A photograph is just like a bar of soap. You might not be able to wash your hands with it and you wouldn’t want to take one into the shower with you but an image, like anything else that’s bought and sold, is a commodity. It has a price that someone is prepared to pay and beyond which no one will buy it.
That’s a simple fact that tends to get lost when the product is artistic. It’s easy enough to add up the cost of the materials, packaging and marketing that went into a bar of soap, then compare the bar to others on the market to come up with a competitive sales price, but how do you place a value on the beauty of an image? What do you compare it to when every photo is unique?
There’s no easy answer to that question — the only way to find out the correct price for certain is to place the photo on the market and see what people are prepared to pay.
But that assumes the marketplace is open and efficient: buyers know where they can find other images that would equally meet their needs; sellers are aware of the prices that buyers are willing to pay for similar types of images for similar uses.
Creating the Photographer’s NASDAQ
Not all of that knowledge is easy to come by. Stock sites might be filled with a particular type of photo but they do little to show the value of artistic images, and the prices are fixed. One of the biggest criticisms leveled at sites like iStock is that they undervalue photographs. If a buyer is willing to pay a dollar to use an image, there’s a good chance he’d pay $2 — or more. A stock site doesn’t allow the photographer to ask.
Private negotiations between buyers and sellers like those that take place regularly on Flickr then might be closer to true market rates but they’re not transparent and prices are skewed by sellers’ lack of knowledge. Few photographers on Flickr really know what a buyer would be willing to pay for their photo and many consider their first sale a learning experience.
That’s why we were intrigued when we received a comment from John Griffin in response to our post on what photographers should consider when charging for a photograph. John and his partner, both former stock traders, are the founders of a new service called CutCaster that aims to price photographs as accurately as the stock market prices assets.
“[T]he idea was to create an electronic marketplace similar to the one we worked in, which gave control over pricing back to the sellers and buyers in the market and provided tools to educate the participants in order to make better decisions over buying, selling and creating,” John told us by email. “We wanted to create a dynamic marketplace much like the NASDAQ stock exchange and also give people tools to educate themselves on what the marketplace was looking for, analyze the data surrounding their content and find available market research like… Bloomberg [does] in finance.”
The site, which has only recently opened for business, allows sellers to use CutCaster’s pricing algorithm to suggest the correct fee. At the moment, all prices are based on a single royalty-free (RF) license but there are plans to offer a range of different licenses as well as extended rights. CutCaster takes a commission of 60 percent for non-exclusive content and 40 percent for exclusive images.
John and his partner took two years to examine how the photography market prices content for different licenses, the amount different sites were charging buyers, and what people thought about pricing their own content. As a result, images start on CutCaster with a default price of $5 which then rises depending on factors that include: the number of views and downloads it receives; its exclusivity on the site; the amount of time the image has been offered; originality; and an increase in keyword enquiries.
Similarly, images that spend a long time on the site without being sold; have poor metadata management; or are similar to other images available on the market are likely to see their prices fall.
Set your Own Rates
But buyers can also offer less than the algorithm’s suggest price and sellers can override the algorithm to charge their own fees which they can then adjust in response to demand. According to John Griffin, sellers choose their own rates about 40 percent of the time.
“[G]enerally they will price [a photo] higher [than the algorithm does] but if it is priced too high a buyer can go in and submit a lower bid so the seller can still capture that sale if they do happen to price their content too high.”
Clearly though, a high price is also likely to put off potential buyers and reduce sales.
CutCaster’s main goal is be to provide a fluid marketplace enabling photographers and buyers to reach a fair price, but it’s not the site’s only goal. It also aims to be open to all photographers.
“We wanted to create an open marketplace to all and get away from the Getty
exclusiveness, which works well for them but excluded a large part of the market,” John explains. “There are no ‘gatekeepers’ saying you are not good enough.”
And if the system works, there shouldn’t be any buyers saying your prices aren’t realistic enough either.
Take a look at the sort of images CutCaster is looking for and tell us what you think.
[tags] photo marketplace, cutcaster [/tags]