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hourly rate
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I am doing a project with an hourly rate right now, and debating whether to charge the client for “trial and error” process of converting video files, importing, and exporting with various codecs to determine the best one. If I were more experienced with these types of files (MPEG1 from a VCD) it would have been quicker, and I could charge the client less. It seems counterintuitive to charge more for my learning curve. In this case the actual editing took less than half the time spent importing and exporting. I’m a one-person one-computer small business. Anyone care to respond with how they deal with a similar issue?
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This is an interesting thread. I’m glad to hear the term ‘grinder’ being used. It describes a lot of people out there.
I wanted to share some things with you I’ve learned in the car business and in feature film production.
Currently, I’m located in an emerging market, Houston, Texas. I’ve been in this market now for 7 years and have made a name for myself by producing top pro bono work. The nobody’s I’ve befriended and helped are now producers in their own right and producing commerical properties with huge profit potentials and they love me and wouldn’t go anywhere else for their post. I helped build the clients I have now and that is lesson #1.
Lesson #2 is about grinders. Grinders are looking to exploit your negative perceptions of yourself. Inexperience, insecurity as an artist and they are to be avoided. It’s kind of like having a frigid sex partner, neither one of you will be satisfied with the act and it could cause further problems down the road.
Lesson #3 is about finance. Case in point. I recently started actively marketing my special effects and animation again in this market as more filmmakers are taking steps to produce features in this region and most of the CGI producers in this area are less experienced or incapable of “selling” their work to the clients with confidence and being able to offer terms which are favorable. This is lesson #3 – terms.
I met with some filmmakers last month. They expressed an interest in using me to produce some effects for their film. They have limited funds but are actively seeking funding for their projects. I worked out the effects and figured it would be necessary for me to bring in a couple of animators, but additional computers to render with and my break even would be about $10,000. I bid the project telling them I’d need the ten grand and could defer the rest of the payment until after the sale of the property. They couldn’t do this. Just like the person coming in the buy a car with $1000 in the bank, they’d rather finance as much of the car as possible, even if it ends up costing them more money later, so that they can keep their cash. I was pissed that they turned it down, I was giving them a great deal and really putting myself and my team out on a limb to help them get the picture made. They told me they were going to write the CGI out if that was the case and we both had nothing in the end.
4 Weeks later… I made some additional connections and partnered with some other animators and was in a position now, for the client, where we could provide 100% financing of the effects. I immediately contacted the client and let them know we would be able to produce the effects for them, we could finance the effects 100%, but the effects would cost them $100,000. In this finance arrangement, we are seeking 10 cents out of every first dollar that comes in from the sale or licensing of the picture and that if we can review the budget, the proposed crew and schedule and these things meet our requirements, then it would not be neccessary for us to have our names in the chain of the title of the film. They immediately wrote me back and said “that sounds great, let’s have another meeting.”
By being in a position of providing credit to the credit worthy, my business is now looking at twice the income from the same project and we’re able to work with a client we were not able to accomodate before. So by partnering with my peers I was able to turn a 0$ situation into a small windfall.
FYI: my original bid was $50,000, out the door, TTL with a $10,000 down payment.
Now I’m looking at twice the money for the same work.
Lesson #4 – listen to the client. “I only have $1000.00 and I need a 30 second HD commercial” may initially sound like a grinder to you. Your response might be I can do it for that, but you haven’t really heard them. Even if you can do it for that, you’re not going to get his $1000.00 because that’s all he has. You might get $100, but chances are you are dealing with someone nice and they dont’ want to exploit you either. It might be the end of the fiscal quarter and they may have to make a large tax payment, but they do have money coming in and they NEED this commercial. Find out what they have in mind, that is, if 100% financing is something they’d be interested in taking advantage of, see what kind of schedule they’d like to create for payment, what they’re comfortable with, and THEN see if that’s something you are comfortable with and make a deal. Financing is a service you should consider offering but not until you understand how to protect yourself FULLY.
Something to think about. You know your business better than anyone and your needs. If you are just starting out, make friends and develop partnerships. It will only serve to strengthen your position AND negotiate TERMS over PRICE. Both you and your customer can win in this scenario.
