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pballain
hourly rate
on Apr 23, 2007 at 9:00:39 pm

I know this question will have many different answers because there is not one right answer...however, I wanted to get an average of what editors are charging for their time. I am just starting to actually charge for what I do for my clients. I have done corporate work for about 5 years now, but it's all been on the "side" when I have time. I am a very experienced editor working with Vegas/DVD Architect. I don't usually shoot the original video, but can. What is the hourly rate you all are charging for work on the editing side of things. I've been told that it's best to charge by the hour instead of flat rate per project.

Any answers will help out tremendously. Thank you in advance.


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cowcowcowcowcow
Mark Suszko
Re: hourly rate
on Apr 23, 2007 at 10:10:39 pm

Never charge using a flat fee. That way lies madness. Always establish an hourly rate.

You can use other folks in your area as a guide, but the first step is to calculate what it is costing YOU to edit, then build from there to include the profit. What some OTHER guy charges may have little to do with his OR your reality, so blindly copying another guy's rate is a mistake.

If you are editing on your own gear, figure the cost of buying, maintaining, upgrading that gear, software, expendables, blank stock, insurance, tax witholding, all your costs of doing business. Put your weekly salary down as a cost. Also put in a percentage that goes into the bank to save up. Total all the costs. Divide the costs into the number of working days you want to be working in the year, that tells you how much per day, per week, per month, per year you must make to break even or make a profit. Your rate is that figure, plus whatever markup the local situation enables you to tack on. Aim for a figure that meets your etsablished calculated personal minimums, but sits in the middle of the range of your competitors. But always defer to the floor you calculated, even if it makes you more expensive than anybody else in your area.

The reason the other guys are charging less may be they didn't do the same homework as you, and are low-balling the rates at a level they cannot sustain. They may be setting a rate that barely keeps the gear out of hock, but doesn't allow for upgrades or improvements. They may be limited in what they can offer with that rate in areas like graphics, music, audio sweetening, etc. They may have a second and third job that's underwriting the video business. They may be taking a page from Gates and just trying to starve out all competitors, then raise the rate once they are the sole survivor. They may just be really BAD, and need the lowball rate because they only ever see a customer once. Hopefully, you want to build repeat business, and you do that on reputation, not on price. The quality of your product and the integrity of your dealings is the number one advertisement for this kind of business.

No matter what, NEVER, EVER, believe the phrase: "give us a price break on this first one, and we'll give you more business in the future, it will be good for your portfolio". For me, these "magic words" mean these folks are crooks and liars, best referred to your worst rival. You are an editor, not a bank. Still, if they ask for this, and you would walk thru fire for the chance to work with the particular client, turn the phrase around and say: "I'll give you a terrific break on the third one, let's see real money at the real rate for the first one". If they balk, walk away. Best thing you can do. They may even come back, after they've burned someone else, or tried a lowball player and been dissatisfied. Once you set a lowball rate, it is VERY VERY hard to raise it. Our markets are an incredibly small circle, word of mouth and reputation will make or break you.


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Timothy J. Allen
Re: hourly rate
on Apr 26, 2007 at 2:13:19 am

Mark spells it out pretty well. Rather then simply echoing his advice, I'll add just one more thing...

I don't recommend setting a pure simple "hourly rate". I'd set a day rate (up to ten hours) a half day rate (for those times you work between 1 minute and 4 hours on a project during a day) and an "overtime" hourly rate (the overtime rate should be well above your daily rate divided by 10, I'd say at least double).

This keeps you from losing full days of work because you booked a project that only took 90 minutes. I book a minimum half day for any project. There are a number of reasons for doing so, including:

*It keeps clients from "underestimating" the time it takes to edit something.

*It help keep you from working with "grinders" who only want to pay for a couple of hours of work, even though booking the edit session with them blows away the time you could have booked for a larger job.

*In my opinion, that 11th or 12th hour you spend doing "one more thing before we wrap up and you go home" is worth more than any of the hours during your "expected normal" working hours. It gives everyone a reason to wrap the project up in a timely manner rather than keep going that same day. (There's not as much incentive if you are "already here anyway and it will only add a couple of hours to the finished cost".)
JMHO



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pballain
Re: hourly rate
on May 15, 2007 at 2:05:34 pm

thank you guys very much for the information. VERY helpful.


