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Do FCPX freelance editors charge for your “Edit Suite”
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[James Ewart] “Absolutely. I do think sometimes people charge for their equipment as a way of bumping up their price.”
If you need to rent equipment for a job at a cost to you, you don’t pass that cost on to the job? You absorb that cost in to your normal project fee?
If you hire a DP that doesn’t own a camera, you expect their rate to cover the cost of a camera rental?
If you go to a color session, you expect the rate to be the same if you’re in the big theater with the expensive projector, or a small room with a plasma?
If you go to a ProTools session, do you think that they shouldn’t charge for sound effects search and license? Or custom music creation? Or music license? That should just be included as part of a rate? What if you didn’t need to license any sound effects? Should the rate stay the same?
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The discussion is split, depending on whether you are in a situation where you ALWAYS use your tools versus one where you SOMETIMES use your tools. In the case of most facilities, the rate typically includes a person and the gear in the room. OTOH, if you are hired freelance for some jobs, like editing a film, it’s a dry hire, where you may or may not be asked to also provide a bid/estimate with your gear.
Oliver
Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com -
I’m just going to keep hammering that project fees don’t do anyone any good in the long run. 🙂 Clients will become even more divorced from what video can cost, and it makes managing cost a lot more tricky for the supplier.
Of course, it’s different for everyone, and if you have short jobs that are completed quickly, or you have a specific job with a specific deadline, the yes, you could add up a project fee that would simulate a time based estimate and make sure the costs will be covered. I’m glad everyone’s jobs are that tidy, but the second there’s a new cost added, project fees can eat up a margin quickly.
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Of course extras cost extra Jeremy.
But computer and software are included. -
[James Ewart] “Of course extras cost extra Jeremy.
But computer and software are included.”And that’s cool. Computer and software is definitely built in to the cost of doing business for us too. As I stated in my first response to this thread, it’s pretty easy to figure out an hourly rate when you know the costs.
If we hire freelance designers, and frequently they will charge a nominal fee for stock and software since everything is subscription based these days (computers will be subscription based one day, too). It is a way to recover their costs. Some just charge a higher rate, which ends up being MORE EXPENSIVE than just breaking out the line items. What I have yet to see is someone charging a subscription rate for their video services. As a matter of fact, if you talk to any size agency, you will find that being the Agency of Record (which essentially means that an agency and a client entity sign a contract for a guarantee of money over a course of time for an agreed scope of work) is increasingly a harder and harder sell. All clients want a project fee, and since the money isn’t as steady, it is much harder to staff and therefore control costs. So in that case, “subscription” is losing, which is one of the fundamental problems I have with Adobe CC, is that it really doesn’t mirror a production based income stream. Luckily, it’s cheap enough to keep around for now.
Really, the point of me having this discussion, despite being called obtuse and deflective and seemingly carrying a minority view among the three or four people really talking about this subject, is that project fees, at least through what is a limited lens set on this forum, are helping to bring down an already thin profit margin. I still haven’t heard differently other than ‘it works for me’. If I were to budget 3 30 minute blocks of TV show, because the job varies so much, I couldn’t put a rate on all three. If it was the same thing over an over, sure, but our business is extremely varied.
I don’t know what it’s like by you, and Tim Wilson mentioned how he doesn’t know “how the youngins are doing it”. Well, let’s find out how the youngins are making an adult income. And if they aren’t, why they don’t.
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Jeremy, you’ve raised a couple of interesting points above. I promise you a quality response on the issue of project fees.
Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive | RenderBreak [blog] | Profile [LinkedIn] -
[James Ewart] “When a painter of carpenter comes to my house I do not expect to be charged for the use of the brushes or hammers.
Yet a profitable, busy savvy painter and carpenter IS charging you for the use of his brushes or hammers….it’s part of the cost of them doing business. You can pretend they don’t, but if they don’t, they’re losing money.
I no longer charge for my computer and software when editing. It saves a boring conversation.”
