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Author Topic: Cost of doing business  (Read 20428 times)
Yelhsa
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« Reply #40 on: August 22, 2013, 05:38:48 AM »
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Go Go, you asked "Why bother?" earlier - well as this is a 'Pro Business Discussion' forum, then I think it's as good a place as anywhere, to ask other like minded pros questions and challenge one's own believes & thinking about what one is actually doing.
Because even if what I'm doing appears to work okay, there may actually be a better way to do it - which I just hadn't thought about.

And if there is, then I want to know about it - because I'd be the first to admit, that even after many years of doing this, I still don't always get it right - as every quote I submit is not excepted. So I question things that others may say or believe in, in an attempt to find the answers, which I believe we are all looking for too. Hence this 'Discussion' forum... where we can discuss things like how best to run our businesses, what words we should be using, how to logically think it all thought, etc, etc.

So I've simply told you all what I believe it's all about and what it is that my clients are actually paying me for... as far as I'm concerned.
Craig clearly believes it's for something else, hence the discussion so far - which I'm quite enjoying - because it's better to discuss these things here, where it costs nothing but a little face to be wrong; rather than not to be able to answer these questions should a client ask them, which could actually be very costly, if you have got it wrong.

So that's why I'm bothering - because I'm constantly questioning what I myself believes to be true - just incase, after all these years of thinking I'm doing it right, I discover there is in fact a better way or more logically way or more profitable way, to go about it.
« Last Edit: August 22, 2013, 05:53:13 AM by Yelhsa » Logged

Yelhsa
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« Reply #41 on: August 22, 2013, 05:46:04 AM »
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When I do an advert we request 50% of the production costs upfront.  When I shoot for an editorial magazine, my production expenses are sitting on my credit card or out of my pocket for 30 to 90 days.

Okay, so now back to Jeffery, as I have a few more questions here about what you have said... which I hope you don't mind answering on this 'Discussion' forum.

The way I see it, based on what you have said, the magazines are really just paying you for one thing here i.e. an agreed amount of money, for the use of your images, after you have produced them.
Whereas, the advert are paying you for 2 things here i.e. they are paying you an amount of money towards 'the production costs' first and then they are paying you another amount of money for the use of your images afterwards... and that's basically it.

So in the case of the advert, where they are paying you an amount of money in advance towards 'the production costs' - does 'the production costs' here include your time i.e. pre-production time, photography time, post-production time, travelling time, etc ?

Or is that what your 'creative fee' is all about - which you didn't happen to mention if they actually paid you for or not !!

In other words, do they actually pay you for 'your time' here beforehand OR are they really just paying you for the use of your images afterwards, which you have had to spend time on producing first ?

Just trying to get a better understanding of what your clients are actually paying you for here, as opposed to what you are thinking they are paying you for - hence the questions.
Because these are questions I asked myself many years ago, when I was trying to figure it all out i.e. what are my clients actually paying me for, and why would they be prepared to me more for that ... or not as much for that, as the case may be ?

So your 'creative fee' for example - what is it and why would they be prepared to pay you more for that... or not as much for that, as the case may be ?
Do they get more of something, if they agree to pay you more for it or do they get less of something, if they don't want to pay you as much for it ??
Or are they really not actually paying you for it at all, but rather paying you for something else instead, which your 'creative fee' just happens to be a part of ... as far as they are concerned ??

In other words, looking at it from your client's point of view - rather than form your own point of view here - and asking the questions that they may ask, about what it is exactly, that they are paying you for here !!

Is it for what you think it is or is it actually for something else completely different - which you hadn't though about before ??

(By the way, I don't think there are really any totally right or wrong answers here - so these are just some questions I'm asking on this 'Pro Business Discussion' forum, which others may want to think about too - as they are the sort of questions that your clients may ask you someday, to explain what it is, that you are actually asking them to pay you for beforehand or explain what it is that they have actually paid you for afterwards.)
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Go Go
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« Reply #42 on: August 22, 2013, 09:14:55 AM »
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Hi Ashley,

Sorry if I may have sounded curt, or impatient earlier. Time is precious right now.