Later skaters,
reallybadbrad
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This is an interesting thread. I’m glad to hear the term ‘grinder’ being used. It describes a lot of people out there.
I wanted to share some things with you I’ve learned in the car business and in feature film production.
Currently, I’m located in an emerging market, Houston, Texas. I’ve been in this market now for 7 years and have made a name for myself by producing top pro bono work. The nobody’s I’ve befriended and helped are now producers in their own right and producing commerical properties with huge profit potentials and they love me and wouldn’t go anywhere else for their post. I helped build the clients I have now and that is lesson #1.
Lesson #2 is about grinders. Grinders are looking to exploit your negative perceptions of yourself. Inexperience, insecurity as an artist and they are to be avoided. It’s kind of like having a frigid sex partner, neither one of you will be satisfied with the act and it could cause further problems down the road.
Lesson #3 is about finance. Case in point. I recently started actively marketing my special effects and animation again in this market as more filmmakers are taking steps to produce features in this region and most of the CGI producers in this area are less experienced or incapable of “selling” their work to the clients with confidence and being able to offer terms which are favorable. This is lesson #3 – terms.
I met with some filmmakers last month. They expressed an interest in using me to produce some effects for their film. They have limited funds but are actively seeking funding for their projects. I worked out the effects and figured it would be necessary for me to bring in a couple of animators, but additional computers to render with and my break even would be about $10,000. I bid the project telling them I’d need the ten grand and could defer the rest of the payment until after the sale of the property. They couldn’t do this. Just like the person coming in the buy a car with $1000 in the bank, they’d rather finance as much of the car as possible, even if it ends up costing them more money later, so that they can keep their cash. I was pissed that they turned it down, I was giving them a great deal and really putting myself and my team out on a limb to help them get the picture made. They told me they were going to write the CGI out if that was the case and we both had nothing in the end.
4 Weeks later… I made some additional connections and partnered with some other animators and was in a position now, for the client, where we could provide 100% financing of the effects. I immediately contacted the client and let them know we would be able to produce the effects for them, we could finance the effects 100%, but the effects would cost them $100,000. In this finance arrangement, we are seeking 10 cents out of every first dollar that comes in from the sale or licensing of the picture and that if we can review the budget, the proposed crew and schedule and these things meet our requirements, then it would not be neccessary for us to have our names in the chain of the title of the film. They immediately wrote me back and said “that sounds great, let’s have another meeting.”
By being in a position of providing credit to the credit worthy, my business is now looking at twice the income from the same project and we’re able to work with a client we were not able to accomodate before. So by partnering with my peers I was able to turn a 0$ situation into a small windfall.
FYI: my original bid was $50,000, out the door, TTL with a $10,000 down payment.
Now I’m looking at twice the money for the same work.
Lesson #4 – listen to the client. “I only have $1000.00 and I need a 30 second HD commercial” may initially sound like a grinder to you. Your response might be I can do it for that, but you haven’t really heard them. Even if you can do it for that, you’re not going to get his $1000.00 because that’s all he has. You might get $100, but chances are you are dealing with someone nice and they dont’ want to exploit you either. It might be the end of the fiscal quarter and they may have to make a large tax payment, but they do have money coming in and they NEED this commercial. Find out what they have in mind, that is, if 100% financing is something they’d be interested in taking advantage of, see what kind of schedule they’d like to create for payment, what they’re comfortable with, and THEN see if that’s something you are comfortable with and make a deal. Financing is a service you should consider offering but not until you understand how to protect yourself FULLYand you do that easily but running mental scenarios of cause and effect in the context of consequence and doing thorough research.
Something to think about. You know your business better than anyone and your needs. If you are just starting out, make friends and develop partnerships. It will only serve to strengthen your position AND negotiate TERMS over PRICE. Both you and your customer can win in this scenario.
