A CONVERSATION WITH SCOTT HIGHTON PART 2
The second half of 2-part article.
by Doug DeRusha
 You've been particularly prominent on the QTVR list when it comes to issues of pricing VR work, copyright laws, and business ethics, and you take a very professional approach in managing the business of immersive imaging. What are the fundamental building blocks needed to grow and sustain a VR business, and some of the problems that people are likely to face?
 First, you need to understand your potential market and figure out how you are going to sell your services AND to make a profit while doing so. There was a lot of enthusiasm early on in real state VR. That market appeared to have high volume potential with large dollar amounts being transacted, and the use of VR tours offered tremendous commercial benefit to both buyers and sellers.
However, the companies that pushed hardest to bring VR to the real estate market did so with an approach that VR photography was a commodity that "anyone can produce, as long as they use our proprietary technology and products." They didn't concern themselves with quality or value for the most part, but rather, promoted ease of use and low cost. The major technology players then got into a price war, forcing the market prices for their services down to a level where it was impossible for ANYONE, including deep corporate pockets, to profit. The result of all this was that when you mention VR to most consumers today, they believe that VR is nothing more than low quality, low resolution home tours on the web "where you can look around a room."
Price is the last refuge of the marketer. It is what you use when you have nothing else to distinguish you from your competition.
It is therefore important for VR photographers to accurately assess their potential markets, and then price their services in those markets so that they are compensated fairly for the value they bring to their clients. This value must always extend beyond price alone, and include quality, vision, experience, ability, reputation and efficiency. Keep in mind that photography is primarily a service business. Professionalism and even personality are important, too.
After understanding and identifying the markets which you will target, you need to figure out what you have to charge in order to remain in (and grow your) business. This is a relatively simple process, but one which most people fail to do before starting.
1) First, add up all the expenses you will have to run your business in a year - things like advertising, rent (or the portion of your mortgage payment that corresponds to your office/studio space), insurance, utilities, phone, equipment, vehicle costs, travel, education, professional dues and association memberships, promotion, office supplies (including letterhead, business cards, computer software), professional services (accounting, legal, photo assistants), taxes, licenses and permits, portfolio and web site costs, and postage/shipping. Add to this the salary you need to make from your business efforts (remember that salary is different than profit), profit (which is what you put back into your business to allow it grow) and any other expenses such as equipment depreciation, debt reduction (credit cards), loan payments, employee benefits and cash reserves. This gives you a total dollar figure that you have to bring in simply to stay in business that year. Note that these figures do not include expenses directly corresponding to specific shoots, as these are generally passed on, with a markup, to the client.
2) Next, you need to estimate how many billable days of work you can realistically expect in the coming year (be sure to err on the conservative side). Keep in mind the normal rule of thumb for photographers, that for every billable day they work on a shoot, they will require an additional TWO days in preparation and post production. Thus, even the busiest photographers rarely ever bill for more than 100 days in a year, and most bill for less than 50.
3) Take the total dollar amount that you need to earn from part one (total expenses) above and divide it by part two (the number of billable days you expect to have). This gives you the MINIMUM amount that you will need to charge for your services each day you work. Understanding that you are actually losing money if you agree to work for less than this, will help you say 'no" to clients who ask you to work for less than you're worth. If you don't go through this pricing exercise every year, you'll fall into the trap of thinking that ANY paying work is better than no work, and you will be willing to accept any offer that comes your way, unaware that doing so is putting you that much closer to going out of business.
You cannot price your services based on what it costs someone ELSE to be in business. Your fees have to be based on YOUR costs of doing business. If your market won't bear your costs, then you either need to change your approach, change your costs and the way you do business, or change the market(s) that you work in.
Remember that if you are not in a position to say "no" to a bad deal, you will never be able to negotiate a good deal.
You've said that good photographic technique and creative vision can be brought together into an entirely new medium with VR, and that the complexity of VR is diminishing with the increase in consumer-level software and affordable digital cameras. How do you think the combination of these factors will affect the future of VR?
It is my hope that it affects it positively, and I see little reason why it should not. The easier a tool is to use, the more efficient and practical it can be.
When Apple first introduced QuickTime VR in 1994, we all had to learn MPW programming and build our own camera rigs in order to produce the images. Today, a variety of consumer software is available (with good user interfaces) along with commercial pan heads and camera systems. All of this means that the photographer or VR producer can now spend far less time on the underlying hardware development, and can dedicate his or her efforts to being more creative with the technology.
Most photographers didn't get into photography because they wanted to sit in front of a computer screen all day writing computer code or pushing pixels around. We got into it because we have a passion for our subjects and a joy in creating exquisite images. We learn whatever technical skills we need in order to enhance those abilities, but our main purpose is to create good, effective photography.
As the technical requirements for VR diminish, VR authors will be able to dedicate more of their efforts to the creative and quality aspects of their work. A reduction in necessary technical skill will also mean that more people will be able create VR. Much like autofocus, auto-exposure cameras help everyone shoot better photographs today, so too will more effective VR tools enable "everyone" an opportunity to create virtual reality images.
However, the cream still rises to the top. Just because everyone can take a properly exposed and focused picture with the latest auto-everything camera, doesn't mean that those pictures are always good photographs. When publishers, corporations or advertisers need quality imagery, they still hire professional photographers because of our vision, experience, reputation and ability to translate a desired concept into an effective visual image. This is the case with VR, as well. If the low quality, point-and-shoot look of most real estate VR we see today is "good enough" for a client, they will be perfectly satisfied with the efforts of a starving student or photo hobbyist who will shoot the job for $200 or less. The better our VR technologies get, the easier it will be for that student or hobbyist to dedicate more effort to improving the quality of their work. However, when quality and vision are truly important to a client, they will wisely seek the assistance of experienced professionals.
I can't help but remember the days after Apple first desktop publishing via the Macintosh computer and the LaserWriter. Suddenly, all the prohibitively expensive typesetting tools became available to the masses, and many corporations decided that they could simply do their design and typesetting "in-house" for far lower cost. The result was an onslaught of bad design for a while -- single pages with a dozen or more fonts, poorly designed ads and aliased type. It didn't take long for the novelty to wear off and for most corporate clients to remember why IMAGE was so important to them. They remembered why there was value in having a professional designer do their design and layout work.
Photography is the same way. Anyone can take a technically sound photograph with today's auto-everything cameras, but these images are usually ineffective for use in corporate promotions, publications and advertising. Dull photography presents a dull, non-professional image to clients, and hurts their businesses.
VR photography is no different. The novelty of VR has worn off, so clients and customers are no longer enamored simply at being able to look around a room or rotate an object on a web site. They demand quality imagery that is well-lit, well-composed and visually effective. Corporations can't afford to show their products, facilities, locations
or subjects with the inferior point-and-shoot quality of today's real estate VR, no matter how easily done or cheap it might be. They need good photography that they can count on consistently, and that's why they seek out professionals.
Email: dougderusha@mac.com
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