When starting out, many photographers choose to charge for their time in determining their pricing or fees. This is a simple approach to pricing one's photography, but it's not always the best. The other primary way of pricing is based on value.
In this article, we'll look at the pros and cons of hourly or timed based pricing, value based pricing, and hybrid models for pricing your work as a photographer.
Time Based Pricing
In time based pricing, you're charging for your efforts based on the time spent on a job. This might include the time spent on site and making images as a photographer, but may also extend to pre-production time, post-production time, and so forth.
An hourly rate, half day rate, day rate and overtime are all examples of different forms of time based pricing common to photographers.
Pros: The benefit of time based pricing is that you're being compensated directly for the time you put into a job.
Cons: Time based pricing alone doesn't account for the use of the image or other fine details of image licensing or rights conveyed to a client.
Value Based Pricing
Value based pricing prioritizes the usage and the “work” the images are doing for an end client, rather than the time required to produce the images. With this pricing method, the considerations of who is using the images, how they are being used, what they are being used for and where they are being used are all of paramount importance.
Value based pricing is extremely important when it comes to different kinds of clients. The value of an image to an individual using images for personal can be very different than the value the same images could bring to a business or brand. An image that ends up being printed as fine art to be hung in a home has a very different value to an image being used in an advertising campaign that ends up on a billboard in Times Square, for example.
More specifically, value based pricing recognizes the difference in licensing and rights that an end client requires. Personal use vs promotional vs commercial, duration of license, exclusivity, and any and every other factor of image usage can factor into value based pricing.
Value based pricing alone is most commonly seen as stand alone image licensing, where images have already been produced and are being licensed either individually or as a group.
Pros: The benefit of value based pricing is that it recognizes the fundamental worth of them in the context of their use.
Cons: Value based pricing may not be appropriate or rational for all types of clients or situations. In addition, value based pricing alone doesn't account for the effort that goes into the creating images for an end client.
Hybrid Pricing Models
As you can see from the pros and cons of time and value based pricing, each has strengths as well as weaknesses. The solution to address the weaknesses of using a single pricing method is to use a hybrid pricing model that blends factors of time and value.
At higher levels of photography jobs, it's common to naturally approach a hybrid pricing model. This is commonly incorporated into a photography estimate or invoice as charging some combination of the following line items:
- Day rate
- Photographer's fee
- Image licensing
In these examples, one may invoice for a day rate and also an image licensing fee. In this instance, the “Photographer's fee” may be a catchall for one's time, work, and value added but which is separate from the licensing.
Some photographer's may also combine a time based fee and licensing into a general “creative fee.” Yet other photographers may consider a photographer's fee and a creative fee to be synonymous. Here, the terminology is less important than what you're charging for: both time (hours and days) and value (usage and client considerations).
Another form of hybrid pricing is to break down pricing by time, but in a way that's informed by the value and use of the photography. This is commonly seen when you work in a specific industry or specialty of photography where the use is limited and common from client to client.
Why you should using only avoid time based pricing
Time based pricing structures leave off some of the most important considerations for your value as a photographer.
A portrait session with an individual might take just an hour or less to produce a striking image. Perhaps it only takes five minutes. However, the actual use of the image can be extremely importance in understanding the full value of your efforts.
If the image is intended as a print for a family member, the use and value of the image is very specific. But if that same image is used as album artwork by a pop star, the value is extremely different. The work that goes into the image may not differ dramatically, but the use does, and so does the value.
Furthermore, time based pricing doesn't reward the efficiency of experience. It might take an experienced photographer 5 minutes to make a compelling portrait that would take a novice hours.
Ultimately, both time based pricing and value based pricing have their merits. Using one single method for pricing is often inadequate for photography jobs that are appropriate to both. The best option for most photographers is to charge for their time AND the value they create.
The way I look at charging for time vs money is this.
When you're paid for your time only, you're being paid as an expert technician. When you're paid for the value you bring, you're being paid for your vision as a creative. Each kind of work has its place, but we all know as photographers that the most rewarding work are the ones where we are contributing the most value — and when we are rewarded for that contribution.