Pricing & Negotiating: Album Cover and Collateral for Rock Band

By Craig Oppenheimer Wonderful Machine

Shoot Concept: Environmental group shots and individual portraits of a well-known band.

Licensing: Advertising, Collateral and Publicity use of 12 images for 1 year. However, the images would primarily be for use on the album cover and in the album booklet.

Location: An outdoor scenic location in California.

Shoot Days: 1

Photographer: Lifestyle and Landscape Specialist.

Client: Grammy Award-winning alternative rock band represented by a mid-sized record label with offices in the US and UK.

Here is the estimate:

estimate_termsClick to enlarge 

Creative/Licensing: The record label originally approached the photographer with a request to create 12 images of the band. One of the images would be placed on the cover of the band’s upcoming album, and the other images would end up inside the album’s multi-page art booklet. It was also likely that the images would appear on the band’s website, iTunes page, various collateral pieces, merchandise and publicity materials.

Before speaking with the record label about their budget, I had an idea of what we might be up against. The music industry is notorious for paying very little while obtaining a lot in the way of licensing. While larger budgets might be available for shoots with big name artists, those projects account for a very small percentage of the shoots that take place in the music industry. Based on a few other projects I’ve worked on in the past, my inclination was that the photographer could expect to get around $5,000-$6,000 for his creative/licensing fee plus expenses, and I was hoping to limit the licensing as much as possible.

When I spoke with the record label, I learned that they had a bottom line budget of $12,500 for the project, and they wanted this to not only cover all creative/licensing fees and production expenses for the shoot, but also to include the layout and design of the album booklet. The photographer and I decided to create an estimate that was appropriate for his photography work only, and leave the design services out of the conversation because it wasn’t a service he offered.

When compiling the estimate, I tried to keep as much of the budget in the creative/licensing fee while also factoring in payment for pre/post production (all of which adds to the photographer’s “effective fee”). In most cases, I approach the creative/licensing fee first to determine what I believe is appropriate without taking a budget into account. However, in this case, I laid out all of the expenses, and determined that the amount left over in the budget lined up with my expectations for what his creative/licensing fee should be.

Before submitting the estimate, I did check a few other pricing resources. Getty priced one image for “retail product and packaging” use on the cover of up to 500,000 products for 1 year at $2,300. Corbis had a specific pricing category for CD packaging, and priced 1 image just under $2,000 including use on the cover as well as inside of up to 500,000 albums for 1 year. FotoQuote priced a similar use at $2,700 and BlinkBid didn’t offer specific pricing guidelines for this use. While they would be obtaining licensing for 12 images above and beyond album cover use, extrapolating the prices suggested by Corbis and Getty would put us far outside of a range I felt was appropriate for a project and client like this.

Assistant: The photographer paid his assistant a bit higher than the rates I typically include, and we would only need him for the one shoot day.

Digital Tech Day Including Workstation: The digital tech would help to manage the flow of file intake and display for client approval on location, and I included $500 for their day plus $750 for the workstation.

Location Scout: The record label/band wanted to shoot at a “scenic” location, and suggested the possibility of photographing the band on a beach. This opened the door to a lot of possibilities in California, and we included two days for the photographer to scout locations in his hometown. If he wanted to outsource this task to a professional location scout, this would have also covered their time and expenses as well.

Location Fees/Permits: I spoke with a few scouts local to the area, and we determined that a few hundred dollars would cover a permit for a single location and the time it would take to acquire it.

Photographer Pre-Production Day: Before the shoot, the photographer planned to meet the band and the record label contacts to discuss his approach. He’d also be arranging transportation, hiring his crew, managing the scouting results and essentially acting as a producer to pull everything together, all of which we charged for his time to do.

Van/Prop Rental: The only prop that would be needed for the shoot was a vintage van that the band would be posing in front of. The photographer happened to have a friend who owned just the right vehicle they were looking for, and he negotiated this fee for the van to be used and driven to/from the location.

