CAPIC was founded in 1978 as a national, not-for-profit association dedicated to safeguarding and promoting the rights and interests of photographers, illustrators and recently, digital artists, working in the communications industry. Starting as a single group in Toronto, CAPIC has grown to six chapters, spanning the country from Halifax to Vancouver, with a membership of over 1030.
Q. Does CAPIC offer a Business Practices Manual?
A. Yes. The Business Practices Manual can be found below:
What photographers and illustrators should sell - in addition to their time and expertise - are licences to their work, rather than the actual work or images themselves. Thanks to copyright laws, creators are able to license the rights to their work for specific uses. This is like renting a photo or illustration for use in a magazine, in an advertisement, or by an organization. Copyright laws also give photographers and illustrators certain rights that, if enforced, can pay long-term benefits.
The following copyright information can help protect your professional and financial interests. This information is provided as a general guide and doesn't replace professional advice. Note that copyright law is constantly changing and subject to ongoing revision and court interpretation. International treaties also affect Canadian law. Keeping up with all these legal changes is extremely complex. For general information on copyright issues that relate to photographers/illustrators, contact CAPIC. For specific legal information contact a lawyer who specializes in copyright issues.
The Importance of Copyright
Copyright legislation protects a creator's work and protects a creator's professional reputation. Copyright is increasingly important to professional photographers and illustrators because it affects how you negotiate with clients, the fees you charge and, ultimately, the long-term success of your business.
Other creative professions give an idea of the importance of copyright. Thanks to controlling the copyright to their work, musicians earn money when their songs are played. Copyright also ensures that authors, producers and many performers earn money when their works are read or viewed.
Copyright and photos
Canada's copyright law treats photographs differently from other types of artistic work. Photographers need to take extra steps to ensure they own the copyright to the work they do for clients. If you neglect these steps:
you will be ineligible to obtain copyright protection for that work; and
your client, not you, will be the legitimate owner of your work.
What is copyright?
Copyright literally means having the right to copy, which extends to all types of reproduction, publication, public presentation and other specified uses. Copyright is part of international law that deals with 'intellectual property.' These laws, which vary between countries, also apply to patents, trademarks, industrial design and trade secrets.
In very broad terms, copyright protects the expression of original ideas but not the information itself. This expression is often called 'the work' or, in the case of photos and illustrations, 'the artistic work.' Copyright consists of a 'bundle' of different rights that covers how that work is used. The copyright of a work can be divided into a number of rights, and each right dealt with separately.
Take a simple example of a photograph showing an apple at sunset. Copyright law does not protect the idea behind an illustration or a photograph. The idea of taking a photo of an apple at sunset is not protected by copyright ñ there are no restrictions on creating such an image. But the expression of a specific image - the way the photography is taken, the positioning, the lighting etc. ñ is protected through copyright. Even if the photograph includes elements, such as a building or object, that are not yours, the work itself is yours. (Note: in certain cases, you do need permission to include other people and/or their property in your work, see section on model releases).
Copyright is based on a simple principle: whoever creates or owns a work controls how that work is used. To qualify for copyright, a work must be:
Not a copy of an existing work.
Exist in some identifiable (i.e. physical, visual, electronic) form. Also, the work must be created by a person who is a citizen or resident of Canada, or connected with another country that adheres to the Berne Convention or a similar international copyright treaty, or is first published in such a country. Canadian copyright law applies to works in Canada. If a work created in Canada is used in another country, then that country's copyright law applies.
Copyright on photos and other commissioned work
Unlike other Canadian independent creators (creators who are not employees), photographers are NOT automatically the first owners of copyright in their work. Canada's copyright law singles out photographs and some other types of commissioned artistic works for different treatment.
Section 13(2) of the Canadian Copyright Act states that the copyright owner is the one who commissions and pays for the ìengraving, photograph or portrait. In other words, provided a client or buyer commissions the production of a photograph and pays for such a work, the client/buyer automatically holds the copyright on the photograph and/or ìengraving - not the photographer or person who created the ìengraving - unless the buyer and photographer/creator have an agreement to the contrary. The Copyright Act applies this provision to a ìportrait or ìother original created on a commission basis, but doesn't specifically define what types of commissioned illustrations this includes..
Here are some general guidelines about who owns copyright on photographs and illustrations in the absence of written agreements to the contrary. When photographers/illustrators create photos, portraits or engravings (in the case of illustrators, portraits only):
When creators produce a work for themselves, they own the copyright.
When creators produce a work as part of their employment, including apprenticeships, the employer owns the copyright.
When created on a commissioned basis, the person or company that commissions the work owns the copyright once they have paid for it in full. If the client who commissions the work fails to pay for it, the copyright remains with the creator.
Illustrators benefit from the same copyright principles that apply to other creators, except when a portrait is commissioned.
Photographers/illustrators can arrange to own the copyright on work they do for employers and clients. To do that, photographers/illustrators must have the employer or client sign a written agreement that clearly states the photographer/illustrator is the first owner of the copyright to the work and the copyright remains with the photographer/illustrator. This agreement should be made in advance of every job, project and/or assignment.
Canadian copyright law states that any contract that specifically addresses copyright issues is valid only when in writing and properly signed.
CAPIC's Photographic Production and Licensing Agreement deals with copyright issues and clients who commission work. This agreement includes the following condition between photographer and client (referred to as the ‘licensee'):
"Licensee acknowledges that Photographer is the first and sole owner of all ‘copyright' in all Photograph(s), and that Photographer shall remain the sole owner of any and all Photographs or any and all materials used in relation to production or reproduction of said Photographs, as well as all copyright(s) therein."
If the client signs, the photographer is the legal owner of the copyright to the photography covered by the agreement.
If you have a valid signed agreement, no other documentation is required for photographs, illustrations or any other work that are your original creations. The international notice for copyright includes the © symbol, followed by the year and the name of the copyright owner. Using a copyright notice is optional in Canada, but is the best way to establish copyright protection when work is used outside Canada. The CAPIC Photographic Production and Licensing Agreement requires identification of the photographer when his/her work is used.