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Bluestupa
Re: hourly rate
on May 19, 2007 at 1:40:42 am

Hi, I think this is the best formula on fees that I have seen yet, but where is the next step discussed? ie. u have to bid on a contract, say it's 6 PSAs (public service announcements) @ 30 seconds each, and you have never done such. Are there any standard charges, expected costs, estimates, etc. on the web for such things? From expierence, I know that 1 minute of music video and 1 minute of doc video are two different beasts to create, and I figure my hours based on my own expierence. But when submitting a bid, it would be nice to know if there are expected/standard/almost consistent rates for the different catagories of projects typically put out for bid. Does that make sense? Thanks a million. I can't find this anywhere on the web...
BS




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cowcowcowcow
Mark Suszko
Re: hourly rate
on May 19, 2007 at 5:01:41 am

Well some folks use a sort of template approach, extrapolating from the knowns and from previous experience, but if you've never done a particular kind of project you just really don't know, that in this kind of situation a flat fee will KILL you.

When you're operating mostly in the dark, it can be useful to set certain benchmarks or progress points, and budget to that. Make one as a test case, then use that experience as a rule of thumb for the rest, if they are all of a similar type.

But as you yourself pointed out, documentary, music video, PSA's all are all very different and run under different assumptions and rules.

What I will say from my experience is, if it is a program that *can* be scripted, then a professionally done Creative Treatment and then a Script derived from it will be the key to unravelling much of the mysteries. As a planning document, the Treatment lays out your needs for locations, sets, effects, actors, graphics, everything. It's not the script, but a blueprint, a beat by beat description of the settings, characters, action and kinds of things to be said, but no actual dialog, along with explanations of the rationale and the styles needed, and more. With a good treatment, any writer that's half good can create the actual dialog script with ease. The Treatment stage is where you pitch all the ideas and see which the client likes enough to pay for.

From there, you usually build your strip boards... a kind of mutant version of a Gannt (or is it Pertt?) chart, calendar, and spreadsheet. Whatever you call it or however you create it, it breaks down the script into preproduction days, shoot days, post production days, etc. and by this process of dividing and sub-dividing the tasks into tinier and tinier slices, you get to a point where you can apply rules of thumb and standards to define the slices and generate actual figures for the hours needed. Hours times rate equals budget figures.

In the case of your 6 PSA's, in the treatment process you work out if they are six chapters of one ongoing story, six variations of one theme, six completely stand-alone pieces all radically different from each other (maybe like the various Geico campaigns all running simultaneously these days). Obviously, just from that much information, you can tell quite a bit about the general shape and cost of things. If they are all variations on one theme, it's likely you are going to share the same location and maybe talent for every one of them. This may mean a shorter number of shoot days, though probably very intense ones. Travel will be up to five times less using just one location, but overtime may go up. What if the spots are all stock footage-derived? Then no talent or transport or camera rentals, but a budget for aquiring the stock and rights, and maybe more editing time will be needed...

All kinds of numbers start to suggest themselves once a few assumptions and specs get laid down. When you know your talent and their capabilities, you get some idea of how long they might take to nail a scene, times how many scenes, etc. and generate some time figures. Better actors cost more but save time and give a higher quality. A shorter number of shoot days reduces the studio and gear rental costs too. if you can nail six spots in one day's rental, you've saved hundreds if not thousands right there. If the notice is short, or the actors are not as good and maybe need prompters, that's another expense and more time to calculate.

On the back end, in editing, what can you anticipate for working on six variations of one basic template spot? Obviously, after the graphics for the first spot are made, subsequent variations might become super-fast to update. Same with music cues, etc. The first of a series is always a little longer getting done, you're always learning and perfecting as you go. I once had to do a run of very simple PSA's, all very templatized,( a simple stand-up, guy reading off a prompter for 28 seconds, fade up, drop a third for ten seconds, cover with a page of chyron at the 17 seconds mark, fade to black at end, add music on a second pass) with mostly changes to lower thirds and slates, but it was something like five spots each of twenty differnet guys in a weekend. I got to where by spot number 20, I could cut the whole thing in one continuous AB roll take, once I could find the right take of the actor, and create each spot in about three-four minutes, but it still took everything I had to make the Monday morning deadline. Were they great? Was I proud of the work? meh... it was exacly what the clients asked for and wanted and it was on time. But it was not art.

