What is a Commercial Photography Image License?

by | Commercial Pet Photography 101, Photography

So you’ve heard the term ‘image license’, and are now likely wondering what in the world it means. Well I’m here to break it all down for you.

I’ll start off with the basics in this article, which help explain why an image license is even a thing.

This article focuses on U.S.-based image licensing, because we are based in California and the U.S. copyright laws apply to the commercial animal photography services we provide to our clients.

If you are based outside of the U.S., and doing business with us, those copyright laws still apply.

Basics of copyright:

In the United States, when a photographer creates a photo, they immediately own the copyright to that photo. The photo is considered their intellectual property and they are the legal owner of that property, unless a copyright transfer agreement has been drafted and signed by the intellectual property holder (the photographer) and the client who has commissioned the creation of the property (images). (More on that later.)

Because the photographer is the legal owner of the intellectual property, they can then display the photos in their portfolio, on social media, in printed collateral, in art showings, etc, and sell the rights to use that photo to their commercial client (usage rights).

If the client isn’t purchasing exclusive use of the images, the photographer has the legal right to license the photos to any other party. This includes direct licensing to other clients, and placing the images on a stock photography website. (Most commercial photos are created for a client’s ‘exclusive use’, although this should never be assumed.)

Benefits of copyright:

If the photographer chooses, they can even get a formal copyright certificate for the photo, which affords them additional legal protections of their intellectual property. We register the copyright on images from all shoots we do for clients, which enables us to provide maximum protection for the images we create.

We use tracking technology that alerts us to copyright infringement (e.g. when any of the images we create have been stolen), and because we own the copyright we can get those images removed fast. In worst-case scenarios, we’ll sue over the infringement. Many of our clients are international household names, and we’ll go to bat for them to protect the assets we created for them. This helps protect our clients’ investments, and most importantly- their brand.

It’s a pretty terrible thing when a company pays good money to have images created for their exclusive use, and they discover those images on a competing company’s website.

So getting copyright certificates, and tracking copyright infringements, are well worth the investment.

Usage licenses:

A commercial photography usage license is an agreement between the intellectual property owner and another party that wants to use the images for their commercial/advertising/marketing purposes. The license spells out the allowable usage (on billboards, on the homepage of a website, in one social media post, etc), and any usage that isn’t included in the usage license is not allowed.

The options for a single usage license are limitless, meaning, if you can imagine a medium/location/duration a company would want to use an image in/on/for, and then combine those mediums/locations/durations, you end up with an endless array of possible usage licenses.

Here are three examples of usage licenses:

#1: The nonexclusive use of three images in a digital advertisement placed on Facebook, with a run time of 72 hours, targeting a North American audience of 2 million game console users.

#2: The unrestricted, exclusive, global use of 15 images in perpetuity. No third party rights. Editorial use requires an additional fee.

#3: The exclusive, perpetual use of 35 images for organic social media posts on a single social media channel. No third party rights. Promoted and paid social media posts incur an additional fee.

So you see, a ‘usage license’ is simply the description of what the end user/client is purchasing the rights to use the image(s) for.

Usage fees/licensing fees:

A usage fee, also known as a licensing fee, is the price the client will invest in the use of the images. This fee is based on the benefit to the client, which is determined by intended use.

Where, what, how many and for how long are questions that are answered to determine what the appropriate usage fee will be.

A global brand placing an image on billboards next to every highway in every U.S. state is going to pay a very high usage fee. A small local restaurant using an image on brochures for their new takeout service is going to pay a substantially lower usage fee.

In those scenarios, the benefit to the company (e.g. potential payoff) is drastically different.

A usage fee is an investment into the results the company expects from the advertising/marketing use of the images. Note that this is an investment that will produce returns, not a cost. 

A company who expects huge results for a long time will pay a higher usage fee than a company that expects small results for a short period of time.

Virtually every photographer is happy to grant unrestricted global usage in perpetuity to their clients, but that commands the highest fee, as it includes ALL perceivable uses, including TV/broadcast, book cover publishing, packaging in every country, bus station ads around the world, etc etc etc. (E.g. a whole ton of usage a company will never use.)

Therefore, the vast majority of companies choose to define their use in order to save substantial amounts of money in licensing fees.

Rights-managed vs royalty-free usage licenses: 

Think about when you purchase a stock photo from a stock website. Some photos are considered royalty-free, where you don’t have to spell out the use, and some photos are rights-managed, where the agency (or photographer) controls the use the buyer is allowed.

Generally in commercial photography when assets are being created for a client’s use, the usage license is rights-managed as opposed to royalty-free.

Although some new, inexperienced and/or low-priced commercial photographers won’t restrict usage and are essentially providing a royalty-free license without being aware this is what they are doing, experienced talented photographers who create images that truly help sell a product or service, do define usage and charge based on it.

