Never Gets Old: Value for the Price
I know this questions gets crushed through and through, but Creative Cow is the place to go for professional advice and I'm not one to pass up such an opportunity.
I put together a proposal for a potential client for a two minute promotional/how-to video for a new product he wants to sell commercially. I am in a medium-sized market, a fair amount of competition. The proposal I gave him came to 1k/minute. This includes everything - HD acquisition (half day shoot, quality production value, dolly, grips), on to full editing (narration lined up, music, text/graphics/basic compositing/effects) and export out to whatever format he needs and DVD w/label.
I'm hanging my own shingle slowly. I own all the necessary equipment, have been doing this for some time now meanwhile thankfully with another job to pay the bills this day and age. Am I out of line with these prices for a commercial business proposal? I've read over Creative Cow and the other questions that fall into my same situation, but I can't discern if those prices are an all-in-one price of shooting and editing or just one or the other. I'm not saying my situation is anymore unique than others, but I couldn't tell if the $400-$700/minute example estimate incorporates the actual shoot or if the footage was handed off to the editor so that 400-700 is editing only, or if that /minute estimate excludes or includes narration/music costs/etc, or how those costs are broken down.
The client stated he thought it too high. I'm not surprised, and understand there is sticker shock when someone hasn't ever seen these numbers for such things. I want to make us both happy - him walking away with a high quality end product, me walking away feeling like I didn't do it for charity. The client will be calling me back so we can talk further about price, I want to have good knowledge going in.
I appreciate transparency for all sides. I don't want him feeling like he's paying through the nose, and a lot of that comes from convincing him the quality is there for the price, which I obviously believe is that fact. Which begs the question - is the price right? Or is my pricing a bit heavenward and I need to come back down to earth?
This community is great. I come here for insightful and informative posts, which in this day and age I feel is in the great minority. It makes me feel good knowing internet locales like this exist.
Thank You in Advance
It, of course, depends on the minutes produced. I've not heard of anyone charging by the finished minute in 20 years. IMO, you should charge by the hour or by the day. Based on your pre pro meetings, you should know how much time you will ut into it so you could quote a flat price for the finished video up front. I believe that's all the client is wanting in this case... and in most cases for that matter. When they ask how much, they really are looking for a dolalr figure so they can move forward or retreat.
I quoted 5k yesterday for a 24 minute show pilot. This will not be 20 layers of compisites though. It's a reality documentary. One day of shooting, 3 days of post, one day for possible revisions. That was my simple formula to be able to spit out "how 'bout 5 grand?"
Had I not been able to do that, they would have bailed.
Or to put it simply, do the hours estimate in your head and give them the final number.
Don't every even allude to finished minute as a formula because it's not!
Consider all your expenses for the gear and, in fact, live expenses. When thinking of the budget, could you live on this (pay all your business and life expenses) if you were to make this on all your jobs. If it can meet your expenses good, if not, it's not the way to run a business. It's too low.
We don't know what your expenses are but you seem to describe a half day shoot with the rest of the work done in post. You don't allude to knowing how long post will take. You could be describing a job in which the client does the script and narration and you do lower thirds or you could be doing a Fox Network Sport Show Open.
$2K might be OK for a low budget thing, a half day shoot, one man band, a day or two of post. If you're including a crew and days of compositing, paid professional narrator, script writer, heavy After Effects, they you're on the low side.
If you're truly a, one man band operation, $600-$1200 an 8 hour day would be a very rough lower budget ball park. It depends on your cost of gear/living, your skills, etc, of course but the above is a better guide than "finished" minute. It's how many hours/days of your life to do the job. It's "finished life" rather than "finished minute."
We have been able to very accurately estimate (both with hours and cost per finished minute, with and without production) for some time. For clients we know well, we use the simpler cost per finished minute and we base it on the description of the project's task.
For new clients we do a full line by line estimate and use hourly or daily rates.
Hey Grinner, at the end of a few of your projects calculate the cost per finished minute based on the final invoice and the minutes delivered. Include all deliverables. I'll bet you'll come to some accurate conclusions. We have been able to.
So to answer the post, 1k per finished minute is a bit low for Madison WI for HD including shoot and post. You didn't say how long it was....typically you are more efficient on longer pieces. On shorter videos with more animation muscle it will go up a bit.
I also think Grinners example of a 24 minute show pilot with only a one day shoot seems lean. Can you get enough to fill 245 minutes in a day? Depends on what it is. But 5K complete seems like a lowball bid from a one man band....no offense Grinner!
Tilt Media Inc.
Video Production and Post
Rich, that formula was easy 20 years ago because cuts, wipes and dissolves were invloved. Now that 30 layers of compositing with 3D, 2D and stop motion animation are easily possible, man 30 seconds of that and 3 cuts of talking head that make 30 seconds are two very different prices. This is why by the hour has been quite the norm for so long.
Now that it's easy to figure time involved before hand, flat rates are a great asset to those who can offer em. Big companies can't do this accuratly. It's why frustrated editors laugh or cuss after their bosses bid a project and make em work through the weekend. lol
Ever notice in big companies how the one doing the bidding is the one with the least experience?
I would have come in with the same $5k as Grinner. Most often, I first ask what they have for a budget. Half the time, it's "I don't have any idea" and the other half tells me what they've got. I start with a personal conversation in which I talk about all that goes into the project, the man hours involved and the level of skill involved. Once they realize that it's not such a simple task, they start to understand the price.
I've commented on that "per finished minute" thing a few times. We just did a national, 2 minute spot with 38 layers of graphics for around $12k, followed by a very nice 2 hour event video for $4500. Where does the finished minute theory come in on those two?