How well do you know yourself as the editor? If it's kind of cut and dried work, mostly straightforwards cuts of the best takes of scripted stuff, and you're mostly making fine adjustments to timing and the like, how fast can you throw things together? Not to scare you, but Walter Murch said that on Apocolypse Now, it was considered a good day if they make one single cut in a day. That is, going thru five or more camera angles of the same shot, and all the takes of that shot, cutting something together, then viewing it and viewing it in context of all the shots that came before it, then approving the cut or udoing the splice and trying something else... to wind up with one CUT per day that stayed and was approved, was considered amazing progress. I bet you're going to be a little faster than that, but by how much? Do you build in x number of hours for experimentation when the script is not very specific, or the shots in the can don't match the storyboards and you must improvise or repair? What if they throw changes at you in post? Are the compositing or other special effects tasks things you're very comfortable with? What if they are farmed out to someone else? What's the deadline for the project to air, and is there enough time to dot he thing right the firt time, is there some pad to use in perfecting the final 10 percent of the thing, or is the timetable sucha rush you'll have to pull double shifts to make the fedex drop in time? For which you should be charging a higher rate...?

And I thought quadratric equations were tough in school!

I think the thing you can take away from my rant here is, anybody who can just drop a flat figure on you for a job as potentially complicated as this, without doing the homework, is foolish or crazy. or so experieced he/she probably doesn't need the work anymore.



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Bluestupa
Re: hourly rate
on May 19, 2007 at 9:37:05 am

Love it. And I went to film school because I could not cut the math in rocket science. I hear what you are saying and understand it all. But I have to put in a bid, and I am bidding against very large advert agencies, and we are just a home studio. The spots are all on one theme, can be cookiecut after getting one done, need to be done on an insane schedule of about 3 weeks, will be done with non-actors, are subject to a review by committee from the client, and shot on location on a small island in middle of the Indian Ocean, and I am not much faster then Walter Murch. It's starting to feel like Apocolypse Now, as this contract could bring our studio out of the backwaters of this asian jungle.
BS

"I watched a snail crawl along the edge of a straight razor. That's my dream. That's my nightmare. Crawling, slithering, along the edge of a straight... razor... and surviving."
Kurtz, Anow, 1979



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Mark Suszko
Re: hourly rate
on May 19, 2007 at 8:48:11 pm

"subject to review by a committee of clients". Well, there is probably the number-one problem you'll face. If you use the treatment process as the guiding document, you will save a lot of trouble because you run the treatment past these people and get them up to speed before a dime is spent. If they are going to kill or change an idea for any reason, let it be there, on paper, where a change will not cost wasted time and money later. They cannot point to your finished work and claim to be surprised at anything about it, since they knew everything that was coming and had signed off on it first. To protect their interests and yours, insist on this step in pre-production. Go as far as making a photomatic prototype of the typical spot in the series to make sure it is understood.

(Even that step can be dangerous, some clients have been known to be so thick, they cancelled a spot at the photomatic stage becasue they believed they were looking at the final air cut of a finished spot, Conversely, some have been so stupid, they liked the photomatic rough cut so much they insisted on using it as the master.)

Some factors in your planning for the six spots:

Travel. Customs probs. Weather/humidity. Breakdowns with a delay in getting repaired or backup gear/supplies in. Talent that needs more coaching than planned. Over three weeks, somebody WILL get sick. If you could give more details about the project, we could make more detailed suggestions.