The value of copyright is easily lost if you don't know the law and fail to enforce your copyright. Today's technology allows easy re-use, and misuse, of images and other copyright material especially in electronic, or digital, form. Understanding copyright principles gives you a better opportunity to benefit whenever your work is used, in any format.
The good news about copyright:
Canadian copyright law gives the copyright owner of a work the exclusive right to reproduce, publish, publicly present that work, or any substantial portion of that work, or make certain other uses of that work.
To comply with copyright law, reproduction of a copyright work in most cases requires permission from the copyright owner. That permission must be put in writing and may involve a fee negotiated with the user.
Copyright law gives the copyright owner the right to set a fee and conditions for every use of the work. These fees and conditions are important ways for creators increase their earnings and gain recognition for their work. By controlling copyright, you can also ensure that your creative work continues to generate revenue for your estate and your heirs for 50 years after your death.
This is why it is critical for photographers/illustrators, and other professional creators, to ensure that they are either:
The sole copyright owners of their work, or
Fairly compensated if someone else is to own the copyright of their work.
The bad news about copyright:
Enforcing the law is up to the copyright owner and doing that effectively requires significant time and may involve substantial legal costs.
To ensure that photographers/illustrators own the copyright to their photos, illustrations and other creative work, they need to have written agreements to that effect with all of their clients.
Copyright issues affecting the Internet, CD-ROM, electronic databases and other electronic formats are just beginning to be recognized. Until effective ways to deal with copyright issues are in place, many clients, producers of electronic media and others will continue to ignore creators' copyright.
Whether the copyright owner of a photo/illustration is the creator, the employer or the client, copyright law gives original illustrations and photographs similar protection to that available for music, books, computer software and other types of original work. Work created in electronic or digital formats, such as computer-created files and images, also qualifies for full copyright protection.
The joy of licensing
Creators do not need to sell their copyright work. Instead, creators are able to license the rights to their work for specific uses. Copyright can be bought and sold, much like a tangible asset. However, it is usually better for creators to retain ownership of the copyright in their works and then to license specific rights to clients and other users. When copyright owners transfer or grant all their rights unconditionally, it is generally called an assignment of rights or a buy-out. When only some rights are transferred, it is usually called a licence. The terms of a copyright licence are negotiable. As will all copyright contracts, Canada's copyright act recognizes as valid only those assignments or licences that are in writing. The copyright owner can license very specific rights to a work and retain all other rights that are not specified under that licence.
A copyright licence for a photograph/illustration should be negotiated by specifying all of the following five terms:
Type of media
A licence for a corporate brochure is different from a licence for a book cover or magazine feature. The licence fee depends on the individual licensee and how the licensee values the photo/illustration.
Licences may be defined by a market, such as English- or French-language North America, a specific country or the world. The larger the territory in which a work appears, the more valuable the licence.
Timing and/or duration of use
Work can be licensed as a first-time or secondary use. First-time use is generally at a higher licensing fee. Work can also be used for a specific time frame, such as a three-month advertising campaign or one year for an annual report. The longer the use, the more expensive the licence.
Circulation and/or visibility
A photo/illustration used in a mass-market newspaper ad may have higher circulation than if used for a targeted direct marketing campaign. The higher the visibility, the more valuable the licence.
An exclusive licence gives the licensee the sole right to use that work as defined by the licence. A non-exclusive licence lets the same photograph/illustration be licensed to different clients and/or for different uses at the same time.
Here's an example of an effective copyright licence (Note: the number in brackets refers to the number of the licence term described above):
The non-exclusive(5) right of reproduction for 5000(4) posters(1) for the greater Toronto area(2) for 6 months(3).
There is no requirement to register copyright work in Canada. Purchasing a certificate of registration can provide proof that the work is protected by copyright and that the registered owner is the owner of the copyright in that work. For the latest information on copyright registration and current fees contact the following federal government office:
Canadian Intellectual Property Office (CIPO)
50 Victoria Street
Place du Portage, Phase I
Ph: (819) 997-1836
Copyright allows creators to:
- Prevent unauthorized changes to a creator's work, and
- Protect the creator's reputation.
These provisions are known as ‘moral rights.' Moral rights, which are part of copyright, give the creator the right to be identified with the work and the ability to protect the integrity of that work.
With moral rights, creators can decide whether or not to include their name with their work. They also get a veto on any changes to their work that would harm their reputation.
In Canada, moral rights always remain with the creator (or the creator's heirs), even if someone else, say a client or a publisher, becomes the copyright owner. Unlike other rights, moral rights cannot be sold or transferred. Creators can waive their moral rights. This means the creator agrees not to enforce his/her moral rights. Such a waiver can apply to all uses or be restricted to specified circumstances.
Any request to waive moral rights should be considered carefully in advance because it means surrendering critical protection to your reputation as a professional creator.
Duration of copyright
For most works, including artistic works, copyright begins when a work is created, continues until the end of the calendar year in which the creator dies and then remains in force for the next 50 years.
Special rules exist for photographs. Thanks to work of two professional photography groups, CAPIC and PPOC, in 1997 Canada amended its law covering the length of copyright protection on photographs. As of 2000, the copyright term on photographs depends on the copyright owner.
If the copyright owner of a photo is an individual, usually the photographer who took the photo, the copyright term begins when the photograph is made, continues during that individual's lifetime, and remains in force for another 50 years, until the end of that calendar year. This is the same term for illustrations and other copyright works.
If the copyright owner is a corporation, the copyright term begins when the photograph is made or printed, and continues for another 50 years, until the end of that calendar year. The lifetime of the photographer is not a factor. Note that this rule applies only to corporations with many shareholders. If an individual photographer incorporates his/her own business and is its majority shareholder when the photograph is made, the copyright term for that photo is the same as for an individual photographer who operates an unincorporated business.