In my experience as a photographer if you fail to charge your clients for the use (usage) of your images by specifying (license) the exact allotted use and time of use then you are leaving money on the table.

There is no simpler way to explain this. Now if you are working in the retail environment and shooting portraits for people that is a different story. I am talking about business to business photography for publication. Advertising or editorial use, basically photography produced for commerce. In this arena there is only one consideration and that is value, as in what is the value of your effort in creating a picture. And thanks to the law of the land (USA) as the creator of your image you own all rights to the image. Take into consideration that you sometimes need property releases or model releases etc, but make no mistake this is commerce and as a creator of original work (your picture) you have the right and obligation to oversee it's use and usage.

This model works for me and if a client does not understand, then it is my job to explain it.

It's business, if your not going to do it well business will eat your lunch.
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Craig Lamson
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« Reply #43 on: August 22, 2013, 11:32:50 AM »
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In my experience as a photographer if you fail to charge your clients for the use (usage) of your images by specifying (license) the exact allotted use and time of use then you are leaving money on the table.



I'll make my point and I'm sure Ashley will make his.

Markets and clients are different.  You are from New York.  I'm from small town Indiana.  Others everywhere in between.  What a customer is willing to pay and for what will vary everywhere. 

My market demands certain things.  Any given manufacturer I shoot for will want unlimited usage.  Print, web, PR, editorial (trade and consumer pubs who request product images, which the manufactures see as PR) Dealer usage ( for their retail advertising) and even letting suppliers use the images for their own trade advertising (which the manufactures consider PR).

I'm not alone in the number of guys who have tried to sell in this market by usage. And we all saw the clients stop buying photography from us.  You can "educate" until you are blue in the face but they want what I listed about and they ultimately dictate the price they are willing to pay for it.  Within reason, even if they really like the images you make, money talks and BS walks.  So you choose, work within the system or find another client base.

Do I license my work?  Of course.  At least we have gotten THIS far and the term buyout  does not get tossed about much any more. But quite frankly this is 'feel good" verbiage for me..  A blurb from a fact sheet of mine.

Usage Rights

We understand your clients needs are vast and varied and can change at a moments notice.

We grant unlimited first and second party usage rights for all RV images we produce.  Your client and their dealers may use these images for all of their needs, including web, editorial, and advertising.  We also grant the agency unlimited usage rights for self promotion.  We do however ask that third party usage such as trade show displays or advertisements by a supplier to your client, only be granted usage rights after contacting us.  We many or may not assess a licensing fee.


I don't care about the length of time, simply because the images we produce are useless after a model year. 

There is simply no money here left on the table because the end user simply won't pay for the multiple usage licensing model. And if I did my part correctly they call me the next model year to shoot here products all over again.

BTW, that was written for agency customers, but quite frankly I'm not working directly for the agency much anymore, but rather direct for the manufacturer and I generally get paid in 15 days. 

That's what works for ME.  And quite frankly I do pretty well with this model.  I net low 6 figures, which might not be a lot in NY, but its a very good living here where the cost of living is among the lowest in the country.

I don't chase more traditional b to b, or other local advertising work because the rv, and marine stuff keeps me plenty busy.  But I do know that paying by licensing is is not a staple.  One of the more prominent agencies  in the area ( I was shooting for an RV company and they were producing the print and web for them) told me they were surprised I could bill like I was.  Their standard was to pay day rate and require all the raw files.  And they had no trouble getting photographers to play.

Would I like to get paid MORE for the use of the images I make?  Of course, but that's not going to happen if I continue to work for the clients I have.  And at 60, I'm not really interested in looking for a different niche.

Is there money left on the table ...here?  Nope.

One size does not fit all.





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« Reply #44 on: August 22, 2013, 12:43:06 PM »
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I am curious, for those who use a creative fee model, what part of your production time do you include in that? Do you just include the time spent shooting, or do you include the time spent retouching and processing the images and preparing for the shoot as well?

