Priceless
Still another tough question! Aren’t I full of ponderous philosophy lately? But really, how DO you put a price on artistic work? Let’s think about it from a purely business standpoint for a moment. There are the materials to consider, (and if the work is digital, that can be pricey indeed! Yeah, Photoshop and Wacom tablets!) There is the hourly rate of the artist, which will naturally vary from person to person. There is printing, mounting, blocking, packaging, and shipping, that all might be necessary to consider. Then there is a big question- what if it’s a movie of some sort? Distribution is another cost- do you go with DVDs or release it on a digital download system?
Assuming you aren’t going to make one person pay for your entire Adobe CS bill, how do you decide how much to charge for that print? How much should a hand knit sweater cost? Or the CD that took your band 2 months to put together? Or the quilt that your grandmother made? It’s really hard to be honest with yourself when putting a monetary value on your time, your talents, and your passion. Most artists do it because they love the art, not because they want to get filthy rich, but that doesn’t mean that they shouldn’t be fairly compensated for what they do.
When I asked Hawk about his work, he talked about his Ebay auctions from a few years ago. He was raising funds for… um… something, and posted a few sketches up on Ebay to help. Auctions are wonderful for determining the value of a piece of work, though it’s sometimes tough to get perspective. Hawk’s work ended up in a last-second bidding war and the sketch sold for several hundred dollars. “I was freaking out when it up just to 20 bucks! In my mind, it’s just a sketch, a drawing. I’m not dead!” The not being dead part seems to be a sticking point- DaVinci and Degas are dead and their work is priceless! That must be the trick! I can’t be alive while my work is valued highly!! What do you do if you’re not dead but still want to make some money off your work?!
I asked Garth Graham about how he puts a price on his art when I talked to him recently- he’s a professional artist making a living off his work. “A lot of it is having a heart to heart talk with yourself and saying, ‘how much am I worth?’ A realistic evaluation of the quality of your work, and how long it takes to make it, and how much that time and effort is worth.” It’s hard to be honest enough with yourself to come to a fair price for your time, but there are ways to start: “I took a look at how much the ‘professionals’ make. I probably should take a look at how much their clients get billed (as one is always bigger than the other in industry). Then I averaged how long it takes me to do a particular kind of drawing and used that as a baseline. I charge commissions based on complexity, using that baseline as a minimum.”
It really still boils down to being honest with yourself about your skills and talents, and how strongly you feel about the work in question. How do you price a creative work?
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March 10th, 2008 at 6:18 pm
Since you’re talking about price, you mean what is the fair market value of the art. You seem to be confusing the art’s fair market value, opportunity cost, and book value.
Fair market value (FMV) is equal to whatever the customer is willing and able to pay for it. Think of the equilibrium point on a Supply and Demand chart. That will give you a rough estimate of the FMV. Milton Friedman created a formula to calculate this, but it is beyond my mathematical capabilities. Inputs (e.g. equipment, ink) has no bearing on FMV.
Book value (BV) is the cost of a product. This is what your accountant will value it as. BV will be the sum of the inputs including raw materials, a pro rata portion of the value of the equipment used (you’re not going to create 1 piece of art on Photoshop, so you can’t consider the whole cost of the software into that 1 artwork), the artist’s labor, and a proportionate amount of overhead costs (e.g. studio rent, electricity, marketing efforts). This is the absolute minimum a supplier (i.e. artist) will sell a piece for, and represents the break even value of producing the art. This does not include profit, because profit is the difference between BV and FMV.
Opportunity cost is the next best alternative. If the art studio could not sell art, what would it be selling? Opportunity cost less the BV is considered the normal profit for that industry/company/widget. This is not what your competitors earn, it is what else YOU could earn if you could not being doing this. Generally opportunity cost is less than or equal to that next best option.
Hope you enjoyed my economics lesson.