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How to deal with a problematic client
So this is the situation:
– We sent in a final cut of a project (currently 11.5 minutes long). The client wants it to be no longer than 9 minutes total. We agreed on subplots to cut out. So far so good.
– Our contract states very clearly that our company retains copyright on all source material we generate (i.e. original tapes).
_ The client has a new website and they want a 3 minute web version of the project – like… tomorrow. We patiently explained that this would not be possible for us to deliver quickly, as we’re now involved in new projects.
_ At this point the customer requested the original tapes we shot so they can have someone else edit it. And now they became aware for the 1st time of the clause in the contract that the tape belongs to our company. We also tried to explain to them that it would take anyone else a much longer time to create a shorter version from the source material.
– We finally agreed on a 1 month drop-dead timeframe to deliver the 3 minute version to them.This is all preamble for the following question(s):
1. We charge by the finished minute. It’s going to be difficult to distill down their message to 3 minutes. In other words, there will definitely be creative work and just work-work involved. Should we treat this project as completely independent of the original one and charge our regular rates, or should we discount (since there are no more shoots, and we already have an 11.5 minute version from which to start?
2. They might actually want 2 more spin off projects from the original one that might be pretty straight forward (though they might find it too difficult to work with us, as we have found with them). Basically we’d have to change the introduction of the original project and split the original project in 2. What makes sense to charge in that case?
3. Our clients are non-profits and therefore our rates are incredibly reasonable ($800.00/finished minute).I’d love feedback ASAP as we need to get back to them within the next day or 2.
Thanks in advance for reading through this saga.
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48 Replies
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[dorit grunberger] “- Our contract states very clearly that our company retains copyright on all source material we generate (i.e. original tapes). “
I don’t agree with this clause at all. If a client pays me to produce a project for them and they pay for both the production costs and the tape stock, they own the original tapes. There are others on this forum who operate the way you do, but I don’t think it’s the right way to treat a client. It’s their product, their tapes.
My guess is that this client will think twice about using your services in the future and look for someone else who agrees that the original footage is theirs, not yours.
[dorit grunberger] “Should we treat this project as completely independent of the original one and charge our regular rates, or should we discount (since there are no more shoots, and we already have an 11.5 minute version from which to start? “
If the 3 minute project is an add-on and not part of the original agreement, yes, you charge for your time. Either flat rate or by the hour, whatever you agree on.
[dorit grunberger] ” 2. What makes sense to charge in that case? “
Your standard rates.
[dorit grunberger] “. Our clients are non-profits and therefore our rates are incredibly reasonable ($800.00/finished minute). “
Charging by the finished minute is not something I recommend to anyone. I have never done this and will never do this. Each project is unique. One project might cost me $100 for a finished minute while another will cost me $20,000 per finished minute. Each project is custom so each project is budgeted custom. I have standard hourly and day rates for each service we offer, but we do not offer any sort of “finished minute” rate. I would be out of business if I did.
Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.STOP STARING AND START GRADING WITH APPLE COLOR Apple Color Training DVD available now!
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Thanks so much for the input Walter
When we 1st started this business, we ignited intense discussion on this forum around the whole “who owns what” issue (I’m sure it wasn’t the very 1st time that happened).
We decided to fall on the side of owning the raw footage. and our rationale was as follows:
1. We have very accommodating rates.
2. Our clients are on very tight budgets and need to know in advance what the cost will be.
3. The client pays for the final product we create. They do not pay for travel, any additional rental of equipment (only if there’s a special lighting request) and most importantly, they do not pay for the tape stock.
The only way we can continue to produce is if we have control over the stock. Of course we can’t and wouldn’t use the footage for anything but the client’s project, but it is ours to keep.
4. I totally understand about going out of business, because we wind up doing so much work that the per hour returns are questionable.
5. On the other hand, we are emotionally engaged in telling the clients’ stories. In this case we’re trying to help a hospice center raise more funds AND reach out to their community.
Final word: we’re thinking twice whether we want to continue to give our services to this client since dealing with them has been very difficult (didn’t get into it here).Thanks again Walter.
Anyone else???? -
what Walter said
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[dorit grunberger] “1. We have very accommodating rates. “
Most important is that it accommodates your business model. McDonalds is quite profitable as are many gourmet restaurants. You just have to have a business model that ensures you’ll stay in business.[dorit grunberger] “2. Our clients are on very tight budgets and need to know in advance what the cost will be. “
You do this by getting a detailed description of what they want as well as a budget. You then tell the client what you can do within the budget. You can accurately control both production and post production budget. In addition you can allow the client to drop or add things a la cart.
