Transparency and the photo biz

Transparency is one of the theoretical conditions required for a free market be efficient. - Wikipedia

In case you've missed it there is an interesting conversation going on on A Photo Editor. APE posted some advertising and editorial estimates. Read the comments if you want to see ensuing debate about pricing. I want to thank him for posting these and for the debate he started. There were 154 comments as of this morning. In many ways APE is doing for the industry what our professional organizations believe they cannot do - openly discuss the cost and value of photography.

I think there is a very interesting lesson from the level of debate and the tone of surprise these estimates caused on his blog. Photography is not a transparent business. In many cases the professionals in photography can't accurately assess the value of their work to the market.

There are good reasons for this. It's hard to quantify the value of creative thought. Each creator has a different business realities and costs of production to consider in pricing. That said, not honestly and openly discussing pricing has in my opinion been a problem for our market.

Economists, particularly western ones, hate opaque markets. They are inefficient, volatile, and have higher costs then transparent ones. The web in many ways has made the market much more transparent. For example, it's super easy to find out how much everyone else is paying for a car. This protects buyer A from paying more then buyer B. This in turn helps legitimize the value of the vehicle.

Another problem with opaque markets is they allow the more informed player (in our case the client) to control the negotiation. A transparent market is one where all parties have equal access to information. If you knew what Sterling Cooper paid for their last 10 photo shoots you would be in a stronger negotiating position with them and with their competitors. In the current photography market a client can tell you - we never pay for that, every photographer signs this contract, the other guy is bidding 1/2 of what you bid - all you can do is guess what the other guy actually does or did. The more you know about the market the more accurately you can value your goods and services. Let's be clear transparency is not price fixing - which is illegal. In fact the more knowledge everyone has in a free market the fairer it tends to be.

Do give these estimates a careful read. For a definition of transparency here is the Economist's A-Z.

-Michael