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Not sure how to proceed

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Mitch GoodwineNot sure how to proceed
by on Feb 9, 2013 at 7:57:09 pm

Hey all.

So I've got an interesting issue on my hands.. Been working post for a while now and I've recently started my own thing outside of my day job. The first job I got was doing some work on a feature, basically edit prep (ingest, sync, logging.) I submitted a bid for the work and they accepted, paid in advance. During the job I was asked for some extra work (sample scenes, etc.) which I did. Then after getting halfway through setting up the project in Premiere they asked me to set it up in Avid as well since they were still unsure of where the actual post production was taking place. I started the Avid portion (since certain rented equipment was needed to ingest the raw data) and am now about to complete the Premiere version. Also, in the bid were costs of equipment that needed purchased and rented in order to complete the work, also paid in advance.

So, my questions are:

Who owns the equipment purchased for the job?
Since there are some additional costs for shipping and rental, do I bill them for this?
Should I finish the Avid job or invoice for that before completing?

I was planning on sending the drive with the work on it that was paid for and sending them an invoice to complete the Avid work. I am just unsure of the professional thing to do, if they ask for the equipment and I don't send it am I in the wrong? I've got more work into it than the cost of the gear..

Thanks for any advice.


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Nick GriffinRe: Not sure how to proceed
by on Feb 9, 2013 at 9:23:35 pm

The best arrangements are the ones made up front and in writing. Everybody knows about everything -- how much work / the nature of the work; the best estimate for labor based on those two things; and all predictable cost items including rental, purchases and consumables. When that changes mid-stream you document with a "change order" or at least a memo of understanding. That part is not rocket science, just good business. (And it's not likely that I'm saying anything you don't already know.)

As to who owns the purchased gear, that too should have been covered, but in the absence of any agreement on that let me offer another thought. The movie business as a whole doesn't like to own stuff. That's why, with the exception of large studios, nearly every cost item in a movie's budget is an expense (i.e.- rental) not an asset (purchased property). And, as I understand the business, even with the items the studios own like fully lit sound stages these are rented to individual productions so they are part of that project's budget as an expense, not an asset.

It's probably best if you offer them anything for which they've paid, but, if their structure is that of the traditional movie accounting model, more likely these asset items are not something they would want.

Perhaps what makes sense is for you to offer to absorb these items -- at their DEPRECIATED value -- in lieu of some of the overage it sounds like you are owed.

My two cents, anyway. Let's see what others have to say.

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Mitch GoodwineRe: Not sure how to proceed
by on Feb 9, 2013 at 9:36:53 pm

That is good advice. And the change order is something I will be applying from here on out for sure. I'm learning as I'm going and I am not really foreseeing any major complications but I like having some 'just in case' scenarios ready to go.

I'm planning on sending the material completed along with an invoice for costs of additional work completed and an estimate to complete the additional edit prep. I can also include the depreciated value of the assets aquired and state that these can be accepted in lieu of payment.

Also; this isn't a studio or anything that I'm dealing with, it is the first indie film of a couple guys. The costs of post weren't planned out and from what I can tell they were very unprepared with the pricing of post services. I tried to help the best I could, as I'm sure everyone understands explaining costs of the intricate steps involved is not always conveyed easily..


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Mark SuszkoRe: Not sure how to proceed
by on Feb 11, 2013 at 3:31:51 pm

This is tricky. They contracted for the loading in and setup of the footage into Premiere and Avid files and projects. My gut says you were supposed to figure the costs of the drives into the jobs, and you should bill extra for the extra Avid work not originally requested. They paid you for loading up and organizing those drives, they get the drives, and what's on them.

Your rental costs should have been passed on to the client. You don't break out that cost, you add it into your overall rate calculation.

The equipment purchase? I dunno what equipment, but let's say it was something like a video breakout box or hardware encoder. Then probably that comes out of your end, and if you were smart, you billed enough to cover owning that, once the job is done. Or you'll bill enough the next time or two to finish covering owning that.

On the upside, you will know much better how to detail these expenses and who pays for what, going forward. Be glad you didn't totally go broke on your first deal; any losses, chalk it up to tuition in Life's Business School.

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