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Training videos billing

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Jarrod CecilTraining videos billing
by on Apr 18, 2012 at 6:22:09 pm

I've seen various rates for training videos, but I thought I'd come here first for advice. The project is finished and I invested 13 hours of in-office screen capture and VO recording of their software running on virtual machines. Over 10 videos, I spent 25 hours editing them together with VO/EFX and BG music. I also spent another 5 hours transcoding and uploading said videos for their distribution.
I'm just not sure about rates bc I've never done this scope of project before. I work in the Metro Atlanta area and the client was a theater company with point of sale and back office terminals. They were very happy with the finished product. Any help is greatly appreciated.


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Todd TerryRe: Training videos billing
by on Apr 18, 2012 at 11:45:45 pm

Wait a sec... maybe I'm missing or misreading something, but are you asking how much to bill a client for a job that you've already completed for them??

Was your rate or the price for the job not discussed before you took the gig?

Seems to me that begs two different questions: 1) What kind of client would ever ask for so much work to be done for them without asking what it would cost? and 2) Who would ever do (and complete) a fairly sizable job like that without knowing how much they would be paid?

As I said, maybe I'm misreading that. I hope so.

Nonetheless, sounds like the cost would be just whatever your usual production rates for the location work at their place and the in-house post production at your place would be, times the hours. Just based on those rough numbers, that gig in our shop would be just a shade over $10K. Not including any music or other managed rights, if applicable.

T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com



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Sam CornelisRe: Training videos billing
by on Apr 19, 2012 at 4:56:32 pm

10k for a screencapture job that takes 43 hrs ?
Wow, I am way too cheap.
Hm

- I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.


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Todd TerryRe: Training videos billing
by on Apr 20, 2012 at 2:22:02 am

Well the vast majority of that is editing and VFX work.

T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com



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Sam CornelisRe: Training videos billing
by on Apr 20, 2012 at 7:24:08 am

Still ... 230$/hr ... seems a lot to me. No, let me rephrase that: I would be very happy if I find clients that pay me that rate for this kind of job.
If I understood it correctly, it is about screencapturing, maybe adding titles and do some voice overs. All of this is basic camtasia/captivate- or something alike - stuff. I don't see much VFX here.

Of course, I completely agree with you: the rate should be agreed before starting the job.

- I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.


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Tom SeftonRe: Training videos billing
by on Apr 20, 2012 at 10:17:29 am

Undercharging is the best way to find yourself bankrupt...

Next time agree an hourly fee and keep a timecard, or agree a fee for the job. The absolute MINIMUM you want to charge for an hourly rate for doing this job is $100...


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Mark SuszkoRe: Training videos billing
by on Apr 20, 2012 at 2:07:25 pm

Instead of more piling-on, I'd like to bring up the related topic here of when or if you decide to charge a lower rate for the more "passive" work of digitizing or supervising a render. Do you charge full rate for sitting there watching a progress bar, same as for actual editing work?

From a facilites costs perspective, the machines are tied up either way so no, you should apply the same rate to everything and charge by time.

From a human capital perspective, it may be a grayer question. Babysitting a render, you have some limited ability to work on other things, like paperwork, or perusing the COW forums, but you're still more or less chained to the suite.


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Todd TerryRe: Training videos billing
by on Apr 20, 2012 at 2:37:35 pm

[Mark Suszko] "when or if you decide to charge a lower rate for the more "passive" work of digitizing or supervising a render."


Well just to spell things out a bit about how we do things in our shop...

Firstly, we don't charge as much for simple rendering. We had a commercial job recently that had a lot of Cinema 4D work in it, and because the 3D models were pretty render-intensive (they were a lot of glass and chrome), the render on that job was more than 60 hours for a :30 commercial. We didn't charge our full rate for that, as the machines mostly chugged on that all by themselves 24 hours a day until it was done.

Most everything else that is done in house here has the same rate.... if it uses an edit suite and editor. It could be simple screen captures, a little cuts-only video, or a big production with tons of complex compositing, editing, and graphics production. It's all the same, because it uses (and ties up) the same hardware and personnel. I know a lot of people in here don't like to discuss their personal rates (and that's fine, I understand that), but I don't mind... here a suite and editor is $225/hr for any of that stuff. And we're one of the cheaper games in town for high-end work.

The same is almost true for location shooting. We generally have a set rate for that which includes all crew and toys we normally travel with. Sometimes that gets kicked up a notch, if we are doing something special that requires additional crew members we usually wouldn't bring, or say I have to rent a few extra HMIs or an extra section of dolly track or a special lens we don't own... then that would get tacked on. We don't charge extra on a shoot if a scene requires a jib shot or an exterior would benefit from an HMI for a little more kick... because we always travel with that gear. Conversely, if we don't use it, the rate doesn't go down either. Of course things like props, makeup, talent, location fees and all that are the "extras" but the basic crew/gear costs are the same. We have a "floor" rate for location shooting ($300/hr) that's the starting point.

