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What about leasing top end cameras?


Dallas

As sales for top end cameras of all types declines due to over-saturation of products, something struck me as an obvious solution to stimulate this market and I wonder if any major camera companies are considering this.

What if you leased your cameras from them instead of buying them and replacing them every few years? Think about this, if you really want the latest camera body with every release, you pay a monthly fee and you get it. You don’t have to pay the full asking price, which in some cases could be quite exorbitant (Nikon D4s is an example at $7k), you get full use of the item and you get to replace it with the newer version whenever that becomes available without taking a hit on the capital expense. If you’re a professional photographer the monthly cost would be immediately tax deductible as an overhead instead of a capital expense that you can only claim depreciation on as a tax benefit later.

For the camera companies this means that they would have a steady stream of income provided there is enough buy-in and critical mass, so they wouldn’t need to gamble to any degree on the uptake of a new model they might have spent a great deal of R&D resources on. Also, the older cameras could be returned to them and hopefully recycled. How hard can it be to swap out the circuitry, refurbish the exterior and send them back out with a new brain and suit of clothes? The planet would be happier for sure.

There are so many industries where models like this work. The motor industry is an example. I decided a year or so ago that it’s not smart for me to keep the same car for more than 5 years. So my strategy going forward is that I find the most car I can get for the least amount of monthly overhead. This assures me of a vehicle that shouldn’t give me hassles and doesn’t break me financially. I also don’t have the problem of dealing with super expensive maintenance issues on a paid off car that needs work done nearly every other month (and what cars are they building these days that are supposed to last for more than 5 to 10 years?). The cars I buy usually have a maintenance plan or long warranty so I have piece of mind that should anything major go wrong, the manufacturer is responsible for fixing it.

The cellphone industry disseminated itself into modern culture by adopting a similar business model. You took out a 2 year contract and you got the latest phone. The costs of the handset were amortised over the duration of the contract and the cellphone company also made money by selling you airtime or data concurrently with that handset. Expensive top end cameras could be disseminated into a willing market the same way surely? Lenses you could buy to own, so the more lenses they develop the easier it is to lock you into their brand.

I don’t think that this system would work for cheaper cameras, but it’s definitely something that might get more people interested in the top models that they can’t afford, like the Leica M pictured above. Or the Nikon D4s, or Canon 1DX. I could never afford to buy those cameras, but if I was paying a reduced monthly fee and I had the assurances of them replacing it with a new one in a couple of years without me having to pay more, you bet I'd be pretty keen on those Leica M bodies! The Adobe Creative Cloud model has me quite happy to pay them $9.99 a month to make full use of the latest Lightroom and Photoshop products, the latter of which I haven’t owned in several years.

What do you think? Would you be happy to pay a monthly fee for the full use of a top end camera body like a Leica M or a Nikon D4S or Canon 1DX?

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Posted

What do you think? Would you be happy to pay a monthly fee for the full
use of a top end camera body like a Leica M or a Nikon D4S or Canon 1DX?

 

No way, I don't lease / rent cars or software and I am not about to start with cameras.

I drive 2 cheap cars which I paid for outright and turn over at around the 5 year old mark, I own software that has been updated at no extra cost since the relatively cheap purchase price, I own 3 "high end" bodies ( + numerous lenses ) and photography is 90% of my income.

 

If you can't afford to buy it, go without, simple as that.

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Guest Gabberflasted

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Maybe the tax laws are structured more generously here but it simply works better as a business expense to buy, claim depreciation, sell from the company to an individual ( me ) at a throw away price and then for me to resell the gear ( at a profit ) which then becomes personal income ( separate tax rate ) which is quite legal and results in a more satisfactory outcome.

 

My present accountant has kept me quite happy for the last decade doing such things. :)

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I understand and that's a reasonable response. 

 

I'm looking at this from both ends though. The camera manufacturers need to move more product and I think that if they offered something like this in the right markets they might find more customers willing to "invest" in the utility they'd get from those products at a reduced barrier to entry. 

 

As I mentioned in the piece above, I would love to get back into Leica, but the costs are just way too high. Maybe Leica is a bad example because they are more of an aspirational brand, so they probably wouldn't want or need to do something like this, but the DSLR boys (Canon/Nikon) could probably lock in a steady income stream if they developed a program like this. I'm not suggesting this would replace the existing outright ownership option as most people do like to own their kit, but from a business perspective it may have some merit, especially if the rates were affordable enough. 

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Looking at lensrental.com prices, you probably could just about manage it if you hold onto the camera for about 50% of a two year period.  Just return it when you aren't needing it.

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Not interested.   I just sold 5DII and 7D I to get rid of size and weight.  So renting a 1DX is headed in the opposite direction.  

 

But for a Pro who can use the rent as a tax deduction, it might be a good idea.  I know lots of doctors have their partnerships lease their private vehicles (BMWs, Mercedes...etc.) instead of purchasing them.  It was better tax-wise to have their partnership companies do the lease.  

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I know her in the US, cell phone subsidies are slowly going out of favor toward a better financing to own option.

