A certain mystique surrounds photographers' pricing. Rarely do two shooters submit identical estimates for the same job. How do they arrive at their rates? Is it a scattershot approach, or does it demand precision? For the professionals who've weathered years in the business, pricing their photography is more than a game, it's a practiced skill in which accuracy is the key to winning.
"Generally speaking, photo fees for Atlanta are twice what they are in smaller cities, like Birmingham, and half what they are in New York," says shooter Tim Olive. "Some photographers are fortunate to work in any city at near-New York rates. It's not the city you're in, it's the market. Your rates are what you make them."
In reality, the day rate is a creative fee and does not include expenses, such as film and processing, travel, models, stylists, assistants, unusual equipment, or props.
"My day rate is the fee paid for my expertise," says Dave Schilling. "My studio and equipment come with that."
"I call it a usage fee, not a day rate," says Ron Sherman. "The higher the usage; the higher the fee. The term, 'day rate,' creates too many problems in buyers' minds about what they're getting, or not getting. I set my fee so I don't feel like I'm working on the clock."
Disagreement exists over whether the day rate has remained flat or decreased over the past five to ten years. But, one thing photographers agree on is that it has not increased substantially, despite increased fees in other creative and graphic areas.
"I think rates have actually gone down from what they were ten or fifteen years ago," says Brad Newton. "Today, there are many more photographers and more are willing to undercut each other to get a piece of the work."
"Some areas have declined slightly," notes Sherman, "but rates have been fairly stable during the past five to eight years. I attribute that to the good economy and low inflation. The last time there was a major increase in rates was during a time of big inflation." Schilling agrees, "It's a matter of supply and demand, like anything else in the economy."
What factors come into play in setting the day rate? Usage rights aside, most photographers apply basic business principles in calculating their day rate.
David Seijo, shooter and photo instructor at The Creative Circus says, "The day rate is based on the amount of overhead the photographer gets into in order to establish his business. Everyday pricing increases on every product that says 'photo' on it. You have to take that into consideration as well as the time and film it takes to develop your own unique technique."
Schilling agrees. "My day rate is the combination of all my overhead and expenses and my experience level. I figure out my fixed expenses on a yearly basis and divide them by 12. Then, I divide that monthly total by 30 and add a creative fee to determine my day rate."
Newton adds, "The day rates can seem high, but most photographers don't shoot every day. You have to factor that into what you need to pay the bills, support your family, and stay in business."
Cancellation fees are something all photographers stipulate, usually 50 to 100 percent of the day rate, but few rigorously enforce, because clients rarely cancel altogether, most often, they reschedule.
"Doctors, dentists, and lawyers use the same concept," says Newton. "If I've scheduled my time, I may have turned other jobs down. When someone cancels, I don't make money. But, I try to have relationships with my clients, and if they reschedule because of something understandable, I bite the bullet."
"Cancellations are a tough issue," says Schilling. "My contract states that I need 72 hours notice, or I will charge the full day rate. However, most of the time, it's not a cancellation, it's a reschedule. Shooting architecture, I have to deal with weather issues a lot, and weather cancellations are really nobody's fault. The photographer has to be flexible, but you also have to know when to draw the line."
All other expenses, such as models, props, couriers or overnight services, meals, tips, transportation, unusual equipment, film, and processing are passed on to the client. Most photographers mark up the cost of film and processing by 10 to 15 percent to cover their handling time.
Keeping track of all the variables can be tricky when compiling an estimate. Nearly all photographers use some sort of estimate form similar to those distributed by the American Society of Media Photographers (ASMP) and the Advertising Photographers of America
(APA). These forms provide a checklist to help the photographer remember everything for which he or she needs to charge. This itemized form is presented to the client. Most photographers try to review the checklist with their clients, to make sure they understand how things were estimated.
"I try to estimate high to cover the basics, then save money if I can," says Sherman. "It really depends on how tightly the client's specifications are. If there are a lot of if's, and's, and but's I give a range. Normally, the job ends up within a few percentage points of my final estimate."
"Jobs with substantial expenses usually require a cash advance," explains Olive. "Once a price is agreed upon, any job changes that affect the price must be approved by the client first. Then, we have to keep our invoices within budget."