We did this just to make it simpler for budgeting and for clients' billing. The other company here in town that is most similar to us does things exactly the opposite. Hire them for a shoot and you'll get an invoice as long as your arm detailing every little thing... even how much gaffer tape was used. That's not an exaggeration. That's fine, it works for them... but I prefer (and my clients prefer) getting a simple little easy-to-understand invoice they don't have to wade through.

There's different ways to do it... whatever works for ya.

T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com



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Sam CornelisRe: Training videos billing
by on Apr 20, 2012 at 3:40:57 pm

I have been thinking about this a lot lately, as should everyone do if you take yourself seriously.

In every discussion about rates, most people don't talk about how much time it takes to complete something, neither do they talk about the creative talent. If you are a video magician who can do spectacular stuff that everyone loves in the blink of an eye, twice as fast as anyone else and you charge only by the hour - you would make only half as much as the regular ones with the same rate. That's no real reward for your talent.

The magician could double his rate, but as people mostly compare offers based on the hourly rate, this is not a very commercial approach.

So what can he do ?
He can get as many jobs as possible to fill his agenda, then he makes more money. But as you all know, it is not that easy to mentally switch between too many different creative jobs in a day.

He can make an estimation about how many hours it will take - this estimated amount of hours is about the same as his competitors, and charge by the project in stead of charging by the hour. In this case, he always has to check back how much he actually made (or lost) by the hour, to make more realistic quotations in the future.

It is a little bit dangerous, but he can build in safety nets in his offer for unexpected stuff.

Actually, a lot of thoughts, but I don't have a real answer. How do you guys deal with the amount of hours needed to complete something, as this is a significant factor in the price the customer has to pay?

On last thing ... it is a very different situation if you are not a freelancer, but work in a company with personnel. In that case there is a good knowledge in the company about how long it takes on average to complete a typical job. So an hourly rate with a good time registration will do. The boss can put the magician on jobs where he can make the most profit out of him. And the magician, he should negociate a good wage.

Sam

- I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.


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Todd TerryRe: Training videos billing
by on Apr 20, 2012 at 3:54:05 pm

[Sam Cornelis] "How do you guys deal with the amount of hours needed to complete something, as this is a significant factor in the price the customer has to pay?"

Well yes, the hours it will take to do a job are the single biggest cost-determining factor here.

We have hourly rates for everything... as I mentioned above the main rates are for location shooting and for any post work that happens in one of our editing suites. But we also have rates for general admin/pre-production work, casting, writing, consult meetings, location scouting, set construction, prop acquisition, and several other things like that.

We are not huge, just five people including me (and two of those are as-needed contractors), so we know pretty well what everyone can and can't do, what the strengths and weaknesses are, and can generally guess pretty closely how long a job will take and what resources it will involve.

After that, it's relatively easy math to determine the budget needed for a job.

T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com



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Sam CornelisRe: Training videos billing
by on Apr 20, 2012 at 4:18:22 pm

Well, yeah, that is how you calculate or make an estimation of the costs.
But the question is, what do you do if you get better over time.

Let me get back to the initial question in this thread: making training videos with screencaptures. This first job took 43 hrs. Suppose he starts doing this kind of job on a daily basis. It could be possible that he can achieve the same result in 20 hrs after doing this for a year.

What should he do then: lower the price for this project ? That wouldn't be fair for the gained experience, and the customer will likely find it strange that he had to pay double a year ago.

Now, what I do in such a case: I deliver a better project. I use the extra hours to make something extra, like an extra animation or more spectacular titles. The customer gets a better project for the same price, it may even give you a reason to ask more for the project and most important: it is more fun to do.

Delivering more for the same price puts you ahead for the competition, but then they say: you are undercharging ... and then we're back to the beginning ...

It is not that simple as it sounds.

sam

- I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.


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Todd TerryRe: Training videos billing
by on Apr 20, 2012 at 6:42:13 pm

Well, usually the people who are better and faster at something charge more per hour.

I know our rates today are substantially higher for the work we do than they were when I started out as a one-person company in my house 15 years ago. Our results are much better now as our skill levels, facility, and personnel have increased (and they're faster, too), and as we have collected many more production toys.... but we charge a heckuva lot more for it now.

But you're right, you don't want to price yourself out of profit because you get so good and fast at delivering something that your hourly rate now means you are making no money. That's when it's time to re-think what you are charging.