Also, when using a creative fee model and including the licensing and production time within the creative fee, how are you making adjustments to the fee whenever there is a subsequent change in the number of images you initially agreed upon with the client, and how do you explain how you arrive at the adjusted fee to the client?
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« Reply #45 on: August 22, 2013, 03:47:11 PM »
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I am curious, for those who use a creative fee model, what part of your production time do you include in that? Do you just include the time spent shooting, or do you include the time spent retouching and processing the images and preparing for the shoot as well?

Architectural shooter here - generally working with a scope/fee model.

For the Creative Fee (I call it Photography) I include prep time (packing/unpacking, estimating, etc.) but itemize scouting and travel separately.  For processing, I include basic processing (bulk color, distortion correction, etc.) that gets the files to a proof state - trying not to require too much imagination from my clients.  Retouching is quoted separately either on request, or many times I will make recommendations.

This is on projects where I'm actually itemizing things - many times I will just give a total fee for X images delivered for Y usage.

Quote
Also, when using a creative fee model and including the licensing and production time within the creative fee, how are you making adjustments to the fee whenever there is a subsequent change in the number of images you initially agreed upon with the client, and how do you explain how you arrive at the adjusted fee to the client?

I generally list a fee schedule up front in my estimate for additional images delivered from a shoot.
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Yelhsa
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« Reply #46 on: August 22, 2013, 05:15:23 PM »
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This right here...

Usage Rights

We understand your clients needs are vast and varied and can change at a moments notice.

We grant unlimited first and second party usage rights for all RV images we produce.  Your client and their dealers may use these images for all of their needs, including web, editorial, and advertising.  We also grant the agency unlimited usage rights for self promotion.  We do however ask that third party usage such as trade show displays or advertisements by a supplier to your client, only be granted usage rights after contacting us.  We many or may not assess a licensing fee.


.. is what I believe your clients are actually paying you for i.e. for the use of your images, as clearly stated here.
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« Reply #47 on: August 22, 2013, 05:16:18 PM »
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How does one achieve exceptional knowledge, skill or talent?  I would wager to guess by putting in the time to learn one's craft.  The author Malcolm Gladwell wrote in his book "Outliers- The Story of Success" http://en.wikipedia.org/wiki/Outliers_(book).  That a person must put in at least 10,000 hours to be great at one's craft, skill or whatever.
Moving slightly off topic here - Needing time to learn one's craft is certainly true. The 10,000 Hours rule is a pet peeve of mine as it is well.....utter bollocks.  Tongue  Even the guy who did the study that gave rise to the term does not use the word 'rule' with regard to his findings.
This is basically the nature Vs nuture debate. And in my view, to use a British colloquialism "you can't polish a turd".

A cyclist who lives near me once said about skill, "If it was just a matter of practice everyone could be as good as me."
I just read this week, a magazine article about the 10k hour 'rule' with regard to  sport and it seems the current top female triathlete, Chrissie Wellington, is leaving everyone trailing way behind her. Including many men and she only took up competitive sport in her late 20s and right from the start she was beating others waaaay more experienced than her.
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« Reply #48 on: August 22, 2013, 06:06:27 PM »
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This right here...

.. is what I believe your clients are actually paying you for i.e. for the use of your images, as clearly stated here.

Nope they are paying me for my time.  They don't get to use the images until they pay me for the time and costs to produce them.  And quite frankly there have been many times they paid me for images they NEVER used because they changed the product after the photos but prior to release and then the paid me for my time to produce them again.  

The licensing clause is simply feel good wording for me.  They get the equivalent of a buyout, and quite frankly, not a single one of them cares about the license and I'll never enforce it anyways.  Tried  few times when clients gave a photo or two to a supplier and I requested payment for the supplier.  I was told in no uncertain terms IF I enforced the payment that would be the last I would shoot for them.  And quite frankly the one time fee from a supplier paled in comparison to the continued payment for my time from the original client over a A DECADE.