Never charge per finished minute. That’s like charging for the weight of a meal regardless of ingredients and complexity of the recipe.
[dorit grunberger] “3. The client pays for the final product we create.”
And based on the description you should come up with a an estimate to keep within client’s budget. If a client wants additions or changes to the project, you charge accordingly. I include a “change order” so the client can request and I can respond with changes in cost and they can agree or not. In the contract I spell out shoot days and post production days (including revisions). If things happen on my end to slow me down that’s my issue. If the client does things to slow me down, they’re eating their own hours and I let them know gently that request “x” will take approximately “y” additional hours.[dorit grunberger] “4. I totally understand about going out of business, because we wind up doing so much work that the per hour returns are questionable. “
That’s why there’s a problem with your business model. You need to know approximately (or better still) exactly how many hours the client gets.
[dorit grunberger] “5. On the other hand, we are emotionally engaged in telling the clients’ stories. In this case we’re trying to help a hospice center raise more funds AND reach out to their community. “
There’s nothing wrong with going above and beyond. Some may do it to add that bit of “panache” because you want it for your demo reel. Some may do it because they believe in the project. If the latter let your client know, you’re donating or discounting hours. Show them an invoice and both of you will have a record of what extra you gave and they’ll at least appreciate the extra you’ve given.
[dorit grunberger] “We decided to fall on the side of owning the raw footage.”
I think there’s nothing wrong with this and you did make it clear in the contract too.If this client’s 3 minute video is beyond one was spelled out as the final piece in the contract then the client has to acknowledge that it’s their issue. Then you have to figure out whether you want to meet the client’s belated need. You can make a separate contract for this. You can then work overtime, hire freelance (making this more expensive for the client, in effect a “rush” charge). You can offer the masters at a price. You can offer window dubs so they can do an offline elsewhere and come back to you for the online. You can “donate” the masters to them if you support the cause (or copies of the masters).
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I respect Walter’s position on the ownership issue, but I disagree…especially if you’ve put it in writing. I think a lot of the work Walter does (and correct me if I’m overstepping here) is at the network level and the folks doing the producing are savvy enough to probably demand ownership of all materials. Even if that’s not the case, there is nothing legally, ethically or morally wrong with taking the position that you own the footage, materials and the finished product.
Copyright law unquestionably backs this up, regardless of the many differing opinions on these lists. If a client wants ownership, all they have to do is ask for it as part of the project’s contract. And if you’ve put it in writing in this contract with them, then they have no excuse to now be surprised about that fact.
As for editing a 3 minute piece out of longer piece and needing it “like tomorrow.” I’ll relate a recent client story for you.
We were editing a series of product launch videos for a large manufacturer. There were 5 videos in all. 3 (about 6-8 minutes each were complete, 1 (about 4 minutes and the most important module) was about half done. We didn’t even have a script for the fifth video (about 4 minutes) and it was Thursday prior to a Friday deadline.
We had told the client on Monday that if we didn’t have that 5th script by Monday afternoon, we couldn’t get the 5th video done. We get a call from the producer at noon Thursday. The previously “most important module” was no longer important. The new “most important model” was the 5th video, for which we had just received a script (Thursday morning).
The producer was in a pickle. She was being told, “we MUST have the 5th video for this conference!” We COULD’VE told the client “no way.” But we told them…ok, the only way we can get this edited is if:
1. We dump video #4 for now.
2. You and your brand manager come down here tomorrow. One will work with an editor in the suite cutting the video together. The other will work with a graphics person designing and laying out and proofing graphics. We got on the phone and got our VO talent (luckily in LA and 2 hours behind us) to schedule a voice session.
We also called a couple other clients and explained the situation and asked them to move non-deadline oriented edits. They did because they’ve ALSO been in these situations.
The clients arrived at 7:30am Friday, we worked til 5pm and BOOM…we had a finished video. We even had time for a 30 minute lunch delivered from Panera..PLUS we sent it out for review and revisions, which we did between 5 and 5:45. At 6:20, They walked out the door with 4 separate DVD’s, and .wmv files uploaded to their FTP ready to drop into their presentations on Monday in Orlando.
We were heroes. Nobody worked all night. That client called the following Tuesday after a hugely successful product launch on Monday with about 4 NEW video projects!
I don’t think cutting a finished video of 9 minutes down to 3 sounds all that taxing. We do it all the time, especially for use on the web, and it usually doesn’t take us more than about a day, a day and a half or 2 max.
Should you charge it as a separate project. Heck yes…especially if it was never mentioned as part of the original deal.
