What the Market will bear
Any conversation on price has to begin with the fact that no photographer is working in a bubble. Business location, the state of the economy, and the prevailing fee structure for a specific type of photography are all factors in what photographers will be able to charge.
Photographers working in a metropolitan area will have higher expenses and production fees than their small town counterpart. The basic costs of running a business — studio rental, models, transportation, food, and assistants — are simply higher in a city.
A photographer in a remote, less populated area, hired by a national magazine to cover a local story, will likely be able to demand higher fees than a city counterpart simply because the magazine’s editor has fewer options. The lack of competition gives the remote photographer an advantage.
A photographer working in an area where the economy is manufacturing-based has likely seen fees stagnate and even drop, while a photographer located where the dominant industry is health care or technology has faired much better. Economic conditions will affect what can be charged.
How can the same image have different licensing fees?
Photographers price their work based on the creative and production needs of each project, in combination with the specific use of the images. It is true: The exact same image can cost different amounts based on what is needed by different kinds of clients.
Consider, for instance, a photograph of a coffee cup in a nice setting with a book and some flowers. One-time editorial rights in a regional magazine would cost significantly less than a nationally run ad for a large coffee house chain. The creative and production requirements for the assignment are identical, but the use is dramatically different.
It would be pretty likely that, for the same image, the editorial use is billed at a fraction of the advertising rate. The use is the primary factor in determining the fee.
And what about production costs?
Production needs can vary greatly as well. Is a permit needed to shoot in a specific location? Are assistants needed? Will special props need to be selected or will you use what is on-site? Are you lighting to document the subject or create a mood? Is an extreme time of day needed to pull the image off successfully? All these and more must be considered when pricing the production end of any assignment.
Putting this idea in real terms, take that same coffee cup image we just discussed and add these parameters: The client requires that the location be a specific outdoor café at dusk; specific furniture must be used that is different than the style used by the café; it must look like it just rained; and the café must contain lots of fresh flowers and no people.
These requirements turn this photograph into a high-production image; therefore the cost should reflect these detailed demands. Regardless of use — editorial or commercial — the cost of this image just increased significantly.
Usually (not always) a project with high production expenses will have higher usage fees. This is simply practical; few clients want to pay for elaborate sets, models, or props unless the image is going to be used extensively. Generally, a client’s early production requests are an indication of their overall budget. For instance, if the client answers every production-related question with, “No, we will just shoot what is available when we get there,” you have just been given a tip that the budget is small.
Production questions answered with “We don’t know yet” means you will not be able to accurately quote the job. You can offer ranges or a best estimate, but it’s critical to your bottom line that all numbers should be qualified on your paperwork (estimate) to cover this lack of information.