I shot without this verbage for years and I suspect I have clients who are not even aware of it.  We never issue contracts or purchase orders.  Someone gives me a shot list, usually via an email, I give them the time to produce the images.  They know exactly what my prices are and how much the job will cost.  I'll bet I've not produced more than 10 quotes over the last dozen years. And once I start working for a client the quotes stop.

Small town, friendly, handshake business.  Not one size fits all.

We can go round and round for days Ashley.
« Last Edit: August 22, 2013, 07:13:57 PM by Craig Lamson » Logged

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« Reply #49 on: August 23, 2013, 01:03:00 AM »
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Nope they are paying me for my time.  They don't get to use the images until they pay me for the time and costs to produce them.  And quite frankly there have been many times they paid me for images they NEVER used because they changed the product after the photos but prior to release and then the paid me for my time to produce them again.  

The licensing clause is simply feel good wording for me.  They get the equivalent of a buyout, and quite frankly, not a single one of them cares about the license and I'll never enforce it anyways.  Tried  few times when clients gave a photo or two to a supplier and I requested payment for the supplier.  I was told in no uncertain terms IF I enforced the payment that would be the last I would shoot for them.  And quite frankly the one time fee from a supplier paled in comparison to the continued payment for my time from the original client over a A DECADE.

I shot without this verbage for years and I suspect I have clients who are not even aware of it.  We never issue contracts or purchase orders.  Someone gives me a shot list, usually via an email, I give them the time to produce the images.  They know exactly what my prices are and how much the job will cost.  I'll bet I've not produced more than 10 quotes over the last dozen years. And once I start working for a client the quotes stop.

Small town, friendly, handshake business.  Not one size fits all.

We can go round and round for days Ashley.

The more I think about this discussion, the more I have to agree that, unless you are doing something like event photography, we are not selling our time; we are selling our talent. This is the basis for the argument that photographers should quote in terms of a creative fee rather than a day rate. Time is certainly a consideration in the overall calculation, but really only from the photographer's standpoint. As Ashley points out, do the clients really care about this? Don't they really just care about the results? Seems to me that quoting based on time has a tendency to turn the photographic process into a commodity rather than a creative endeavor. Now, I can understand breaking out time spent on purely mechanical, non-creative things such as preproduction preparation or weather delays, but I think I agree that the time consideration related to the creative process should be encompassed within the creative fee.
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Yelhsa
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« Reply #50 on: August 23, 2013, 04:52:16 AM »
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Nope they are paying me for my time.  

Well you can obviously sell them 'your time' if you like and therefore basically agree to do work made for hire instead.
In which case, you would really need to put everything in writing beforehand:- how many hours do they want you to work them, plus how much will they pay you per hour - as well as: what camera system do they want you to use during those hours that they are paying you for, what lenses do they want you to use, lights, stands, modifiers, computers, software, etc, etc - and then have them sign it all off beforehand OR have them agree to supply it all for you to use, during the time that they are agreeing to pay you for.

Otherwise, you could just turn up with your two hands in your pockets - just like an assistant would do, if you were hiring them to do some work for you.

So in other words, besides billing them for 'your time' here (like an assistant would do), you would normally also bill them for the hire of any & all equipment that they wanted you to use too - and naturally you would mark all of that up +%.

So it would be all about Expenses, Expenses, Expenses - when it comes to this type of agreement.
Because one day of your time is still just equal to one day of your time, no matter how much they pay you OR whether you use an iPhone or a large format camera system OR whether you use no lights or 50 lights OR whether you take one picture or 1000 pictures OR even whether those pictures are any good or not.

So if you are going to be bill them for this, then it's important for you to understand the difference here, between agreeing to do work made for hire and agreeing to provide them with some images for them to use - because what you would be actually asking them to pay you for (beforehand, when you are quoting), would naturally be very different too.

So rather than saying something like this...

