Image licensing 101

I thought it would be worthwhile spending some time demystifying an important but frequently misunderstood cousin to pricing: licensing. But before we discuss licensing, we should spend some time on the basics of intellectual property.

Intellectual property is any tangible or intangible product or service that employs proprietary know-how which can be used to gain a competitive advantage or holds commercial value. It is the idea or the manifestation of an idea which people are willing to pay for. An image is an idea in the mind of the photographer before it is executed, and then it becomes tangible; people pay to have this image for their own use, or perhaps use in conjunction with promotion of their own product or service. In short: it’s worth worrying about if you could make money off it.

The key difference between IP and physical property is its ability to be replicated with little to no marginal cost to the creator; whether one person or a hundred people hear a song, it costs the same amount to produce. Yet clearly, people are willing to pay for the ability to play that song on demand – that’s the iTunes model – which means the song has value, which means that it’s intellectual property. It doesn’t matter whether five or five thousand people buy it, the cost to license for each individual is the same, and the product they receive is the same. When calculating pricing and production costs – i.e. musicians’ contracts – this is all taken into account. No doubt a song composed exclusively and specifically for an event will have a higher license fee than a library track which might be used for anything from an athalete’s-foot-powder jingle to a prize presentation ceremony.

Another example: When you buy a movie on DVD, you’re not buying the movie per se; you’re buying a license to watch the movie by playing it back on your home theatre equipment for you and some friends in a private setting, without any ability to make commercial gain from it: i.e. charging admission for multiple screenings would not be allowed. The theatre that shows the movies has a license too, but they have legal permission to run multiple screenings and collect admission fees.

So clearly, there are many things that affect the value of intellectual property. Let’s look at it in a photographic context: each photograph is IP, and probably has some estimated lifetime value depending on several factors; the aesthetics of the image, the criticality of the moment, and its difficulty to replicate – a generic crappy built-in flash shot of a flower is going to be far less valuable than a studio-lit and atmospheric image of the Loch Ness Monster making out with Bigfoot in The White House, especially if the President is in on the action. Clearly then, intellectual property, pricing/ value and licensing are all related. It’s important to remember this.

Since a photograph – especially a digital one – doesn’t ‘wear out’, this means that it can be reused multiple times, or resold to many people. However, there’s obviously value in exclusivity, regardless of whether you’re the only entity allowed to use it or you’re the one who commissioned the image, it means that legally, nobody else can republish the image for any reason – it is under your control. In situations like this, the lifetime value – let’s say 100 units, for argument’s sake – of the image is probably going to be used up by whoever it is who buys the license, assuming it’s for longer than a short period of time, or it’s something whose value is proportional to its currency. Thus, to give away the exclusive right to use the image, you would charge 100 or pretty close to it. Perhaps even more if there are multiple interested parties; this is how paparazzi get rich: there are clearly a lot of people who want to see Kate Middleton’s boobs.

But what about more complicated situations in which perhaps the photo is well executed, has a decent lifetime value, doesn’t go out of fashion quickly, and might have multiple uses? (We’re talking stock photography here, in case you hadn’t figured it out.) A photo of the grand canyon might be used in a travel advertisement, for an airline, for a hotel, hell, as a composite base for a fashion shoot, as a computer wallpaper* – who knows. And it the original object isn’t going anywhere anytime soon, but that particular combination of light and weather conditions may not be that repeatable. So how much does one charge for a ‘license’?

*The most expensive/ profitable stock photograph in history is reputedly the clouds and rolling green hills used as the Windows XP background. I believe in addition to a very handsome initial lump sum payment, the photographer continued to receive royalties for every copy of Windows sold: that’s a lot of money.

First we must understand the different types of license. (Remember, in the case of a photograph, a license is the right to use.) There’s commercial/ non-commercial; are you advertising something that will make you money? Then there’s time period – one month, one year, in perpetuity? Don’t forget geographical region – obviously, the more people see it, the more widgets you’re going to sell, so the higher the corresponding value of the image that helps you sell those widgets. Finally, there’s media type, which is somewhat linked to geographical region – online media has no region because the internet is accessible from anywhere; print media and billboards can be highly location-specific. In addition the obvious value of having more eyeballs through a geographically wider audience, it’s important not to forget the value of context and repeatability: it’s easy (and therefore relatively cheaper) to get a shot of Mount Fuji in Japan, but not so much in say, Austria. And thus the same image licensed in Japan would likely cost less on an estimated per view basis than licensed in Austria – but the total amounts might be similar because there are simply a lot more people who would see it in Japan.