Equipment: This would cover 2 camera bodies (~$400), several lenses (~$100), a couple power packs and heads (~$200) as well as additional modifiers, reflectors and grip equipment (~$100)

Basic Color Correction and Delivery of All Images on Hard Drive: While the client would only be obtaining licensing to 12 images, they wanted all of the hi-res images delivered to them on a hard drive. This covered the photographer’s time to do a minor edit of the files and deliver them to the client.

Miles, Parking, Meals, Misc: I included a few hundred dollars just to cover any minor unforeseen additional expenses on the shoot day.

Feedback: While the client wanted their original budget to include the design work, they were willing to seek out a designer and come up with a separate budget for that. The only other feedback they provided was that the photographer had to sign a work made for hire agreement, which was not originally discussed despite clearly stating the requested usage in the estimate and defining the language in our terms and conditions agreement. After I explained the differences between the licensing in our estimate and their work made for hire contract, the label asked to see a revised estimate showing fees based on their requirements. Given the fact that we were already a bit over their budget (and the fact they’d still need to pay for the design work separately) I knew we probably couldn’t push the price up that much. After a series of phone calls and candid discussions about their budget, we ultimately presented this final estimate:

estimate_terms_wmfhClick to enlarge 

Results: The photographer was awarded the project, and the images will be featured on the band’s upcoming album. Here is the contract they presented:

WORK-FOR-HIRE-2013_original_Redacted-1Click to enlarge 

We were able to tweak the terms of this contract to be more in line with our terms/conditions, specifically in regards to turnaround time, payment, indemnification, and the fact that the fees were a good faith estimate and that actual time and expenses would ultimately be invoiced. Lastly, I revised their contract to say that they would need to register the images with the US copyright office, rather than the photographer doing this (which should be part of every photographer’s workflow).

If you have any questions, or if you need help estimating or producing a project, please give us a call at (610) 260-0200. We’re available to help with any and all pricing and negotiating needs—from small stock sales to big ad campaigns.

 

Wonderful Machine

There Are 22 Comments On This Article.

  1. I have four record covers and never got paid near that much. Damn! Perhaps because I did most of them when I was much greener? Anyway, I’m curious about the time limits the photographer negotiated for the images. Every time I’ve done a record cover they’ve wanted unlimited usage. Sounds far reaching at first but what if the record becomes a hit and they have to produce a million copies? Or what if it’s a classic. Can you imagine Strom Thorgerson still getting payments for the Pink Floyd album covers from 40 yrs ago?

    When I was first approached to do an album cover, I talked with Jeremy Cowart (who’s done many entertainment packages) and he gave me the advice that I was already expecting. That is, the label is going to want unlimited usage because they don’t want to suddenly have to change classic artwork if you’re no longer willing to negotiate what they see fit. He advised, get a day rate you can live with and let it go. Basically, that’s the industry like it or leave it.

    Discuss.

  2. Wouldn’t delivery on a hard drive (at least one that the photographer provides) mean he’d have to pay sales tax on the total budget, adding at least $1,125 to the estimate? It seems like the client wouldn’t be happy about that, despite the fact that it is noted on the estimate.

    • Pete,

      Since sales tax policies vary based on many factors (including delivery of a tangible item such as a hard drive vs. digital file delivery) we typically include the line “plus applicable sales tax” on our estimates to cover any instances in which the photographer may (or may not) need to charge sales tax. It’s a conversation every photographer should have with their accountant. In this instance, I don’t believe the photographer ultimately charged sales tax.

      • It depends on the state too. In some states, a digital file is considered a tangible good that is taxable. In others, an image is taxable but a right to use that image is not. And then you have some services are taxable (like retouching). So the tax question often comes down to how the invoice is formatted and written and if the billed client is in your state.

        So yeah, accountant. Preferably one with experience in the photo field.

  3. A bit confused by this statement,
    “I revised their contract to say that they would need to register the images with the US copyright office, rather than the photographer doing this ”

    If this was a work for hire agreement, what was the benefit to the photographer having the client register the images with the US Copyright office?