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cowcowcowcowcow
Bluestupa
Re: hourly rate
on May 20, 2007 at 1:31:08 am

Mike, this is all great stuff. I am sure this thread can now be used as a sticky reference for working with any client on video projects. But I still do need a pointer to table of fees for producing 30-second PSAs. Or for folks to reveal Xxx dollars for Y project. I can handle all the rest - your point on treatment/script/storyboards is a great one - I don't start anything shooting-wise until that is signed off - been burned without before. Through a mistake in the bidding process, I even know who i am bidding against, one of the largest agencies in north america. There must be a median or range in that genre, after all, a PSA is not a feature film like SpiderMan3. We know how much those cost. I know how much a 3.5 minute music video costs to make. I have done enough 15-minute promos/fundraisers to know how much those cost to make. There might even be a goverment database somewhere that shows the costs of Nancy Reagans Just Say No campaign. I wish I could find it. How much would you charge for one PSA on say "Ride Sharing" or on "Not Using the N-word." I need numbers.
thx,
BS



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Mark Suszko
Re: hourly rate
on May 20, 2007 at 3:00:09 am

Free type answers:
"It costs what it costs."
"How much you got?"
"How long is a ball of string?"
"How much should a house cost?"
"What should you pay for a car?"

This whole thing is madness. I can't give you a figure because I don't work the same way as you. Where I work, most costs are comped because of the setup; clients only pay for expendables, the dubs, postage, any out of the ordinary expenses for travel, props, hotel or per diem for overnights, etc. The most expensive 30 second TV spot I shot this year, with a rented grip truck with Matthewrs dolly, jib, HMI's and a P2 camera rental, and a full crew of seven and cast of six, shooting seven setups for 4 hours, ran the clients in the neighborhood of 900-1200 bucks, but I average between twenty dollars and fifty or so for most of my spots in terms of billables, and that's mostly for tape, to generate spots that a comparable outside outfit in Chicago would charge roughly $2K-$3k for. I once won a local award for a no-shoot all graphics and sound design spot that cost me five dollars to make, beating five others and one by a friend that cost him over a grand. The facility and staff run off revolving funds and inter-departmental fund transfers... Monopoly money, if you will. In this way we make the entire enterprise affordable to our client agencies where it would otherwise be impractical. This is of course useless to your calculations.

Don't base your bid on what the Famous Big Agency who's name sounds like someone falling down a flight of stairs will charge. That's a ridiculous mismatch. Instead:

Ask yourself, after factoring all the operating costs info you have on the project, do you think you can shoot the raw takes in two, four, six hours? Days? How many days do you figure you'll take to edit the first one, including the time spent logging and digitizing and otherwise prepping the footage first? We already discussed how you calculate your rate way earlier. Rate times hours, baby, and depending how confident you are, a pad on top of that for safety or extra profit. You generate a figure YOU can live with, THEN hope the guy with the checkbook goes for it. If the Big Guys are still billing on a cost-plus system, you are going to spank them every time. Cost-plus offers no incentive to economize anywhere, and it typically jacks up the price of a comparable spot by twenty percent or more. The more the spot costs, the more an agency using cost-plus charges on top of that higher cost, in an unending spiral.

Sometimes, you can get the client to plain tell you what he can afford, and if it is at all congruent with some version of reality, then you conform the production to the available budget and most everyone is happy or at least equally UNhappy. Explain the Golden Triangle: you can have it FAST, CHEAP, and GOOD, but you only get to pick TWO of those three.... any two, but ONLY two. Anyone promising all three is a liar. When you get a response from the client on which two legs of that triangle they are wanting, you adjust the quality level or the delivery date (I'm saying it that way because 99 percent of the time, they will say low cost is important, leaving you only the other two dimensions to work with).

A rule of thumb my old boss has used since the 80's, and that some people hold to today, is to charge a grand per finished minute for something pedestrian and uncomplicated. I feel the fact that this rule may still work at times is that it's purely a coincidence. An ABC-roll Beta-SP to 1-inch edit bay in 1982 costing 3/4 of a million can be beaten today in most respects of time, quality, and sophistication by a NLE system costing under two grand in somebody's second bedroom, or even on a #$%@#% laptop in his car... If we're still charging the same grand a finished minute today, where is the difference going, into the editor's pocket? Or is it reflected in the shorter time to completion or higher quality or sohistication of effects? I don't have an answer, only more questions.

It costs what it costs.

Calculate the costs best as you can, and pitch them your numbers. Be ready to defend or explain each line item, have alternative suggestions ready for anything that is questioned, use the Treatment document and boards as the guide for why each choice has been made.

