A business question.

Some weeks ago I covered a Baptism. I was hired by one of the baby’s grandmother. She asked also for the digital files on a CD. I charged her accordingly for it, besides my working hours. (I know this is a hot topic for some, so please try not to focus in this point).

During the reception, the other grandmother asked what the other family was getting. I told her that some prints ant that they also paid for the digital files on the CD. She mentioned that she was interested in getting it too. I gave her my card and asked her to call me.

She called and I gave her the cost of the CD (the same price I sold it to the lady who hired me). She thought that it was extremely expensive and said that since “I already had the digital files ready to burn on a CD” she was willing to pay 40% of that cost. I kept my original price. Then she insisted on paying that 40% or otherwise she would ask the other family to burn a CD copy for her. I, as politely as possible, answered that that was not a correct thing to do but also I would not be able to stop her doing that if she really wanted to. At the end she didn’t buy the CD from me and I don’t know if she got her copy.

So from one side, she was partially right, because I felt myself already paid for the job I did. So the question is, from a business point, did I do wrong not accepting what she offered me and loose that extra money I was not really expecting at all. It is just that I felt wrong to give her the CD for that amount when the other family paid a good sum of money for it.

The contract says the when a client buys the CD, among other things, they are able to print their pictures as many as the want (again, I know, a hot topic here) but I doesn’t state anything about making more copies of it. (Anyway, here in Guatemala, fighting against the violation of these types of contracts is a battle not worth it).

Please help me telling me how you would have handle this situation and the best thing I should do to avoid it a second time. Sorry for the long post. Thanks for reading.

--
-Jose Pablo.

While she is correct in some ways, yes it's "easy" to make multiple copies of prints, CDs, etc. how that fits into work flow and economics and separate orders, is a lot different from simply assuming that she should get all the benefit from that easiness.

On a separate, distinct, later order there is added labor, you do some fussing around to prepare, burn and deliver the CD, etc. "Volume" discounts can make sense when it's a single transaction but are less appropriate for separate transactions and even less so for separate custoimers.

If you walk into a store, does the first guy pay for all the development, tooling, etc., etc., and everybody else just pays "materials?" Although more similar, if yoiu buy a magazine, doesn't everyone pay the same price?

José Pablo Martínez said:

So from one side, she was partially right, because I felt myself already paid for the job I did. So the question is, from a business point, did I do wrong not accepting what she offered me and loose that extra money I was not really expecting at all. It is just that I felt wrong to give her the CD for that amount when the other family paid a good sum of money for it.

Click to expand...

"Right/wrong"--you're talking moral issues. In terms of ethical philosophy, I'm personally a deontologist--my choices of "right" and "wrong" are based on determining "to whom is my obligation?"

In a business situation, if I have made a contract, my obligation is to the person with whom I've made the contract to stick to the terms of the contract.

I have no obligation to someone I have no contract with, and my obligation to a second person is only to the extent of any contract I agree to with that second person.

My contract with the first person has no real bearing on the second contract, unless the first contract stipulates it. For instance, if the first contract included a stiplation of exclusivity, then I can't sell the same product to a second party.

Other than that. There is no moral conflict between the two. It's totally up to you whether you want to charge more or less for the same product than you charged the first person. To make up your mind, you may well decide "Something is better than nothing" and charge less to keep them from just copying the CD of the first. Or you may not. It's up to how you want to run your business.

IMO, that's also a problem with selling only CDs as the product in that kind of non-commercial situation.

--
RDKirk
'TANSTAAFL: The only unbreakable rule in photography.'

I'm glad you held your nerve.

Right or wrong is not for me to say, but I will comment on the business side.

Personally I would not sell high resolution cd with images - only prints or prepared slide shows.

The reasons are very simple.

1 It would avoid the fiasco you had.

2 The more you sell a commodity the more price sensitive your are. Just to make it clear, a kiio of stainless steel = $x. A cutlery set can be pretty pricey and no one says its only a kilo of stainless steel.

So a digital file or negative is a commodity - a framed print is a finished piece of art.

3 Personally I'm a much better artist than commodity merchant or retailer.

4 I prefer art and trying to see how good I can make it.

5 I do not like to do as little as possible.

Further, if they had to order off your web site they couldn't argue.

Also, if you wanted to, you could pass a list out at contract time with a pricing for total order quantity. 1-9 cds =x 10- = .x, or the more are ordered in total the cheaper it gets. But I still do not like selling files, and make a marketing point out of it - "We don't just dump unknown digital files on you, we offer fine finished products only" etc.

I hope that helps.

