Peter Lik has received $6.5m for one photograph.

Here is a link to his website.

Here is a link to the article, which also reveals that he sold 2 further photographs to the same collector for $1.1m and the other for $2.4m.  That’s $10m in total!

Having looked at Peter Lik’s work on his website, I can’t say that I am terribly impressed by his portfolio.

It seems to me that he over-saturates his photos with colour i.e. that he is using a photo-editing programme like Photoshop to do so.  In doing so, he loses the natural tonal quality and the colours become somewhat harsh and even garish.

Of course, art is very subjective but, personally, I cannot see anything very special in his work and he reminds me of artists like Damian Hirst.

So why would someone pay so much money for a photograph?  And why has he sold upwards of $500m of his work?

I think perhaps Peter Lik is a better marketer than he is a photographer (although I have to say that his website is less than impressive – my images site is better in my opinion).

Firstly, he has clearly been in the industry for quite a few years and has won a number of awards so he has become something of an authority in his niche.  The more that he has social recognition, and particularly from the experts in the niche, the more people are likely to pay for his work irrespective of how good the image is.  This is called ‘social proof’ (- something that Van Gogh failed to acquire in his lifetime.)

It has Lik’s name on it, he has been recognised by the ‘establishment in the photo art world, and therefore he commands a premium.

He has also appeared on television and carried out a number of photographic stunts that have attracted publicity so that he has become a household name in the US.

Next, he limits the number of prints that he creates from any particular photo to less than 1,000 to create artificial scarcity.  In practice, there is nothing to stop him from creating unlimited copies of his images.  I imagine he agressively defends the copyright to his images to maintain that scarcity.

He prices his work starting at $4,000 and increases the prices as the prints sell so that buyers end up paying a huge premium for the last few prints.  The high prices means that there is a perception of higher value, which together with his social proof of being a photography expert, gives instant cache to his work and commands the attention of buyers.

Here’s how one article describes his pricing strategy:

Most photographs are offered in very limited editions. A large format print is often limited to ten or less. And they all sell for the same amount. This is the typical business model for galleries. Lik’s approach is very different. His editions are in lots of 995—950 limited editions and 45 artist’s proofs. Each print is identical but the proofs have a bit more prestige to them so they start at $10,000. His business model is that as a print is selling, the price will increase. Once he has sold 10 percent of a limited edition, the price increases. So, an image that would cost $4000 if you bought the first one, could reach as high as $200,000 when it’s down to the last few. All being said, each photo can gross more than $7 million.

The price alone gives instant exclusivity to his work.

He has also reinvested his profits in creating galleries around the world to showcase his work.  This also provides instant cache for his work as no doubt these galleries are located in places where there is a wealthy client-base living locally.  I imagine that he holds events at his galleries where only the wealthy are invited to exclusive shows of his work.

However, the fact that he has sold the 4 most expensive photographs, more than almost anything else, means that the rest of his work automatically acquires a higher perceived value even though there are probably many better photos available.  This is an example of how value is completely subjective in the art world (and in many other spheres).

You can imagine the conversation with a buyer…  

‘I am offering this print for ONLY $200,000 which is a massive discount on the $6.5m that I sold one of my pictures for – get it now before the price rises or I completely sell out!’

There are lessons to be learnt here for any business – perhaps having the highest prices in your niche mark you out as the ‘go-to’ expert in your industry and the lowest prices mark you out as a relative loser even though you offer a good service.

Isn’t perception a wonderful thing?

People will value you and your work according to the value you place on yourself and your work – remember that when you are marketing your business and you will make more money and be able to command higher prices.  This will in turn enable you to invest in the kind of marketing that maintains the perception of higher value – things like presentation, packaging and marketing events.

$6.5m for a photograph – he’s having a laugh all the way to the bank but I also applaud him for being a master marketer!