5 Reasons Digital Files Should Cost More than Photographs

I am constantly asked how to price digital images. Even if you’re a photographer that sells finished prints, there is a need to know how to price digital images. For instance, sometimes a band needs an image for their new CD cover, a real-estate agent needs a photograph for his/her website and business cards, or a business needs a digital file to create some posters.

Even though it is better to sell and provide a finished product whenever possible, sometimes there is a need to sell a digital file, which means there is a need for knowing how to price these images.

First, here’s a video on pricing commercial work, and below that are 5 reasons that you should charge more for a digital file.

Reason #1 – Digital Costs You More!

Some people wrongly assume that unlike film, digital is free. They charge almost nothing for their images because they feel they are saving money in printing.

This kind of thinking will cause you to go out of business. The truth is that a digital file does and should cost MORE!

One reason is the higher costs of producing digital images, and these costs need to be spread out across all orders. Even though some of these costs don’t seem to be associated with each shoot, they all must be paid for by each shoot.

Aside from overhead and fixed costs, think of how much you have to pay in constantly to upgrading your cameras, your software, your computers, and your computer systems – all of which is associated with digital and none of which is cheap.

On top of that there’s constant education. Add these to your normal fixed costs and you realize that the cost of a finished image is only a small percentage of the total cost of what it takes to create a photograph. Digital is not free.

Reason #2 – Selling Digital Means No Reorders!

In the film days, if someone wanted three copies of an image, they bought three copies of an image. The royalties were built into the system. Now, if someone buys a digital image, they will never buy another copy of that image from you again – never! That is your only sale for that image, and it has to cover what you would have made otherwise.

If you sell your digital files for less than photographers sell finished prints, then your overall sales will be smaller. There is no way around that.

Reason #3 – Selling Digital Automatically Includes a License!

Whether you specify it or not, when you sell a digital file, you are now you’re selling a license with the file, a license allowing the client to use the image as needed without having to pay you any more royalties. You can try to restrict the license, only telling them that they are allowed to use it in certain ways, but you cannot track or police the use of the file.

A license is extra value for the client and should cost more. When you buy a movie on DVD, it includes a license for home use only, not for projection in a big movie house. If you want to show that movie in that way, you need to purchase a different license.

Similarly, if someone buys an 8×10 print, that purchase does not give them license to take that image to the copy house to make more copies. That’s against the law because it’s not part of the license associated with that purchase.

But when you sell or give away a digital file, there is a license implied that they can use that image for anything they want from then on without ever paying you.

Therefore your price upfront for the file has to include the fact that you need to be paid for the use, and multiple use of the file from now on.

Reason #4 – Size of Usage and Region Affects Value & Price!

How the file is used also affects price and needs to be considered. For instance an author who needs a portrait for their book jacket should pay a lot more for one image if their publisher is national and the book will be in every bookstore and airport around the country. They should pay less for the image if they are self-publishing the book themselves and will sell it out of the trunk of their car.

Similarly a band doing a CD with a national label will pay more for their files than a band in your neighborhood that is new, and making CDs at the minimum run of one-thousand at a time.

The pricing has to take into account usage and size of region. The bigger the region, the more one portrait file costs. An image used nationally should cost more than an image used in your small town. An image used on a national website by a big brand name will be seen by more people, and will therefore cost more than an image on a local website that is seen by fewer people. Both are websites, but the regional use is different.

Reason #5 – File Size Affects Value & Price!

The size of the client’s final project affects the price, because larger projects require larger files. Larger files give the client more freedom in print size, but they also cost you more to create.

The larger the file, the better your equipment needs to be. Some really large images almost have to be created on a medium format camera, which costs you more in equipment, insurance, software, and in processing time compared to more normal pro-SLRs.

And because larger files will be seen up close, more time and care needs to be taken in post-production and detail work, costing you more money. Therefore the size of the file will affect price. For instance, a big banner or large back-lit print that is seen close-up will cost more than a smaller image in a brochure, for two reasons, #5 file size and #4 usage and visibility.

But giving someone a medium file size does not really restrict use as much as you think. Some people think that a billboard is a big file. It really isn’t. Right now I personally have about four different jobs as billboards, all repeated along my state’s main freeway. Over the years, I’ve designed and printed a fair amount of billboards and can tell you that up close it’s hard to tell what you’re looking at.

Whether you design with a huge file or a medium size file, in the end, when you look at the vinyl coming off the big printers, the printed pixels up close are big and blury looking. It’s hard to see what you’re looking at.

But to a driver, the final billboard is at such a distance that it is like looking at 8×10 at arm’s lenth. An 8×10 is usually 300-400 dpi and a billboard can be printed beautifully at 30 dpi. But they both appear at about the same size to the eye, and the eye sees both as crystal clear.

The point is that you don’t have to shoot medium format digital to get a billboard sized print anymore. But larger files are needed to create huge prints that are seen up close. Depending on the job and the final needs of the client, the files size affects the price.

For portrait clients, you may perhaps choose to include a small 700 pixel digital image free with any print purchased, allowing the client to have a digital version for their facebook and blog, but anything larger becomes more and more printable and should cost accordingly.

Pricing

Selling digital files therefore means a smaller sale along with a higher price of doing business. This isn’t a system of success unless you understand these five reasons that you must charge more for digital files upfront. And I believe that you should charge per image, rather than charge for a “disk of images.”

So how much do you charge? Well that has a lot to do with how much you are worth. If you’ve read my books and my articles, then you’re print prices should be level with your skills, in which case I’d start with your 8×10 print price as your guide.

On the low end, for small local use of digital files (like a businessman that wants to use his portrait on his business cards and website), start at least at three times your 8×10 print price for one digital file and size the file accordingly. So if you charge $100 per 8×10, then one digital file for small, local use should run about $300.

If the client is bigger, or the file size is bigger, or the usage is a bit larger, start at five times your 8×10 for one file, or in our example $500. If they are purchasing many images at once, your price per file may drop a little accordingly.

Finally, if the client is a national brand-name, and your image will be used on a national scale (like in a book jacket or major CD cover), your price should be much larger. In fact for that kind of purpose it’s much harder for me to tell you what to charge as there are so many factors that can’t be explored in this article. But keep in mind that charging $6,000 – $10,000 for one image is not uncommon.

However, most situations will be in that small to medium price range.

Pricing for Families

Despite the pressure to charge families less than a business, instead keep your prices the same for businesses and family clients. It’s only fair to you and all your clients.

Sometimes while doing a family portrait, you may sell a digital file to the husband or wife for their business website for instance. They will be charged the small usage fee of three times your 8×10 for a smaller file that can be used on business cards and websites.

If a family wants a digital file of their family portrait to “save money,” meaning that they don’t want to pay you for your work and instead want to make their own prints, your price will show that no matter what they order, you get paid for your work. When someone finds out that a digital file is five times the print price, it gives you a change to explain the reasons above why digital files costs more.

Remember that the price of the final photograph of digital file is only a fraction of what it costs you to create. Don’t undercut yourself with the belief that digital is free. Every client must pay their share to help keep you in business so that you can be around next year to give them great service again.