There are two great articles on EP and ASMP that we should all be familiar with, one is the Digital Manifesto on EP and the other is A Justification of Digital Charges by Shawn Henry.
APE linked to a survey on PDN that is asking photo editors to share the kinds of fees they are being charged for Digital Capture. Should be interesting to see the result. Usually with these kinds of surveys the sample is so low that it tells you nothing. Another problem is that it is going to skew towards anyone who has time enough to bother, and that is probably not a good thing for us. So I decided to put it out there myself and try to get some idea of a solid set of numbers and rationale for pricing.
I guess this gets into a discussion of what it is a photographer does? Some people characterize photography as a service, the photographer uses his or her skill to solve a problem. Other people characterize photography as a product, you are creating images. The usage model addresses both ideas, you are creating a product that solves a problem, and the licensee only purchases the use of the product for a specific timeframe. All of these concepts of photography are important to the understanding of what digital charges are and what they are for.
For example, if you only see your photography as a product to be sold to an customer then you are more like a contractor or salesperson. The kinds of charges one expects from this kind of vendor are going to be different from the kinds of charges one expects from a professional or licensor.
Here is something I said before in “Photography, Business or Profession?”
Photography has really become a commodity and images are called “assets” or worse, “IP,” and the photographer has become a business person and not a professional. Again, the distinction? Well, a professional orients towards individuals, a business orients towards customers. This distinction of orientation is crucial, as photography has become more the process of asset generation and management for international media companies as part of their marketing and branding, and less a professional service or graphic art. Photographers are not artists working with art directors to conceive ideas and produce artwork. They are simply vendors, streamlined into a vendor billing system with preset values and expense categories. Just another asset to manage.
The goal is to be a professional with good business practices.
Let’s look at the various digital charges and try to understand them from this point of view.
Digital production-Equipment
You are charging for your equipment aren’t you? Well, you need to be. The photo editor can say that the carpenter doesn’t charge for his or her hammer but the reality is we are not contractors but professionals. You can liken this to mileage, mileage does not “pay for the car” but for the “use” of the car. As I have talked about before, the rates are easily figured out by taking standard rental rates from any local equipment house. TREC charges between 300 and 1000 per day for equipment rental.
You could also go your own route and figure out based on the life span of the equipment, perhaps three years, and based on the average number of billable jobs for that equipment, what is the recovery cost per job? When you look at it from that standpoint, you are talking about the entire digital imaging chain from camera to disc. This number can vary wildly from say eight to fifty thousand dollars. It would be hard not spend between five and ten thousand a year, each year, regardless of what format you are shooting. And every year you shoot you amass more images to store and archive. Film was inert, digital is fleeting. If you can expect to average the costs out over 80-120 assignments per year then it seems the absolute minimum recovery is 100/assignment standing still. (10,000/100) Likely it is much higher. Note I am not suggesting charging 100/assignment for equipment rental, but I am suggesting being aware of what it is you are trying to recover cost-wise (and losing if you are not billing this) and give a realistic idea of how to figure that out.
Digital capture-image fees
This has nothing to do with the equipment, this has to do with time that has been shifted from editors and pre-press to you. In a conventional film workflow it is conceivable that you could shoot transparency, have the lab cut and sleeve the chromes, and once you mark your selects you are done. Let us all admire for a moment the efficiency of film! Well that is no more. You may have captured the job, but now someone else has to see it.
It is also useful to see this from the point of view of the comparison I made above, contractor vs. professional. Photographers are not selling photographs, at least those shooting editorial, corporate or advertising. This is where a great deal of confusion arises. We are professionals making images that we license to others for a duration of time. The physical medium of transfer is not important. When you look at it this way you can see it as a production cost, if you weren’t making images, you would not need media, film or digital. Often times there is the expectation that since the physical media (the film) has disappeared, the cost associated with dealing with the physical transfer has disappeared also. You can see this would is false. The cost of the physical transfer is now largely time, and has grown to include pre-press functions as I mentioned above. Specifically, digital now encompasses the scanning of film and attendant colour management issues. The photographer is now embedded in the press cycle. His or her decisions on color and workflow are vital.
Digital also saves time, saves courier fees for film, the film asset management, cataloguing, archiving, liability, etc. This is no small saving. However, most of it is passed back to the photographer. We are responsible for ongoing archiving, captioning, liability and delivery.
So how do we recover these costs? Many photographers charge a fee similar to film based capture, the cost of the film plus development. I see this as an interim solution, and not a good one. If you follow my logic above, clients are actually getting more when they shoot digital, they are getting press ready files in a much shorter time, with less liability and more convenience. Simply passing on a typical film and processing charge undervalues this cost to you since you the photographer are spending a lot more time on this end. And as we move forward, as film is used less and less, this rationale will seem harder to make.
Clearly this is a time based cost, the more images you shoot the more work has to be done to ready the group for edit. Usually you are making either jpegs or tiffs available on a DVD or in a web gallery along with a reference sheet or proof prints. This is the time for gross colour and tonal corrections, basic cropping, light spotting of dust bunnies, etc. This cost will be client specific since different clients have different workflows. It will be up to you to determine a realistic schedule of costs, either per image, per hour, and including any consumables like DVD’s, prints, delivery, etc.
