Making a video for a client who plans on using it to sell (commercial use)
Hey, I was wondering if someone could school me on this situation, I spent the last hour or so trying to google my situation and I can't find anything solid, here we go.
I have a client/friend. I make him videos to promote himself, bunch of tip videos etc. But later on we made a "digital product" video and filming editing title etc etc he turns around and sells this as a training video for 5 grand a pop but I did the video for 1k..
after I realize how much he was charging and he did get a good amount of people to (well companies to buy) the video to use to train their staff etc. for some reason I felt weird that he can use my work I made and profit so much off of it. So I brought it up to his attention that hey I had no idea you were charging people for the video I made you and if I knew I would of asked for more. we had a fall out over this.
6 months later or so we got back to work and I did a small project for him and again he used it and sold it for $300 per person paid me $200 again I said hey man I think I need to be charging you a commercial license fee or something. He then says "oh I don't know if I am going to make any money form this or not so..."
I was not happy about that here we about to go again 6 month later he wants to do a BIG digital project. and this time around I am telling him upfront about the fact you are selling the videos i made you but paying me peanuts.
can someone explain how I can word it to him? am I even right for thinking this way? Do I have a right to charge him a "commercial use" fee ? what should I charge in this situation? $200 $500? $1000 on top of the cost to make the video.
either that or I will just not mention the fee but increase my rate to do all the work and "hide the cost"
Hoping someone can see where I am coming from. I look at it like a photographer took a photo and then the person is selling the photo, I am sure the photographer charged a commercial use fee or something.
I apologize for any grammar errors etc.
You are getting paid under the system known as "work for hire". That means, you get paid for the initial work you did, but nothing further; the guy that paid you has bought the use of it from you for the one-time fee. That's kind of standard except where there is a different agreement in a written contract. Without a written contract, Work for Hire is the default a judge would decide in the USA.
Whatever it is you want out of these projects, if you want a continuing piece of his action when he sells the finished products, then you need to write up a contract for that, specifying the percentages and amounts and the payment schedule, etc. This situation of yous is very similar to my first business deal in video marketing: We made a video on how to cook deep dish pizzas from scratch, from a kit of ingredients supplied by my customer. The customer sold the video along with the kits to restaurants that wanted to get into the deep dish pizza business. We took a small amount up front, with a contract that said we'd get a percentage of each unit sold. What I didn't find out until later was that the client was making and selling more copies of the tape without telling us about it or giving us out cut. It got ugly, we had to go to small claims where we won and cleaned out his bank accounts to make up the shortfall.
The only reason we won though was that we had it in writing, exactly how the deal was structured, and we had proof the contract was real because some money had already been exchanged and was traceable. Contracts, to be valid must pass three tests, and that money changing hands, called "consideration" is a major test of if a contract is valid or not. It doesn't need to be a lot of money. This is why you see scenes in movies and TV of a lawyer asking the guy for a dollar to make the contract "binding". Sometimes, a dad will sell his kid the family car, again, for a dollar, to make it a valid transaction legally.
Getting back on track with YOUR situation, you could estimate the most that this guy will make, and base your one-time fee up front off of that - it makes for a clean transaction and little work afterwards. But you may guess wrong.
I don't know what your faith tradition is, if any, but I'm partial in these instances to point to the Gospel of Matthew, ch 20 verses 1-16. It's the story of the vinyard owner who hires some workers to harvest the grapes in the morning for an agreed wage, (work for hire) then hires more people later in the day. The Owner, at days' end, pays everyone the same wage, regardless of time put in, and this outrages the guys that worked all day who see the ones that worked only an hour at day's end got a sweet deal. The owner asks the upset guys: "Did you get exactly what we agreed?" They admit yes, they did. "Then", says the owner: "How and how much I pay the other people is my business, not yours." There are about twenty layers to this parable that refer to all manner of issues, (specifically, that God's redemption was for everyone, not just the Hebrews) but some days, I just like to look at that surface story and point out that getting upset that someone else got a great deal, when you were yourself treated fairly, is just jealously and not righteous.
Make the squarest deal you can with this partner, get it in writing, prove thru check writing and cashing that there was consideration of any amount you want, just to make it legal. The contract or deal memo should detail what will happen when, how much goes where and to whom, and how the deal can be broken or ended, and who owns what when that happens. Tell him it protects you both and avoids messy arguments when the rules are written in advance of the game.
What Mark said... he gave you good advice... take it to heart.
I for one am pretty dumbfounded that someone could spend only $1000 for production on a DVD and then manage to sell multiple copies of it for five grand each.
Fantastic Plastic Entertainment, Inc.