The term of copyright protection that Canada provides for photographs is likely to be further amended because having two different terms for one type of copyright work is unusual.
Also, the person who owns the initial negative (or the original photo if no negative or plate exists) is considered to be the 'author' of that photo. The 'author' can be an individual or a corporation (with differing consequences for measuring the term of copyright protection).
After copyright expires, the work falls into the public domain and can be copied or altered without permission from either the creator or copyright owner. Such copying or alterations do not violate the rights of the creator or the copyright owner.
Beware of work-for-hire
Independent professionals who are contracted to provide photography or illustration services must also be aware of the pitfalls of 'work-for-hire.' This is an American contractual term that often appears in Canadian agreements. Whether the contract is used in Canada or the U.S., the effect is the same. Under 'work-for-hire' terms, the client gains the copyright to your creative work as if you were a regular employee, yet does not provide you with any of the usual employee benefits.
Some clients and organizations may want you to agree to a 'work-for-hire' contract. If you sign such an agreement, you automatically lose copyright on the work you create for the client. This is an unfair 'heads-I-win-tails-you-lose' situation. Once a work-for-hire contract is in place, photographers/illustrators lose their ability to license their work, as recommended under CAPIC's Photographic Production and Licence Agreement.
In cases where the client wishes to acquire copyright ownership to the work you do, the fee you negotiate should fairly compensate you for the full value of the copyright work, since you will have no rights left to license to future potential users of that work.
Photocopying and electronic rights issues
In addition to conventional copyright issues, the technological advances in photocopiers, computers, the Internet and digital technology raise still more issues and concerns about copyright. Using, distributing, copying and selling creative work in digital or electronic form is now commonplace. Whether these digital works are pictures, photos, other images, words, sounds or some other expression of creativity, copyright laws also apply.
Copyright owners around the world now recognize that specialized organizations are often the most effective way to manage certain copyright licences, including photocopying and electronic rights. Such organizations, commonly known as collective societies, operate by:
-Gathering/obtaining specific rights from the copyright owners they represent.
-Negotiating licences with those who use those rights.
-Collecting the licensing fees and distributing royalties to the appropriate copyright owners.
-Enforcing copyright as necessary.
The Canadian Copyright Licensing Agency, better known as CANCOPY, began in 1988 to administer the photocopying rights for its affiliated rights-holders. In 2000, CANCOPY collected licensing fees of about $20 million on behalf of the rights-holders it represents - individual creators and print publishers. In that year every member in good standing received a minimum payment of $500. CANCOPY now represents its members' rights in digital/electronic formats.
CAPIC officially joined CANCOPY in 1999, and encourages its individual members to work with this agency. CAPIC strongly recommends that its members convey the photocopy rights of their photos and illustrations to CANCOPY. Enforcement of copyright in the digital domain is a challenge for freelance creators, independent rights-holders and collective societies. Various users and providers of digital content in Canada and other countries sell or distribute digital material while ignoring the copyright issues of independent creators, such as freelance writers, photographers and illustrators.
Recent court rulings around the world, including a major U.S. legal decision, Tasini vs. The New York Times, continue to uphold the principle that digital content providers cannot include the work of freelance creators in electronic databases without the freelancers' express permission.
How to protect the electronic rights of your work
Instead of dealing fairly with copyright issues, it is likely that many publishers, clients and other users of photos and illustrations will continue pressuring CAPIC members and other professional creators to sign away their electronic rights for little or no additional compensation.
CAPIC recommends the following negotiating strategies:
1.License specific uses of your work. Do not assign or transfer your copyright.
2. License only non-exclusive rights to users, unless a substantial premium is paid for exclusive rights.
3. Avoid signing 'work-for-hire' contracts.
4. Do not waive your moral rights.
5. Keep written and signed contracts for all photography and commissioned assignments.
6. Photographers should use CAPIC's Photographic Production and Licence Agreement to ensure they own the copyright to their work.
7. Agree to terms that are fair for you, minimize clients' rights to your creative work, and provide fair additional compensation for additional uses of your work by the client.
8. Clearly state that all rights not expressly granted in a contract remain your property.
9. Be sure to require appropriate credit for your work in all formats that you authorize.
10. When licensing electronic rights, make sure to license different types of electronic rights separately. Website rights are separate and distinct from electronic database rights. Other electronic media, such as CD-ROMs, should be licensed separately.
11. Try negotiating non-exclusive licences and/or setting time limits on each electronic licence.
12. Because of the complexity of electronic rights issues, grant the electronic rights to your work to CANCOPY and help the agency license your work for you.
Sources of copyright information are listed below:
Canadian Copyright Law, 3rd Edition, by Lesley Ellen Harris LLB, McGraw, Hill Ryerson, 2000. A good general background to copyright issues.
Digital Property: Currency of the 21st Century, by Lesley Ellen Harris LL.B, McGraw, Hill Ryerson, 1998.
Canada's Copyright Act (unofficial version) available at the website: www.laws.justice.gc.ca
Moral Rights in Action
To kick off one Christmas shopping searound the necks of the 60 Canada geese models that make up the original sculpture. The sculpture's creator, artist Michael Snow, used his moral rights to take legal action against the sculpture owner for adding unauthorized ‘decorations' to his work.
The court agreed with Snow. It found the ribbons were prejudason, the Eaton Centre in Toronto decorated its sculpture, Flight Stop, by tying red ribbon bows icial to Snow's reputation as an artist and ordered the decorations removed immediately. The court ruling noted that Snow was ‘adamant in his belief that his naturalistic composition has been made to look ridiculous by the addition of ribbons and suggests it is not unlike dangling earrings from the Venus de Milo.'
Worksheets & Timesheets
Tracking the time and money you spend while working lets you know how much money you earn (or lose) on each job. Ideally the actual costs and resources needed should be close to your original estimate. However, every job is unique and can require unexpected expenses and demands on your skills.