--
Peter

Persuasive Marketing Systems -
inc Copywriting, Design & Photography

Interesting question and situation. When I first considered it, my inclination was why not give her the CD at the discounted price or even for free since she would most likely receive a duplicate copy if she requested it from her son or daughter for free.

But then I considered it further, and determined given all the variables you probably saved yourself alot of headaches. You have no idea what the relationship was between the two grandparents, and had you offered the discount to one, how would you justify the full price to the other.

In the end, the grandparents that paid for your services will probably makes copies of the CD for the rest of the family, but at least they will have control over that decision.

i agree, you did right by not selling at a discount. suppose g'ma one finds out you sold it to g'ma 2 at a discount. How do you explain that to her? what if she asks for 40% of her money back? She may have felt ripped off and now doesn't want to do anymore business with you.

my $.02

-joel

Yet another option is to leave room for maneuvering in situations like this. I have a client for whom I shoot once per week at an ongoing project. The owner needed one 16x20 of a particular shot for a presentation. I quoted a price and he agreed. There are several subcontractors involved in this, but they have nothing to do with photography.

Once these subcontractors saw the 16x20 however, 5 of them wanted duplicates. I have the right to sell prints to anyone, as long as it doesn't damage or demean my client or his business. Out of professional courtesy, before I sold to the others, I informed my client. He said "sure, go for it". Since I offer all clients discounts for ordering multiple copies, I informed him his bill would be adjusted downward to the volume price as opposed to the single copy price. He had already received his print, but it's existence made the other 5 sales possible and it only seemed fair to me that he receive some benefit as a result of a "volume" print order (it was only 6, but still...). I made a lot more money, he had a lower bill and everybody was happy.

In the case of the CD that started this thread, what would have been the consequence of contacting the original buyer, discussing the additional sale purely as good public relations (they ARE family and will learn of the other sale), and then thinking up a price that would have done something similar to my print story? IMO, it would be bad PR to charge the full pop to the original client and then 40% to the johnny-come-lately. If, however, you decided to create a discounted price for 2 CDs at roughly the same time, perhaps there would have been a monetary reward for you and good vibes from both families. If it were mine, I might decide on 160-180% divided by two or something similar.

We all have to make up our own minds about these things, but making additional profit without devaluing my work while making people happy is just good business. It would also have made it much harder for the second client to insist on 40% if it were known to both sides of the family that she was getting the same deal as the original.

Most of us agree that the ease of duplication is a double edged sword. It's still in a state of flux at our studio, but I tend to think like I've outlined here. Certainly I agree that it would have been a mistake to sell the 2nd so deeply discounted, especially with 100% being charged one side of the family. It might have been a real negative for you once it became known.
--
jrbehm
http://www.behmphoto.com
http://www.studiob-productions.com

Good points and it's certainly an option to be considered. In commercial situations I can see this as a great option because their isn't any baggage to deal with. I've dealt with some families where it's very competitive or hostile between the in-laws and such a conversation would have been very uncomfortable.

Hi Jose

You, as a photographer, own the copyright of your images and as such you should be selling your images for People / Clients to use.

Called 'Usage Rights'.

In this case, the 'Usage Rights' are for 'personal usage only' and as such you are correct in charging as much to a second person as the first.

If you base your sells on 'time' - 'work for hire' - then the first person may feel because they paid for your time, etc, then they own whatever you produced during that time - which would include your images.

In which case, the second person could get the images of the first person and use them for free.

To avoid confusion, it's therefore important to sell your images for 'Usage' and base your fee on that rather than your 'time'.

When you buy a music CD you are paying for 'Personal Usage only' - you don't own the 'Rights' to the music to do as you want with it. Same thing here with your images - your work is covered under the same Copyright laws as the music business, movie business, etc.

It is therefore illegal for someone to make copies of your work without a licence to do so.

The important thing to remember, when selling your images, is to say the price is for the 'Usage of the images' and don't be quoting for your 'time'.

You can't copyright your 'time' and it has no real value to your clients.

It's a very common mistake photographers make - charging a 'day rate' for their images as opposed to charging for the 'Rights to Use the images'.

Your model made a lot of sense -- in 1970.

"When you buy a music CD you are paying for 'Personal Usage only' - you don't own the 'Rights' to the music to do as you want with it. Same thing here with your images - your work is covered under the same Copyright laws as the music business, movie business, etc."

You are 100% right, now if we could only convince the millions of people out there that do illegally copy music cd's and movie dvd's daily to turn themselves into their local police department.....

Other than quoting the existing copyright laws, how do you exactly prohibit your customers from copying your photo CD's or scanning the prints you provide them? I think the major music and film production companies will testify the honor system doesn't work too well.