Later skaters,
reallybadbrad
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hi jilliwoodward, it seems that charging clients for your homework would be counterprofitable in the long run. Although I have been there. Clients will bring you all kinds of wacky stuff, “video” from ancient digital still cameras, stuff that’s been copied and recompressed using who knows what, and video that’s frankly not worth editing. Key to pricing that kindof job is recognizing it up front during the negociation process, and explaining to the client that reworking the video supplied into something presentable is going to cost more than if you were working with “normal” video, or if it were something that you shot yourself. (but be careful not to offend) But this might mean that you will have to “eat” your learning curve if you take in junk not knowing what it is, and then later having to spend lot’s more time just getting the frames to play right. Good luck!
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You’re not seeing “rates” here because any “rate” is meaningless out of context.
This forum is about Corporate Video, not digital filmmaking, church video or special interest videos. Those are all perfectly reasonable things to do – but to compare rates between them is irrelevant.
For example, as a corporate shooter, I carry a $2million dollar liability policy. (Plus errors and omissions and a bunch of other business insurance policies) Without them – and the ability to call my agent and get a coverage rider instantly – I can’t shoot for many companies because they can’t (nor SHOULD THEY) even let me near their machinery/equipment.
That and a hundred other small things I must consider in the context of MY business profile and/or liability will be different than it is for a person shooting a “church” or a “wedding” or “digital film”
I will say that if you charge someone $500 for a video. No matter WHO you are, if you look at that number on a pure business basis and extract your tax obligation, the depreciation/replacement cost on your gear, consumables, and other standard business costs, you’ll be lucky to take home 50% of that.
And if it takes you 20 hours to produce that work – (meeting, planning, scripting, shooting, editing, mastering, burning DVDs, etc) you’re making SUBSTANTIALLY less than a typical plumber, or electrician. (And THEIR tools don’t become obsolete every six months-1 year!)
I can point a handycam at a talking head in available light and generate 15 minutes of video and $500 might be OVER charging the client.
And I can fly to 3 cities, use a full crew in each, employ dolly track, jibs, and a Jet Ranger with a Tyler mount, spend three weeks in post plus have a team of 3 artists work for weeks on the graphics, and $100,000 might be a BARGAIN to generate MY 15 minutes of video.
That’s why it’s so hard to quote a “magic” number.
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Well, Look at yourself as a building contractor. You need to account for all the materials and time. You need develope a business plan that gets you to the standard of living you would like, and bid accordingly. Sounds simple, but just doing that you will become aware of what you are worth. Give nothing away, account for the time you spend writing the proposal and budget. Offer 3 tiers os pricing in various formats with various finished product. Once you get it down, the forms are replicable and you will bid on a lot more projects. Have your hourly rates ready on excel sheets, if you do this correctly either way by completed price or hourly rate it should keep you covered. Know how many hours it will take. I usually go my the rule of thumb 10hours for every finished minute of video. So if I charge 250 per hour for DV, that makes a 60 second dv commercial worth 2500 . I offer HD service also and suprise suprise the price for a 60 second spot is 50K. This is the most important point, don’t pick up a camera of take on footage unless your costs are covered. I usually require 30 percent down, so in the end should the thing collapse my losses are limited. get another 30 at rough cut. If you have a big client who has a solid background you can for go the rough cut charge. I would rather sit here and type advice than be shooting or producing for free. I love the field but the words spec and free are what makes it tough on everyone. IMHO Get this stuff down early, so you can bid all work. Local cable vs regional network, industrial local vs national. psa vs non profits, all considerations so make sure you have packages ready to go for all potiental clients. Just a quick change of address and a slight change of verbage get the job done for me, if the client doesn’t like what he sees then he isn’t a client, he is a crook. Remember you product is your livelyhood don’t let the client wag the dog. You gained the power by staying up late at night figuring out all the software tricks and finding the best cameras and hard drives, use is wisely. LOL
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Does anyone charge per minute of finished video? I’ve seen some competitors charge like $250 per minute of finished/edited video. Is that a good rate to charge?
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NO, NO, NO!
Please re-read this thread. -
There is a great article here about corporate video production rates.
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Here’s a good corporate video production rate card to give some examples
https://www.haveabutchers.co.uk/ratecard.html
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