Capturing all the costs and resources by each job ensures:
• All billable costs get passed to the client for payment.
• You can accurately determine your future costs. This improves your ability to esti-mate and charge rates that properly reflect your work.
Without knowing your costs, you risk:
• Charging too much and pricing yourself out of the market, or
• Charging too little and absorbing costs needlessly.
Billable expenses range from film and processing to supplies and materials, studio rentals, research, travel and talent fees. (See below).
Worksheet for tracking billable expenses
Here's a list of information and expense categories a typical photographer will use to capture and track costs that are a client's responsibility:
• Name of client
• Name of project
• Project coordination costs
• Preproduction costs
• Location scouting fee
• Location fee and permit
• Set expenses
• Casting fees
• Model fee
• Clothing fees
• Props and Accessories fee
• Stylist, Make-up, Hair costs
• Photographer's fee
• Photographer's assistant fee
• Film and developing, scanning or retouching costs
• Equipment rental
• Production/Location costs (on-site meals, couriers)
• Transportation expenses
• Hotels and meals
• Special insurance (weather, equipment)
An accurate estimate is the mark of a professional. Estimating with precision is half skill, half art and a critical part of any successful photography/illustration operation. If your estimate is too high, you lose work. If your estimate is too low, you lose money. Accurate estimating requires three elements:
Knowing what you want to do
This should be part of your overall business/professional strategy. Successful photographer/illustrators strive to become known for certain specialities. By focussing on particular niches, they can quickly identify the professional assignments they want to accept and quickly reject those jobs that lack appeal to them.
When estimating, keeping a professional focus helps in two ways:
• It eliminates work outside your interests. An immediate benefit is that you don't waste time bidding for every potential job that comes your way. Better to refer requests that don't interest you to colleagues who concentrate on that work.
• It builds your estimating expertise. Estimating gets easier with practice. By doing similar types of work over time, you can learn how to do the work, including preparing the estimate, more efficiently. Using computer templates can simplify this process. You can build on this experience to avoid potential pitfalls and streamline each step.
Without artistic and financial goals, it's difficult to develop expertise in your professional work or your business operations, including your ability to estimate. The phrase 'Jack of all trades, master of none' certainly applies (See Chapter One, page 11 for advice on developing your own strategic direction.)
Knowing your actual costs
This information comes from your financial records. Accurate estimating requires accurate costs. That's why keeping up-to-date accounting books and a paper trail of your daily timesheets is important. Remember that every estimate needs to include:
• The specific expenses of a project (your time, materials, travel etc.), plus
• The overall costs of operating your business (salaries, rent, insurance, etc.).
The better you know what you spend to run your operation, the better you can prepare an accurate estimate for a job. Work and time sheets also give you an indication of how you spend your time and if you need to improve your efficiency in certain tasks.
Preparing estimates quickly can be just as important as accuracy in today's competitive marketplace. A delayed or late estimate, no matter how accurate, often means no work. Also, time spent estimating isn't a cost you can usually bill back to the client. Having the right information at your fingertips makes estimating more efficient so you can spend more time on creative work. As you gain experience in estimating jobs you can modify and fine-tune the important costs to track.
Knowing the client and the project
Some projects are a joy. Others are painful. The client often makes the difference. A difficult client can turn a potentially profitable job into a money-loser. How? By requiring lots of revisions or reshoots, demanding all work be done 'yesterday' or taking months of persuasion to pay your bill.
Knowing the full details of a project, before giving an estimate, is extremely important. Rarely will clients have all the information you'd like to have before work begins. It's often up to the photographer/illustrator to ask the right questions to understand the client's requirements. Failing to do this can result in estimates that are either too high, and you won't win the project, or too low, and you may get the work but will lose money.
When unsure about some aspect of a project, use your best judgement and include in your estimate any additional costs you foresee. Put in writing details such as the number of revisions and the estimated studio time required. This protects you from doing additional work that the client never discussed and which you never included in your estimate.
What to ask before an estimate
Prospective clients often expect professional photographers/illustrators to quote a price for a few images on the spur of the moment. Don't fall into that trap. You need some basic information before you can begin negotiations. If a client pushes for an immediate dollar figure, always offer to contact them back with a verbal or written estimate, once you've learned more details. Point out that this information is necessary to prepare a price that's fair for both parties. Giving yourself time to think through a project can help you avoid overlooking potential complications and identify possible cost-savings.
The following questions cover five important aspects of any new job. Use them as guidelines since it's unlikely you'll get ready answers to all your queries. Remember to keep accurate notes of the answers. The written word is more reliable than memory and provides a valuable record should you have to negotiate a tough contract with the client.
1. The Work
• What does the client want to use the images for?
• What person/place/thing is to be depicted?
• What is the setting - in a studio? On location?
• How will the resulting image be used?
• Number and type of media (print, broadcast, electronic).
• Size of printing run.
• Length of time.
2. The Image/Photography/Artwork
• What background/research material exists?
• What previous images have been used? Results of previous work?
• What parameters/guidelines/restrictions exist?
• Confirm use of specific corporate colour schemes and dimensions of image.
• What medium is required for delivery?
• What format is required - print, original artwork, electronic file?
3. Other Players/Competitors
• What other professionals have been contacted/considered for the project?
• Who will make the selection and on what criteria?
• Who are providing the ancillary services - other artwork, layout, film work, printing?
4. How The Work Is Organized
• How is the project organized and who has overall responsibility?
• Deadlines and milestones - for entire project, for images.
• What is the budget - for entire project, for images?
• What are the stages of production?
• Who is the project leader/individual contact?
• Who has sign-off/approval authority and at what stages?
5. The Client
• What is the business? What is the size and type of the client's market?
• What types of products/services does the client offer?
• What type of customers does the client serve?
• What is the client's current financial situation?
• What is the client's advertising/marketing/promotional budget?
