How it works
The exclusive right of photographers to copy and use their products is protected by copyright. Countless industries purchase photographs for use in publications and on products. The photographs seen on magazine covers, in television advertising, on greeting cards or calendars, on websites, or on products and packages, have generally been purchased for this use, either directly from the photographer or through an agency that represents the photographer. A photographer uses a contract to sell the “license” or use of his or her photograph with exact controls regarding how often the photograph will be used, in what territory it will be used (for example U.S. or U.K. or other), and exactly for which products. This is usually referred to as usage fee and is used to distinguish from production fees (payment for the actual creation of a photograph or photographs).
The contract may be for only one year, or other duration. The photographer usually charges a royalty as well as a one-time fee, depending on the terms of the contract. The contract may be for non-exclusive use of the photograph (meaning the photographer can sell the same photograph for more than one use during the same year) or for exclusive use of the photograph (i.e. only that company may use the photograph during the term). The contract can also stipulate that the photographer is entitled to audit the company for determination of royalty payments. Royalties vary depending on the industry buying the photograph and the use, for example, royalties for a photograph used on a poster or in television advertising may be higher than for use on a limited run of brochures. A royalty is also often based on the size at which the photo will be used in a magazine or book, and cover photos usually command higher fees than photos used elsewhere in a book or magazine.