Quote
To produce and then provide (X number of) images of (whatever it is) at (wherever it is).
For exclusive use, for (whoever they are) to use these images for:-
Media use: (All Media or for whatever media it is that they have said they need to use your images in).
Period of use: (Unlimited years or for whatever length of time it is that they have said they need to use your images for in the above).
Territory of use: (Worldwide or for wherever in the world it is that they have said they need to use your images in the above).
Licence fee based on the above: $ (the amount you would like them to pay you for agreeing to this).

.. which would then tally with your 'Usage Rights' terms - you would instead list everything that you are possibly going to need, to do whatever it is that they want you do, during the hours that they have agreed to pay you for... and you would then get them to sign for that beforehand - so as to avoid any misunderstandings down the road, as to what it is that they are actually paying you for here.

By the way, agreeing to do WMFH is actually not a bad way to work in my opinion - so long as you fully understand how it works and the difference in how to bill for it - because it usually does mean that you can get to use the best & latest of gear, which you may otherwise not be able to afford.
So it does have it's advantages too - which you can also take advantage of, if you play your cards right Smiley
« Last Edit: August 23, 2013, 05:06:58 AM by Yelhsa » Logged

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« Reply #51 on: August 23, 2013, 06:24:56 AM »
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There's a lot of bickering about how to describe how you charge.
Now obviously doing any photographic work takes time to do, so charging for time seems logical, particularly if your work has a short shelf life/one off use where repeat sales are not going to happen. But if you licence the same work to many people and as usage type [local ad Vs worldwide campaign] will alter fees dramatically, then your income from imagery will not necessarily be related to time taken to produce the work. So charging by time is meaningless in that context regardless of the fact that time is used to produce the work.
Unfortunately, the problem with the licensing model is that nowadays it is being undermined by those willing to do work for a [not very good] flat fee and increasing reluctance of buyers to pay for anything other than the time taken to do the shoot - time taken to do post processing and all the other tasks involved with doing a job seem to not register. As for example when people complain about wedding photographers charging thousands for 'just' a few hours work. Even trying to explain licensing and usage is pointless at times, the client has a budget and that's it.

The thing is there are numerous ways one can charge for one's work.....  
time,
time + expenses,
time + expenses + usage
time + usage,
usage,
talent,
talent + time + expenses,
talent + time + expenses + usage.....etc.

All these variations are perfectly valid as a business model - providing they suit your particular situation.
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Yelhsa
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« Reply #52 on: August 24, 2013, 03:23:24 AM »
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I am curious, for those who use a creative fee model, what part of your production time do you include in that? Do you just include the time spent shooting, or do you include the time spent retouching and processing the images and preparing for the shoot as well?

Also, when using a creative fee model and including the licensing and production time within the creative fee, how are you making adjustments to the fee whenever there is a subsequent change in the number of images you initially agreed upon with the client, and how do you explain how you arrive at the adjusted fee to the client?
What Creative Fee means and includes, etc, according to the American Society of Media Photographers.

I believe it was a new term which some American photographers started to use about 10 or 12 years ago, when 'Digital' became the new way forward - as prior to that, and even to this day in most parts of the world, it would be what an Art Director would charge for their input.  
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« Reply #53 on: August 27, 2013, 11:02:02 AM »
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I feel part of the difficulty is people need to quantify things.

We understand the concept of 'time' / our clients understand the concept of 'time'
Therefore, it is very easy to compare apples to apples over 'time' (or creative if you'd like) and other costs (production, post, licensing etc)

However...what sets one photographer apart from another is talent, vision, style, what they see, and of course their ongoing relationship with a client.

If a client has two equal estimates from photographers whom they have used in the past.  They will pick the professional whom best suits the job.

We don't shoot under Day rates, or half day rates.  We call it creative rates.  However many of our clients will say 'we've a job that is an x day shoot' would you be interested....

The quantifiable part becomes negligible, however in general the client needs it...
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Yelhsa
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« Reply #54 on: August 28, 2013, 01:50:42 AM »
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However many of our clients will say 'we've a job that is an x day shoot' would you be interested....

