Changing business practices to reflect a changing marketplace.

Markets change over time. Destructive market forces destroy existing paradigms and allow for the establishment of new ways of doing business while also opening up the potential for new businesses to fail. In the past markets would remain stable for decades or centuries which gave innovators a life time or at least a good amount of time to profit from their new ideas and their destructive re-imagining of their markets. Not so anymore. Innovation and change occurs in ever compressing cycles. Businesses, it seems, are more interested in volume and being the first mover than in margins and sustainable practice.

In the world of photography stock was one of the first shifts in an established market construct. The introduction of pervasive stock photography sales, with declining cost to consumers roiled the status quo of the maturing assignment markets. And drove down the cost of an image.

The closing of 4000+ portrait studios (mostly in Walmart and Sears stores) is an indicator of a shift, caused in part by the pervasive penetration of foolproof digital cameras into the hands of the lower middle class demographic of the buying public. And the near universal use of viewfinder screens on phones, tablets and televisions has eviscerated the market for printed images at nearly the same speed with which e-books and on-line reading are devastating the market for printed books in many categories.

If you created a business as a portrait photographer and your pricing model was based on the wide spread concept that the portrait session itself (your time, expertise, taste, and technical skills) was to be offered as a loss leader or a break even proposition while the profit from each consumer portrait job lay in the sale of prints you are about to either hit the wall of a new reality or you are already out of business.

Very few consumers surveyed have an interest in buying a print (as a value-added artifact) from a professional photographer. That doesn't mean that those consumers no longer want the intellectual property that come along with the artifact, they just aren't keenly interested in the artifact itself.

The old pricing model built in margin for the cost of doing business and heaped profit on top of that number. Clients in previous generations rarely had secondary viewing opportunities that were as compelling as a good print. To view an image on a television screen, pre-flat panel and pre-HD meant looking at an image with a net resolution of about 525 lines of interlaced information. The gamuts were extremely limited and color uniformity nearly non-existant. There was no peer-to-peer electronic sharing. Sharing meant having additional prints made and, as the original negative remained in the hands of the creators, that meant consumers HAD to pay for each individual use.

Now it's rare to find customers who constitute both a sophisticated visual market (taking images should still be creative and fulfilling) and who are constrained from wide spread sharing. Their hierarchy of needs has shifted in ways that Maslov could not have predicted.

If our local market is an example then technology-forward, affluent clients are much more interested in having unlimited personal use of images created of them and for them, on all manner of electronic devices, then they are in having single physical artifacts in their homes. They understand the fluidity and ease of the process of having acceptable prints made, understand that the actual costs of good prints continues to drop and that a good physical reproduction can be made from files that they possess. There are no barriers to keep consumers from ordering their own prints and paying wholesale. The mystery has been drained from that "scary swamp" (consumer's previous perspective about printing).

The new customer still wants (for now) the art of the image as it relates to lighting, posing and post processing creation but now, instead of being satisfied with a few images they want to possess and control the digital files. They want to be able to make the canvas print or wrap the face of their toddler around a coffee cup. They want to order the thirty-nine cent, five by seven inch print from Costco without paying an additional $50 or even $100 to have the same print mounted a piece of board and presented in an embossed envelope. And can you really blame them for not understanding the business model? They've been told for years that they should go to a professional portrait photographer for the artist's vision. But they end up paying the lion's share of their budget for the product, not the IP.

What's a business poised on the edge of uncertainty to do? Obviously, we need to re-examine every angle. According to studies of the current, ascendent generation they are much more interested in buying and sharing experiences than they are possessing treasures. So, now owning a house and scrimping and saving for a down payment becomes a more prolonged period of rental and the savings are spent hiking in Nepal or following Formula One racing around the world. Or just taking time off from work to pursue passions. Can we make the actual portrait sessions more fun and interesting? Can we turn a portrait session into a mini-workshop and dinner party as well as a venue to create great work? I know a lot of amateur photographers who've expressed an interest in being photographed or having loved ones photographed so they can experience what a "real" session is like. Why not package the experience?

We can also create very interesting and desirable styles of lighting and camera work in order to give consumers something they can't get anywhere else. That might mean shooting on medium format film or shooting with medium format digital camera for a more interesting interplay between tonalities and focus falloffs. It might mean lighting styles that would difficult to mimic with speed lights and tiny soft boxes. And it might just mean working at  high levels both technically and aesthetically.