The job of stock agencies is twofold: firstly, to serve as a clearing house for people looking to license images, providing diversity and a consistent level of quality; secondly, they’re also supposed to maximize the lifetime value of the images they represent. (Whether they do so or not is another debate.) Ignoring microstock agencies, which work on the basis of volume (fifty cents an image regardless of usage or content, perhaps half of which might go to the photographer) the rest of the more serious agencies will find out what you intend to use the image for, at what size, across what geographies and media etc. before presenting you with a quote. I know that agencies like Getty require this as a matter of course before you even get any sort of ballpark number; there are separate and intricate negotiations that go on behind the scenes if an image is to be used on an exclusive basis or have its rights bought over entirely.

In recent times, the agencies have been acting increasingly like the 500-pound gorillas they have become: agree to our rather one-sided royalty structures (where up to 80% goes to the agency) or have nothing at all. Inevitably, photographers agree with the agencies – myself included – because it often represents the difference between having all of nothing or some of something. The way I look at it, I’d rather have my images out there and available for sale – you never know, you might get lucky and be the recipient of a rights buyout or large exclusive deal – and thus potentially generating income, rather than sitting in my archive and probably never even viewed by me. Of course, agency representation comes with many caveats: for most agencies, you are no longer allowed to license the image on your own, i.e. all representation rights for that image transfer to the agency on agreement; and of course, they will never take images that are subject to existing licenses – whilst it’s still possible to extract some value out of it, there’s no point representing an image that has a significant chunk of its lifetime value already used up. Of course, for my better images, I prefer to retain tight control of the rights; they are not represented by any agency.

Even freely downloadable/ available images have notional licenses attached to them; the most common being ‘all rights reserved’ and ‘creative commons’. The former means that the image is not to be used without express permission from the IP holder, i.e. the photographer; they may grant you a license that involves payment, or it may not involve payment. According to Wikipedia, the phrase originates from “the copyright holder reserves, or holds for their own use, all the rights provided by copyright law, such as distribution, performance, and creation of derivative works; that is, they have not waived any such right.” This nicely ties in with the latter: creative commons are several types of generic usage licenses created by the Creative Commons organisation which detail terms and conditions of use for other parties who wish to use the intellectual property. All do not require explicit permissions (so long as the conditions of the license are fulfilled) from the creator or IP holder in order to use the work. Note that this is not the same as waiving rights entirely. Common stipulations of creative commons licenses usually take the form of credit or acknowledgement to the original creator of the work.

As a photographer, it’s important to bot know what your rights are, as well as keep track of any license agreements you might have made with other parties; this is so that if later on, you choose to offer an exclusive or regionally exclusive (for example) license, then you can actually ensure that you meet the terms of your agreement with the new party. I would strongly advise against putting any of your work out there under anything but ‘all rights reserved'; this way you have legal recourse if any of your images are used without your permission.** Similarly, don’t ever upload any full size images – even though legally people are supposed to seek permission, nobody ever does; piracy is too easily seen and treated as a victimless crime. Too often – especially in lower-educated third world countries – the perception is not only are there no physical goods stolen, there isn’t even a real person you can see! Avoid this entirely by not making useful-size images available. This is the main reason I will never post full size images online, so please stop asking. From the other perspective, if you use an image or work that is ‘all rights reserved’ without permission from the creator, you are liable to have legal action taken against you, and you will almost certainly lose. Think carefully: I’m sure you’d be rather angry if somebody took both credit and commercial value out of your hard work and didn’t even so much as ask your permission first.

**I imagine that your wife or girlfriend wouldn’t be pleased to find out that the nice portrait you posted on Flickr has been stripped and is now used to advertise haemorrhoid medication in Indonesia; it might not be that dramatic, but it’s happened to me often enough that I think you get the point.

Although most people who deal with creatives, images and IP should in theory be familiar with licensing, I’ve been met with enough blank stares and confused looks when broaching the topic that I’m convinced that it really isn’t common practice in this part of the world. This is not necessarily a bad thing. Clients don’t often understand why they need a license (“but I’m paying for the images!” is a common response) – it’s not so much that we want to charge them more as we need to ensure that legally, all parties are fully covered. Just as I want to have it in black and white that I can or can’t license the image to a competitor, you as a client would also want to make sure that if I breach that agreement, you can sue me for doing so since you paid for exclusivity. Generally, once explained, all is clear and there aren’t too many problems. I consider client education a necessary thing to safeguard the long term future of the industry – clients who understand and appreciate IP are certainly much easier to work with in the long run.

For the most part, you can grant these clients time-restricted unlimited media exclusive licenses anyway – most commissioned work of this sort is either small value and/or highly client specific, which means that you won’t be reselling them to anybody else, and the only possible way for you to increase the lifetime value of the image is to extend the usage period. For the most part, I actually tend to grant indefinite licenses in the interests of the client relationship; I’d rather they happily come back to me for more work rather than grudgingly hand over a bit more license money.