Most often, we just hash it out and agree on a price that we're all happy with. Most often, I show them samples of past projects and go from there.
It's a dry heat!
Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
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2-Sony EX-1 HD .
Ask me how to Market Yourself using Send Out Cards
the real problem is that pricing is all over the place.
local cable offer spots for $250 or even free. Now we all know that is real poor production; but the client thinks that is "good enough" and why pay all that extra for your services?
So you have to sell the reasons for charging more. I'm having a tough time getting through to people that they can make themselves look bad with a poorly done production. Especially those who don't buy video very often.
Ed, that's the tough part about sales.
Sometimes it involves explaining ROI to a potential client. Spending some more money can result in a quality production that can increase sales and be repurposed. There are still potential clients (no so potential IMHO) who don't get it.
Keep in mind that if you become an ad agency you can get your piece of the media buy too. This can help you manage costs knowing you get money "on the backend." At one point, the local cable company sales people had my demo on hand when the ran into more discerning clients who weren't happy with their "free" productions.
To all who have posted to this, thanks for taking the time. It has been informative.
In summary, for all the production value/time I budgeted I feel I gave him a correct proposal. Now, whether that is what he really wants (or thinks he wants) that's something to talk about further. I assume I could point him in the direction of the local tv stations for the local car commercial quality, but I assume that's not what he's looking for either; somewhere in the middle.
I didn't quote him at 1k/minute. That was just the cost if he did the quick math. In my experience of an informercial/advertisement styled video, with the quality I put in, thats what it came to and I thought that to be in line for the two minute piece he wanted produced. Our cost of living etc it is lower than average, so I believe I factored that into price. For time involved I expect two, maybe 3 8 hr days work time from start of shooting to handing off the finished product.
Grinner - cool you can give a quote so quick. In such a pricing, does that include all music/narration/production costs? If it does, I see those elements eating into margins/profit really quickly - do you just go in with those factored in, how do you keep those costs down? It is those costs that I've looked over here in the forums and they seem to be mentioned little, yet they can add up quickly. Narration for three edited pages = $200 I won't be seeing! Music selection if need be = addt'l money going straight through me! On a 5k shoot, the margin is better between that, but scale down to a 2k shoot... it eats up more, and quickly.
How does one protect from these costs to keep these small jobs worth the while? Or can they be chalked up for one more piece on the reel?
Again, thank you everyone for your time and the information, it is answers like these that people come around here.
I'm adding this up for your 2k video production.
1/2 day shoot with you and 2 crew members.
V/O for 2 minutes
HD camera, Lights, dolly
Production liability insur
Workmans Comp insur
2K seems very low, even for a small market with low cost of living.
I have to agree with Ed here. Your cost is too low.
We don't offer 1/2 days of shooting. We only offer full day rates.
So for us this would come in at least $5,000 plus insurance.
I'm late to this party, but here is my answer:
Pay yourself first. Don't make your hourly rate the hourly rate you pay yourself. You have to figure your prices based upon your business staying profitable, not just you paying the rent. In other words, if you take home $50/hour as a paycheck, add to that your overhead and profit. That is your actual hourly rate - multiply by the estimated hours, plus a shoot charge and now you're talking.
You want your client to walk away happy, as opposed to just walking away. But make sure you are charging enough so YOU walk away happy too. If you bid low and wind up working 40 hours, making your hourly rate $10, then you lose.
A good rule of thumb in business, don't lose!
Yeah, way low.
At least for semi-high-endish professional production. Not a cable production.
When we get the inevitable "How much does a video cost" question, my smartass answer is always "How long is a road?" It just depends on where you want to go and what kind of scenery you'd like along the way.
Actually, I always want to answer, "How much you got?" But I don't.
But, to wild ballpark it, for long-form stuff (and here anything longer than a :30 commercial we consider long form) I tell clients that they are probably looking at somewhere between $1500 and $5000 per finished minute. It just depends on what goes in it and how long it takes. A talking head is cheaper than Gone with the Wind, plus car chases through Tara.
Your estimate to your potential client is dirt cheap, especially if it includes the narration (talent fees) and music licensing. If the $200 Comcast production is "good enough" for them, then that's where they need to go.
Fantastic Plastic Entertainment, Inc.
[Paul O'Brien] "Grinner - cool you can give a quote so quick. In such a pricing, does that include all music/narration/production costs? If it does, I see those elements eating into margins/profit really quickly - do you just go in with those factored in, how do you keep those costs down?"
Yes, partial quotes do a client no good. They'll on ly make em made later when you change it or start babbling about fine print or expenses. I use dewolfe music most of the time and can pay a blanket fee for an entire production. I have not counted needle drops in years thanks to them and eager local bands looking for promotion. My VO dudes are top notch and because we such a great relationship, I can literally email a script and tag the email with how much money I have of it. They turn it around that same day and invoice me for that amount. Veeery simple.
In the case of this show, there will be no VO expenses and all of the music will be free from local bands. This was discussed and agreed upon before I gave the verbal quote in the same meeting.
This has been a great asset... being able to quote before another company gets the jump. They even commented on how easy it was and how much they are looking forward to it after wrestling with other companies that felt a need to make it difficult. I literally just look at things as a grand a day.
"We fix $7 haircuts".
I need a video.... $500.00
I need a good video..... $5000.00
I want it all.... $50,000.00
"We fix $7 haircuts"..... Priceless
FrostLine Productions, LLC
Everyone has a story to tell.