Pricing in the consumer world needs to take into consideration the customer's desire to "hold" the potential images in their hands and on their machines. So, instead of anticipating selling physical product down the road pricing needs to be changed to reflect the fact that it's the IP that has the value, not the artifact. This means that to be profitable one must charge much higher session rates.  If you charge a sitting fee of $200 and your average print sales were $650 per customer, you might want to consider making the sitting fee something like $650,  then working with the consumer in a proofing process to select the final images and then charge a standard (profitable) fee to "complete" each image via post processing. That might include sophisticated retouching and file preparation for a number of different output scenarios. So, in effect the post production becomes the printing.

One could still offer large prints since some people will still order large family portraits for display but you'd probably be better off offering photo books since the market seems to lean more toward personal coffee table books of multiple images rather than larger, single display prints. The big sellers will be disks full of images to playback on consumers ever growing and ever improving TVs and monitors. Parenthetically, we used to sell a batch of five by seven inch prints along with every corporate head shot. It was a good profit center. We haven't sold or had a print ordered for a commercial client in probably seven years. That went away. We raised our session prices to compensate for income that's never coming back.

The benefit of making your money upfront while, for all practical purposes, jettisoning the extra labor and costs of selling, printing, shipping from labs, mounting, etc. is the certainty of good profit at the time of shooting, or shortly after. That's when consumers have the highest motivation and desire to transact.

Look, if you are a professional portrait photographer you know that the portrait you just made is going to end up on the sitter's iPad or Surface tablet and that's where it will have it's dominant "residence." You might as well get paid for that use. Because, remember....it's the vision that has value, not necessarily the paper it's printed on...

When markets shift you have choices. Sooner or later your customers will decide for you.


Gregg Mack said...

Sounds like good advice to me, personally. This certainly isn't how the PPA says to go about it - yet. I realize that I'm at the bottom of the portrait photography food chain. I don't advertise or seek portrait customers, but I occasionally get asked to do portraits. I still price out a "print package" (the group that I deal with consider an 8x10 a BIG print - even though I show some much larger samples). My pricing is pretty simple: buy three 8x10's for $XX.00, and only if they buy the prints, they can also purchase the final images (JPGs) on a CD for $YY.00. They always buy the prints, just so they have the opportunity to also buy the CD.

My rational is pretty simple. I want them to see the prints that I create using my color managed workflow. I know that they are going to take that CD to Costco and have more made (maybe - many just want the photos for LinkedIn or Facebook), and if they get those prints back and they don't look like my prints, well, I would be happy to print some more that do look like my originals. I'm not trying to nickel and dime them with additional sales of 8x10 prints... rather, I am somewhat protecting myself from complaints, or just unhappy customers, because the prints from Costco aren't like the samples that I show when we did the shooting session.

I don't think that I have the "final solution", but I did realize some time ago that they group that wants me to do their portraits really only want the photos in JPG format...

Kirk Tuck said...

Gregg, I've looked at research that says consumers really aren't interested in prints. That's probably only true for the markets wherein the majority of people are internet savvy to respond to questionnaires... I'm not really in the consumer market but occasionally I get calls to do portraits for people as well. Most who want prints only need a 5x7 for desktop display or in a small area of their homes. All of them want and, in some cases (resum├ęs, applications, blogs, social media, websites) need digital. I'll never be able to control all the media in the digital age. If people really do want prints (and I still show a print portfolio) they are looking for one piece of faux fine art to hang on the wall somewhere.

I've read about a couple of thriving businesses where a photographer provides a full day of artful candid coverage and supplies a beautifully designed book. That's interesting.

John Krumm said...

I've thought about that, offering book creation, following a family on an outing of some sort, and turning it into a book. But it would have to be one expensive book to make it worthwhile. People are always impressed by the family books I've made, but of course each represents the cream of the crop from a year or more of shots, and then considerable time processing (and then the final book creation).

Ivan Singer said...

Really compelling blog article, and a topic near and dear to my heart as well.

I've been shooting musician portraits and live performances since long before the days of film's demise, and I agree that the power of the almighty print is dead. In those days, I lost more sleep being dismayed by the cost (outlay and footwork) of obtaining finished custom prints for my clients, packaging and presenting them, and providing it them in person, which almost always guaranteed their referral. In effect, my rates were boosted not by my actual profit margin, but by all of the overhead that I needed to spend to deliver the final goods to the customer. Only when I started to shoot weddings did the economies of scale pay off for custom-quality prints.