    • K4kafka,

      Since the images would be considered a work made for hire, the copyright would therefore belong to the client. We wanted to make it clear that the photographer would not be taking the time to registering the images with the copyright office on behalf of the client, and that this would be the their responsibility.

      Craig

  4. Did you have to give in to the work for hire clause? I’ve always worked from the idea that photographers should never accept that.
    I would think that there are circumstances that would make one have to take the work for hire, but I am wondering what those circumstances would be for an established photographer.

    • Carlos,

      The photographer chose to accept their terms, but a photographer can always choose to accept or decline a project for numerous reasons. While we always try to limit the licensing in some way and have the photographer retain the copyright to the images, some clients simply insist on a work made for hire contract. Many times these contracts are used by organizations hiring a full time staff photographer, but occasionally some clients may ask photographers to sign a similar contract even if they are working on a freelance basis.

      In this case, the photographer decided to take on the project since the payment was adequate, it was the beginning of a nice relationship with a new client, and since they were able to adjust some of their additional terms to meet his needs.

      Craig

  5. Great post… I always try to guess the creative fee before enlarging the doc. I was actually pretty close on this one! (I was a little lower)

  6. When a large brokerage like Wonderful Machine goes for a greed-grab and rolls over on “work for Hire” agreements ALL photographers at ALL levels suffer.
    Shame on YOU Wonderful Machine!

    • I can’t believe Wonderful Machine openly admits accepting a work for hire agreement. At least those who accepted these terms in the past kept it to themselves. Thanks for taking the extra step to further ruin the photo industry Wonderful Machine.

      • Bill Cramer

        Different pricing/licensing strategies are appropriate for different types of clients, different photographers and different situations. While it’s not something we encourage, there’s nothing inherently wrong with work-for-hire, it’s just a question of getting a fee that’s commensurate with that usage.

        • SHAME ON WONDERLAND! NEED TO TAKE POINTERS TO MORENIMLE AGENCIES like Weiss, Sharpe and even effective underthe wood work agencies like i hart reps

  7. I have a question: so what can the photographer do with images themselves if it’s work for hire? Can he/she sell fine art prints, use them in exhibitions, as portfolio pieces, etc.?

    And why can’t the photographer retain the copyright while giving the label/artist an unlimited license for usage?

    • Mike,

      Photographers are often able to retain self promotional rights in a work made for hire contract, and that was one of the revisions we ultimately made to this contract. This would allow the photographer to use the images in his print/online portfolio, but since the copyright would not belong to him, he wouldn’t be able to license the images to any other client.

      In many cases when a client wants to “own” the images or asks for a “buyout” (which is a term we try to avoid), what they are really requesting is the ability to use the image in any way without having to come back to the photographer to negotiate rights. In these cases (if the fees are appropriate and if they aren’t requesting a work made for hire) the photographer can retain the copyright while conveying a license to the client for exclusive Advertising, Collateral and Publicity use in perpetuity. So to answer your question, a photographer CAN retain copyright while still conveying an “unlimited” license, but in this case the client specifically required a work made for hire contract to be signed.

  8. Craig,

    Great article. I just have one question when it comes to your Delivery line.

    In the agreement you have ” The Work shall be delivered in J-Peg format or other such format to be determined by the Company after good faith consultation with the Artist/Photographer”.

    What does mean? I mean if they artist signed over the rights why does the Company need to have a good faith consultation with the Artist/Photography to request say RAW format?

    I apologize if this question seems strange, I am a new photography and still trying to understand copyright.

    • Dave,

      This just means that the photographer and client will discuss the best file format to deliver the images. The licensing and file format requested are two separate issues.

  9. THANK YOU SO MUCH FOR YOUR INSIGHT! I am looking at hert reps. Besides commercial clients…they are known to implement intriguing strategies landing photographer cover album deals. small agency though.