Re: FLASH: Pricing Guide (+ Licensing)

[Franke James]

Laura,


Pricing is a very complex issue that's intertwined with your ability to sell

your work for what it's worth. You may be leaving money on the table and you

don't realize it. Originality, quality, reputation, effectiveness,

entertainment, "stickiness", strategic thinking, aesthetic appeal -- these

are all things clients will pay for. 


Licensing is one way to derive maximum value from the work you produce.

Instead of charging the client, let's say $50K, for all the rights to your

creation, you sell them only the rights they need for their specific use,

say $10K. If your creative is a success, they may come back and ask to use

it in different media (so you get paid more), and they may ask to use it for

a longer period of time (so you get paid more). That's good news. Everyone

is happy. And two years down the road if the client still sees value in your

creative you will still be earning royalties. 


We did a website project with original photography (by me). The client paid

only for the use of the photos on the site. When they decided to extend the

creative into other media they paid for those additional rights which

amounted to tens of thousands of dollars. 


>Understanding your rights as a creator is always important. But there are

>"real-world" issues - you have to be able to get the work on those terms.


Some clients will walk away but those that understand the value of your

creative will stay. Don't undersell yourself. This conversation has planted

the seed. Read up on the issues. You may be able to increase your income

substantially this way. But it does take the "chutzpah" to walk away. I've

annoyed some clients by being knowledgeable about copyright, but so what? 


>> The concept is also similar to performance fees which some ad agencies use

>> (and which we have used successfully). If you create a "hit" you'll earn

>> more money than if you create a dud.

>This implies that you're creating the games on spec. 


No, you are not creating anything on spec. Performance fees are bonuses on

top of a flat fee that you negotiate up front. Here's an example of how it

works: We agreed to do an ad campaign for a client. He wanted to pay us a

middling amount. We knew how much work it was, and that we're perfectionists

who will push until it's right in every detail. So, we negotiated a flat fee

plus a performance bonus based on sales. We more than doubled our fees. The

client was thrilled because he saw a direct relationship between our fees

and his success. 

 

>>Well writers, but traditionally artists just sell paintings outright. 


Artists still own the copyright to their works even after the paintings are

sold, (unless they signed away their rights). 


>Hm, so I guess I should go build a site and start working on a large

>user-base - I'll be back in a couple of years ;) (kidding)


Not a bad idea. Proving that you can attract eyeballs is one part of the

equation on how much your work is worth. Building a permission marketing

list is another.


Good luck,


Franke


Franke James, MFA

Jamesgang.com

______________________________________________

The World Animation Celebration May 30-June 4, 2000 -- Hollywood, CA

http://www.jamesgang.com/jamesgang/press/index.html

Franke James, Jamesgang.com, will be moderating the panel: "Economic models,

business models, animation and the brave new world on the Internet"

Featuring Shockwave.com, Icebox.com, Disney Online and more at The World

Animation Celebration. Talent search for Shockwave and Flash animators


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