I had originally intended this article to be one of those “top ten” lists of common pitfalls that photographers make when entering into a photography contract — a mix of legal and drafting considerations that everyone should look out for when writing or reviewing written agreements. The more I reflected on the topic, though, the more it became clear that while there are lots of important considerations to keep in mind, there are really three major pitfalls that, if not fully understood, can have a significant impact on photographers’ ability to make a living.
Pitfall 1: Conflating the Services Provided with Use of the Work Produced
As a photographer, you offer your clients value in two distinct ways:
(1) your technical skill, understanding of the craft, and unique vision; and
(2) the work created as a result of applying the attributes described in point 1 to a client’s unique needs.
Because each is independently valuable, it makes sense that you might charge separately for each. But too often, photographers don’t. Many times, often as a result of pressure from clients, photographers settle for a single price that includes the shoot, image production, and the client’s downstream usage of those images.
This kind of framework within a photography contract is not the greatest deal for a photographer because it needlessly conflates the value derived from a one-time engagement (the shoot and its associated post-production) with the value derived from the final images, which usually lasts for a substantial period of time after the initial work is complete. As photographers, you are paid not only for the work you’ve produced but also each time your image is used.
Moreover, this approach harms the art licensing market for the images because such agreements generally contain either no restrictions on the use or very broad parameters, allowing the client to essentially use them in ways that would ordinarily incur additional art licensing fees. For example, if you’ve shot a series of food images for a specific ad, but the client later decides to use those images on their website because you agreed that they owned the photos outright and did not specify any type of usage rights, then you are losing money.
Put another way, including downstream image use and not specifying any art licensing rights in the upfront fee essentially kills the goose that lays the golden egg. A photographer’s image library is arguably his or her single most important professional asset. Providing images without any art licensing usage requirements for a single, one-time fee substantially reduces the value of those images and harms the ability to monetize them effectively later.
To avoid this pitfall, photographers should consider separating their fee structure in their photography contract into the three distinct parts described above: the shoot, the post-processing, and the art licensing fee. Some photographers combine the shoot and post fees into a single “creative fee” as distinct from the art licensing fee.
Regardless of how you choose to structure it, the key is to keep the upfront fees separate from the art licensing fee, and treat the license like you would any other client – pricing is based on the nature, scope, and duration of the use.
Figuring out what to charge for particular uses is a vast topic unto itself, but a good place to start is fotoQuote, a software tool by Cradoc fotoSoftware that provides pricing guidance for more than 360 stock uses, 72 assignment job types, and 40 assignment line items. Their data is also built into certain photo hosting platforms such as Photoshelter.
Pitfall 2: Agreeing to “Work Made For Hire” (Without Really Understanding What That Means)
First, a note about the nomenclature. Typically when we hear people saying that they’re creating copyrightable work on a “for hire” basis, they’re wrong. “Work made for hire” in a copyright context means something very specific: either that the work was created by an employee of an entity in the course of his or her duties; or that the work falls into several very specific categories and the parties agreed that the work would be treated as a work made for hire in writing, before the work was created. You can read more about works made for hire in Steve Schlackman’s recent piece Freelancers or Employers: Who Really Owns the Art?, but for right now, let’s assume that most arrangements between photographers and their clients are not actually “for hire” deals.
What people are usually talking about when they say a “work made for hire” is an arrangement where the client takes the copyright to the images created by the photographer in what is called an “assignment.” There are some important differences between a work that is assigned by the photographer to the client and one that is owned by the client as a work made for hire, but for now, the end result is all that matters: the client gets the copyright, which means that it can use the images however it wants, for as long as it wants, and the original photographer will never see another dime, and can’t ever license the image again to anyone – the original client or a third party.
While such practices have become a common source of discontent within the photography community, clients who seek to own the images outright are often not trying to be unreasonable. Many clients, especially large companies, license tens of thousands of images a year, and keeping track of the rights parameters for each one, and making sure that employees fully understand the restrictions, can be challenging.