The quantifiable part becomes negligible, however in general the client needs it...
What is it that they actually need here and why do they need it ?
Is it just because they want you to confirm in writing beforehand, that you will be producing all these images that they want to use, on a particular day or between the hours of x&y on a particular day - rather than it being y days or at a different time - so as to avoid any misunderstandings, as to when the images will be created !!
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« Reply #55 on: August 28, 2013, 10:28:07 AM »
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Generally at this point we have no idea when a shoot will take place. Perhaps we know the month...but the rest is weather and project (construction) completion dependant.  There may be numerous visits of 1-2 hours.

Yes, they are asking for a confirmation that we are interested, and many of our clients understand how many shots of a building can be achieved for a given 'x' rate.  They are able to quantify and budget before they even call us. We will of course at this point provide a confirmation and firm quote of their assumptions or otherwise.

This is a framework and terminology they are familiar with, and it works for us.

One size doesn't fit all.
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« Reply #56 on: August 28, 2013, 01:01:29 PM »
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... and many of our clients understand how many shots of a building can be achieved for a given 'x' rate.  They are able to quantify and budget before they even call us. We will of course at this point provide a confirmation and firm quote of their assumptions or otherwise.

We would do a simpler thing - so we would usually just let them know what the per image fee would be, which would naturally be based on a pre determine amount of use, e.g. 400 per image for 1 years use in Multiple Media throughout the UK plus on the Internet.

So that way, the only real thing that they need to figure out beforehand, is how many images can they afford to stay within their current yearly budget.
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« Reply #57 on: August 28, 2013, 04:18:17 PM »
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We would do a simpler thing - so we would usually just let them know what the per image fee would be, which would naturally be based on a pre determine amount of use, e.g. 400 per image for 1 years use in Multiple Media throughout the UK plus on the Internet.

So that way, the only real thing that they need to figure out beforehand, is how many images can they afford to stay within their current yearly budget.

In Andrew Latreille's case, it seems that his clients are experienced and have a general sense of the amount of time it takes to photograph their projects. Nevertheless, photographers who have a different style or use different techniques than they are used to might take more or less time than they are used to. In some cases, there may be unusual situations that would require more time than normal, either due to logistical considerations or as a result of needing more time to achieve a specific look to the images, which situations would warrant a higher fee than normal. In such cases, it would seem useful to me to let the client know that part of the fee calculation is due to additional time involved, whether or not one tries to be very specific about that time.
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« Reply #58 on: August 28, 2013, 06:13:08 PM »
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.. it would seem useful to me...
Yes, but just because something is of great value to you, doesn't automatically mean that others will see any real value in it. So it may be best to stay focused on the things that they will actually see real value in and/or that are important to them, rather than talking to them about the things that are really only of value to you and/or that important only to you.

For example: spend 2 hours producing an image which they don't want to use veres spend one hour producing an image which they do want to use a lot - and tell me which do you think will be worth more to them !!

'Value to them' is therefore not the same as 'Value to you'.
« Last Edit: August 29, 2013, 02:00:24 AM by Yelhsa » Logged

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« Reply #59 on: August 29, 2013, 03:20:56 AM »
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Moving slightly off topic here - Needing time to learn one's craft is certainly true. The 10,000 Hours rule is a pet peeve of mine as it is well.....utter bollocks.  Tongue  Even the guy who did the study that gave rise to the term does not use the word 'rule' with regard to his findings.
This is basically the nature Vs nuture debate. And in my view, to use a British colloquialism "you can't polish a turd".

A cyclist who lives near me once said about skill, "If it was just a matter of practice everyone could be as good as me."
I just read this week, a magazine article about the 10k hour 'rule' with regard to  sport and it seems the current top female triathlete, Chrissie Wellington, is leaving everyone trailing way behind her. Including many men and she only took up competitive sport in her late 20s and right from the start she was beating others waaaay more experienced than her.



Yes, it's talent coupled with self-belief. Time spent is simply the honing process, but the raw material has to be there in the first place.

Sad for those without, but nonetheless true.

Rob C
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