But costs you money in capital expenses you aren’t amortizing…..I bought an 800 dollar piece of software for animation — charged the client 1200 for the job…..made 400 dollars for my labor and the rest covered my investment. After that, whatever I charge is pure profit on the first software price investment. That’s called capitalism. Unless you’re running a charity, it’s foolish not to factor in the price of your equipment and software.
Andy Field
FieldVision Productions
N. Bethesda, Maryland 20852 -
[Andy Field] “it’s foolish not to factor in the price of your equipment and software.”
Of course I factor it in. I just save my clients and myself the tedium of going through all the items and bits they get when they ask me to work for them. They get me and my stuff for a rate. My experience is that my clients eyes glaze over if I start breaking it all down. I find (and this is only my personal experience) that it looks like I’m trying to “justify” my costs. So I don’t bother. Unless they ask.
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Hi Jeremy. I’m revisiting some earlier remarks. As kind of a preface, I’d say that I think we are trying to solve the same problems, but from different sides. More on that in a minute.
[Jeremy Garchow] “I’m just going to keep hammering that project fees don’t do anyone any good in the long run. 🙂 Clients will become even more divorced from what video can cost, and it makes managing cost a lot more tricky for the supplier. “
Likewise, I think that hourly billing might not do anyone any good in the long run. Clients become even more divorced from what video is worth, and it makes managing capacity a lot trickier for the supplier.
[Jeremy Garchow] “Of course, it’s different for everyone, and if you have short jobs that are completed quickly, or you have a specific job with a specific deadline, the yes, you could add up a project fee that would simulate a time based estimate and make sure the costs will be covered. I’m glad everyone’s jobs are that tidy, but the second there’s a new cost added, project fees can eat up a margin quickly.”
If I’m understanding your POV correctly, you assume that scope will creep, and that costs will creep, and you look to protect yourself against that. You do this by avoiding commitment to either scope or price.
I wouldn’t agree that a client having a theoretically unlimited ceiling on the cost of their video is good for them, or that you having a theoretically unlimited obligation to continue working on the project is good for you. The client can’t manage their budget, and you can’t manage your calendar.
A project fee is not a promise of infinite free changes. It is a commitment to a specific scope at a specific price. While you look exclusively at cost management above, I consider cost management and scope management to be two sides of the same coin.
We are finding that a good way to convey this idea of scope management starts in budgeting. We’re currently trying an approach with three quotes (note: not estimates for project fees!), with good-better-best scopes and corresponding prices. We’ll spell out specifically what each level includes (and sometimes just as important, what it excludes). This does three really important things:
1) It puts the client in control of price. If they’re price-sensitive, they can pick a level that best suits their budget.
2) It establishes a direct link between scope and price. Everyone agrees right from the beginning that more is worth more and costs more.
3) It allows us to demonstrate where we can add value. Keeping the emphasis on what value the client gets for their money — how much we understand what their problems are and how to solve them — helps set us apart from vendors who just sell buckets of hours. This is not just a semantic difference; paying us for value instead of paying us for hours focuses us on solving the client’s problems, rather than focusing us on completing work for its own sake.
With a scope and a price agreed upon, and with the idea that the client can get more if they pay more out there on paper, and with our value-add obvious, when a scope change comes along that would trigger “new added costs” as in your example above, it’s completely natural and appropriate for us to revisit its pricing as a change order. This does two really important things:
1) It triggers a discussion of what the change is actually worth. When there’s a budget line item attached to a change, all the client stakeholders get on the same page faster.
2) We will be paid for the new value we add.
Let’s think about your “new cost added” hourly-billing example above. Where does the new cost come from? If it’s something new the client it asking for, clearly they should pay for it, and that’s covered with project fees as above. If it’s not something new, why wasn’t it in the original estimate, and how did it become the client’s problem?
Really, what I’m suggesting probably isn’t so different in structure from what you’re actually doing, except that one method is built around value explicitly and the other is built around costs.
Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive | RenderBreak [blog] | Profile [LinkedIn]
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