NOTE: This was originally published in September 2012 on the Mean Creativity blog. As that site is no longer maintained it was re published here. My rates and types of projects have changed, but not my billing philosophy.
I work mostly with small companies and start ups doing what we will abstractly call “marketing”. Most of the time, I end up doing online marketing and media production. My background is as a photographer, cinematographer and editor; so I tend to make original videos and photos big parts of a social and search marketing strategy. That’s not just because I have a production hammer and think everything looks like a nail as a friend once accused me of. It’s because video is a huge part of online marketing.
It may just be my clients, but I feel like a lot of people are just clueless about how to work with a video production company. Every time someone comes to me wanting video I have to give them the third degree just to get the information I need to give an estimate. So I wanted to write a quick post explaining some of the problems I’ve run into and what my solutions have been.
How Most Video Production Companies Bill?
Most people who work in video (myself included) don’t like tracking time on set. Instead of billing hourly, most of us work on a flat day or half day rate. Most of the time, gear is billed as a fee of 5-10% of the value of the equipment. Editing is typically as a package–something like 20 hours of editing for a discounted rate. Then, after the first 20 hours, editing would be charged at a normal hourly fee around 20% greater than the package would have equaled if you were adding the number of hours. There are fees for writing, prep days and casting as well.
What it takes to do a video right.
So if someone calls me wanting a 1 minute interview with 4 of their clients in 2 locations talking about how wonderful they are, I’m thinking, “Okay 2 locations, 3 hours at each place it’s a full day. Well we’re shooting on a DSLR and with lenses the kit fee is $800. Lighting and audio gear comes to a fee of $800 and you’re going to need some stands, gels and that type of thing coming to an other $150ish. I’ll need to pay a production assistant something like $120-$450 depending on experience.
With the cost of hiring a camera operator (or paying me to run camera) and a 10 hour editing package comes to around $2,300. But it may be a little more or a little less depending on the project. Add a half prep day $500 for me to get everything scheduled. This also helps compensate for my time on the phone and replying to emails.
That brings the cost for the video to around $4,750.”
Oh I’m sorry is that too much?
We could go cheap on the lights, maybe cut some gear, shoot in only 1 place (so that the full day becomes a half day) and if the client is clear about what they want and behaves themselves on the number of changes the edit could be done in 10 hours to get the rate to a about $2,900. But that’s still a lot to a start up with say 750K in investment. I’m asking for .25% of all the money they have.
So, as a video production company, I can’t bill less and maintain the quality we both want. I spend an average of a half hour a day on 5 separate days on the phone or sending emails before we even have a contract. I’ll spend at least 3 hours getting the crew and gear ready. Then I’ll spend a day or at least part of the day on shooting and 2 days out of the next week editing and encoding to send you the video.
We have some costs set in stone in terms of gear, but those costs are the same if the gear is used for 1 hour or 10. So, let’s say we’ve cut everything we can cut and gone with the $2,900 video and you’re still not sure about it. I say, “Let’s shoot more!” Once you cross the threshold of 4 hour’s you’re paying the crew for a full day. It doesn’t matter if it takes 4 hours and 15 minute or 10 hours, we bill the same amount. Let’s work to come up with 1 or 2 simple video concepts, we could do 4 or 5 if they’re really simple like these product videos I did for Wasp Barcode.
So now you’re spending more than you were spending before. This won’t fix the problem if you simply don’t have the money. If you’re more concerned about bang for your buck, this is the best way: Spend an extra $1,000 or so for more editing and an extra prep day for me to help you come up with concepts for the videos and go over production logistics, but come out with 3 videos. For you $2,900 may be too much for 1 video, but $3,900 may be the perfect price for 3.
This article by Mason Pelt of Push ROI was first published in Mean Creativity on September 2012. Now canonicalized here. Photo by Mason Pelt.