licensing

Business Licence

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Earlier today, someone requested a quote for a few pictures to be used on their clothing store’s web site. So I sent a quote for a few pictures to be used on their web site. The person replied that it was “silly” that the quoted price didn’t include all rights, for all the pictures taken, for all eternity.

Photographers are running a business. The purpose of every business is to make money. Photographers make money either by selling pictures or licensing pictures.

Many photographers would be happy to sell all rights to their pictures. But the price would range from thousands of dollars to tens of thousands of dollars and maybe even much higher. Really.
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Should you adjust your set?

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The photo assignment has been completed and the finished pictures and invoice have been sent to the customer. But for whatever reason, the customer’s plans have changed and they now want to reduce the usage or even cancel usage altogether.

Should you, the photographer, reduce the original license fee and send a new invoice?

Perhaps the customer originally requested a five-year license for some business portraits but their plans changed and now they want only a one-year license. Maybe the customer initially wanted a license for sales brochures and web use but now they’ve decided to go web only. Or perhaps the work included a license for magazine advertising but the customer cancelled their advertising campaign.

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One lump or two?

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In the previous post, it was mentioned that some professional photographers will list their creative fee and licensing fee separately while others will combine the two fees into one number. Which method is better?

Combining the two fees:

• Some customers find a single fee easier to understand.

• The client doesn’t know how much each fee contributes to the total. This allows the photographer more wiggle room if they have to negotiate the creative or licensing fees.

• The client doesn’t know how much each fee contributes to the total. The photographer can benefit when relicensing the picture since the client doesn’t know what the original license fee was.

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Photography Fees Explained

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When estimating and pricing photography, commercial photographers base their price on the combination of a creative fee (also called a photography fee) and a licensing fee (also called a usage fee). Some photographers will list these two fees separately while others will combine the two into one number.

The creative or photography fee depends on the complexity of the assignment, the time involved, the photographer’s talent and experience, and the photographer’s business overhead.

The licensing or usage fee depends on how the client intends to use the finished photography.
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Photo licensing saves money

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Did you know that it’s cheaper to buy a house than rent a hotel room?

A mid-range Toronto hotel room might be $160/night. That works out to $4,800 per month which is much higher than the average monthly mortgage payment on a house in Toronto. But since a customer needs a hotel room for only a short time, that $160 nightly room rental is 3,000 times cheaper than the average $480,000 house.
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Split Decision

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Commercial photographers are sometimes asked if two (or more) customers split the cost of the photography licensing fee, can they both use the pictures?

For example, when a photographer is hired by a hotel to produce pictures of some newly decorated rooms, can the interior designer also use the pictures if the designer splits the cost of the photography with the hotel?

The answer is “no”.
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Usage and licensing fees

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The fee for commercial photography is based on two things: production value (creative fee) and usage (licensing fee). Remember that production expenses are in addition to this.

One point of the previous post was to show how production value affects the creative fee. High-end camera gear, lots of lighting equipment and lots of time spent creating a picture will result in a very good photo and also a more expensive photo.

The second factor determining the overall fee is photo usage. This usage is a combination of four things: how many pictures will be used, how the photos will be used (media), where the images will be used (location) and when the pictures will be used (time).
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