I keep hearing the argument presented that if one separates one’s usage licensing fee from one’s creative fee, that photographer “runs the risk” of losing money if the client changes its mind on the usage. For example, if the deal is struck for 1 year local print ads and the client changes its mind to 6 months local prints ads, the photographer would be forced to change the usage licensing fee and, by this argument, lose money.
I think that it is better to be fair and equitable in business than to make every dollar possible in every situation. Thus, I have no problem with a photographer changing the usage licensing fees to reflect a reduction in usage license to be granted, or even refunding payments already made (though most folks won’t get paid so quickly)–with one major “if.” Here is the big if: If the change comes within a set period expressed in all the paperwork (terms and conditions), for example, within 15 or 30 (or whatever) days of the invoice date. After that pre-set period (chosen by the photographer, mind you!), the deal is done-done and the client has the original bigger license which it can choose to exercise in whole or in part. No more chances at changing the deal, no more potential refunds, after the “changeable” period expires.
Look, why shouldn’t the photographer reduce the usage licensing fees and/or refund (if payment has already been made) if the license needed is reduced (within the parameter I just set out above)? If the license was expanded by the client, the photographer would demand (rightly!) greater fees–so why do some people have an issue with being fair on the other side of that equation?
Clients will understand the limits of the refund/reduction window–they understand business and contracts. And, more importantly, they will appreciate the fairness you show in how you run your business–which will build trust.
I did this with my photographers when I repped, and I was repeatedly thanked for it AND given additional projects for my guys because of this. I think it happened something like 3 times total in my years of repping. This is not something that happens often, but if you set out a policy for how to handle it and do so with fairness, the long-term good you will gain will far outway the short-term loss of money that may occur.
Running your business with fairness and compassion will get you much farther than running it our of fear or greediness.
How do you feel about a cancellation fee for purchased copyrights that are returned? It seems to me that there should be some accountability on behalf of the client once the estimate and purchase order is signed off.
Okay, for you readers, I asked Bruce what he meant by “purchased copyrights” and he means licenses–so don’t get confused about that.
As for the question, I think that you can go either way–put in a penalty or not–that is more of a personal choice. In my own business, I would say “no penalty” just for the good will of it, but I think it would be better to be willing to make the changes even with a penalty than not make them at all.
Also, you don’t have to advertise this–you can just have it in your T&C and, if it ever comes up from your client–that is they say “Hey, the end-client has decided to run the campaign for only 6 months instead of a year–can we change the usage and what would the fee change be?” you can say something like “In the T&C it’s clearly written that changes within 30 days from invoice are no problem, so yes, I can make those changes for you” or whatever.
Is that clearer? Hope so. –Leslie
Hope this doesn’t seem like a silly question – but what about if they canceled usage altogether? (NOT “we don’t like the pictures” – say, more like “For other reasons, we’ve decided not to run the campaign which these shots were part of.”) How would you restructure the fees?
Rob:
Same thing, basically. If they cancel the usage within the time you have pre-specified, then they don’t pay for the usage (and they get no license). However, after that, they own the license as originally agreed and they simply do not exercise the rights that license affords them.
Kind of like renting a car–you may have rented it to drive all day but if you end up only driving for an hour, you don’t pay any less–you had the right to drive it for 24 hours for the fees you agreed to pay.
–Leslie