Advice on rate for corporate video
We were approached by a client to produce a 4 to 5 minute video highlighting their services, history and available space ( they are a very large business park in the midwest). The video will be used on their website, and as a DVD promo. They will be taking two other quotes from some unknown competitors, but have said that they really like and prefer our work.
Our company's background is commercial still photography, and has begun to expand to accommodate the video needs of some of our clients. We've had someone advising us on a couple smaller video projects in the past, but he is unavailable in this situation.
CreativeCow has always been a great resource for us, and I thought I would turn to you guys for a little direction. We will be hiring a shooter in our area that we have been wanting to work with for some time on a project, and his cost will be 700/day for shooting and 500/day for editing. The shoot itself should take two to three days, and about 3 to 4 days for editing and production. When I factor in our costs, time, travel, and misc expenses the figure that stands out is in the ballpark of $8,500. Would this be too low, excessive, or right on?
Any direction the forum would have would be greatly appreciated.
8500 is what we used to chage for corporate video abut 3-4 years ago. It's a competative market though. If you're wanting to spend three days, that's kind of low. And you have to incorporate time for multiple cuts and the client changing their mind. Budget in some time for project management expenses. And try to cut it down to one full day of production.
Thanks Rebecca, I really appreciate the feedback. It sounds like we're in the ballpark with 8500, which makes me feel better. I've been breaking down our costs and time required for the project, and its jumped up a bit to $10,400, which I feel pretty comfortable with.
If anyone else has any thoughts please feel free to pass them along.
On a related note, after you account for all of your time and expenses, what is the typical profit margin you full time video producers expect to bring in off a given project.
For the project mentioned above for example, if you billed the client $10,000 what would you generally expect to clear from that? I understand that there are a lot of missing elements in that equation (how much equipment, what kind, for how long, etc.) but if you had some ballpark information that would be pretty helpful for this and a few other upcoming projects we have in the works.
Your initial post concerns me, so forgive me if I'm overly blunt, overly obvious or both. Like you we do both still work in studio and on location and, for the past 15 years, video in house instead of at rented facilities.
[Jim Winn] "Our company's background is commercial still photography, and has begun to expand to accommodate the video needs of some of our clients. We've had someone advising us on a couple smaller video projects in the past, but he is unavailable in this situation."
OK, so this will be your first project essentially on your own? This is far better than if you had done no video work before, but nevertheless potentially problematic. I've seen this in many other businesses where 'the grass is always greener' in a parallel business and a 'how hard can it be' mentality is easily adopted. The problems almost always are ones of not knowing what you you don't know. This means that you are still very much on the learning curve part of the business.
If you're on the learning curve can you realistically (as well as ethically) charge your client as if you were seasoned pros in this aspect of the business? That's up to you to decide. However my advice is to be conservative in your estimates but somewhat liberal in not charging for overages like re-takes and re-re-edits.
One tip that's fairly obvious, but probably should be stated, use your strengths. Often times when we have a static subject (and I assume many aspects of real estate can be very static) shoot stills and animate them in After Effects. Say you want a 40 to 1 zoom into the doorway of a building, starting with a wide shot of a group of buildings. Well a 40 to 1 zoom for a video camera is a BIG deal and costly to rent. If you have After Effects or another motion application, it's almost free.
Video is an entirely different mentality than still photography, and it's not just the type of lights. In video interest is created by movement of subject, camera movement and any number of other temporal things to which still photographers have trouble relating. For example, a person crossing into the frame to go out the other side or behind an object gives great dimensionality and a feeling of space and time. In still photography there are only a handful of positions where the person will make a decent shot and a few thousand places where they will only ruin the shot. (Perhaps a simplistic example, but it's early in the morning here.)
Video also requires a near constant understanding of context. How did we get here and where are we visually going. It's good that you're working with an experienced cameraman because he (or she) should know enough to give you good 'coverage,' enough alternates, reverses, close-ups, etc. so that you can put together a story, not simply a collection of shots.
[Jim Winn] "They will be taking two other quotes from some unknown competitors, but have said that they really like and prefer our work."
Let's hope that they are telling you the truth on this one and not stringing you along while they accumulate alternative vendors. Your best protection on this is to come at them with ideas and approaches to their specific project. This is also your best defense against a competitor with a healthy reel. Your biggest obstacle will be a competitor's reel which has something in which your client can see their own idea of what they want. In the client's mind it goes something like, "That! I want that, just with my product and my name instead of what's there."
Good luck on this Jim. Diversification is one of the many paths to success many of us must follow these days.
Really, what you're doing in this case is subcontracting the bulk of the project to this shooter/editor you like, so the whole thing really rests on his shoulders and his ability to deliver. Why then, does your client pay more to you to manage this whole thing, when theoretically he can deal direct with this subcontractor? What added value do you bring to this project to justify your cost and profit?
Without knowing more about the project, I couldn't say if the three days of shooting was enough, or too much, but I would err on the side of planning to spend more editing time.
