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How much should I charge for commercial license?

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Marcus MarottoHow much should I charge for commercial license?
by on Aug 22, 2013 at 4:13:35 pm

Hello,

I know there are a few posts similar to this, but I'm in a somewhat unique situation.

I have a production company that is working on a project for a large company that is interested in using some of my footage for an in-store demo unit. I have unique footage that they can't get anywhere else and they want to put up a display in 5 flagship stores across the country. They are asking for 2 segments of footage between 1-2 minutes long.

This footage is fairly expensive to produce, and as I said, they can't get it anywhere else. They are looking for a license for anywhere from 1-5 years.

Does anyone have any suggestions as to what I should charge the production house?

Thank you,


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Todd TerryRe: How much should I charge for commercial license?
by on Aug 22, 2013 at 5:04:47 pm

Would love to be helpful, but it's really impossible to say given the info we know. You know your footage and your client, we don't.

Is the client a mom-n-pop privately owned company (even with multiple stores)? Or is a Fortune 100 company worth billions? Knowing that would help.

And you say it's "unique footage that they can't get anywhere else"... is that really true (such as documentation footage of a one-time real life event)? Or is it just that it would be prohibitively expensive for them to re-create? If one could re-create this footage, what would it cost? A thousand dollars? Ten thousand? A million? We don't know what it is, so can't guess at that.

Is this a continuing client that you have and want to maintain a relationship with?... or one you just want to get as much cash out of as you can for a one-time deal?

And lastly how valuable and important does the client think the footage is, and how crucial is it for the message they are trying to get across? Deeper pockets will usually get you more for the footage, but even then there is a stopping point. If, say, Richard Branson needed the footage he could afford any price. But would he? There would get to a point where even he would just say "Nah, it's not worth that" and do something else. That's the hardest part to judge.

I realize this is a complete non-answer... but knowing some of those unknowns might help you figure out a decent and fair rate.

T2

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



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Marcus MarottoRe: How much should I charge for commercial license?
by on Aug 22, 2013 at 6:03:08 pm

Hi Todd,

The client is in the Fortune 100, one of the top 20.

It would be possible to recreate our footage with lots of time and money. We spent 6 years developing the process and finding the best equipment to use. However, the client is looking to get this done within 60 days and while it is possible to get similar footage elsewhere, it would not be anywhere near our quality. I would say that what the production house is looking for costs us somewhere around $10,000 to produce.

This would be a one-time deal. We haven't looked to use our footage anywhere else so far, although it has always been something that we thought we might do in the future.

Lastly, I believe that for the usage they are looking for, there is no other option that would be adequate and that changing to something else in the short time window they have is not a very good option for them.

I don't want to price this out of the possibility, but I would like to use this transaction to show my company that trying to license our content to outside productions would be a lucrative idea.

Thanks for your help.

Here's an example of our footage.


Update: I did a search on Getty and the closest thing I could find would cost $1700. Bear in mind that this was not even close to the quality of my footage, but it was for up to 10 years.


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Todd TerryRe: How much should I charge for commercial license?
by on Aug 22, 2013 at 7:14:53 pm

You have very pretty Steadi footage.

I guess the key would be, whether the client has to have your footage, or can they do with any scenic Steadicam footage. If they need yours specifically, you're in a much better position, obviously.

Not knowing any more about the client or what they want/need to do exactly, and just blindly pulling a number out of my ear... the first figure that comes to mind is $2K a year. That way, since it cost you $10K to produce, then the client has basically subsidized the production by the end of their five-year license... and you can sell or license the footage otherwise in the meantime (not an exclusive license to them, obviously).

That's just one number that comes to mind. If you were to go much higher than that I think they might look elsewhere, if their particular project is not contingent on having your exact footage.

T2

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



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Marcus MarottoRe: How much should I charge for commercial license?
by on Aug 22, 2013 at 7:22:45 pm

Todd,

Thanks for the feedback. They are actually going to be putting this in front of a treadmill and use it as a demo for some of their products so customers can experience what they're selling.

$2K was actually the number we were throwing around for one year, and I figured we'd discount it to maybe $5K for the full 5-years.

Thanks again, I'm glad to hear that I'm not totally off base so far.

(BTW, you should check out some of our runs, I think you might be impressed.)


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Bill DavisRe: How much should I charge for commercial license?
by on Aug 22, 2013 at 7:48:48 pm

You might call the folks who've been selling the TreadmillVR app for the past year or so and see if they'd chat with you about footage value and what they would consider fair.

They have similar footage in a commercial product that's already out there - not as nice, but similar.

Know someone who teaches video editing in elementary school, high school or college? Tell them to check out http://www.StartEditingNow.com - video editing curriculum complete with licensed practice content.


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Todd TerryRe: How much should I charge for commercial license?
by on Aug 22, 2013 at 9:06:59 pm

Maybe I should get this for my own place.

I have a pretty nice treadmill and I love it... if you plan well and use the side rails too I've found it will hold something like forty shirts.

T2

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



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Mark SuszkoRe: How much should I charge for commercial license?
by on Aug 22, 2013 at 10:13:15 pm

(rimshot) Todd, everybody, he'll be here all week...

This footage is lovely, but not impossible to re-capture. So I wouldn't as a ridiculous amount. If the $2k a year sounds good to you, go for it. I would try to price it so that it would be a third less than what it would cost the company to go out and re-shoot. Beware just how "exclusive" the use is: are they going to sub-rent it to others, or just use it in the treadmill product? Do YOU get to re-sell it anywhere that doesn't compete, or is this footage going to be essentially "locked away" in the client's hands for 5 years and you can't do another thing with it? Not even show it in your online portfolio? The more exclusive and longer the ownership, the more you should charge.


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Joseph W. BourkeRe: How much should I charge for commercial license?
by on Aug 25, 2013 at 10:02:41 pm

Marcus -

Bear in mind that there is some competition out there in the form of an app which does something similar to what you're client would be doing, but on an iPad (which may be the track your client is taking as well):

http://www.balita.com/new-app-gives-treadmill-joggers-virtual-scenic-runs/

You may have already run across this, of course, and it may or may not effect the price you agree upon.

Joe Bourke
Owner/Creative Director
Bourke Media
http://www.bourkemedia.com


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