You were hired for ONE client not 2 or 3. I charge each person who wishes to buy my services. For example, if I am shooting a sports event for a client and another family asks me to shoot their child too, the second family pays the same fees as the first. No discount.

I charge a large fee for the CD because I know once I sell it, I will never get the reprint order again.

A few of my thoughts.

First don't sell images on a CD.
Second, having said that we do. So

I print the CD fronts and on that is the clients name Plus our log , name and address, it looks professional.

Then there is a clause printed that states. " Permission is granted to ...clients name...to reproduce images on this disc.

We would make it clear tothe client that this disc was only for their use before it was delivered.

However having said that it is up to the client who they give images to, in the form of prints or files.

So how do get around this proble?

You make sure that the total moneys that you have charged cover your costs and give you a good profit, however many people benefit from your pictures.

Yes it is in theory illegal for your client to burn a copy of the disc, but in reality are you actually going to sue them if they do? Unlikely.
If you make good money from a job, be happy. Don't be greedy.

If you are getting ripped off, then change your practises, ie don't do discs, only prints.
Jules

--
Black moles do not destroy information.

"Other than quoting the existing copyright laws, how do you exactly prohibit your customers from copying your photo CD's or scanning the prints you provide them? I think the major music and film production companies will testify the honor system doesn't work too well."

Your are right but the Law is never the less on your side if you do catch someone stealing from you or making illegal copies or using your images outside of your contract.

As a member of The Association of Photographers (AOP) we recommend all clients read the information at: http://www.copyright4clients.com

The Copyright Designs & Patents Act 1988 – more information on copyright ownership can be found at http://www.patent.gov.uk

I see that according to most of you I did right not selling the CD at a discount price. I didn’t stated clearly on my original post, but also a major reason for not doing it was because sooner or later grandmother 1 would have found out and, as some of you mentioned, this could turn on a uncomfortable situation to deal with. (But keep reading until the end)

I also understand the points made from some of you about the reasons to not offer the digital files on a CD. It’s mainly to deal with this kind of situations or keep loosing job opportunities like this one, since if not me, the guy next door will do it. But that’s another topic for a separate post.

I’ve applied the model discount for more copies of the original files, but until now all the request had come form the same customer. This was the first time a second client asks for some work hired by another person and it really took me off guard. I want to be more prepared for the next time and that’s mainly the reason I posted my question. I really liked Jeff B. approach. I’ll think more about it and try to see how can adjust it to my business practices.

What worries me most is to find a way to have only happy customers, because like things ended with grandmother 2 it may looks for her that I’m the greedy photographer that didn’t want to sell her the CD at a discount price and start bad mouthing my job. I read somewhere, applied to social photography, that actually when you are hired by someone you don’t have just one client, but all their family too.

Thinking about this more slowly, I guess I should have not answered immediately to her request. I should have told her that I would analyze her offer. Then talk with my original client about the situation and at the end maybe even give her the CD for free, since as I mentioned before I felt I was already well paid for that job. In this case maybe I could take all the family as just one client, since somehow they all are related. But still, I think there is a gray line here of how to separate clients 1 and 2 and deal with them independently. I guess each case will be different and have different factors to consider.

The important thing at the end and on the long run, I think is better to have happy customers that will get you more work by good recommendations.

Thanks again to everyone.
--
-Jose Pablo.

Jose

Is a tricky subject, and I actually think you made the right choice by sticking to your guns. For the future I would recommend that you look into purchasing some CD protection software such as Copy Protect that will enable the customer to view the images taken, but encrypt the images making it very difficult for them to be copied to a hard drive or another CD.

Hope this helps

Regards

Steve

"Your are right but the Law is never the less on your side if you do catch someone stealing from you or making illegal copies or using your images outside of your contract."

The law is on the side of large content producers that I grant you.

But not so sure it's really photographer friendly, at least in the US

Ever meet any photographer that has been the victim of copyright infringement? Ever meet any photographer that has pursued an action in fed district court? What is the ratio of one to the other?

There is a disconnect between the type of low economic value infringement that most photographers probably have to deal with and the costly, time-consuming remedy of going into fed district court. So much so that it is somewhat misleading to state "the law is on your side".

(I exclude the case where all you want is to stop infringement on the web. For that there is a simple, fast and cheap remedy in the DMCA.)

Though some here have already spoken similar thoughts. I feel like adding my 2 cents because on this level I am 'struggling' with how to offer and sell my photography. The more I read of other experiences and then give thoughts to such I balance these with what I know.