What about Luke 16:1-13?
Luke 16 is more about salesmanship:-)
Mark has given you outstanding advice. The only thing I might add s to always discuss the specifics ahead of time( which includes the goals of the project and the uses of the video. Then create an agreement that details every item. This is just as critical to do with friends and family as it is with clients.
At the end of the day, your friend has every right to do what he wishes with the video. He also has every right to charge what he feels he can get. You have the same right to charge what you feel is adequate.
If you want to make an agreement that includes a percentage of profit for each video sold, both of you can discuss this and reach some sort of agreement.
But really, you have no control over what your friend does with the video. As Mark so eloquently said, you are part of a work for hire project. Your friend has every right to refuse any type of percentage payoff.
I have a client who manufactures and sells devices for $5,000. I charge him less than that for a video. I never ask for more than the cost f the video project.
Maybe you're not charging enough for your service. Maybe you're friend is a great salesperson! Either way, since you're friends, it can't hurt to ask. Then decide if you still want the work or not.
Greg Ball, President
Ball Media Innovations, Inc.
I understand where you're coming from. Unless there is a contract stipulating the work is work for hire, then you are still the copyright holder. In the US, this not a criminal offense. That presents a few dilemmas for you. I cannot think of any instances where that result in you collecting additional money without spending quite a bit on lawyers to sue him.
My question for you is: why do you still work with him even though he makes you feel bad.
Increasing your fee sounds like a good solution, but it might make him upset.
In conclusion, you have another issue looming. Let's suppose you increase the fees and he declines the fees and goes somewhere else. Then he says he wants the footage because it belongs to him and he will give it to the new editor. He will post here in 6 months asking the same general questions. We will respond generally as we are here: what does the contract say? If it does not stipulate work for hire, then the photographer owns the footage. If it stipulates work for hire, then he'll need to get a lawyer and sue you. That's expensive.
What does the contract say?
PS "Paying you peanuts" by the way is only in comparison to his mark up. Honestly, you're lucky to find a good salesman. Sales always gets paid more than the rest of us. They have a harder job, honestly. Marketing yourself means you can say your work generated revenue for that guy and so new clients should hire you because they will make money too from your awesome videos. That way you can grow your business. You should consider asking this guy to write you a review that you can post on your website about how awesome your videos are and how much money they made him.
Thanks for all the responses. Sorry for the late reply. It comes down to this. I made him these videos charged him 1k he turned around and sold my work as a digital product (training material) and charged 5k even if he only sold 1, he is laughing. I just was wondering if I had the right to feel my way, and there seems to be am mix, some say, oh you're just a work for hire everything is his he can do what he wants with it, while others says something else more in line how I was feeling.
I don't want a percentage of what he sells. that would be hard to prove anyway, he could just b.s the numbers, So I made my decision., I will just include in my rate a licensing fee to keep me from getting upset. The problem is this. I mentioned this when we did a smaller project and he paid me $350 for the whole mini digital product and was selling it for 450 or something like that. When I said hey, you can't do that to me you need to pay me more if you are selling as a digital product. He says , well it's a risk on my end I can end up not selling anything and take a loss.
to the person saying it may be great to have this guy which can lead to work, yeah right, I have been working with him over 2.5 years and all this initially started from, you get me clients you don't pay full rate etc, He got me 1 client in 2.5 years. A lot of , oh you're going to get so much business from me blah blah. Nothing. 1 client which actually end up in a cancellation due to some other b.s
I am feeling like he is taking advantage of me, such as sales guys do. No more friend prices. This was all friend prices no contracts etc. I don't even want to work with him anymore after i type all this out and realize and feel this way so, I probably won't unless he pays me exactly what I want and I am satisfied. No more hook up.
Thanks for reading. I apologize for my grammar errors.
If you're going to succeed in this, you have to let go this obsession about what he does with what you've sold him, and how much he will make. I once worked on a video for a law suit that gained a then record 20-million-dollar settlement. I never even considered that they should give me a "taste" of that win, though I made an intrinsic contribution to the video that helped win the case. That's just not how it works. You want more profit participation, you don't want to be work for hire, fine... but you're asking for a lot more work too, because your partner is the marketing/hustling/deal-making arm of the arrangement.
You wanna be happy in a video career? Stay in creative, leave sales to the salesmen.
You wanna be wealthy from a video career? Leave the Creatives to their work and get out there and SELL it.
yeah I don't know about that answer, But thanks for chiming in.
your situation is no where near my situation. I only found out later he was selling the videos as a digital training product for 5k. I gave him a break to help him out cause I thought it was just for personal promo use. Anyway I learned from this. and won't let a situation like that happen again.