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Illogical Pricing
According to the skewed logic of RF single image unit pricing, a small local client printing a poster would pay more than a major corporation pays for an insert in a widely distributed brochure. This results in a huge potential loss of revenues from major clients who should and easily could pay more equitable fees for the license of images. RF pricing logic is even more flawed in an increasingly digital world. Take the example of a client needing an image for a large electronic use versus another client needing an im- age for a small print project. Since Royalty Free only “values” image units, the small print license costs four times what the electronic use costs, regardless of scale and scope of the uses.
The disconnect between price and use becomes an increasing concern as the media mix shifts away from print and more into electronic media. With the spreading use of broadband both at home and work along with the growth of online advertising (expected to double in the next five years) and emerging new digital media, there will be increasing demand for imagery.
As image use for digital media applications expands, we expect the net effect will be an overall DECREASE in the average size of image resolution needed. By offering lower prices for smaller files, RF is in effect “discounting” electronic media uses, giving away even more to clients than it has already. So, a licensing model that prices images by FILE SIZE offers a flawed business model for the digital age.
The Rights Managed model, by basing price on usage, needs to capitalize on the opportunity presented by the expanding digital markets. However, to do so, stock distributors will need to rethink RM pricing to accurately “value” electronic media uses, rather than undervaluing them as is the case with large publishing clients for whom digital use is con- sidered an “add on” to a print license, or bundled into a bulk deal.
In the emerging marketplace, the VALUE of imagery in digital media usage needs to be fully recognized by image distributors and compensated for by image users. This will require some major overhaul of the current stock pricing approaches.
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