required to produce and deliver the photographs. You may be required to provide substantiation for all of your expenses. If you bring the job in under budget, you bill the client accordingly. When your client asks for a "bid," you will bill the client for the total amount of your "bid" regardless of your actual expense, usually with no need for substantiation of expenses.
Whatever term the client uses, it is imperative that you clarify the approach they are expecting you to take and what substantiation they will require on the back end, prior to providing your budget.
Once you determine your place on the fee ladder, what other factors should you consider? There are many. The license is most important, because the license represents the amount of money that your client will spend on media, and indicates how many people will see your work. The greater the requested media buy, the greater your client’s budget is, and the more you should be paid for the license.
Consider the media type, frequency, period of use, region of use, languages, priority and exclusivity, and include these specifications in the license description on your estimate. Also consider the time and effort required for you to complete the job, the overall job size, and your leverage. There are estimating resources available, such as PhotoQuote and the Advertising Photographers of America (APA) Survey. In the end these are only references and should not be relied on in determining the most appropriate fee for a job. Consider the facts, and quote a fee.
Be up-front about expenses and contract terms No matter what rates or rights you negotiate, always get an expense advance before shooting. State your requirements specifically—the amount of the advance, when it must be delivered, and when the balance will be due. Many photographers receive 50 percent of the entire job. Others receive 50 percent of the expenses only. Some photographers get one-third up front, one-third on delivery of the film, and one-third within 30 days of the invoice date. This way, at least you get two-thirds of the job paid on delivery of the film, with only one-third left to the inevitable 60-to-90-day payment struggle.
In addition to an expense advance, you should always get the client to sign your estimate and give you a signed purchase order.
Don’t just file the purchase order away when you get it. Read it very, very carefully. Correct any mistakes made by your client in the job description and usage rights indicated on the front of the P.O., and initial your corrections. Make sure that you receive and review the back side of the purchase order. Cross out anything that:
• mentions "work for hire;"
• assigns liability to you for anything;
• states that the P.O. represents your entire agreement;
• mentions client cancellation rights;
• mentions client’s right of refusal;
• mentions copyright transfer or anything else that conflicts with the terms of your estimate, or that just plain doesn’t sound right.Note that this sometimes involves crossing out everything on the back of the purchase order!
Then initial all of your changes and send a copy back to the client before the shoot. It is always best to get a signed estimate, but that doesn’t always happen in the real world.
If the client refuses to sign your estimate, you can either
• wait until the day of the shoot and insist that the estimate be signed before the shoot begins; or
• indicate on the face of the P.O. that the terms of the P.O. shall be controlled by the terms of photographer’s estimate #XXXX dated XX/XX/XX, and that in the event of a conflict between the terms of the P.O. and the terms of the estimate, the terms of the estimate will prevail.
It can be tough to keep your objectivity when working in a vacuum. Photography can be a lonesome profession, unless you take the initiative and reach out to your peers. Develop relationships with other photographers. Find mentors. Get to know your suppliers. These relationships will prove to be invaluable resources when you are stuck and need advice on the estimating process, or when you just need to bounce an idea off something other than the walls of your studio. Pick up the phone and call another APA member. His/her advice might save you from committing to a plan of action that is wrong for you, or wrong for the industry (or both!). That’s what the APA is all about.