As for continuing to work with the client…well…if you’re not making money on the deal and they’re a pain in the backside, then it’s not really doing you or your business much good. When we deal with non-profits on tight budgets it’s usually a joy because they’re appreciative of reduced rates and of our candor in trying to help them with the marketing, which is usually not very well done.
They also usually let us do ALL the creative, so we tend to produce some of our best stuff with non-profits (conceptually at least since production budgets are tight).
Bottom line, you’re in a service oriented business. You probably don’t believe it, but there are probably a hundred, heck a thousand other companies that could do what you do and deliver a similar product. What sets you apart will be the service you give to that client. Doesn’t matter what they’re paying or how they treat you. You should treat every project as if it’s your most important. You never know when that $3000 account is going to mushroom into a half a million dollar behemoth. We’ve seen it happen. And everytime the turning point was the service we gave them…NOT the quality of the finished video. I should mention we do quality work, but certainly nothing ground-breaking.
Hope that helps.
Chris Blair
Magnetic Image, Inc.
Evansville, IN
http://www.videomi.com -
[Chris Blair] ” I think a lot of the work Walter does (and correct me if I’m overstepping here) is at the network level and the folks doing the producing are savvy enough to probably demand ownership of all materials.”
Nope. We do not have any contracts that specify ownership. There is an understanding that project is the property of the client. Most of our work is not for the network level at this time. We’re doing a lot of documentaries now. But it doesn’t matter if it’s a corporate training video or a new series for a network, the ownership of any project rests with the client.
That’s my business model and it’s worked for me for 8 years now.
Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.STOP STARING AND START GRADING WITH APPLE COLOR Apple Color Training DVD available now!
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STOP charging by the finished minute. This was an idiotic practice from many years ago and it makes no sense. Charge by the project using any formula but that one. I guess this means that you charge $400 for a 30 second commercial, right? And $ 72,000 for a 90 minute seminar taping?
So, if you build a 12 minute spot and they ask to cut it down to 3 minutes, that means $ 2,400. And you wonder why you’re having problems.
Try charging for your time with a range of dollars that makes sense. We have a piece on our website that is 20 seconds long and cost $ 68,000. They should have hired you for $ 275.
Steve Wargo
Tempe, Arizona
It’s a dry heat!Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD . -
Oops, I hit the send button too soon.
The thing that will keep you in business the longest with a long list of long term clients is “fairness”. Yeah, you also have to offer a lot more things like great quality, on-time / on-budget delivery and an outstanding set of ethics. Bla bla bla. Some of my clients have been with me for over 20 years, starting with S-VHS production. One thing that I have never done is to claim copyright, except when I’m the victim of nonpayment.
There have been dozens of clients who’s first question was “Who owns the copyright to my footage?” My answer is “You own everything that you pay for”. Holding a client’s footage hostage in order to get future work is professional suicide. Regardless of the intellectual property laws, to them, it looks like nothing more that trickery or greed.
I don’t mean to come down on you hard on this but I run my business on the “100% referral” business model and charge what I call “The Happy Price”. They’re happy, I’m happy. Everybody’s happy. As silly as it sounds, people love it when I say those words. Again, it’s all about fairness.
Hire someone to chop that thing down to 3 minutes, today. Even if you lose a few bucks in the process.
Steve Wargo
Tempe, Arizona
It’s a dry heat!Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD . -
Ouch Steve!
For brevity, I didn’t get into too many details. We usually agree on how long the project is and that’s what the client pays for. If they ask for the world (which you know they do) and if we can’t keep it within the agreed upon length, we give them more. Then together, we cut it down again to the final length, or if they like it as is then we don’t charge them beyond what was agreed on.
We do understand that there’s a lot more work goes into a 30sec psa than a 30 minute straight shoot.
We’ll give more thought to a change in rate structure.
Thanks for your suggestions -
And…I don’t think I was clear enough in the original description of the issue.
1. We don’t hold the footage ransom, we keep it so that the client doesn’t do what they’re trying to do, and that is to use us to get cheap work.
2. The 3 minute project is beyond the original project. The client wants both. We’re just about finished with the 9 minute version and will work on the 3 minute web version this weekend.
3. The contract was for the 1st 9 minute project only, for which we’ve received 75% of the total bill at tihs point.
4. I see no reason not to charge the clients for a 3 minute piece that was not part of the original project – do you?
5. I’m sure you charge quite a bit more than we do (and probably worth it too ;-)). We can’t afford to “hire someone to chop it down.”Thanks again for your input and everyone else so far. This is a loaded subject every time it comes up. Live & Learn!
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