Bottom line: if you’re going to at any point bill for photo work, make sure you understand and manage your rights and IP carefully. It will help you to both maximise your revenues, as well as ensure that you’re not caught in the position of not actually owning your own images. MT

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Images and content copyright Ming Thein | mingthein.com 2012 onwards. All rights reserved

Comments

  1. Reblogged this on James de Penning Photography and commented:
    Another excellent Ming Thein article regarding IP in relation to licensing images. Check out his website for lots more interesting articles on a wide range of photography related topics.

  2. What max. image size would you recommend? I upload full size to Flickr for my own use but limit views to 1024px – but I think this is potentially large enough to make theft worthwhile for printing at small sizes or web use, so have been considering only uploading 800px or smaller sizes.

    • I do about 1200-1400px on the long side, generally. Anything smaller looks bad enough to do your images an injustice. Small, considering the large images are 36MP…

  3. Ming, I fully agree with you that it is very important that photographers understand the legal context of their work, and intellectual property and licensing is a key part in this. While it may be more important for those considering to make commercial use of their photos it is relevant for all photographers. It is also correct that reserving all your rights gives you the greatest control (obviously). However, I think your discussion of Creative Commons is too simplistic.

    First of all you don’t discuss the benefits of using a Creative Commons license – it can help you to get your work out there and used by others. Potentially a lot. This can help building contacts and even win future clients. I am not saying it is right for everyone but there is a benefit to giving up some control (beyond feeling good for sharing something with others for free, but that is a very subjective thing). Perhaps more importantly in this context I think your saying that *only* reserving all rights allows you to resort to “legal recourse if any of your images are used without your permission”.

    Now, if you make available an image under CC you cannot generally stop others using it, but you can take legal recourse if they use it in a way that you have not allowed them. For instance, if you post a photo of your girlfriend on Flickr you would probably select a CC license that does not allow others to use the photo commercially – so you can protect yourself against the example you cite. You can also stop others from making any changes to your work. Protection goes even further, for instance CC licenses have clauses like “you must not distort, mutilate, modify or take other derogatory action in relation to the Work which would be prejudicial to the Original Author’s honor or reputation.” For many use cases CC gives more than adequate protection.

    Also, the protection that “all rights reserved” gives you really depends on the country in which someone decided to make use of your work. In quite a few cases it will be impossible to enforce your legal rights because local authorities won’t take any action. Other countries limit intellectual property, for instance through “fair use” clauses that allow, amongst others, parody.

    There simply is no protection that works in 100% of all cases. If you want maximum control not make high resolution files available is probably the best protection, but it will only help when someone wants to print your work, not in a web context. I still think it is a good suggestion not to make full size available freely if you even vaguely consider some commercial use in the future. So to sum up, I fully agree It is important to understand all licensing options; I would just suggest not to discard CC straight away and instead to pick the license that suits you best for the specific image.

    • Hi Torsten, you bring up good points regarding CC – however, I live in a part of the world where most people don’t even know what IP is, let alone the finer points that differentiate the various CC licenses – so it’s generally safer not to allow it, period. It’s also much easier to prohibit rather than seek legal damages afterwards (this will incur costs on your side, and you might not get recover anything).

      As usual though, if you don’t want anything used without your control – don’t show it. I suppose I should be more specific and say that the compromise I’ve come up with generally works for me – show low res on Flickr and reserve all rights – but passive legalities and rights are never going to stop the unscrupulous, sadly. Needless to say: no high res work of mine is available online anywhere.

      • I’ve had a few images ripped off in the past and I doubt the difference between CC and exclusive IP rights makes much difference. I think the best safeguard you have is simply not to post high-res images online (if you are worried about this sort of thing). I have some images with Getty, and those that sell for low res purposes are almost worthless anyway given the very small sums involved. So if people rip me off it really doesn’t worry me too much.

        In the extreme case if my low res image becomes the background image for the new Samsung Galaxy X phone CC will give me as much recourse as a more exclusive license.

      • I’d agree with RadiantFlux – there may be a few people who have heard of CC and still copy without checking the details of the license, but I’d doubt whether having images listed as CC or with copyright makes theft any more likely; one difference is that Flickr automatically makes full size files available if you go to CC — that is what has stopped me from using CC widely on Flickr – but that is a Flickr specific issue. However, in terms of reducing legal costs or seeking legal damages afterwards I cannot see much difference between CC and reserving all rights.

        • It’s the psychological dissuasion we’re after. I agree, for an educated audience, it makes no difference. But most of the time I’m dealing with the kind of people who don’t think pirated DVDs are illegal.

  4. The link to the pricing article you mention in your first sentence does not work

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