The images a photographer creates become automatically the Intellectual Property (IP) of the photographer: the photographer owns the copyright.
When a photographer performs a client assignment the images (or other work results) get licensed to the client: a usage license is granted to the client. The name implies that a license is tailored to the specific use scenario of the client.
It is a little bit like Software licenses: if you buy a software you buy a license to use it and that license can be either broad or more limiting, like you may install a copy on 3 devices. People commonly understand that concept once they buy a software, like let’s say Adobe Photoshop, they do not buy the coding of that software and also other people may buy that software. The code belongs to Adobe and if you would want to buy that code it would cost you a little more than just the price for your specific copy.
Same goes for stuff photographers create. Photographers ask you what your planned usage is and the license and the associated pricing is tailored to that use scenario.
Why it is important that a photographer’s should always itemize the usage license in the estimate
A professional estimate from a photographer should itemize fees and charges and among the fees is the Usage License Fee according to the stated use scenario which defines clearly what the client can do with its ‘copy’.
Aside from agencies and professional art buyers it is a line item which a lot of clients do not like or understand: ‘I am the one who pays you for the assignment, why do I have to pay for a license?’ The answer is similar to the software analogy: creating the work result is the ART of the profession, whether it is a photographer or a software developer, and you are asking them to create a work result that you will be able to use for the specific purpose. It would be way more expensive if you want to pay for all the experience of the creator and if you want to own the IP — the idea is that a tailored license makes the project costs less expensive than including ‘everything’ and own it all for a higher price. All license pricing is usually an adaption to market, use, and the client: yes, it makes a difference if you quote a local mom-and-pop business or Nike.
IP buyout is actually an option, but it is expensive because the creator then has no further right to the creation — for some companies it is worth it, they have reasons. For most clients it is just about having a license for their specific purpose.
Some photographers do not itemize the license in their estimate and say ‘included’, just because they (may be rightly so) think that client is upset and will not understand. In some cases I even do that, but it must be a specific assignment where is not much infringement to be feared.
Infringement? If a photographer prices a license, it is tailored to the use scenario of the client — the smaller the use, the less expensive the license because the photographer understands that you don’t want to buy the whole store when you just need a chocolate bar. But what happens if the client, let’s assume it is an architect or interior designer or realtor, provides the images to all the sub contractors who work on the project, from the kitchen manufacturer to the floor guys and all of them use the images for their marketing and because the images are so good they get new customers? That is not what the photographer wanted, it is an infringement. If the original client would have told the photographer that it is a shoot shoot for 5 companies the pricing for the license would have been higher, of course.
If a photographer has NOT put a price on the license then it is difficult to proof the value of it and therefore how much damage the infringement does.
If photographers shy away from telling the client what the license costs are then they are hurting the entire industry of professionals. Everybody must understand that pricing a usage license is NOT a crime, it is how the entire business works. Like with the software analogy: if you sell a license for 2 devices you do not want that the buyer copies it to all 100 devices in its company, right?
How much is a license?
There are tools where you can type in the usage scenario, client type and size, etc. and it calculates the value. You can also check the Getty Images Stock Photography website, pick any photo, and customize the license: that will probably result in a pretty expensive license, but it helps to understand that licensing is the way to price the creative work result.
Sometimes those tools are estimating pretty high and a photographer knows that it is not a fit for its local market or small client.
So, an option is to look at the client and the market and establish a fair market pricing, like say 30%, 50% or more of the photographer’s fee. Even if a photographer feels that the client wants only ONE NUMBER, then create that quote and point out that 30% is the license cost.
What licenses exist?
I mentioned in my post to terms: ASSIGNMENTS and STOCK PHOTOGRAPHY.
With an ASSIGNMENT a photographer is assigned, contracted to work on a specific task with a specific outcome.
With buying STOCK PHOTOGRAPHY the buyer can only get what is available, there are no custom images (video) they can request.
Whatever the client goes for, it will result in LICENSING the image, either the assignment outcome or a stock photo.
There are 3 categories of licenses:
Usage for selling, promoting a product, service, idea, etc.
E.g. use on website, for advertising, product packaging, brochures, PR, social media, marketing, reports, etc.
E.g. use in magazines and newspaper articles, either print or online, books, etc.
Editorial is an important category because it it not just concerning e.g. a photo from a news event, but e.g. imagine an architect who gets an editorial article about its company and projects and with the proper images that becomes a valuable article not only for the magazine but also for the architect! It’s probably, in an advertising sense, more worth than placing ads somewhere and the editorial piece in the magazine is free. That equals free advertising with more reputation value than an ad!
A magazine will ask for an Editorial License for images before they use it in their piece — therefore, if a client plans to use images for editorial purposes, they will need such license.
Any photography done for personal use — most notably think about wedding photographers or portraits, but also many others.