"Some jobs require digital post production, which has become a replacement for darkroom work," he adds. "We also charge a slight production mark-up fee of 15 percent on expenses to cover the production overhead, such as bookkeeping expenses and so forth. This figure is itemized on the original estimate."
"Rates range from $200 to $1,200 per assignment, depending on the extent of the project," says Daemon Baizan. "I think the flat rate evolved because it's easier for magazines to deal with, knowing up front what the costs will be and putting limits on them. The trick is to find a way to shoot within the publication's parameters and make a profit. The photographer assumes all the risk."
Unfortunately, for editorial shooters, the trend in rates is headed downward. The September 1998 issue of Photo District News (PDN) compares rates from 49 national and regional magazines, in 1989 and in 1998. While advertising rates have doubled during that period, assignment rates have barely kept up with inflation, decreasing in a number of cases.
PDN points out that although many magazines consider their rates negotiable, "with so many photographers vying for editorial jobs, few have been willing to risk holding out for higher rates."
The article also goes on to detail how magazines are gaining more uses from assignment photos, while paying little or no extra compensation to the shooters.
The debate comes in when clients want to buy all rights to images for an unlimited amount of time, which essentially means the photographer loses his or her ability to generate income from those images, or use them in any other way. Should the photographer grant all rights and if so, how much is adequate compensation? What fees are appropriate for limited usage rights?
"Usage rights vary according to the media and time period of use," explains Olive. "For example, extended usage, such as two years with unlimited media, will cost more than a six-month ad in trade magazines. We use stock photography rates for a point of reference because we know they work. But, every shoot is different and has different requirements. That's where negotiation comes into play. When a client isn't sure about additional future uses, we have guidelines that show in advance what it would cost if they decide to re-run an ad. Our guidelines are helpful in explaining the alternatives to the client."
"I have a schedule I developed for myself," says Sherman. "I don't get involved in buy-out, it would be such a high price, I'd have to pick the client up from the floor. If the buyer is inexperienced, I explain the extra value of the images, that's what I charge for."
"I look to the ASMP for guidance on usage," says Schilling. "I tell my clients that there's no such thing as a buy-out, it would cost more than their company has. When you explain it to them, most people realize that a photo becomes dated and it's not usable after a year or two, so there's no point in paying for what they don't need. A lot of education is involved."
"I think it's important to introduce the client to the concept of usage in a positive way," says Baizan. "Ultimately, they have to realize that anything beyond the original usage is subject to additional compensation. I'd rather allow clients more usage rights for a shorter time than allow them vague usage rights over an unspecified period. I think you give up less in the negotiations when you are specific about the rights."
These pros agree that photographers who grant buy-outs are jeopardizing their own businesses in the long run. "People don't understand the value of their work and the number of reproductions," says Newton. "They're quick to give away the rights because they want the money now, instead of potential future income."
Seijo tells his students to get a tight, close-to-final comp. "Most of the details will be on it. Then you can talk with the client and go over the comp verbally, which is a must. What we do is visual. When you start using words, it can get confusing, so try to get as many visual aids to help describe the idea."
Sherman says photographers need to know the goals of the project. "Will it be documentation, mood, information?" he asks. "Also, will the job be awarded on ability or price?"
"Usage, usage, usage," he continues. "Finally, will the subject be ready to be photographed when I get there? Delays add to the cost."
Newton says clients would get better estimates if they used the standardized estimating form that they gave to all photographers bidding on a job. "I try to review my bid with the client to make sure they understand what are fees and what are expenses. People tend to look only at the bottom line, so I like to point out potential discrepancies. My bid could be 50 percent higher, but I've included every possible expense."
"If a photographer has been selected and you need two more estimates, ask for complementary estimates," advises Olive. "It's not fair for a photographer to spend an entire day carefully planning a shoot when you know he won't get the job. Secondly, respect the creative. An accurate estimate is very difficult without creative input. Make the art director accessible. Finally, if you need more than three estimates, ask for ballpark figures. Then you can decide who you want detailed estimates from."
Creative execution, expenses, usage right, photographers must consider all of the variables in estimating their prices. Like their skills behind the camera, estimating has been fine-tuned over time. Those who maintain a competitive edge give their pricing the respect it deserves, so they can remain in the game for the long-term.