Note: You'll also need mailing address, invoicing information, payment terms and contact names/positions once the project proceeds. Never start a job without a signed copy of your estimate and terms in hand.
If you know a client is particularly demanding but still want the work, consider incorporating a ‘frustration factor' into your estimate. This is a charge you build into your estimate knowing your client will likely demand something unexpected. The aim is to cover these unspecified additional costs. Knowing your bill includes this extra amount can help reduce your own frustrations when the client confronts you in mid-project with an extra surprise.
Photographers and illustrators need to be paid as professionals. You need to charge more than just your day-to-day expenses or what you think you need to survive. Professionals include in their prices the costs of training, equipment replacement, insurance and other expenses, such as administration, support staff and overhead. This allows them to continue to create top quality images.
Unfortunately, some clients consider photography and illustration as commodity products, where the supply of images greatly exceeds demand. In these situations, you must be able to able to negotiate a fair price for all the professional services you provide.
This can involve explaining to your client about the value of your expertise and knowledge. Trying to compete on price alone is unprofessional. Remember, there are hobbyists and others who are willing to work for less than you. Set your fee at a level that you feel is fair and justifiable, then don't undervalue yourself.
An effective pricing method is to base your total fee on the following components:
• Basic costs
Which cover the materials and other resources, including your overhead expenses;
• Your creative services
Which includes your professional services plus the additional expertise you provide to a job; and
• The usage fee
Which is based on how the client uses your work.
Your basic costs are straightforward. These are the fixed and variable expenses for your business.
Your creative services cover two elements:
• your professional services and, when needed, the services of others (such as talent, assistants etc.).
• the additional expertise you bring to a job. For example, a client may rely on your ability to analyze and plan an entire project before actual photography/illustration begins, or keep a project on schedule. These services can be legitimately charged back to clients as preproduction fees, project management fees.
Usage fees are negotiable. Some clients consider an illustration they can use many times as more valuable than a picture they can use only once. Other clients believe a photo created for their exclusive use is more valuable than a generic shot that anyone could use.
Pricing by Program
Computer software is now available to help quickly establish pricing estimates. One of the most popular for photographers is called fotoquote, developed by Cradoc Bradshaw, an American professional photographer.
fotoquote is designed to calculate suggested prices when selling stock photos for specific markets and a variety of uses - from small advertising brochures to licensing images on websites and other electronic formats. The details are available on-screen and can be printed as customized price quotes on letterhead or fax pages. The software, available on CD-ROM for Windows or Macintosh computers, is regularly updated with current U.S.-based prices for more than 140 different categories of use.
fotoquote also includes a variety of ‘scripts' to help users negotiate better terms with clients or prospects. Says Bradshaw: “There's a consensus among professionals that in today's market, a photographer with weak negotiating skills is losing money.”
fotoquote is now available only as part of a larger, freelance photo management software package, fotoBiz, developed by Bradshaw. More information is available at http://www.cradoc.com
Put it in writing
As the final word on estimating and pricing issues, when in doubt, write it out. Without a written record of your costs and estimates, you lack an effective paper trail that justifies how much work you have done and how much a client should pay.
Once a job is underway, a client may request another illustration or a different backdrop for a photo and think it requires little or no additional effort by you. If the job originally called for four images, adding ‘just one more' actually increases the job requirements by 25%!
Providing written estimates and complete billings lets you capture those additional costs in a factual, professional way that, if required, gives you a significant negotiating advantage when you and your client discuss fees and costs.
Handling Financial Paperwork
The financial information you need to track day by day in a ledger includes:
• Date of deposit
• Name of client
• Job Number/Name/Invoice Number
• Amount paid in the following categories
o Professional fee
o Provincial tax (if applicable)
o Goods and Service Tax//Harmonized Sales Tax.
• Total amount paid, including contract advances
• Amount owing
• Date of payment
• Cheque/transaction number
• Total cost
• Amount paid cash/cheque/other
• Advances against expenses
• Expense categories (should include subcategories for all applicable taxes)
Before setting up the necessary files for your business records, consult a financial professional. As a guideline, photographer/illustrators will typically require the following categories to keep their financial and other important records:
• Bills Payable
Unpaid bills for business expenses, such as art supplies, office expenses, equipment, rent.
• Bills Paid
Records of making payments for all expenses. It should include details about the payment method, such as cash, cheque, credit card.
• Accounts Receivable
Money your clients owe you for work you have billed.
• Accounts Paid
Money received from clients. This should include a record of the payment (such as a copy of the cheque or deposit receipt) and a copy of your invoice.
• Inventory of Supplies/Equipment
This lists all the material and assets used for your business. By tracking them, you can better manage you business requirements, purchasing activities and your tax-deductible depreciation costs.
• Suppliers and Clients
Written, updated records of your preferred sources for services/materials, and the people who use your work. Include contact names and numbers, addresses, pertinent account numbers, etc.
• Agreements and Contracts
Record of the work you've done and the terms of each project.
All signed releases that cover the people and property that appear in the images you create.
Studio management software, such as fotoBiz, or bookkeeping programs, such as QuickBooks or MYOB, can do much of this record keeping for you.
Taxes are part of doing business. In Canada, income taxes are charged on individuals' earnings and on businesses' profits. Businesses must account for their earnings and expenses, then calculate the income tax owed on the difference.
Business income tax is complicated and always changing. Below are highlights of income tax issues that relate to professional photographers /illustrators who operate their own businesses. For the latest tax-related information refer to information provided by the Canada Customs and Revenue Agency (formerly Revenue Canada), financial professionals and CAPIC.
Business income is all money earned by providing a service and/or conducting an activity for profit, or with, what the government calls ‘a reasonable expectation of profit.' How long a ‘reasonable expectation' lasts in the view of tax officials is not defined. However, failing to report a profit for more than three consecutive years can bring your operation under additional scrutiny and increases the chances of a tax audit. An audit is one way tax officials determine if an operation is run as an actual business or as a hobby.