There is NO secret decoder ring, every spot is hand-wrought by an artisan(s) and they charge what they are worth for their time.





And who is this "Mike" guy!?!?!








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Bluestupa
Re: hourly rate
on May 20, 2007 at 3:41:12 am

Ha! Mike is a caffine hallucination. Thanks Mark for all of your great info and expierence specifics. I know deep down what u say is true. A ball of string is as long as a line of string. But like with a ball of string, I wish there was a price sticker on the wrapper of all the PSAs I've seen out there. But now moving on, I am going to do as you suggest and calculate MY rate as u descibed. I will also try the triangle angle, but based on my knowledge of client and the time in the fiscal year, the pocket is deep...hence the bid going out to the big boys.

I love what your 80's boss said. I think we may have had the same boss back then. I was in IBM internal affairs. He said something like "I'm not paying more then 10 grand for that." It was a 10 minute internal promo for something called a PC XT. So he must have been using the same rule:)

Okay, back to the calculator.
BS




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Mark Suszko
Re: hourly rate
on May 20, 2007 at 4:02:40 am

While you massage the keys of your Bowmar Brain, two little bits more, and I swear, I'm done:

If the 1982 rule of thumb still holds for the rate being a thousand per finished minute, why don't all 30-second spots cost $500?:-)


And, one more argument to make during the budget meeting, after you ask them outright what they can afford for this, and they say they don't want to commit to a figure, or say something really impractical an unrealistic. If this was a commercial 30-second ad, or a training video or a promo of some sort, ask them this:

"On this new doodad you're advertising, how much are you forecasting or planning to make on it this fiscal year? A million? Five? What percentage of that amount are you willing to spend to insure that you make that sales figure? One perent? Two? Would you invest five percent of the ultimate value of this account to make sure we sell all of it? And how much IS five percent of five million dollars? So why are we quibbling about the gorram cost of the #$#% tape stock?" (or insert whatever line item they are giving you a hard time about)

Hm?

Since it's a PSA, you generally cannot point to a sales profit like in that "percentage of the Big Nut" argument. But you CAN point to things like: "this spot should drive 50x more people to the xyz web site each week", or "This spot should result in x number of new donors or volunteers or voters calling the toll-free number". Those are quantifiable results, a metric you can get a grip on. You can say that the effective spot will generate x number of new site visitors at a cost per thousand of Y, measured by site logs after the first day of the spots airing. Is that CPM in the ballpark or not? While you can never guarantee viewer response to that level of exactitude, you can certainly hit a range, and with that, compare the cost of the spot to other media like print ads, radio, etc.





"Oh, you wanted to RECORD that?"


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Bluestupa
Re: hourly rate
on May 20, 2007 at 5:13:54 am

again, all good stuff, thx! but this client won't quibble. I am more worried about underbidding the big boys but not bidding as much as i could have gotten. i know that sounds crazy, but in the world of bilaterals and ingos, this is what happens: contracts are usually awarded to lowest bidders unless one of the following:
1. they want hi-quality results from a big name (or friend of a friend), or they just want a big name.
2. they think the lowest bid is TOO low to produce anything resembling quality, either hi or low, and don't know the bidder well enough to make a judgement.
I am dealing with both variables...hence my request for the database of PSA production costs that appears no where on the planet.

I can figure out how much it will cost us. fine. I have no idea what the big names will bid, but it's gotta be higher. fine. The range inbetween what it will cost us, and what the big names bid is an area of let's call it "profit oppurtunity."

See where I am going with this? Is that shady or what! But heck, this is business. I want to get my people as much money as they can possibly get from a job. Is that not reasonable?

So if I knew what the high-end of the range was, I could predict something lower but above what it takes for us, in order to make a profit while at the same time giving the client a good deal. Ha! how to do that?

BS






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Nick Griffin
Re: hourly rate
on May 20, 2007 at 12:14:32 pm

Bluestupa -

Mark, as usual, is dead-on in what he writes. I don't know the answer either, but I'm probably a little closer to the world of your competitor.

Some basic facts:

Big agencies work on big budgets.

Most of the big agencies sub-contract production to outside companies and mark it up. Some, generally not the biggest, own their own production companies so that they can show an invoice from a supposedly outside entity. (Which they ALSO mark-up.)