In addition, the consequences of a misstep, no matter how innocent, can be severe: statutory damages can be as high as $150,000 per work infringed. To minimize the risk of making an expensive mistake, many companies have established policies that they must own the rights to creative works that they commission. If they own the copyright through a work made for hire agreement, they can’t ever be sued for using the work.
The problem isn’t that some clients want photographers to transfer the copyright to the images created for the client, it’s that they don’t want to pay for it. While the default position should always be that the photographer keeps his or her copyright, I disagree with those who say photographers should never sell their copyright interest. Instead, my view is that you should only sell your copyright interest in a work made for hire agreement if the price is right.
The tricky part, of course, is figuring out whether the price is right. From a technical, economic perspective, the value of a copyright assignment is the present value of all future art licensing revenues. Figuring out what that requires is a little-educated guessing and some simple math. For those afflicted with arithmophobia, it might be better just to rely on intuition and professional experience. Essentially, all you’re trying to do is figure out about how much you could make from that image over its lifetime if you were to license it on a routine basis. That amount is what you’re giving up as a result of transferring the copyright, and is thus about what you should charge for it.
Conceptually, it’s simple; from a practical perspective, it’s full of risk. What if you guess too low and leave money on the table? What if you aim too high and the client balks? That’s the reality of being in business. Running a business – any business – is inherently risky, and a big part of running a business has to do with simply balancing how much risk you are willing to accept given the potential rewards (sales or other opportunities).
Rather than treating a request for a copyright transfer as an affront to the value of creative professionals, think of it as a business problem. The client wants the copyright for a reason – it might be as a hedge against infringement risk as described above, or it might be because the client thinks it needs the copyright to use the images in the way it wants to. A better understanding of what the client wants and how to achieve it will foster a much more productive and likely long-lasting relationship.
Beware of standard form contracts or terms and conditions in work made for hire agreements or other similar contracts provided by clients, which may include language that transfers the copyright. Sometimes it’s not as direct as you might think – phrases such as “transfer,” “assignment,” “work for hire,” or “buyout” — can all be construed as rights transfers. Also, be on the lookout for broad rights-granting language, phrases such as “in any and all media now known or hereafter conceived” or “in perpetuity.” These are less likely to be construed as transferring the copyright, but give the client such broad rights that it might as well be.
Bottom line: As a general rule, try not to transfer your copyright through a work made for hire arrangement, but don’t become enraged if a client asks about it. The client is just trying to protect itself, and just like the client, you should also protect yourself, by making sure you only transfer the copyright if you are fairly compensated for doing so.
Pitfall 3: Not Seeing a Lawyer
Regular readers of my articles know my rule: always involve a lawyer. Generally, you don’t need to see a lawyer every time you enter into a contract, but it’s always a good idea speak with one to get your basic contract forms set up, and to put together a set of guidelines to apply when negotiating other parties’ forms. A lawyer can give you a quick rundown of what to look out for and a sense of what you can handle yourself versus when you should call in legal help. Having a lawyer help you get started will also make sure your contracts and business practices are at a certain baseline so that if something does go south in the future, your legal team will be in a better place to represent you.
While you’re at it, you might want to speak with an accountant as well to get a better sense of what you should be charging — or more importantly, what you need to be charging to ensure that your business remains successful.
There is no doubt that the business of photography has changed dramatically in the past decade or so. Photographers are increasingly under significant pressure to deliver more for less, and asking them to agree to onerous or overly broad contract terms is one way that can happen. By being aware of the major ways you might unwittingly give up your art licensing rights and devalue your creative work, you will be better positioned to avoid falling into the traps.
Any questions about your photography contract or art licensing rights? Leave your comments below.
Chris Reed is a Los Angeles-based photographer and lawyer. He practices copyright law in the media and entertainment industries and is the author of Copyright Workflow for Photographers: Protecting, Managing, and Sharing Digital Images from Peachpit Press.