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Pond5 has allowed for contributor determined pricing for a long time. VideoHive is opening the gates as well. How much should I charge for my stock footage has been a long debated question when given the opportunity. This post aims to help provide ways for individual contributors to make the most of the freedom provided by these two profitable agencies.
Trying to Crack The Contributor Pricing Code
[Just as a spoiler alert, Stock by Numbers has just begun a test to try to determine an ideal price range for our clips. We don’t have results yet. If you’re interested in our testing method and how you might apply it to your own portfolio, read on! If you are just looking for answers or evidence, please come back in a few months.]
Pond5 has been unique among the big agencies in that it allows its market to regulate its own prices. Each contributor gets to judge how much they think their content is worth.
The advantage – there is not a cap on how much you can charge. The downside – Pond5 does not publish other clip’s sales. This means it is hard to know whether your footage is competitive and affordable within the market.
Charge too little and you stand to leave money on the table while driving the value of the whole industry down. Charge too much and you’ll be too expensive for customers.
So a huge question I have, and many other contributors have voiced as well is: what is the best clip price to maximize earnings?
A (Maybe) Happy Mistake Leading Down The Rabbit Hole
Beyond wanting to try to maximize SXN earnings towards our 2018 goals, one of the main reasons SXN so intrigued with this pricing question is because of a mistake we made near the beginning of our portfolio.
For a few weeks, we had our clips priced very low, around $100 for 4K and $25 for HD. We got a few sales and decided to raise our prices a few weeks later, but accidentally raised the price of a few clips higher than intended, up to $299 for 4K and $199 for HD, rather than the industry standard $199 4K / $79 HD. We didn’t even realize this mistake until a few of these very high priced HD clips sold!
After this happy accident we decided to raise the prices of all of our clips for the foreseeable future to see what would happen. To our surprise, it seemed as though our rate of sales increased rather than decreased.
But, our portfolio was also growing in size and we had only had low pricing for a few weeks at the very beginning of our listings. Since there was no method or real tracking, we can’t really know whether this price increase helped or hurt our overall earnings. We’ve also noticed that it takes time for a clip to sell for the first time, making those first few months even less reliable as evidence.
A Lack of Advice and Information
Pond5 has tried to help their contributors tackle the pricing question, as they want to earn the most possible as well. But their information is in many ways conflicting and without evidence backing it up.
Their “How to Price Your Pond5 Media for Maximum Profit” guide is definitely worth reading. It has some interesting insights and encouragingly states:
Even with the increasing ubiquity of reasonably priced, high-quality recording devices, the average prices of video sold on Pond5 are constantly increasing — due in large part to the fact that there is a growing market for professional 4k footage shot on high-end digital cinema cameras.
It also describes that their is a “growing market for professional 4k footage shot on high-end digital cinema cameras,” as we’ve discussed in previous posts on what gear you should be using.
Model-released footage, 4K, and aerials are all more valuable at the moment and should be priced “higher,” but higher than what?
The big challenge here is that their generalities are based off of a huge variety of portfolios. The general prices they list roughly match those of the other large agencies, so no breaking information here…
Another issue is that while they quote prices for 4K clips of around $200 – $150, if you let Pond5 set the price of your footage (as of January 22nd, 2018), it defaults to $50 for 4K and $25 for HD. If $50 / $25 are their set prices, this must mean that they have found those to maximize earnings across the entire agency. Again, there are unfortunately a lot of poor quality clips on P5 that might be dragging down this number and their own blog post in combination with their automatic pricing seems to confirm that they know that.
If your portfolio is full of in-demand subjects shot with an Arri Alexa and the portfolio down the road has 10,000 clips of ducks on a pond shot with a 5D, using an average price based on the clips in both your portfolios will lead to an undervaluation of your port. (Assuming the duckmaster’s clips don’t go viral anytime soon.)
The question that still stands out is – what are the right prices for my specific clips and unique portfolio?
While some might question the value of even trying to figure out this number, since each agency is introducing some form of membership and standardized pricing, Pond5 has given little indication their contributor controlled pricing is going anywhere.
Since VideoHive recently announced that they will allow contributors to begin adjusting their own pricing as well, it seems like contributor pricing is here to stay for the foreseeable future. So, it can’t hurt to try to maximize profits while we have some control.
How Can The Ideal Price Be Determined?
Of course Stock by Numbers still does not have hard answers here. In many ways it’s impossible to answer this pricing question across the board, for the above reasons. Tastes and trends also change and the aesthetic and communicative quality of a clip will always be subjective to some degree.