The big agency is going to show a reel that will blow away the client's review committee. It doesn't matter that the job being bid / pitched is supposed to be location shot using a three person video crew. The big agency reel is going to have spots shot on a soundstage, using a crew of 60, shot on 35mm, color corrected after a carefully managed flying spot transfer, with Flame CGI elements added... (you get the idea). And here's the rub: the client committee won't understand the difference because they're looking at it on the same screen (presumably) that they'll be using to view your stuff. The big agency stuff simply looks phenomenal - big time, glamorous stuff. The big agency spots will also have crisp and clever writing and sparkling design. (That you can counter. See below)

Your reel, in contrast, will be a reflection of what you actually do, not what you've hired others to do.

So how do you effectively go to battle against this? First you make it clear that you and your company are the ones actually DOING the work. Point out that you are often hired by ad agencies, but in this case, they are speaking with the source of the work - you.

Second, and here's the hard part, you have to form a relationship with the people making the choice and coach them through the process of understanding what you will actually be doing and what their options are. What, for example, will it cost to shoot the spots in HD... on Super 16... on 35mm. You have to get them understanding the process enough to compare apples to apples. It's your best defense against the mind boggling big agency reel. Perhaps your most effective argument could be that you can do so many MORE spots (or more takes, more shoot days, more on-camera talents to select from) for the same amount of money as another provider might charge.

One other thought on being competitive: big agencies generally have extremely talented writers and art directors. Add at least one of each to your budget as freelancers. Consider adding one or more examples of their work to your pitch, IDENTIFYING it as such. Again, this is part of the coaching process.

So what will the big agency charge? Hard to say with PSAs. They may even designate this as a "pro bono" project, meaning that they will donate their time and only ask for "out of pocket" expenses. With that in mind, here's some perspective on what they may view as expenses:

Several years ago I asked one of my big agency friends, "How is it that your agency can take even the simplest of spots and have it cost $200,000? I can add up all of the elements and can't for the life of me see how even the most 'creative' account manager could have this simple spot cost more than $60,000 to maybe $80,000." His answer stuck: "Spots cost that much because EVERYONE in the process WANTS them to cost that much."

The ageny has a mark-up on all costs so they don't think having two sushi chefs at the craft services table is excessive, nor are the bowls of extra large macadamia nuts and imported waters that are costing $8 a bottle. And of course all of that is needed because the agency is going to have a dozen or more people on the set: a writer (or two), a couple of art directors, a creative director, the account manager, the account exec, his assistant, the odd vice president or two to schmooze the client, his department heads, their assistants, etc., etc., etc. And notice that we haven't even begun to discuss the crew.

But what ABOUT the people in the client organization? Wouldn't THEY want the spot to cost less? Which sounds better on the golf course: a)"Wait until you see the new TV spot I had the agency do this month, we really pulled out all the stops." or b)"Even though we used to pay $200,000 for our TV spots, I figured out how to get a spot for less than $38,000. Want to see my bargain spot?"

Let me repeat so it can sink in: "Spots cost that much because EVERYONE in the process WANTS them to cost that much."

Given this mentality your actual cost of production may be far lower than the big agency's "out of pocket" expenses. So don't be shy. Budget for everything, add a contingency line item of (pick a number) 7% of the total costs and, above all else, do whatever you can to form a relationship with the client to insulate yourself against the glamor projected by the big agency.

Or... the fix could already be in and the big agency already has the gig locked up. That's why we have more than one pitch going all the time.

Oh, and the "hourly rate?" Develop the day rate discussed above. Charge half price for travel days. Then take your costs and apply a mark-up to them. Think of everything and then add in the contingency percentage.





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Bluestupa
Re: hourly rate
on May 20, 2007 at 2:18:17 pm

Nick, that one made me laugh! So true. They want it to cost that much. Even for reasons other then vanity. To clear a fiscal year end budget is one that I see alot. But the saving grace for us is that we work with poverty-alleviation agencies and all of us are natives of one of the poorest countries in the world. So it's even understood that $$$ spent with us is in line with the UN's millenium goals...somewhere in there...But that's a tough one for moral. Pay me 'cause I'm poor. The thought usually ends with "and ur stupid too." Well, anyway, I think I have enough info now to do what i need to do. I'd ask about radio psa fees vs. video psa fees, but that would just return to madness as Mark would think.
THANKS SO MUCH U TWO FOR ALL THE TIME SPENT WRITING HERE!!!
BS in Nepal




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gaspar
Re: hourly rate
on May 22, 2007 at 10:09:53 pm

This is one of the best threads I've ever read on the cow. Holy moo....