Business income for professional photographers /illustrators must be reported as it is earned, regardless of when the money is actually received. This is known as the accrual method.
Business income does not include wages or salaries earned through regular employment. Keep a separate record of income you receive from non-business sources (such as investments, pensions, property income).
Keep permanent financial records. A basic financial statement for businesses is the Statement of Professional Activities (Form T2032) provided by the Canada Customs and Revenue Agency. All income entries must be supported with original documents, such as invoices, receipts, deposit slips, bank statements etc. These should be kept organized and available for reference.
The value of any awards - including cash, merchandise or services (such as a vacation trip won in a contest) - received as a result of your business activities must be included as business income.
Business expenses are costs incurred for the sole purpose of earning business income. To back up business expenses claims, you need to keep receipts, invoices, cancelled cheques or some other voucher that creates a paper trail for the amount spent. Each receipt should include the seller's name and date. These receipts should be kept organized and available for reference.
If you operate a studio at your home, you can deduct the cost of the space that you use to earn business income. This cost is based on the percentage of your home that you use as your place of business (i.e. if it's one room of a five room home, you can claim 1/5 or 20% of your household expenses). In this way, you can deduct a portion of you household expenses, such as rent/mortgage, property taxes, power, and heating.
Accounting and legal fees are tax-deductible. Rather than spend your time preparing your income taxes, GST/HST returns, employee accounting, hire a financial professional and claim those fees. Annual membership fees/dues in professional or trade associations, including CAPIC, are fully deductible.
You can deduct up to 50% of allowable business meals and entertainment costs. Again, receipts are required to back up these claims. These expenses need to be incurred for business reasons. A tip: write the date, place and business event and/or client on each meal/entertainment receipt.
Other charges that are often overlooked as deductible expenses:
Interest and bank charges on your business accounts (including the interest charged on money borrowed to run your business).
Maintenance and repairs on equipment.
Insurance premiums or riders that cover business equipment.
Advertising costs, such as directory listings.
• Office expenses
Including business cards, stationery, and subscriptions to professional journals and periodicals.
Phone, fax and Internet service charges used for business.
• Convention costs
Travel, registration, accommodation and related costs to attend a professional/business conference are fully deductible. Note that that 50% rule applies to entertainment costs incurred during such events.
• Education costs
Tuition fees of more than $100 for certain business/professional-related courses can be deductible. Official receipts from the educational institute are required.
• Depreciation of capital equipment
The annual wear and tear on equipment - from computers to filing cabinets - is deductible as a capital cost allowance. The amount claimed each year depends on the type of equipment, its purchase date and how much depreciation you've already claimed on that item.
Two types of deductions that require careful accounting are meals/entertainment and motor vehicle expenses. Tax officials are known to check these deductions very closely. Vehicle mileage must be recorded by total distance driven and distance driven to earn business income. Also, receipts must be kept for all vehicle expenses, such as fuel, repairs, insurance, leasing costs, etc. There are different tax rules for different types of vehicles. Getting professional tax advice before claiming these types of business expenses is strongly advised.
GST/HST and employee taxes
The Goods and Service Tax (GST) is a 5% tax levied on most goods and services in Canada. GST is chargeable on the goods and services provided by professionals, including photographers and illustrators.
The Harmonized Sales Tax (HST) combines the GST and the provincial sales taxes in New Brunswick, Newfoundland and Nova Scotia. As of 2000, the HST rate was 13% charged on the same goods and services as the GST. With the HST, the federal share is seven percentage points; the provincial share is eight percentage points.
Any business operation in Canada that earns more than $30,000 in revenue in one calendar year or over four consecutive quarters must register for GST/HST. Businesses that earn $30,000 or less during a year can voluntarily register for GST/HST.
Once registered, you charge GST/HST on all your billings and you also get to recover the GST/HST that you pay to operate your business. From the GST/HST that you collect, you can deduct the GST/HST that you pay (known as input tax credits), then remit the difference.
Charging GST/HST at time of sale is not an issue with clients - they expect to pay this tax and most will recover the GST/HST you charge. To make it convenient for your customers to claim their input tax credits, the Canada Customs and Revenue Agency recommends businesses clearly show the following information an all invoices and documents for sales of $150 or more.
• Your business/company name
• Invoice date
• Total amount payable
• Indication whenever GST is charged at 5% or HST at 13%
• Your business number (available from the Canada Customs and Revenue Agency)
• The client's name
• Terms of payment
• Description of goods and/or service covered
It's a good idea to register for the GST/HST as soon as you can, even if you are just starting your business and unsure when your annual sales will exceed $30,000. By registering at the onset you get two advantages:
• You can recover the GST/HST you pay during your start-up period.
• You can avoid the situation where, at the end of the year when your business earnings exceed $30,000 for the first time, you become liable for paying GST/HST but didn't collect any. When that happens, you either have to pay the GST/HST owing from your own pocket, or re-bill your past clients for the tax. Both remedies require substantial additional administrative work.
Registering for and collecting GST/HST requires additional administration. Businesses collecting GST/HST must make monthly, quarterly, or annual reports, and pay the resulting tax amounts as required. For full details, contact your local tax services office.
For many small businesses, it is easier and faster to use the Quick Method of calculating and remitting GST/HST. For the latest instructions, contact Canada Customs and Revenue Agency.
Employers are required to deduct the following from their employees' pay:
• Income tax,
• Employment Insurance premiums, and
• Contributions to Canada Pension Plan (CPP) or Quebec Pension Plan (QPP).
Employers must also make matching payments for each employee's CPP/QPP contributions. As well, some employers are required to make payments under workers' compensation laws (for details contact your provincial Workers' Compensation Board).