I don't miss those days at all and all-digital products are all I am asked for and all I want to sell. Listen to enough podcasts (TWIP, The GRID, and (dare I say it) OTP) and you'll hear all of the trends towards building prefab mobile apps for clients and selling digital usage licenses, custom client eBooks, etc. The revenue issue I face day-to-day is EXACTLY what Kirk is positing; is getting agreement for payment upfront for that initial IP, and not the desire to obtain the physical manifestation of it.

To bring it back to you, Kirk, since you mentioned dropping off CDs at the Zack, so when you shoot a venue, do you contract with the venue for a flat day rate, the production company, or the individual artists and performers? How do you work out the licensing for the images?

Dave said...

Wow you just hit one of my issues dead on. We've had a growing interest in our senior photos and one thing we've wrestled with is that yeah, prints aren't all the rage. That means finding creative ways to shoot and burn without being a shoot and burner :)

On the other hand my focus has been on shooting high quality in mobile locations and trying to figure out what my "take" on it is (putting my own stamp on the sessions). I don't know maybe the answer is a flat rate. I'm really thinking of scrapping the mono lights and moving to some ideas I've wanted to try with Fresnel, dramatic lighting in interesting locations.
Finding the value for clients is the thing. The valuation for Flickr clone shooting is dropping by the minute, but I think there will always be room for people who know what they're doing, or who do it in original ways.

Kirk Tuck said...

Hi Ivan, to answer your question, My business contract is with Zach Theatre who are also the production company. When I shoot marketing images or dress rehearsal images I am getting paid a set, negotiated amount and in return I'm giving them a license to use the images in their marketing materials, in print and on the web, for the run of the play and the run of the season. I'm happy to have them use the images in fundraising materials regardless of how far (time wise) the use if from the show. I don't sell prints to the artists or performers. The technical crew have an evening dress rehearsal at which they can show up en masse and document their contributions to the productions.

If actors want images for their personal portfolios of the actual dress rehearsal I allow the theatre to provide them with a digital file specifically for that use.

Any use by any other third party (non including editorial fair use) is a separate issue and the third party must negotiate with me for the usage. I decline any use that would violate any agreement the theatre has with the original copyright owner of the material. Most of those uses would include commercial applications.

theaterculture said...

On a strangely related note, I have an actor friend who is a mall Santa every year to make Christmas money. In his case he's actually employed hourly by the photographer, who gets a small upfront fee from the mall that doesn't even really cover his expenses but he used to do just fine selling prints to parents.

In 2011 the photographer actually lost money because of parents standing directly behind him with their own cameras and then refusing to buy anything, in spite of having hired an "elf" to try and stop people from doing this. In 2012 they switched to not letting the kid onto the lap until a package had been purchased and the debit transaction complete, and "Santa" had to break up a lot of near-fights involving agressive parents who didn't read the sign before lining up.

The mall has already been in touch with my actor friend to see if he'd be willing to work directly with them in 2013 for the same fee they used to pay the photographer, and people will just do their own iPhone photos; he's torn about whether or not to take the gig.

theaterculture said...

I'd be curious to hear what the smart, savvy photographers in the room think about the ethics of Santa's dilemma?

Neil Gaudet said...

Good article Kirk. Thanks for writing it.

Kirk Tuck said...

I don't think the Santa has a dilemma. He can choose to accept or not accept the job. The photographer probably won't be asked back either way. Imaging jobs like this are destined to be either redefined by someone coming in and doing something unusual like creating instant posters or something, or the photo component will go away and the mall will provide a Santa as part of its seasonal marketing. The photographer needs to be flexible, abandon this venue and figure out a different way to profit in the holidays.

Dan Speicher-Pittsburgh wedding photographer said...

Great advice. We see a lot of this in the wedding market as well. People charging per mile, per edit, etc. I have seen small prints really die off, and books can be a tough sell when people can get a "nice" book from blurb or artifact uprising, for under $100. But there is still a market for large prints, and still a market for high end albums that will last a life time. In the corporate world, I've seen day rates get cut, clients demand video as a free add on, and a total rights grab take place all at the same time.

Not sure where it will go, but I believe that photographers with business sense will always have a job, just not sure if they will ever be able to retire.