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'How to' video - suggestions re payment structure.

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'How to' video - suggestions re payment structure.
on Jan 25, 2006 at 1:51:53 am

Ok so here is the idea, an associate wants to produce a range of how to video's the topic is almost unlimited. I offered to do the first one no charge to get something together to show potential's about 2 thirds finished at this stage and looks pretty good (even if I say so myself).

So the question(s)is(are)....has anyone done a joint venture like this, how have you covered the production payment issue....get paid for each project as it is finished off or go into some sort of partnership splitting sales etc, any other thoughts/suggestions.

And I guess if you have done something like this any thoughts on what sponsors have put into the production of each video ie... $X per video or per series of videos etc.

Appreciate any input....cheers Paul.

"I love deadlines, especially the whooshing noise they make as they go by".

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Mark Suszko
Re: 'How to' video - suggestions re payment structure.
on Jan 25, 2006 at 4:19:29 pm

A very common system is to structure the payment in thirds: one third up front, one third after the first rough cut, one third on completion/signoff of the master. There are variations.

The theory is to cover costs as they are incurred, and not make the person shooting and editing the video be a de facto "bank". You want some money up front so you are not working for free until the end of the project: some projects become like Zeno's Paradox: the final distance to completion becomes infinite. On the customer side, completion payments in thirds offers some control and protection as well: if you just hate the direction the thing is going in, or plans change, you can stop the process at one of the three parts and walk away with the remainder of the money, and no harm done. As a rule, I always use the first and maybe second payments to make sure ALL of my sub-contractors, suppliers, rentals, crew, etc. are completely paid off; I will forego any profit until those accounts are settled, because reputation is everything in a closed production community. If you get a rep as a slow payer or welsher, your resources dry up and you can't get credit (monetary or metaphysical) with anybody - you can't do good business in that climate.

Another key issue beginners forget to cover is plainly defining, up-front, the ownership of the raw materials and the final finished work. There is a lot of case law to cover this stuff after the fact, when a question comes up and a conflict occurs because of a misunderstanding of who owns what - trust me, you don't want to have to settle the issue in court, nobody wins then. There are different "rules" for still photogs and video. So, establish from the beginning, on paper, if this is formally understood to be a "work for hire" or not. Do you retain the rights to the physical shooting tapes, but not what's on them? Or do you retain the right to use what you shot for some other project, not necessarily with your friend? Do you split any money made from "re-purposing" the footage? Do you retain the right to show clips or the entire work as part of your own demo reel, on tape, disk and maybe theinternet, to other possible clients, or is it to be protected with a non-disclosure agreement? Who owns the rights to the master tape? Is the master tape theirs only after final payment? How many re-edits are part of the contract, and at what point are additional revisions going to be considered a new project, billed separately?

Those questions need to be answered and agreed to on paper and signed. Don't necessarily call it a contract, maybe a "memo of understanding".

If you are certain about these issues up front, it makes for a more friendly and relaxing relationship for the project, with good prospects for continued happy collaborations.

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