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billing question

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Aaron Cadieuxbilling question
by on Feb 19, 2010 at 5:38:30 pm

Hey guys,

Has anyone in here ever charged for editing on a per-minute-of-edited-video basis rather than by-the-hour?

Thanks,

Aaron


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Mark SuszkoRe: billing question
by on Feb 19, 2010 at 5:52:41 pm

We used to quote that way; in the 80's, we'd quote a thousand bucks per "finished" minute of the final program. I think you would be crazy to bill that way now, today, because the technical and economic variables are completely different. If you did a project that DID work out to about $1k/min, it would be totally by coincidence these days.

You need to have a good grasp of how long things take to do before you start estimating the time. Bill by time spent, times your established hourly rate, or extrapolate the hourly rate to a day rate, charge by full days, be done with it. If you commit to a locked-in figure that you had to guesstimate, you are either going to bid too low and lose money, or bid too high and lose business.
Neither is a good business plan.


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cowcowcowcow
Fernando MolRe: billing question
by on Feb 19, 2010 at 6:42:25 pm

Mark is totally right.

If a client ask me for a two minute video, but there are hours of not-cataloged raw material, just finding the good shots and assembling the video, plus versions and changes can become quite more difficult than if I were asked to make a two minute video from a ten minute interview.

I was just explaining a client the other day: "I'm not selling you a video, if that was the true, I'll come here with a catalog of twenty videos for you to pick one. I'm charging you for my services, and the consequence of my services will be a video that will be good only for you".

*Always share a link to your site and rate the posts. This is a free service for you and for us.


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Rich RubaschRe: billing question
by on Feb 19, 2010 at 10:50:06 pm

What we have done is track invoices for projects and measure how much per finished minute we charged based on the length of the videos we delivered. We have found that we are pretty darn consistent depending on how the videos are constructed. We have three basic levels of per finished minute for editing and two basic levels for per finished minute of pure animation.

We don't always use this to create an actual proposal, but we use them internally and with our best clients to throw a number out before the project. We are very close at estimating this way.



Rich Rubasch
Tilt Media Inc.
Video Production and Post
Owner/President/Editor/Designer/Animator
http://www.tiltmedia.com


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Mark SuszkoRe: billing question
by on Feb 19, 2010 at 11:00:23 pm

That's the key, Rich; you might throw that figure around the office internally but I maintain you should NEVER tell clients that figure because every situation is a little different and you don't want to set up unreasonable expectations. And what a client thinks of as one of your "levels" may expect something more than what the level really is. Like expecting a lot of roto work on the low-budget powerpoint transfer level of work, at the powerpoint video budget level.


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Lynn ElizabethRe: billing question
by on Jan 10, 2011 at 6:34:52 am

>>Rich Rubasch
We have three basic levels of per finished minute for editing and two basic levels for per finished minute of pure animation.

We don't always use this to create an actual proposal, but we use them internally and with our best clients to throw a number out before the project. We are very close at estimating this way.<<<

Rick, would you be willing to post in more detail about this? I'm dealing with the same issue of trying to estimate time to bid. I must admit it's a bit like trying to find your way around in a dark room.
I'm about to change from life history type projects with packages to trying to bid to businesses for web video and am trying to get a ball park for how long various types of projects should take. Thanks.


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Mick HaenslerRe: billing question
by on Feb 20, 2010 at 12:54:39 pm

[Mark Suszko] "We used to quote that way; in the 80's, we'd quote a thousand bucks per "finished" minute of the final program. I think you would be crazy to bill that way now, today, because the technical and economic variables are completely different. If you did a project that DID work out to about $1k/min, it would be totally by coincidence these days. "

Interestingly, most projects I'm doing right now work out to be within 20% of this old rule. But I live in a world of coincidence! TBTG!



Mick Haensler
Higher Ground Media


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grinner hesterRe: billing question
by on Feb 20, 2010 at 12:50:01 am

It was pretty normal 20 years ago. It was linear land and options were simply not like they are today. It now depends on the minute being produced... hence the norm of by the hour billing.



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Mike CohenRe: billing question
by on Feb 20, 2010 at 1:12:46 am

If your video's narration is 20 minutes long, then should you only pay for 20 minutes of the narrator's time?

When you go to Denny's, you know that 2 eggs cost about $.05 if you buy as many eggs as they do, two slices of toast are another nickel and hash browns are about the cheapest food in a restaurant, yet you pay a lot more than 33 cents for breakfast.

Maybe that was a silly example, but basically I agree with the others - charge for your services. When we estimate charges, we do so based upon the amount of work we know it takes to create a particular type of project. The final length is sometimes not known. Shouldn't always matter. We know scripting, shooting and editing time may vary down to the hours actually spent, but if you don't spell out hours of work, then you figure out how to charge for your service, not your hourly wage.

Now if you make $1,000/hour and it takes you 1 hour to cut one minute of video then sign us all up!

Mike Cohen




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cowcowcowcowcow
Walter SoykaRe: billing question
by on Feb 21, 2010 at 1:15:45 am

[Aaron Cadieux] "Has anyone in here ever charged for editing on a per-minute-of-edited-video basis rather than by-the-hour?"

Perhaps I'm reading too much into your question, but it sounds like your client might be uncomfortable with open-ended hourly billing. What the client really wants is to know how much the video will cost upfront; what they don't want is any sort of surprise, and I think this is very reasonable.

