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How to charge clients for long-term edit storage

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nick szpara
How to charge clients for long-term edit storage
on Jul 18, 2012 at 6:15:53 pm

How do you charge clients to save a backup of their project at your post house or edit suite? I've been saving complete versions of projects including all original footage, capture scratch, graphics, exports, etc. so that if they ever need to go back to an old project (and a lot of them do, months down the road), I can just mount the drives, open it up & go. Now I have several clients who have about a dozen terabytes worth of projects on my backup RAID.
I've heard two ways of doing it: include a storage fee in the final invoice for the edit, or charge a small fee per gigabyte per month. What's a reasonable rate? And how do I start charging these clients who have significant hard drive real estate without pissing them off?
(and yes, I know about tape backups, and no, I'm not about to invest in a LTO system unless you are really really convincing)


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Mark Suszko
Re: How to charge clients for long-term edit storage
on Jul 18, 2012 at 7:18:24 pm

I think you need to present them with options at the start of the project, not after.

Better to just buy a drive and add it to their bill, I say, than to try to (from their standpoint) milk them forever with monthly storage charges.

It's about perception: buying a drive that you can turn over to them at any point, and charging it to the immediate project, it's really just like charging for the videotape or other commodities, directly associated to the work at hand. They probably won't blink, especially if they know that drive belongs to them and you are just holding it. You can frame it that they can have the drive on demand, or if they sign off, you can credit their account for 80 percent of the drive cost, wipe the drive, and use it for another client.

(Which will cause them to call you 24 hours later to ask for one more change to the huge project you just erased; it never fails.)

But, if you're essentially charging them rent to store their footage month-to-month, they see no "value-added" to that, just an ongoing cost. They won't care that that drive saves them many hours of expense from re-digitizing or whatever. They can't relate to deferred or avoided costs in their world, only actual costs. They'd rather buy replacement hardware when something breaks, than pay maintenance contracts, and they see you the same way. They will rather just gamble that it won't be needed. And to them, if they lose the bet, either the change to the project is worth the added costs, or it isn't, the fact they would be making you do a lot of drudgery in re-creating lost assets is not even on their radar. Especially for internal projects within an organization, like a corporate in-house shop. In-house processes are of little interest to most clients.

One other way to look at this: when they call for a change: you can undercut the competition's hours on the same job because you were smart and saved all the elements. The competition has to start from scratch, so their bid will be based on more hours. You can offer what looks like a discount, and nit be out anything, if you kept the elements. Of course, if these clients are weasels, nothing prevents them from taking their drive they paid for, with all the elements, and handing that off to your competitor, either... but I think few clients figure that out, and if you give great service, it shouldn't ever occur to them to do so.

That's just my own opinion.


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Bouke Vahl
Re: How to charge clients for long-term edit storage
on Jul 19, 2012 at 7:40:45 am

True, but I don't really agree on all points.

I won't even ask the client, just back up and add it to the bill. Otherwise, no matter how well it has been talked trough, the client will blame you if revisions seem impossible cause there is no backup.
And even if you have a signed contract, you'll still be the bad guy.
I'm so arrogant that i refuse jobs if the client is too cheap to spend a very small part on these things. (If they are this way, it's not a fun job anyways..)
If i do feel it's a fun job but a cheap client, i hide the cost somewhere else ;-)

So you got a backup, and the client might take it elsewhere.
But the physical rights might belong to the client, the content might belong to the client, the 'creative' work does not always belong to the client!

That's the least of my worries.
By buying a drive, you yourself can be hold responsible for keeping the drive alive. And that WILL fail one day or another, placing you in an awkward position. To avoid this, you SHOULD hand the drive over to the client! (So if it fails, they broke it, not you...)
Of course do NOT include project files on it, just content. (And make darn good triple backups of project files yourself).

This is the reason i use LTO. It's way safer than drives, and 99% of my competitors cannot read LTO, so that guarantees clients come back to me for revisions. (Well, not entirely the truth, i don't really have competitors, but you get the idea.)
LTO is a bit more expensive. (well, price per MB is less than a bare drive, but the backup systems cost is about 3500 USD, so you need a fair amount of tapes to get to the break even point.)
Add to that, the transfer speed is very high, and you only have to backup once (i really believe you should backup to two drives if you choose HD to back up, and that adds to the cost/time...)

You do the math yourself, but never ever let clients decide what's good for them. It always backfires.

hth,

Bouke

http://www.videotoolshed.com/
smart tools for video pros


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Nick Szpara
Re: How to charge clients for long-term edit storage
on Jul 25, 2012 at 4:51:25 pm

While in theory I agree with the 'buy a drive, put it on the invoice, hand off to client at the end of the job for safe-keeping' model, that wouldn't work in a lot of situations. For example, one client will do 5 spots at the beginning of every month, and they will pull material dating back up to 2 years ago. I have to have that library of footage and graphics stored locally to make the edit manageable. With the 'buy a drive' model, the client would have to walk in with 2 dozen drives and connect them all up in order to revise a :30 spot.
In this case I think I could just tack a $50 storage fee onto the edit invoice, which in practice will become a $600/year charge to live on our RAID array.
For other, 'one-and-done' type projects, maybe it's still a $50 storage fee that's valid for six months from the end of the project, at which point it gets deleted from the RAID and they have to buy a drive if they want it backed up? It's hard to know at the inception of a project if the client will become a repeat customer or not, therefore it's hard to know whether their media/projects will need to be accessible 6 months from now.
Am I making any sense?


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Mark Suszko
Re: How to charge clients for long-term edit storage
on Jul 18, 2012 at 7:21:20 pm

I think you need to present them with options at the start of the project, not after.

Better to just buy a drive and add it to their bill, I say, than to try to (from their standpoint) milk them forever with monthly storage charges.

It's about perception: buying a drive that you can turn over to them at any point, and charging it to the immediate project, it's really just like charging for the videotape or other commodities, directly associated to the work at hand. They probably won't blink, especially if they know that drive belongs to them and you are just holding it. You can frame it that they can have the drive on demand, or if they sign off, you can credit their account for 80 percent of the drive cost, wipe the drive, and use it for another client.

(Which will cause them to call you 24 hours later to ask for one more change to the huge project you just erased; it never fails.)

But, if you're essentially charging them rent to store their footage month-to-month, they see no "value-added" to that, just an ongoing cost. They won't care that that drive saves them many hours of expense from re-digitizing or whatever. They can't relate to deferred or avoided costs in their world, only actual costs. They'd rather buy replacement hardware when something breaks, than pay maintenance contracts, and they see you the same way. They will rather just gamble that it won't be needed. And to them, if they lose the bet, either the change to the project is worth the added costs, or it isn't, the fact they would be making you do a lot of drudgery in re-creating lost assets is not even on their radar. Especially for internal projects within an organization, like a corporate in-house shop. In-house processes are of little interest to most clients.

One other way to look at this: when they call for a change: you can undercut the competition's hours on the same job because you were smart and saved all the elements. The competition has to start from scratch, so their bid will be based on more hours. You can offer what looks like a discount, and oit be out anything, if you kept the elements. Of course, if these clients are weasels, nothing prevents them from taking their drive they paid for, with all the elements, and handing that off to your competitor, either... but I think few clients figure that out, and if you give great service, it shouldn't ever occur to them to do so.

That's just my own opinion.


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