But, conducting tests on your own portfolio over a long period of time can give you data that might help you earn more in the future. Observing SXN’s tests and results (and potentially sharing your own) will at least give you something to benchmark against based on your own subjective comparison of the quality of your clips to ours.
Pond5 luckily offers some very useful information as a starting point, sales, downloads, item views, etc. Tracking this information and sale frequency in a methodical way might yield some concrete pricing direction.
The Pricing Test
To get the ball rolling Stock by Numbers is conducting the following test on our portfolio at Pond5 (Skip to the bottom if the math is of no interest):
- Maintain an across the board price for each clip in the portfolio for six months to a year.
- Drastically alter the standard price of clips after a defined period.
- Track the earnings rate.
- Compare that earnings rate over each period.
- Attempt to normalize any variance from potential exponential effects of portfolio size or portfolio growth.
- Assess if the change in rate was significant and positive or negative.
Variables To Account For – Creating Apples
There are some issues when conducting this test. Mainly, that there are many moving parts in a portfolio, and without trying to normalize them, our results might be rotten… Here are a few that we are taking into consideration, and how we’re planning on dealing with them.
Linear Views vs. Exponential Views:
It is hard to know whether or not your earnings rate over time linearly or exponentially increases as your portfolio grows. Does a higher number of customers lead to more views on all of your products? While this could only be determined over many years, if it does happen, it could complicate the test by making it hard to compare one period of time to another with equal weight.
We believe that even if effect does occur, it can somewhat be normalized by looking at six month chunks of time and taking into account the the number of views per clip in each different time period. If a larger portfolio yields more views to more clips exponentially, this can be adjusted for since Pond5 gives us this information.
The last, and one of the trickiest variables, is the fluctuation in the number of clips in the portfolio itself. If we were to only use the cumulative number of clips in the portfolio to find our RPC (Return Per Clip) over a certain period of time, it would potentially be extremely inaccurate. If we had 300 clips in the portfolio for 11 months, and then added 400 clips on the last month of the time period, we couldn’t accurately derive and RPC by dividing total earnings by 700 clips.
To offset this, we’ll use another metric – Clip Days. CDs is the number of days any given clip was in our portfolio. So, for our portfolio, we had 300 clips online for roughly 11 months, which equates to around 108,900 CDs. For one month, we had an additional 400 clips in the portfolio for a total of 700, equating to 21,000 CDs in the 12th month. So for 12 months, we had a total of 129,900 Clip Days (130,000 for short).
Apples to Apples
By comparing earnings over two different time periods with the same number of total CDs we can get a much more accurate idea of whether or not a pricing change between these time periods had any effect on our total earnings.
So, we’re going to use Returns Per Clip Day rather than Returns Per Clip going forward. Apples to apples. Easy right?…
The Test Equation:
Now that we have our methodology worked out, we can break it into a more simple and actionable equation:
[VPCD 2 / VPCD 1] X RPCD1 = Normalized RPCD For Period 1
VPCD1 = Views Per Clip Day during Period 1
VPCD2 – Views Per Clip Day during Period 2
RPCD1 – Return Per Clip Day during Period 1
We can then compare the Normalized RPCD for Time Period 1 to the RPCD of Time Period 2.
So, if RPCD2 > RPCD1 we have some good evidence that our pricing adjustment worked!
Over a long period of time this should tell us two very valuable things:
- Whether there is a linear or exponential relationship between portfolio growth and earnings.
- Whether our pricing adjustments actually worked.
Finally, to help improve the validity of these results, we would have to change prices in the opposite direction and re-calculate. If the trend goes in the opposite direction according to our price change, we’re gaining pretty solid confidence in our results! If not, then it’s back to the drawing board…
Since this test is just starting, we will be updating it periodically, we only have a few of the variables in hand. Based on the 365 day sales chart above. Those are:
RPCD1 = Total Earnings / Total Clip Days = $2,566 / 130,000 = $.02 / CD
Our prices remained constant for this time period. $299 for 4K footage, $199 for HD (pretty high we know).
They have now been adjusted to a more industry standard $189 for 4K and $79 for HD.
Ss soon as Stock by Numbers accumulates another 130,000 Clip Days after our recent price change, we’ll be able to make our apples to apples comparison, hopefully yielding some answers.
Please stay tuned and let us know if you have any advice or input on this undertaking. Thanks for reading!