However, as the others have mentioned, finished-minute pricing doesn't factor in the things that raise or lower the cost of production. While knowing the price tag upfront will make your client happy, you would be taking on a lot of risk in agreeing to the price based solely on finished time.

A quick analogy: I couldn't approach a contractor and ask how it would cost to build a 2000 square foot house and expect to get any kind of reasonable answer, because square footage is not the primary driver of the cost. I also wouldn't want him to go ahead and start building, and simply charge me as he proceeds, because I have no idea what the final price would be. Instead, we'd have to have some dialog. The contractor would ask me all sorts of questions: how many levels, what style, what grade materials, what is the site like, etc., and then have some plans drawn up and develop a quote.

I think this is a good approach for budgeting video, too: start with a dialog with your client, and then develop a script. Video is very cheap and very easy to change on paper, before production begins, but very expensive to change after production is finished.

Once your script is written out and agreed upon, you can break it down into the elements you will need to produce or acquire and budget accordingly. At the end of this process, you can tell your client what the cost to produce that script will be. They will be happy, because they'll have a good idea what the video will cost, and you will be happy because the script limits the scope of the production, and therefore limits the risk you assume.

Of course, you'll also need to agree with your client on how to handle changes; what might seem like a relatively small script change might have bigger cost implications than they expect, and you'll need to work with your client to keep them well-informed as the process unfolds and the project evolves. If I wanted to add another bathroom to my house, it may seem like a very simple addition to me, but the contractor would have to run new plumbing, and the cost might be higher than I would expect.

Another possibility is that your client is looking for a price per finished minute as a way of comparing bids. This reduces production to a commodity, and isn't really fair to you or informative to your client. Price per finished minute doesn't reflect how the video will meet their needs. A video for a development company might benefit from a 3D rendering of the site and proposed buildings; if your proposal includes it, and your competitor's does not, you will lose when you compete on price. You might win, though, if you compete on effectiveness.

You're not just selling the finished video as an end product; you're selling your service to produce it. A lot of your value will come in advising your client. You'll be indispensable if you can work with your client to get past what they are asking (price per finished minute), determine their real underlying needs (budget or vendor selection), and address them.

Walter Soyka
Principal & Designer at Keen Live
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
RenderBreak Blog - What I'm thinking when my workstation's thinking
Creative Cow Forum Host: Live & Stage Events


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Steve WargoRe: billing question
by on Feb 23, 2010 at 4:59:29 am

We just started cutting a low dollar feature film. Thanks for the tip. We're going with the $1000 a finished minute. If I drag some of these shots out, we be RICH!

Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .

Ask me how to Market Yourself using Send Out Cards


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Steve WargoRe: billing question
by on Feb 23, 2010 at 3:06:21 pm

We just went over this a while back and the extremes are this:

Is it fair to charge $500 to cut a 30 second spot and is it fair to charge $120,000 to edit a 2 hour movie?

Years ago, when the per minute charge was the norm, we edited in an entirely different world. Now, we can accomplish a lot more in a lot less time so we go ahead and do more. Everything has changed but the numbers still average the same.



Steve Wargo
Tempe, Arizona
It's a dry heat!

Sony HDCAM F-900 & HDW-2000/1 deck
5 Final Cut (not quite PRO) systems
Sony HVR-M25 HDV deck
2-Sony EX-1 HD .

Ask me how to Market Yourself using Send Out Cards


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John BaumchenRe: billing question
by on Feb 23, 2010 at 6:29:48 pm

I once had a client ask me how much it would cost to make a video. I explained to him that as much as I'd like to give him a price, his question was like asking a builder how much it would cost to build a house. How many rooms,........what materials.....


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Milton HockmanRe: billing question
by on Mar 19, 2010 at 5:06:14 pm

Glad you brought this up. As freelancers and relatively new studios it can be hard to establish a per hour or per finished minute rate. Whatever's easier for the client to say yes to is better right?

A lot of people like "per finished minute" because its easy and good rough estimate for client to budget project on. Clients always ask me "how much will it cost, give me a ballpark" and per minute seems easiest in this situation.

These same people think that going by "per hour" could scare a client since they think you're counting the minutes, could make unnecessary revisions, and don't want to pay for those hours.

However, billing hourly but making it seem like per minute is best way to go. Just think to yourself, how many hours could I do this in...times it by your hourly rate...and says its per finished minute. Get what I mean? 10 hours x 100/hr = 1000.

Here's a situation you'll find yourself in if you don't approach it the right way. Recently, my employer was asked by another internal employee how much a :30 second commercial would be for an upcoming conference we put on. One of our team members (who only works on corporate videos) sent her an email saying we charge $1,000 per finished minute.

After several weeks the client calls and is gung ho on getting it done. They already mapped out there idea for the spot, all excited, wrote a script etc.

We had a meeting, got their ideas (which was a CAD like drawing that turns into real life situations and follows an article throughout its journey...which we've seen on tv a lot.) When it came down to budget questions, we asked what they had in mind...guess what they said..."Your employee said it would only cost us $1,000 for a :30 to :60 spot!

Crazy huh? They want tons of animation work put into this thing for only a grand????

See how per finished minute quotes can get you in trouble? Unless you have all the facts...



Freelancer Designer Virginia
Find out more about me, see my portfolio, and read my blog

Web, Video, Graphic Design Info Blog
My blog updated weekly with industry tips, tricks, and news


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