The money collected must be sent regularly, usually monthly, to the federal government (or for Quebec residents, the Quebec government). The amounts required vary by salaries paid, location and year. If you have employees, the Canada Customs and Revenue Agency recommends that you open a separate payroll deduction account. To this account you can deposit regular payroll deductions from your staff and send specified payments to the government on time. For current details and deduction rates, contact the nearest office of Canada Customs and Revenue Agency www.ccra-adrc.gc.ca
Written contracts with clients have become a necessity for all professional creators. Written contracts also formalize the business relationship between creator and client. The responsibilities and requirements of each side should be clearly and fairly spelled out.
Written contracts are an effective way to ensure you keep control of the copyright to your work. For photographers, a written contract, signed by the client, is the only way they can retain copyright protection on their commissioned work.
A letter of agreement, purchase order, job confirmation or similar document are all forms of contracts. An effective agreement should function as a working business document, as well being legally binding. To help its members know what are the elements of an effective contract, CAPIC has developed the following series of guidelines:
• Identify the people involved and delineate their responsibilities.
• Ensure the work is described in detail and not open to interpretation. This includes stating a specific number of revisions or re-shoots covered by the contract.
• Clearly state that the copyright to the work belongs to the photographer/illustrator.
• Clearly state the type of rights being licensed and how the work is to be used.
• Identify who will approve the work - in progress or on completion - as well as how and when this approval is required.
• Arrange the contract price on a cost plus fee structure. Make sure clients understand that they are responsible for all reimbursable costs.
• State the payment terms and include any incentives for prompt payments and penalties for late payments.
• Provide for the client's prompt return of all specified material to the photographer/illustrator.
• Include provisions for changing the scope and cost of the project; applying kill or cancellation fees; remedying and disagreements arising from the contract.
• Have the client sign the contract (this is required to ensure photographers own the copyright on all commissioned work).
• For large jobs, consider negotiating an advance on the fee.
CAPIC strongly recommends using its standard contract for all assignments. CAPIC members can obtain copies on request from the CAPIC National Office.
What about clients' contracts?
Professional creators are regularly facing situations where a client wants them to sign a contract prepared by the client's own company. Unfortunately, most such contracts have been drafted with little input from professional creators or, even worse, little or no understanding of the professional concerns of photographers, illustrators and other creators.
When clients offer you their contracts, compare the terms and language to CAPIC's standard agreement. Note any significant differences, especially those that affect copyright. Then explain to the client how those terms would affect you and your business relationship with that client. Many clients are willing to negotiate the terms of their own contracts once they understand your viewpoint. Increasingly, creators who understand the value of their work prefer to work with like-minded clients.
For clients who are adamant that you use their contract, you can agree to their terms (however one-sided they may be), refuse the project, or modify/exclude the disagreeable terms. You can make changes by crossing out any offensive contract passages, adding your own terms, then initial the changes and return a dated copy to the client. Keep the original for your records. In this way, you protect your rights, while the client has a signed piece of paper for processing.
A purchase order (PO) is a document a company issues to request a product or service from a supplier. When properly used, a PO is a binding contract. Obtaining a PO before starting work is the sign of a professional, especially when dealing with a new client and/or in the absence of a contract or letter of agreement.
A valid PO must be in writing and include the following information:
• Name and address of purchaser
• PO number
• Date of issue
• Purchaser's job/docket number
• Name of supplier/product
• Description of service/product ordered (including rights/usage licensed)
• Basic fee
• Allowable expenses
• Due/delivery date
• Terms of payment (i.e. net 30 days)
• Tax exemption numbers
• Amount of deposit (if applicable)
For illustrations and photography, a PO should also state:
• Original material will be returned to the illustrator/photographer
• The agreed-to cancellation/kill fee
• That the client is liable for the loss/damage of material while it is in the client's possession.
Note that many companies issue their own POs with standard conditions included, often in fine print. Check that these conditions match yours. If you disagree with specific terms, cross out any that you want excluded then, if necessary, add your own terms. Initial your changes and send a copy back to the client. Always keep the original PO for your records.
Letters of Agreement
Depending on the client, obtaining a purchase order or a signed contract can take longer than expected. To help get a project underway in the meantime, and ensure you have some form of written agreement, draft your own letter of agreement and send it to your client. While such a letter is less formal than a contract, the agreement is still binding.
The letter itself is simply an acknowledgement of the project and provides you a measure of protection until your client issues a PO or contract. The language of the letter of agreement can be simple, but be sure to state the relevant terms of the project. These will be similar to those contained in a contract or PO and should include the following:
• Name and address of client
• Date of agreement
• Purchaser's job/docket number
• Description of work (including rights/usage licensed)
• Fees and expenses
• Due/delivery date
• Payment schedule and terms
• Any other conditions and/or expectations surrounding the project.
A letter of agreement can include all these details and still convey a friendly, yet businesslike tone. One effective technique is to include a phrase stating that if anything in the letter is incorrect or incomplete, the client should contact you by a specific date, otherwise the terms are acceptable.
Upon receiving your letter of agreement, a client can review your proposal and ensure all details are covered. If not, the client can clear up any misunderstandings at a very early stage. The advantage of this approach is you get to outline the project from your perspective and uncover potential misunderstandings before work begins. If necessary, you and the client can renegotiate aspects of the project before either side has committed significant resources to the work.
Below are sample terms that should be part of agreements between illustrators/photographers and their clients. This information is designed as a first step when drafting or reviewing your own client agreements.
Since business practices and laws change, consult your colleagues and other professionals for the latest contract terminology or if in doubt about specific aspects of client agreements. CAPIC members can also contact the CAPIC National Office for further information.
Contracts are a necessary part of professional practice. A written agreement creates an important paper trail for future reference, should problems and disagreements occur between you and your client. Good contracts build good business relationships.
No one set of contract terms is applicable to every assignment. The content of an agreement will vary depending on the work involved, client and the way you operate your business. Each contract should address the issues below.
For Illustrators - Terms to use in Production and Licence Agreements
1. Identify the illustrator and customer (or 'licensee') by name.
This specifies who the agreement covers. The 'illustrator' can be the individual or the illustrator's Likewise, the 'licensee' can be the customer's personal or business/organization name. This makes sure you know whom you are working for.