[Mark Suszko] "Really, what you're doing in this case is subcontracting the bulk of the project to this shooter/editor"
Mark- I didn't get that impression from the original post. I read that he was just hiring a shooter this time around. As we all know, these days the cost of entry into an editing system is stupefyingly inexpensive. And even if they are using the shooter for the editing also, Jim and his group may add value by functioning at the high end as producers and/or at the low end as location scouts. And of course the real value comes from being the one who has the ear and attention of the customer.
I agree that not knowing anything about the final production and the expectations placed on it by the end-user client, it's impossible to know how many days the shooting and editing should take.
Sorry I have been MIA so far in this discussion, but I really appreciate all of the feedback everyone has given thus far.
To address a couple of points:
Beyond the visual quality of our work, one of the reasons our clients hire us for stills or video is that they are typically in the field of heavy industry, which sometimes requires a long list of safety training and/or certifications to work on-site. For example, our entire team has surface and deep mine certifications from MSHA, the Mine Safety and Health Administration, which allows us to work in mining environments. Our clients come to us first, because they know we understand and can meet all of their safety requirements and get the job done. David, the guy we will hire to shoot a lot of the work for this upcoming project, has worked with us in the past on non-industrial projects and we will be hiring him on full time near the end of 2010.
The person who has advised us on past projects has only done so in the areas of appropriate price and bid formatting. We are more than comfortable with our technical ability to produce the project. On the editorial end we have the New York Times and Time.com as clients, but as I'm sure you know the editorial side of things works much differently than the commercial side, and as that side of the business picks up we want to make sure that everything is structured the proper way. For this particular project the client had seen some of our other work and approached us specifically to produce something similar for them. They will be getting two other bids as it is a requirement, but we are definitely the front runners in this situation.
Part of the reason we are hiring David as a shooter is that the project also requires a significant amount of still photography, and we will have our hands full managing and shooting that work. If we did everything on our own it would add at least another week to the project's timeline, adding too much to the project's end cost. In this situation it is more efficient for us and the client to shoot both the still and video portions of project at the same time.
Along those lines, I would love to know what the typical profit margin is on a similar video project. Obviously our expenses are going to be slightly higher than normal since the logistics require us to hire on additional hands, but something to compare with would be helpful. We have several other clients who have approached us about doing similar work before the end of the year. We always planned to build this work into our business, but had planned on having more time before we got to that point. These clients have sped up our timeline, and as that grows I want to make sure our business grows in a responsible fashion. Again, that's in part why I wanted to turn to you guys, because I trust your opinion.
So, hopefully this give you guys a little more context. Again, I really appreciate all of the feedback and especially the concerns you voiced in the earlier posts. Honestly, if someone approached me with similar questions about the still side of our business I would without a doubt raised similar questions, so I completely understand.
I'll chime in on this. First, your estimates, based on your listed specs, sound about right for a small to mid-market sized corporate video. We've done 4-5 minute videos for anywhere from $5000 to $20,000 over the years, so it all depends on expectations, design, scripting and visuals required.
I'll second Nick's advice that shooting and producing video is FAR different than shooting stills. We've used shooters in the past who shot both stills and video and my major complaint about them when they shoot video is they don't comprehend coverage and sequencing. Meaning they just don't understand that you need the context that Nick referred do. So we would get all these great close-ups but no wide or medium shots to show the viewer where the people were in the scene. Same with industrial equipment. We'd get very cool shots of gears and pulleys and assembly lines moving but no wide or medium shots to visually explain to the viewer what they're looking at.
On the editing side, there's a real art and science to good editing. What I mean is good editing is rythmic, almost musical. Not to mention the technical & aesthetic aspects of knowing when to cut, when to dissolve, when to do something different than those two when transitioning (which in my opinion is rare). Story is also important, even if it's a "how-to" video there are ways of injecting story elements into it.
When I see videos produced by companies that primarily do design or still photography, these are the areas where I see they fall short compared to experienced video production companies. They tend to be more art than substance. You can have both.... and effective videos usually do have them both. So just be conscious of these sort of things.
Over the last few years we've gone from being primarily a video production company to being a full-service advertising and marketing company. Like you, we hire out if we don't know something very well, but we are always looking for ways to move the work back in-house, simply because it's hard to make money paying freelancers to do everything.
Magnetic Image, Inc.
I think you're probably in the right neighborhood price-wise IF you can deliver. Since you are subbing out the work, you just better hope your shooter knows what he is doing.
As for margins/markups, I think most people here would be very hesitant to divulge such information. This is a very open community, but some things are over the proprietary/competitive line.
When people ask about pricing I always have the same answer. You need to calculate your price based on a thorough accounting of job expenses, overhead and estimated taxes, plus a profit based on future growth planning. Most businesses have some sort of future growth plan, with a cost attached. If you don't, then you need to go write one up even if it's a one year plan. Think of things like facilities expansion, gear, cash reserves, etc. and when you will need these things. If you need $100k in a year to meet your future plans, you will need to pull in a minimum of $8,300 in profit each month to cover that.
Short answer - You are the only one who can answer the question of how much profit to shoot for. It's all based on what you need as a business and what you think you can get from your clients.