 

I can see this being an issue with the camera companies wanting long term contracts, possibly high insurance required to be had on the gear you get from them.  Not a major issue with a larger photo business, but individuals could suffer.

 

I could see a third party company trying this, similar to a rental.  That would prevent people from being locked into a specific brand and could use whatever they wanted/needed for the situation at hand.

 

I'm also not a big fan of switching out gear too often.  It takes some time to get the gear meshed together(checking for front/back focus issues, dead pixels on sensors, faulty equipment).  

Really no different than leasing a car...you do take a chance.  I just do not see me doing that.  I don;t lease cars either.  I buy a 2-3 year old model so I'm not paying for the "off the lot" depreciation.

 

It's an interesting idea, and might be possible, but something that the companies would have to get right from the get go.

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I would love to have the option to lease a camera because I like to upgrade regularly and leasing locks in the resale value which provides protection from technological obsolescence.  That said, the incremental improvements between models seem to be getting smaller.

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I would love to have the option to lease a camera because I like to upgrade regularly and leasing locks in the resale value which provides protection from technological obsolescence.  That said, the incremental improvements between models seem to be getting smaller.

 

Agreed.  That is why, if I do upgrade, it is 2 or three models from my current body.

 

Up until a few months ago, I still had and used my Nikon D50.  Only sold it because I did not want it to go to waste as I tend to go straight for the Nikon Df now - the D300/D700 combo are my work cameras...and the Oly EM5 is now my fun camera.

 

Those Nikon's will likely be used until they die.

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Think about it this way: if you paid a reasonable fixed sum fee to a manufacturer like Nikon or Canon (or whoever else makes really expensive cameras) and that fee allowed you to have access to the cameras for as long as you liked, would you be keen? The "reasonable" fee would have to be lower than if you were to take out finance on buying the camera outright, so there has to be an advantage to doing it. 

 

Assume something like a D4s at $7k over a period of 24 months costs you roughly $350 a month including interest, wouldn't it be worthwhile to get that camera at $200 a month and know that if you wanted the newest one you would get it as soon as your contract period is up? 

 

Ron, 100% right on the fact that there isn't much improvement between models these days, but at least you're keeping on the leading edge of what's newest at a reduced cost. 

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Think about it this way: if you paid a reasonable fixed sum fee to a manufacturer like Nikon or Canon (or whoever else makes really expensive cameras) and that fee allowed you to have access to the cameras for as long as you liked, would you be keen? The "reasonable" fee would have to be lower than if you were to take out finance on buying the camera outright, so there has to be an advantage to doing it. 

 

Assume something like a D4s at $7k over a period of 24 months costs you roughly $350 a month including interest, wouldn't it be worthwhile to get that camera at $200 a month and know that if you wanted the newest one you would get it as soon as your contract period is up? 

 

Ron, 100% right on the fact that there isn't much improvement between models these days, but at least you're keeping on the leading edge of what's newest at a reduced cost. 

 

If my entire income counted on photography and having the newest gear...I can see this being a reasonable endeavor.  However, then we must also think about either buying or leasing lenses as well... and we must make sure that the income can cover the lease expenses.

 

I'm not saying that a lease option is a bad idea...just a lot to think about, wrap your head around a different gear acquisition model than what we currently have.

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Thinking about something manufacturer related now; how much manufactured inventory goes unsold from any production run, I wonder? If you break down the costs for the maker to individual units and then look at unsold inventory versus the profit margin on an individual sold unit, I wonder if it would be a more profitable model for makers to only make as many units as they are able to get lease orders for? Could change the financial risks completely.

 

I think that a lot of their manufacturing costs probably come down to re-tooling when new models come out, so if they were recycling older models, putting new guts into them and then sending them out again they might be able to cut down those retooling costs significantly. 

 

If you think about Nikon's problem with the D600, introducing a program like this might actually do them some good. If they fix all the old D600's and put them back into the market as leasable bodies at say $50-75 a month they might win some favour with old customers, not to mention the possibility of gaining a few new ones. 

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Perhaps there is a different use model for lenses.  If we acquire top notch lenses and do not damage them, they should last through several generations of bodies.  While we do occasionally see a Mark II of some lens, they are not that common.  The larger and faster changes are in the bodies.

 

So lease a body and return it every 2-3 years when the next generation or model shows up.  But for lenses, perhaps keep the good ones for as long as they are useable.   The different use model may mean it is better to purchase your lenses and depreciate them.   I guess much depends on your situation and the local tax laws.

Edited by mcasan

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The shipping and customs headache would kill me, Chris. ;)

 

If your idea did come about - they probably wouldn't run the scheme in the southern hemisphere, so we'd still loose out.

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If we look at the way cellphones made their way into our lives, perhaps this leasing idea could also work for retail outlets that are also under pressure to make sales just to stay in business, should they partner with various manufacturers. 

 

With cellphones we got a contract from a provider saying that we got a new handset every 24 months, but we also got "free" minutes to talk on that phone with. I haven't had a contract for about 6 years now, but I think that these days they bundle data and sms quotas in with the monthly subscription. 