Increasingly I have seen some clients demand RAW files with no conversion supplied. This is obviously an end-run around digital capture fees. Forgetting for a moment any arguments about authorship and who knows best regarding the finished form of the image, you still cannot get around a basic per image charge for the time involved. Someone, your digital tech, you, has to get the images from the camera to a hard drive or DVD in an organized fashion, perhaps naming files, organizing shot folders, and being responsible for each and every image. Had you been shooting film, the physical media would have accomplished some of this for you, organizing shots into rolls and frames. In fact they get more than this as I have said.
Looking at it from the authorship standpoint it is obvious that this is pretty shoddy, you are a professional not a contractor, and even contractors have more respect for their work. Anyone demanding RAW’s should be educated, or shown the door. This is why charging fees similar to a film workflow should be avoided. It encourages these kinds of end-runs. Professionals who shoot video have long had hourly charges for prepping transfers, the logic is simple, the deck is engaged for so many hours making the transfer, and that is time you cannot be doing other things. We need to be billing these costs in the same way. While you may not like a per-image charge, which reminds me of buying ground beef by the pound, a small-medium-large tier system can work, or bill the hours themselves. If lawyers can bill hours, so can we.
Digital Tech’s
A note about digital tech’s. This is the assistant with the brain on steroids. The uber-geek. Or not, but at any rate, digital tech’s are commanding far higher rates than even first assistants. This is an interesting development. It shows how the marketplace responds to cost and demand pressures. From the point of view of the assistant, the fees are justified by the unholy amount of responsibility that now rests on their shoulders, and also the amount of additional training they need over other assistants. But it is interesting that we are seeing a class of assistants emerge as professionals essentially, they are no longer interns. As editorial has become more like advertising this is to be expected, the days of the assistant working as an apprentice to a great photographer seem a little quaint. Although I still very much like the idea. I am not knocking assisting, it has been my path, however the idea was and I hope still is that assistants are doing it to leave some day and go out on their own. It is a trade of sweat equity for knowledge. But as the business has changed and the bar for graduation seems higher now than ever. And graduating to what? Same fees as twenty years ago. Clearly this paragraph is going nowhere…my point is to be careful to maintain a rational digital billing schedule. By engaging a digital tech you are in a sense making image capture a flat fee, since we traditionally paid assistants by the day. The point would be that the tech fee should cover the same ground as a per-image or hourly capture fee. To bill for both to me seems egregious. I would like to have feedback on this.
Final file prep
After the job is delivered and the editor has made their selects you now have to make the final image. You supply reference prints, or you send a DVD or upload to a server, either your own or theirs. This is a time based cost. It will vary tremendously depending on the nature of the shoot and any post production that needs to occur. It will also vary depending on if the prints themselves are final art, which they could very well be. Be careful here not to include any retouching as this will become a monster of it’s own.
Fees vs production costs vs expenses vs. markup
This needs to be crystal clear. Fees are what professionals charge. It is a value proposition which (is supposed to) balances the value the client derives from the creation against a specific amount of money you receive. Clients will try to shift all sorts of costs onto this fee, you have to resist this. You have to acknowledge the image is intrinsically worth something and creates value for others.
Production costs are not expenses. This has to be clear also. Production costs are what it costs you to produce the image, and can vary wildly depending on the assignment. Everything above is a production cost.
Expenses are what employees incur, and they are reimbursed. There is a temptation to call everything that is not a fee an expense, however this is wrong. An expense is something that you pay out of pocket in the course of completing the job. You expect reimbursement. The reason production costs are not expenses is that production costs are not related to money you pay out per job but to the time you spend, and they are proportional to the job and in your control. Expenses are fixed, and not in your control. They are what others charge you. Examples of expenses include transportation, travel, meals, per diems, etc.
Markup is essentially a carrying cost, or an inventory cost. In the past, markup has been applied to film and other consumables, or to expenses. While there are good business reasons to apply markup, I believe it has been ultimately detrimental to our profession because it makes us look more like vendors, like we are selling “something.” The marking-up of film and polaroid was an effort to recover the time and expense involved in the use of film. Used to be film needed to be tested since batches varied widely and could not be counted on to reproduce color similarly from batch to batch. To a degree that is no longer the case, although as film production declines and labs run less and less film, a case can be made that testing is now imperative if you are to know what you are getting. A lot of consistency has been lost. Film also did not transport or store itself, and did not replace itself when outdated. So there was a cost involved in it’s use beyond the price on the box. This is what markup was supposed to cover.
As the editorial market has become increasingly irrational markup has become a de-facto fee subsidy, losing it’s meaning in the process. And revealing the deficit in it’s rationale. We should have been charging the production cost of the use of film. This cost would persist even if the client bought the film for us. Looking at it rationally and professionally this cost makes the same sense when applied to digital as I have outlined above.