There's the old axiom that if your company is always (or most always) fully booked, then it's time to double your rates. You will immediately lose 40% of your clients... but in the end you will work less but make more. I'm not sure if anyone has actually tried the instant 200% rate hike or not... I think that's more of a theory than something many people are brave enough to try. Then again, our own rates have gone up about 250% since we first started. We still try to be a bargain though and give people more than they pay for... with rates lower than our clients can get at other higher-end post houses in the region.

T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com



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Sam CornelisRe: Training videos billing
by on Apr 20, 2012 at 7:06:04 pm

Thanks for sharing that Todd, that's interesting to know.
How did you raise your rates? Was it only for new customers, or for the existing ones as well ? If so, any tips about how to communicate that are welcome.

Actually, we are drifting to a topic about which you don't find much information on the forums. There are a lot of posts that deal with beginner's questions, but not so many that deal with growth.

For instance: raising rates vs. loosing customers, hiring the first employee vs. collaborating with other freelancers. You can find all information about the legal and HR consequences (eg accountants are a good startes) - but how do you deal with that in your business. For me there are 3 mayor concerns at this time (I guess you already figured out the phase I am in right now):

1. Working freelance = focus on what you like the most: be creative and being able to take whatever may come and looks interesting. Being responsible only for yourself and your family.
2. Growing into a bigger company = great part of your time dealing with personnel stuff, being responsible for other peoples job (is also a good thing: you create jobs), on the plus side: more continuity and maybe bigger projects.
3. Growing = bigger overhead cost, so you have to raise your rates.

Any thoughts about this are welcome,

Sam

- I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.


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Todd TerryRe: Training videos billing
by on Apr 20, 2012 at 7:52:39 pm

[Sam Cornelis] "How did you raise your rates? Was it only for new customers, or for the existing ones as well ?"

Well we never did a huge rate hike all at one time... our present rates are the result of several gradual hikes through the last decade and a half.

When we knew a rate increase was needed, that was immediately applicable for all new clients. We had some long-term existing clients that we told that we had new rates, but that since they were such good clients we would be happy to keep working for them at the present rate for a certain period (like the next six months or so).

That helped soften the blow for them, and maybe even feel like they were getting a bit of special treatment.

I think we ever only lost one client due to a rate increase... and frankly it was one that we were glad to see go. They were doing the very lowest-of-the-low end production, paying a pittance and expecting work of far far greater value than they were getting charged for. I haven't missed them a bit. Everyone else has stuck with us.

The only time anyone has even raised any eyebrows is a couple of times when a client we had worked for only once or twice many years before came back with a request for a new job that was similar to their old one, only to find that it was now going to cost them twice as much, or more. They still booked the jobs, though.

T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com



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Sam CornelisRe: Training videos billing
by on Apr 20, 2012 at 7:54:34 pm

Thanks, that's very helpful.
Sam

- I have read the entire internet, and I am feeling a little bit bored, so I started to reply to interesting forum topics.


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Steve MartinRe: Training videos billing
by on Apr 21, 2012 at 12:34:15 pm

Lots of very good info on this post... and i agree with most of it. I'll a few additional thoughts (not entirely on topic, but close) in case some might find it helpful.

Like others here, we're a small shop (6 people including me) and we've been in business for over 20 years. So when we do a good job of determining the scope of work (SOW) before hand, we can usually estimate how long something will take within about 10%.

One of the tool we use is Quick Books for estimating. For everything we do and every piece of equipment we have, there's an "item code" with a client friendly description and a unit price. So for example, an AF-100 camera package w/Manual Nikon Primes is $500/day. An ARRI Fresnel Combo kit is $75/day and so one. We have about 150 different item codes in all broken down into categories: pre-pro & creative development, equipment, crew, post production and expendables.

On the estimate, we simply select items codes & quantities and we generate a reasonable accurate estimate. In many (most) cases, we send the estimate to the client in a "blind" format - it strips out all the unit prices and quantities and only prints the a description for each line item along with the total cost at the bottom of the estimate. So while we see all the details on the screen, on the client print out (or PDF) it just looks like a detailed outline of the project and a flat fee.

At the top of the estimate, we write a custom paragraph project description (SOW) that out lines the deliverable(s) and production variables (i.e based on a 2 day shoot at such-and-such location with a post production that includes xyz revision cycles and a yada yada yada... This helps eliminate a common client thought that the project is an all-you-can-eat approach to our time and resources. If the they start pushing past the SOW, we gently (or not so gently in some cases) remind them that while "we can certainly do that for you" it's not included in the SOW that we all agreed to and will cost $x.

Like I mentioned, this is a bit off topic, but this approach has worked pretty well for us over the years.

Production is fun - but lets not forget: Nobody ever died on the video table!


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