Generally- the more engaging and captivating the images and the higher quality they are- the higher the usage fees are expected to be. #yougetwhatyoupayfor

Why royalty-free licenses exist with stock photos and not commercial photography:

Royalty-free image licenses are found in stock photography because they aren’t being licensed for exclusive use. Because hundreds of thousands or even millions of users can end up using the same photo, the stock agencies can afford to extend very low royalty-free usage fees.

This can be a confusing area for clients who have minimal or no experience hiring a commercial photographer to create custom content just for their brand. They assume that they become the legal owner of the images after the photographer creates them.

They assume that they are having products created for their use, so they own the products, much like if they were purchasing any other product on the market. That isn’t the case when copyright and intellectual property comes into play, as outlined above.

Royalty-free usage licenses compared to licensing songs:

Usage licenses and usage fees are similar to royalty agreements and payments in the usage of songs. But because you can’t track the use of a photo the same way you can track the playing of a song, you pre-pay for the estimated future usage.

Both parties- photographer and client- work together to try and determine what that usage is/might be so that you aren’t paying for usage you don’t actually need, and so that you aren’t actually using the intellectual property in ways you didn’t pay for.

A growing trend in the industry is for companies to ask for unrestricted exclusive-use licensing in perpetuity. This means that they would be the only party who could ever use the photographer’s intellectual property, for whatever usage they wanted, in perpetuity. The photographer would retain the right to use their property for promotional use only, but would relinquish all other rights to their work.

Exclusive, unrestricted use = a very high price tag

Because of the value involved in an ‘exclusive, unrestricted, in perpetuity’ license, it always comes with a very high price tag, because the client is receiving maximum benefit from the images forever. If they go on to be the next Nike or Apple, they can continue to generate millions of dollars in revenue every year from the usage of the images in advertising and marketing.

The vast majority of clients will never need unrestricted licensing, because they will never take advantage of most of the usage that licensing type includes, which includes everything from ads on the side of busses, to displaying the photo in a tv show scene, to printing on mass-produced mugs and t-shirts. ETC.

What makes the most sense, and what we recommend doing (and often do), is extend exclusive use licensing with broad rights (like printed collateral + all social media for example) for a period of one or two years. This keeps the cost down and affords the exclusivity to the client that they need. But it also prevents overpaying for assets they are unlikely to use two years from now.

The benefits of the vast majority of photos in this day and age of digital-first marketing, really occurs in the first year or two of use (or even just a matter of days or months in the case of digital advertising and social media.)

This is why nearly all successful companies produce at least one commercial photo shoot every year. The global brands do many shoots per year, often investing $100k-$350k+ in a single photo shoot. (See a link to those estimates below.)

Work-for-hire agreements

To complicate matters further, there are work-for-hire agreements, which are typically employed in situations where the photographer is an employee of a company.

When a photographer is an employee, they get benefits and vacation pay and medical insurance, etc. The company then owns the copyright, pays for all of the gear and software (which is very expensive) and the photographer is paid an hourly wage, with a consistent 160 hours per month (or more).

This arrangement is a win-win for both parties, as most freelance commercial photographers don’t come even remotely close to working 160 billable hours per month, and they have to pay all of their own expenses and taxes, which often come to 40% (or more) of their revenue.

Sometimes clients will contact freelance commercial photographers or agencies like ours and expect a work-for-hire arrangement where our photographers (and us) sign over the copyright to the client, and they pay what amounts to an hourly wage for the photography service and usage.

Unfortunately clients who ask for this and pay low fees usually don’t realize that a) it’s a (very) unreasonable request, b) it’s offensive to ask for it because it’s really trying to take advantage of the creative by asking for everything and paying very little for it, and c) it’s very rarely legal.

The same benefits for the client can be obtained by purchasing an unrestricted license in perpetuity, or including the categories of use the client is most likely to use, for a set period of time. (This is what we do for all but our biggest clients, because it provides a great benefit to our clients at a lower cost.)

Very few companies actually need to own the copyrights on the intellectual property the creative is making.

Real-life commercial photography estimates

If you’d like to see a wide variety of real-life commercial photography estimates for shoots in every industry, take a look here. You’ll find real-world pricing for all aspects of a photo shoot, where it’s clear that they run the gamut from low-budget commercial photo shoots under $10k to shoots that are $250k and up. Most commercial shoots are somewhere in between.

Where to get more info on commercial photography licensing and pricing

If you are a commercial photographer (or a company who hires them!), head over to The Image Crafters website to get great education about the business of commercial photography. You’ll find information on licensing and usage, commercial photography pricing, including estimates and bidding, commercial photography contracts and more,

Are you a company in the pet industry in need of compelling and engaging animal imagery? We are a commercial pet photography agency with 19+ years of experience creating animal images for some of the world’s top pet brands. We’d love to chat, and you can get started working with us here.

Jamie Piper
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Dogling Creative™ (FKA Cowbelly) is a creative, web and design agency that provides commercial animal photography, stock dog and cat photos, graphic design, branding, web design, copywriting and other services to pet-industry businesses and brands.

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