Copyright infringement is nothing new. I know over the last couple of decades I have had client misuse my work and I'm confident I have lost future sales. That was with film and the assorted ways prints have and are copied. Today with digital makes such even more obvious so how I am looking at your diliemma is like this.

When you are contacted to do work for a client you need to factor in how much money on average you think you need and or wish to make from each client. This will vary for each of us based on overhead, personal living costs and general beliefs in how good we are and what we may think we deserve. Build into your sales model the amount of money on average you feel you need to make from each client. Sadly you will need to treat each as a FINAL sale and structure what you want to initially sell be they prints, frames or unframed , in folios or not and digital files. If you can attain the average sale you desire then you are fine and future reorders become more or less irrelevant.

To take care of reorders such as the situation you were put in I'd suggest having a separate reorder price list that you can use. One that is discounted to reflect the fact that others may say things like you have the images done already how hard will it be to burn another disc etc? You keep these prices high enough to make it worth your while but low enough to hopefully stop others from copyright infringement. Now you just as all photographers have will hardly know if your work is being stolen but I think a future reorder price list that is discounted only for future reorders. is a way to help alleviate such.

This is all stuff I'm struggling with working on how I want to sell work but I think it is wise to attain as much income from each initial contact as you think you are worth, and in being competitive with other photographers in your area, adding enough to give you a decent living. After you make such money initially then be happy with it and move on. By all means build relationships with your clients to try to get future business but I think it is not worth much an effort to try to attain reorder income from past shoots, but have prices in effect for those who may want such.

--
visit my photo gallery of images from my 10D

http://phileas.fotopic.net/c258181.html

In the UK you bill them and if they don't pay you then simply take them to a small claims court for not having paid a bill.
It's not costly and it's usually a straight forward thing.

The main thing however is to be sure your terms & conditions are clear and that you also make it clear what it is you are selling in the first place.

If you are selling your images based on your time, i.e. a day rate plus expenses, then the Client could argue because they paid for your time and expenses, they therefore own everything you produced during that time - and a Judge would probably agree with them because it makes sense.

This has been a stumbling block for many and now with digital and CD's the problem is being highlighted.

That's why it's important to make it clear to Clients, from the out set, that your are selling them images for their use - be it personal, commercial or whatever.
Their use, not for the rest of the world to use.

The usage can be unlimited in terms of time, media and territory but it should be clearly stated.

I do come across this sort of thing all the time and before I got my head around the difference between selling images for usage verses selling images based on time, I hit problems too.

No one likes to be ripped off and your clients aren't any different. Most people aren't out to rip you off neither.

It's important however to get things straight at the start, so there is no misunderstandings.

The misunderstanding of what they (the Client) are buying is usually were the problem lies.

As a photographer, you are sell images for people to use.
That's it.

If you are charging them for your time, then you will most likely hit problems as they will feel they own what you do during that time - and if someone else wants to buy or use the images, they will feel you have already been paid for the images (your time), so why should they have to pay you again (for your time).
That is what I believe has happen here.

The wording on your invoices and quotes is important and you need to be clear about what it is you are selling and charging them for.

From the advice received here, it was interesting for me that it was mentioned two different approaches to run our photographic services.

Phileas F. commented:

" When you are contacted to do work for a client you need to factor in how much money on average you think you need and or wish to make from each client. This will vary for each of us based on overhead, personal living costs and general beliefs in how good we are and what we may think we deserve. Build into your sales model the amount of money on average you feel you need to make from each client. Sadly you will need to treat each as a FINAL sale and structure what you want to initially sell be they prints, frames or unframed , in folios or not and digital files. If you can attain the average sale you desire then you are fine and future reorders become more or less irrelevant. "

-------------------------------------

And Ashley Morrison commented (twice, thanks for that):

" If you base your sells on 'time' - 'work for hire' - then the first person may feel because they paid for your time, etc, then they own whatever you produced during that time - which would include your images.

In which case, the second person could get the images of the first person and use them for free.

To avoid confusion, it's therefore important to sell your images for 'Usage' and base your fee on that rather than your 'time'.

If you are charging them for your time, then you will most likely hit problems as they will feel they own what you do during that time - and if someone else wants to buy or use the images, they will feel you have already been paid for the images (your time), so why should they have to pay you again (for your time). "

--------------------------------------

So far, I’ve been working more in the direction of the first business model presented here.

But I found interesting and valid the points presented by Ashley, so I would like to know what other people think about this.

This is in order to create a constructive debate. My last intention is to put both of you against each other. On the contrary, I appreciate your time for commenting and helping me.

Or is it actually just one business model with small differences between each other?

--
-Jose Pablo.