2. Describe the illustration(s) required:
Be as specific as possible to ensure no important part of the job is open to interpretation. Include details such as:
o The intended use(s) of the illustration(s)
o Subject matter
o Required illustration content and style (expression/mood to be conveyed)
o Whether the illustration is to be original or existing
o Number, format, size of illustrations required
o Number of revisions allowable and at what stage of production
3. Set the licensing terms:
Under an agreement, the illustrator grants to the licensee a ‘non-exclusive' licence limited to uses that are described as part of the agreement. Specifying licensing terms allows the illustrator to control how the client uses the illustrations. The terms also let clients know the value of specific illustrations. Terms are set according to:
o The type of media and/or placement (i.e. an illustration on the cover of a mass magazine is usually more valuable than a small illustration used in a marketing brochure for a neighbourhood business).
o The number of illustrations used.
o How long the illustrations will be used.
o The territory/format in which the illustrations will appear (i.e. by geographical location and/or for a website/CD-ROM).
When dealing with non-exclusive licenses, the illustrator may be able to simultaneously license the same work to other clients. If a client wants to be the only user, exclusivity is available for an additional charge (see Line 4 below).
4. Make exclusivity optional:
The illustrator grants to the licensee an exclusive option under which the illustrator reserves the illustrations covered by this agreement to the sole benefit of the licensee from [insert license start date] until [insert license end date] on the following territory/formats [insert a specific country (i.e. Canada), market (i.e. North America), and/or format (i.e. for website use or annual report)].
Be as specific as possible. The wider the exclusivity granted, the more valuable the licence is to the client. The license fee should reflect this additional value.
As a summary, below are some of the major costs that should be included as part of an illustrator's fee and charged to the client:
• Production costs
• Pre-production and research
• Personnel (including illustrator's assistant; models, stylists)
• Props / Accessories
• Travel / Courier service
• Other services (equipment / prop rentals; special insurance)
For Photographers - Terms for a Photography Production and Licence Agreement
1. Identify the photographer and customer (or '‘licensee') by name.
This specifies who the agreement covers. The 'photographer' can be the individual or the photographer's company. Likewise, the 'licensee' can be the customer's personal or business/organization name. This makes sure you know whom you are working for.
2. Describe the photograph(s) required:
Be as specific as possible to ensure no important part of the job is open to interpretation. Include details such as:
o The intended use(s) of the photo(s)
o Subject matter
o Required content in photo (i.e. name and/or type of people, location, apparel/accessories, expression/mood to be conveyed)
o Whether the photo is created or selected from stock
o Number and format of photographs required
o Number of revisions/re-shoots allowable
3. Set the licensing terms:
Under an agreement, the photographer grants to the licensee a 'non-exclusive' licence limited to uses that are described as part of the agreement. Specifying licensing terms allows the photographer to control how the client uses the photos. The terms also let clients know the value of specific photos. Terms are set according to:
o The type of media and/or placement (i.e. a cover photo for a mass magazine is usually more valuable than a small photo in a marketing brochure for a neighbourhood business).
o The number of photos used.
o How long the photos will be used.
o The territory/format in which the photos will appear (i.e. by geographical location and/or for a website/CD-ROM).
By using non-exclusive licenses, the photographer can simultaneously license the same work to other clients. If a client wants to be the only user, exclusivity is available for an additional charge (see below).
4. Make exclusivity optional:
The photographer grants to the licensee an exclusive option under which the photographer reserves the photographs covered by this agreement to the sole benefit of the licensee from [insert licence start date] until [insert licence end date] on the following territory/formats [insert a specific country (i.e. Canada), market (i.e. North America), and/or format (i.e. for website use or annual report)].
Be as specific as possible. The wider the exclusivity granted, the more valuable the licence is to the client. The license fee should reflect this additional value.
As a summary, below are some of the major costs for a photography assignment that should be included with the photographer's expenses and charged to the client:
• Production costs
• Pre-production and research
• Film and processing / Polaroids
• Prints / Scans / Retouching
• Personnel (including photographer's assistant; stylist; make-up artist; hair stylist)
• Background / Set design / Accessories / Clothing
• Travel / Courier service
• Location scouting and location fee
• Weather ‘permits'
• Kill fee (as needed)
• Other services (equipment / prop rentals; special insurance)
Contract Terms and Conditions
Below are a series of terms and conditions included in professional contracts.
All invoices are payable upon rece
Q. What are the benefits of membership?
A. THE CAPIC Web Site
Promote your talent on our new, gallery-based national site, searchable by location and specialty. Resources, forums and business practices information at you fingertips. www.capic.org - several CAPIC chapters also have their own sites
A bi-weekly email bulletin with news, tech and discount links.
The most important benefit of membership is the “group voice” that empowers CAPIC to represent you on various fronts - Copyright, at the local, Provincial and Federal government levels and with advertising agencies and publishing companies across the country. The Business Practices Manual is available from the CAPIC office. Members can purchase the Manual at a discount.
Business Information and Legal Referrals
When you need copyright or contract information, you can contact our National Office on the toll-free line 1-888-252-2742 (416-462-3677 in Toronto). CAPIC maintains a relationship with lawyers specializing in Copyright and Contract law and refers members to them when necessary.
National & regional suppliers of services and materials plus AVIS, Hertz, digital and traditional labs, stores and a Toronto boutique hotel.
Educational and Social Events
Held regularly by local chapters. By being part of a network, members can quickly increase their knowledge and skills.
- $10,000.00 Automatic Accidental Death and Dismemberment - included with General, Sustaining, Associate and Emerging Talent membership.
- Equipment & Studio - policies designed for professionals in our industry. (Available to General, Sustaining, and Associate members. Not available in British Columbia and Quebec.)
- Optional Group Rate Life, Health & Disability Insurance - packages for members and employees that are among the best available. (Available to General, Sustaining and Associate members)