Pricing & Negotiating: Industrial Shoot for Annual Report
Wednesday November 9th, 2011
by Jess Dudley
I recently helped one of our industrial photographers quote on an annual report for a New York graphic design firm. The client was a large, US-based oil company. The design firm described the basic elements of the project to the photographer—4 shoot days creating photojournalistic (including aerial) pictures of oil rigs and refineries in the Gulf of Mexico and southeast Texas. The primary use was for the oil company’s annual report, but with other possible uses in mind, they were asking for a “buyout.”
After getting those details from the photographer, I called the design firm. First, I wanted to find out what their idea of a “buyout” was. It’s a term we hear a lot, but it means something different to everyone. For that reason, we don’t use it in any of our paperwork. I wanted to find out if they really needed all those rights or if they were willing to accept limitations on the number of images, geography, duration of use, type of use or degree of exclusivity. I always make sure the client understands that as the usage rises or falls, so does the price. And if they want to contain the costs, we can tailor a licensing agreement to fit their needs so they’re not paying for anything they aren’t going to use. An “all rights” deal is certainly the most convenient solution for everyone, but it’s also the most expensive option for the client. (My first thought was that most design firms don’t get involved in advertising, so I figured we could at least eliminate advertising use.)
The design firm’s project manager and I discussed the creative, licensing and budget. She needed a variety of candid, ambient-light images of workers operating three off-shore rigs and one refinery, architectural shots of the refinery and aerial images of each rig. They wanted the photographer to capture what was happening, without staging any pictures, so the pre-production would be minimal. The helicopter was the only serious production component and it would be provided by the client.
They would be using the images in a number of internal and external collateral pieces and for press kits and other publicity. They didn’t need advertising use and their audience was limited to North America, but they wanted to be able to use any of the pictures from the shoot and they wanted to be able to use them without time limit. With all that information, I went to work on the estimate.
Fee: Clients tend to view these shoots as an opportunity to build a library of images that they can use in lots of different ways for years to come. But this presents a pricing dilemma for photographers. It’s easier to estimate the value of one-time annual report use than collateral use of all the pictures forever. How many useable pictures is the photographer going to make? What’s the likelihood that the client will use them all? How long before the photographs look dated and can’t be used anymore?
In this case, the photographer could potentially create 100 usable images per shoot day. Pricing this out on a per image basis in Blinkbid, FotoQuote or on a stock site will yield astronomical numbers. For example, five years of national collateral use for 400 images in Blinkbid yields $2-4 million for the licensing fees alone. If the licensing were limited to one-time annual report use, I would tend to quote 2500.00/day plus expenses for an average photographer on a multi-day project. With the additional uses and duration added in, my experience is that it’s worth around twice that amount. So I quoted $20k for the creative fee.
Assistant: The photographer only needed one assistant for the project and he wanted to work with his regular first assistant, who he pays 350.00/day for commercial assignments. (I’ll normally have the first assistant travel with the photographer and hire a local one if we need a second assistant.) We budgeted for two travel days, a scout day and a prep day to pick up and return the rented gear and to pack. Assistant rates can vary widely depending on the assistant, the photographer, the client, the shoot. I have found that I can get good assistants in most cities for about 300.00/day.
Capture Fees: This fee covers the time and equipment/software necessary for the initial image download/editing/organizing/tweaking/web-gallery-making. The client wasn’t going to be reviewing the images during the shoot, so we didn’t need a digital tech on site.
Photographer Travel/Scout Days: The photographer would have two full travel days and one scout day to prepare for the shoot once he arrived in Texas. He wouldn’t be scouting the rigs, but he would be meeting with the client and scoping out the processing facility.
Airfare: I priced out two round trip tickets to Houston for the photographer and his assistant. I found tickets for 390.00 per person on Kayak.com. I padded the airfare a bit to account for potential increases in fares between estimate submission and approval. I hate going over budget on anything.
Baggage Fees: These days, if you forget to account for excess baggage, you could be in big trouble. The photographer told me that he’d be checking three bags of gear. I accounted for two more bags for personal items and priced out the baggage fees on the airline’s website. 50.00 per person for the first two bags and 100.00 for the third, each way.
Car Rental & Gas: The photographer and assistant would need a vehicle to get from their hotel to the heliport and processing facility. I priced out the car rental, insurance and gas for the week. I always look at Kayak.com and Enterprise.com for car rental rates unless the photographer wants to use a specific agency for rewards purposes. (Check out the Wonderful Machine discount we have with Enterprise. You don’t have to be a member to get it.)
Lodging: The photographer and his assistant would be staying at the same hotel all week, each with their own room. Unless the photographer specifies a brand, I use Kayak.com or Hotels.com to find rates.
Equipment Rental: The photographer wanted to get gear from a rental house he was familiar with close to him. He rented two camera bodies (300.00/camera/day) four lenses (~50.00/lens/day) two Scrim Jims (100.00/day). 900.00/day x 3 days (same as a week) = 2700.00.
Post Processing Days: For most jobs, photographers deliver a web gallery of roughly processed, low resolution files for the client to choose from. Then they custom process the client’s selects and deliver high resolution reproduction files. In this case, we were going to deliver “all” of the pictures processed and ready for reproduction. As a practical matter, “all” means a moderate number of similars from each situation, with lots of duplicates removed. In these cases, I’ll typically quote a day’s worth of image processing for each shoot day. If we end up with 100 pictures per shoot day, that will give us about 5 minutes to process each file.
Delivery of Hi-Res by Hard Drive: This covers the cost of the hard drive plus the other equipment, software and time required.
Meals, Insurance, Shipping, Misc: This covers 75.00 per person, per day for food (including travel and tech days), the costs and time associated with getting a certificate of insurance, shipping for the hard drive and a little extra for any unanticipated expenses that might come up.
Finally, I made sure to itemize the various production elements we were expecting the client/agency to provide and I specified that we needed a 50% advance prior to the shoot. After reviewing with the photographer, I submitted the estimate and terms & conditions to the design firm and called to follow up with the project manager. She confirmed receipt and said she’d review it with her team and get back to me.
(click to enlarge)
A day or so later, the project manager called asking what we could do to bring the costs down by about 5,000.00. This was a little disappointing because I felt that it was pretty lean to begin with. We talked about what we could scale back. (I never give up money without cutting back on what I’m delivering.) There weren’t any expenses that we could do without, so it was going to have to come out of the fee. To do that, we were either going to have to limit the number of images or the duration of their use. I asked if we could limit the number of images. She wasn’t enthusiastic about limiting the number of images, but thought a limited duration would be more palatable to the client. So I talked with the photographer and we decided to bring the fee down to 3750.00/ shoot day in exchange for limiting use to 3 years. I should mention that I wouldn’t go much lower than that even if the client was willing to cut the duration down to 1 year. We revised and resubmitted the estimate (click to enlarge):
The client approved it and the photographer shot the project.