Conclusion
We need some numbers here folks. PDN is doing this survey, and I fear probably not well. So these are the categories:
Digital Production, Equipment
Digital Production, Capture Fees
Digital Tech’s
Final File Prep
retouching
Miscellaneous;
DVD/CD burn
contact sheets
reference prints
fine prints
FTP upload
transfer to client drive
web galleries
persistent online download, secure, ie digitalrailroad type service
Some of these categories like equipment are going to vary widely, but we do have the basic rental prices to begin with. What say you all?
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dammit… just lost the comment i left!
I’ve found that too specific costs scare off and confuses clients. They just want to know what something is going to cost them. Important to break everything down on invoices though so they know what things costs compared to what your fee actually is… i.e. it’s not all just a big juicy payment.
Yeah, sorry, there was a server issue on laughingsquid that is sorted now.
I agree, there is a balance between itemizing toilet paper and providing a detailed estimate. Clients certainly don’t need to know what we pay for things, but there should be a clear schedule of fees like other professionals.
It depends on the client, sometimes the cost and time of educating a client about this is not worth it, however, you should have an idea of what you are charging and why.
Also, when you are providing an estimate that will be negotiated, you have to leave areas that you can protect and areas that you can discount so you can protect your profits when negotiation on a job. In these cases I do find having more line items like fee, production cost, and expense allows you give a discount percentage on one area, say a generous discount like 25%, which shows you are trying to meet a budget but are holding firm on fee for example. And since you have “given” something, they see that they have to budge too. That gets into negotiating which is a whole area in itself, but rational billing is at the heart of it.
If you clients are scared of what you are charging, consider how much hand-holding you are willing to do. They may be assuming other things too, like you are going to retouch or transfer copyright. Being clear up front in an estimate can put the negotiation on the right footing.
Another thing, clients get to tell you what they need and don’t need, for example, don’t assume they need reference prints or contacts. A lot of photographers bill for reference prints as a way to inflate the invoice, and usually they are not really needed. Colour management is getting better and better across all the players. Reference prints are a value added certainly but not required.
You could have gross categories, but I think you need to state what they include, to avoid confusion.
I have a price list that lists everything from my day or half day rate, cost per file processing, extra discs, film, processing, contact sheets, polaroids etc.. but often it’s best just to use it for my reference and give the whole sum at the start of an estimate. The only variable that is often left open until they know more of what they need is license cost per file / photo depending on usage needed. If they bite then I can educate them as part of the negotiating process.. often giving a few options.. high, med, lower costs to show them what we can do within differing budgets.
Sometimes its best when someone comes to you with a budget and you get to say what you can do within that budget. Often they’ll keep it a guarded secret until your cards are on the table, but a few times I’ve been nicely surprised when I’ve been told what we have to play with, rather than my potentially lower estimate. Either that or its immediately obvious that you should just walk away and say no thanks.
If I was trying to commision photography nowadays I’d be confused by everyone having different ways of working and charging too. Often it’s good to put yourself in someone else’s shoes and imagine what it would be like from their side. For people who don’t understand half of what the technology or process is (hence, they’re hiring you) it must be extremely baffling.
Well it is dependent on the clients you are talking about. Certainly magazines are used to seeing multiple billing schemes, I think this is what the PDN survey was trying to plumb, to get a consensus on what kinds of fees are common. The EP and ASMP articles I linked to at the beginning state the same things.
Unique clients usually have a harder time because they don’t commission as much work. They get used to whatever the last photographer did. In those cases it can be difficult which is what I think you are saying, a bottom line price is easier to understand.
I think you do have to have an internal idea of what these prices are, so that your own estimate to yourself includes accounts for these production costs even when you are only submitting a bottom line price.
Certainly. You need to know your own costs or you won’t be doing it for long.
I generally try to have fewer rather than more line items, simply because of the confusion and questions that many commercial clients (whom I primarily work with) have. That doesn’t mean that I don’t list out what they’re paying for, but I do group certain items into broader categories.
I do give an estimate for post, which again, generally includes multiple items. Usually my clients don’t care and don’t want to know what everything is, and why they’re paying for it. Usually the bottom line is what matters to them.
I used to charge an hourly rate (and still will if it’s requested, though, again no one seems to care) for processing, retouching, etc. I’ve never had a complaint about it.
Of course editorially this will, and is changing, as was stated in the PDN article. Some magazines are telling the photographer how much post will cost. Also in the article, Seth Resnick (I believe) states that charging hourly devalues what we do in post. I don’t know if I agree with that. First of all, I don’t think that anyone starts and stops a timer to keep track of this stuff. Secondly, if you are better, or doing more complex work, you can charge more per hour. Many people use this method because it’s easy for the client to understand that it may take 18 hours to download and process everything. If you are better and faster, then you should be charging $250/hr instead of $125/hr. Of course you could, as Seth says (and I generally do), just charge a fee, similar to a creative fee or photography fee, or whatever you call it on your invoice.
I guess what I’m saying is that while it would be nice if there was more consistency in the industry, different tactics may be necessary for different scenarios, for different photographers, and for different clients.
re hourly- many retouchers charge hourly and I don’t see that devaluing their work. It is just an honest reflection of time spent. The higher the hourly rate the more skill you assume the retoucher has.