 

What if a retail outlet not only provided you with a new camera every 24 months, but they also provided you with X amount of prints in a month, or training, or some other kind of media, including cloud storage? Maybe even loyalty points that you can eventually cash in for a photo safari/workshop? 

 

The biggest problem I have right now where I live is getting hands on with any of the new equipment. If an outlet like this existed where I could go to them for everything, from auxiliary gear I need to buy (or rent), get prints made, get hands on with new gear and maybe even learn some other skills, I would be happy to pay X amount per month.

 

Most of the retailers here don't want to stock high end digital cameras because the market for them is so small, not to mention the small margins, plus there is a huge risk associated with keeping the stock. The rate at which new models come out often leaves them with unsold inventory on the shelf that they can't move without taking a loss. Whatever way you look at it, unless you can move big volumes retailers are up against the wall in smaller markets. As these smaller markets dry up and the shops close down, getting hands on with the new stuff is just not possible anymore and as such the entire industry starts to slow down. This is what we're seeing now all around the world. 

 

And yet perhaps with some fresh thinking and symbiotic relations developing between the makers and the pushers, things could not only turn around but maybe even get better for the industry as a whole. 

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The biggest problem I have right now where I live is getting hands on with any of the new equipment. If an outlet like this existed where I could go to them for everything, from auxiliary gear I need to buy (or rent), get prints made, get hands on with new gear and maybe even learn some other skills, I would be happy to pay X amount per month.

 

Most of the retailers here don't want to stock high end digital cameras because the market for them is so small, not to mention the small margins, plus there is a huge risk associated with keeping the stock. The rate at which new models come out often leaves them with unsold inventory on the shelf that they can't move without taking a loss. Whatever way you look at it, unless you can move big volumes retailers are up against the wall in smaller markets. As these smaller markets dry up and the shops close down, getting hands on with the new stuff is just not possible anymore and as such the entire industry starts to slow down. This is what we're seeing now all around the world. 

 

And yet perhaps with some fresh thinking and symbiotic relations developing between the makers and the pushers, things could not only turn around but maybe even get better for the industry as a whole. 

 

Perhaps this could be a new business line for you - renting gear out to people on safari.  Hauling big glass halfway around the world is obviously a hassle.  They pay for it during the week and you get to play with it at the weekend.

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Perhaps this could be a new business line for you - renting gear out to people on safari.  Hauling big glass halfway around the world is obviously a hassle.  They pay for it during the week and you get to play with it at the weekend.

 

There are guys here who do that, but it's not something I am looking at just yet. Maybe in a couple of years time when we have more advance reservations I can consider it. 

 

With this particular subject I am thinking more along the lines of the macro economics of the photography industry as a whole. Outlets are closing and people are not replacing their cameras as often as the camera manufacturers would like them to, which in turn puts pressure on those companies. Everybody is feeling the slump, but that doesn't take away the GAS we all feel when something new comes along.

 

Not everyone (myself especially) has the economic means to purchase the latest and greatest body that comes out, so having the opportunity to get full use of something like this at a reduced initial overhead might very well be something I'd want to do. From a business perspective it would reduce a few barriers to enter the top end equipment arena. It's hard to get a business loan as a freelancer. You don't have the regularity of income that the banks want to see, so they're not willing to take the risk of loaning you $10k at a time for something that doesn't guarantee income. 

 

Anyway, at the end of the day I think that business models need to change for this industry if it's going to survive and if the manufacturers are going to find reasons to make more top end cameras. 

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"With this particular subject I am thinking more along the lines of the macro economics of the photography industry as a whole. Outlets are closing and people are not replacing their cameras as often as the camera manufacturers would like them to, which in turn puts pressure on those companies. Everybody is feeling the slump, but that doesn't take away the GAS we all feel when something new comes along."

 

Honestly, and I have thought this for years....camera manufacturers have killed themselves with this hyper fast release of camera bodies.  New models out every year or year and a half with very minimal technology increases generally.

 

They may do better having a longer body life cycle or, as you had posted previously and I have been wanting for many years....make DSLR/mirrorless cameras modular like medium format cameras.  You want the better sensor, you buy that....want the better viewfinder, you can buy that....want the newest fangled body...then you can get that and use your old sensors on it.

 

I think that would be a good model for the camera makers.

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I can see it possibly making sense for digital camera bodies, given the extremely high cost, the relatively short life, and the fact that the paradigm has changed from when most of your money was going on film and processing.  It does not make sense for lenses, which, in most cases, people keep for a lot longer than a typical lease period. But even here I think the business case for leasing bodies declines over time, as the technology matures and the scale of improvements between each generation also declines.  

 

The awkward spot the manufacturers find themselves in is that they had 30 years of exponential growth, starting with the SLR boom of the late 1970s and culminating in the explosion of the DSLR market from about 2005 to 2012, and over the past 18 months they've hit the proverbial brick wall.  Somehow they have to downsize by at least several years' worth of sales and possibly as much as a decade or two to hit a point where they're sustainable in the long term, and that process is going to be extremely painful.  If leasing helps them cushion that fall, that's probably the strongest business case for it.

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