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Bill Davis
Re: hourly rate
on May 23, 2007 at 12:18:41 am

Now that everyone else has weighed in, I guess I'm gonnna come along and fly in the face of a lot of the fine advice given so far.

FIrst, I think the other posters have given fine advice for someone who wants to do traditional work in a traditional fashion.

Personally, I think concentrating on working "traditionally" in an era where all the traditions are breaking down is suspect.

So here's a different approach.

NEVER charge by the hour for anything. Ever.

The metrics generated by hourly thinking are patently false.

This deck, or this camera, or this many hours in the "A" suite is ancient history.

Why? Because if you execute a GREAT cut in 1 hour of editing, that's worth MORE than executing a mediocre cut in 10 hours. And the reality is that the client' won't CARE how long you take to do things. They will care, however if the end result is GREAT rather than GOOD.

So screw hourly billing. If you can do GREAT work fast, Hurray! You should get MORE than the beginners who have to struggle 5 hours to set decent looking titles.

Here's my definition of time based (hourly, daily, whatever) charges - "If i'm good and fast, my work will end up generating LESS money than will the work of someone who is crappy and slow" Think about that. It's patently stupid.

Personally I only quote a single number for the whole project. And I make sure that number MUST have enough RAW PROFIT to make the time spent a minor consideration.

Yes, you will be pretty expensive. But if you're really good, you SHOULD be expensive. Undercharging is a HUGE problem in the production world today, because there are so many equipment rich but expreience poor people in the business.

My advice, separate yourself from them AS FAST AS POSSIBLE - provided you've got the skills to do so.

And you can only get there by concentrating on your SKILLS AND REPUTATION - not on your hourly rates or gear.

Really, NEVER charge for time. You should relentlessly, obsessively, build and charge for your EXPERTISE. Period. Be paid to be smarter, more creative, more business-savvy, more talented or more WHATEVER. And I work your ass off to try and be precisely THAT on every project.

I want to find the flaws in their script, and fix them. I want to be the one to realize when a jib is a better solution than track and dolly. Or when the teleprompter result is too stiff, so I need to shut it down and just sit down and have a conversation with the executive.

I want to learn about my client's business so relentlessly that they STOP COMIING to my shoots at all. Because they know I'll fix what needs being fixed and do what they'd do in the same situation so they can keep runinng their business while I make their videos.

THAT, is the only kind of job security I think still exists today.

Skills trump gear. Particularly today when anyone with a credit card can get all the gear they need.

If you want to use booked days or hours as a metric for efficiency, fine. I guess. But wouldn't it be better if you could get to a place where a SINGLE job generated enough to the bottom line that you didn't have to even DO another project for nice long time?

There are folks out there doing just that.

And they didn't get to that place by doing things like the TV stations of yesterday. (Lets' see, that 1 hour of "online" plus 2 hours of "offline" plus 1.25 hours of ADO - so your bill is...)

Good luck.



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gaspar
Re: hourly rate
on May 23, 2007 at 12:31:10 am

Dammit! Just when I was starting to believe the other guys....

But seriously, Bill, you must have some way of coming up with the number, even if you are not charging the client by the hour. For your purposes, do you still calculate in some fashion the time you will spend, along with all the expenses of the pre- prod -post?



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Bill Davis
Re: hourly rate
on May 23, 2007 at 6:53:18 am

OK, here's how I do it.

I have an ancient Filemaker Pro worksheet that I've been using for developing quotes for about 15 years now. It roughly follows the ancient "above the line, below the line" movie budgeting format I learned back in the dark ages. When someone I don't typically work with asks me to quote on a project, I spend 15 minutes or so filling in all the little boxes with numbers. The form generates a number.

HOWEVER, this number has only a small part to do with with what I actually charge them.

For example, the very first line is a "production fee" which is what I feel they should pay ME for making their video. That line goes up or down based on what kind of client I think they will be and the general scope of the project. It might be 0 for a pro bono project, or tens of thousands of dollars.

All the little boxes just get me thinking about the scope of the project.

Below the line, in the post production section - there are calculations for how many cameras, camera ops, hours of editing, etc. I think it will take. The edit rate I use is about three times what you can get from some other "lowball" cutters in my market - but the point is I'm not trying to charge them this hourly rate at all. I'm just getting a general idea of the value of the time.

At the end of the estimating process, I just look at the bottom line number, know that it totally comfortably protects me if the project "goes long" and I quote a number somewhere in the ballpark of the total - telling them "this is what you'll pay me to make your video, and it's a - not to exceed - number unless we agree the scope of work has changed.

If you want to look at the form, I have it in a download bin on my dot.mac account from a year or so ago when I talked about it on a podcast apperance. Feel free to grab a copy if you think it will help you figure out something similar for yourself.

For what it's worth.

the url is http://homepage.mac.com/davisbill/clientdropbox/FileSharing9.html



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Bluestupa
Re: hourly rate
on May 23, 2007 at 1:30:32 am

Bill, I am glad that you brought that up. No one in 7 years has asked me what my hourly rate is. I think they could give a rat's butt. The only way that I use "hour rate" is to pick an arbitrary high number for my hourly rate when calculating an estimate. That number is added into all the factors mentioned in this great post + profit. But never have I had to give that number to a client. And this is what got me here in the first place: I think we, as creatives, should share those numbers, if not just internally, for the help of each other. Jim in Australia gets xxxx for 30 second Soap commercial. Jane in Tiawan gets xxxx for 30 second Noodle commercial. If there was a database, that would help others, I think, when someone is branching out to a new area of production. One could look at the productions and then judge quality vs.money, and make some determination on their own number (all things considered). In other words, to answer Mark's question "how long is a ball of string" - if there was an informative extensive database on balls of string, one could figure it out..to some useful degree. Just a thought.
BS




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jkm777
Re: hourly rate
on May 23, 2007 at 1:46:51 pm

I am not seeing many rates here. I think that is what we would like to see. For my church, I charge $100 a completed delivered minute with a $250 minimum. These are interviews, etc., nothing special. Most are 3 to 5 minutes. For the company I work for, I charged the same rate for 38 minutes of interviews & historical video combination, along with a few cool graphics. I was on company time for the video shooting, but all editing was offsite so I didn't double dip. (I am an IT guy). I used my XLH1. Ok, I know I am a little cheap..but how much? It's hard to get a full time video shop to give "me" a real answer. Note, as a person doing this part time, I would like to get something rather than nothing. Meaning: my church would probably do about 1/4 the video if I charged more. Now my employer, they are a different story.


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jillpreditor
Re: hourly rate
on May 23, 2007 at 2:40:15 pm

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?

http://www.jillwoodward.com


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Bluestupa
Re: hourly rate
on May 23, 2007 at 6:20:38 pm

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!
BS




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reallybadbrad
Re: hourly rate
on May 23, 2007 at 2:56:29 pm

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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reallybadbrad
Re: hourly rate
on May 23, 2007 at 6:15:49 pm

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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Bill Davis
Re: hourly rate
on May 23, 2007 at 8:05:06 pm

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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Rrotz Productions
Re: hourly rate
on Jun 18, 2007 at 11:07:48 pm

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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Mark Suszko
Re: hourly rate
on Jun 19, 2007 at 12:11:31 am

NO, NO, NO!
Please re-read this thread.


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Charlie Southall
Re: hourly rate
on Feb 27, 2012 at 9:03:20 am

There is a great article here about corporate video production rates.

http://www.dragonflyproductions.co.uk/blog/corporate-video/how-much-does-a-...


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carl cimini
Re: hourly rate
on May 24, 2007 at 6:40:49 pm

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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Luke Cairns
Re: hourly rate
on Jul 14, 2016 at 1:01:44 pm

Here's a good corporate video production rate card to give some examples

http://www.haveabutchers.co.uk/ratecard.html


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