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Old February 24th, 2011, 02:06 AM   #1
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pricing help. two 7 minute product promo videos

I have a customer who wants 2 videos about 7 minutes in length each, that show their products. That they can have play on a dvd in there store, and hand out to customers.

I would be doing this by myself, shot in HD, using a glidecam. the person would walk around and talk about certain products, and I would put graphics and video over certain parts.

Any ideas on pricing? i was thinking 800.00 total, 400 each.

thanks!
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Old February 24th, 2011, 04:58 AM   #2
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re: pricing help. two 7 minute product promo videos

Dave, these are hard questions to answer. First the market is different in every area of the country. Second, how much is your time worth. Thirdly having done product shoots, it's NEVER as cut and dry as it seems. I did one last year that was supposed to be a "simple" explaination of a how to, total running time, 2 minutes. Total shooting time, 1 hour and 30 minutes. The talent just couldn't get the words right. Never mind I had a prompter running, then of course the talent got flustered and we had to take a few short breaks, all the time the lights running and the big eye of the camera staring at her and her getting more and more nervous. Made for an interesting morning.
Anyway, what I'm trying to get at is that little 7 minute video might take 4 hours (or more) to shoot, depends on the talent and how many set ups among other things. Could take a half day or more to edit into final form, how many copies need to be made, how long will that take?

Sorry I can't give you a direct answer but there are just too many variables. If you think your number is the right number than go with it. I'm not saying it isn't I'm just hesitant to throw out a number since I don't have all the details of the job nor do I know your marketplace.
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Old February 24th, 2011, 11:34 AM   #3
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re: pricing help. two 7 minute product promo videos

Adding a note to Don's comments, $400 each is incredibly low. A traditional ballpark estimate often quoted is $1000 per finished screen minute. Figure the value of all your time including prep time, rehersals, etc, the depreciation of your equipment, allowance for equipment repairs, insurance, commuting, etc etc ... it adds up to rather large numbers.
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Old February 24th, 2011, 12:30 PM   #4
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re: pricing help. two 7 minute product promo videos

What you're hearing here is that you have to make a decision.

Are you doing video for fun - merely because you enjoy the process? If so, then charge as little as possible and you'll attract more projects.

But don't pretend for even a second that that's a sustainable BUSINESS model that will actually EVER make you anything more than pin money to use for new toys or to use for fun.

If you want to establish a video BUSINESS, you MUST learn how to price your goods and services properly. This information is often available at very low cost or free from your local Small Business Association classes. Yeah, 50% of the information is BS that largely applies to other, more traditional types of service firms - but the remaining 50% of the info will form the foundation for your thinking about how to make YOUR charges work over the long haul.

Remember, pricing formulas have been in place since the dawn of business. Anyone planning to sustain a business ignores these CENTURIES of experience at their peril.

Good luck.
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Old February 24th, 2011, 12:41 PM   #5
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re: pricing help. two 7 minute product promo videos

Quote:
Originally Posted by Steve House View Post
A traditional ballpark estimate often quoted is $1000 per finished screen minute.
Wow, thank for that bit Steve. It's actually about what I've been coming up with lately when breaking down all the costs into various line items. As you noted, it does depend on how much upfront creative work I have to do with the client but it's nice to know that my estimates have been in the right ballpark. Always good to have a reality check now and then.

Cheers,
Garrett
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Old February 24th, 2011, 04:52 PM   #6
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re: pricing help. two 7 minute product promo videos

Quote:
Originally Posted by Bill Davis View Post
What you're hearing here is that you have to make a decision.

Are you doing video for fun - merely because you enjoy the process? If so, then charge as little as possible and you'll attract more projects.

But don't pretend for even a second that that's a sustainable BUSINESS model that will actually EVER make you anything more than pin money to use for new toys or to use for fun.

If you want to establish a video BUSINESS, you MUST learn how to price your goods and services properly. This information is often available at very low cost or free from your local Small Business Association classes. Yeah, 50% of the information is BS that largely applies to other, more traditional types of service firms - but the remaining 50% of the info will form the foundation for your thinking about how to make YOUR charges work over the long haul.

Remember, pricing formulas have been in place since the dawn of business. Anyone planning to sustain a business ignores these CENTURIES of experience at their peril.

Good luck.
Good info. thank you. Yes I want it to be an actual business. Considering I would charge at least 600 for a 30 second commercial 400 is way to low.
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Old February 24th, 2011, 04:53 PM   #7
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re: pricing help. two 7 minute product promo videos

I often feel like if i say a higher price the client might think I am taking advantage of them, when I really am not.

Any thoughts on how to reassure the client that the price you quote is reasonable?
I am thinking if I list out everything and tell them what the cost is going to would be good, instead of just flat out saying 1500 or whatever the price may be.

thoughts?

thanks!
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Old February 24th, 2011, 06:59 PM   #8
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re: pricing help. two 7 minute product promo videos

When I deal with a corporate client I carry 2 things. A legal pad and a pen. As we talk about the project (I ask lots of questions) I write everything down.
For instance; preproduction; am I writing the script? Am I setting it for teleprompter? Am I coming up with the ideas or is the client (usually a collaboration). when they say "oh it's a just a 5 minute video", I know it's going to probably take at least an hour with non pro talent, I have to light it, set up the audio, probably (not probably) make changes to the script and shot list on the fly, maybe setup green screen, change setups maybe more than once, then edit, probably at least 1 change during that process, usually 2 or 3 since the client doesn't know what they want until they either see it and it slaps them OR I TELL them this is what you told me you wanted. Then of course I have to author the final DVD if that's the delivery system or convert it to the format of choice for the web.
By writing it all down first I don't forget and second when I give them a number which in most I don't do right on the spot since I tell them " I'm going to go back to my office and fine the quote for you based on the information I have gotten from you. If I have any questions I'll call but I should have this back to you within 24 hours" That's when they ask, "Can you give me a ballpark figure?" Heh, I love that. I respond "do you want Yankee stadium OR Wrigley field?" I could be a thousand high or low and I'd rather not be either so I'll get back to you in no more than 24 hours". Most clients are fine with that since what we do is a creative process and not a cut and dried, 1,2,3 process.
This way I can put everything into a written proposal and when I deliver it to them I can go over exactly what I would be doing for the money and I ALWAYS give the dollar amount last. Give it before you tell them what's included and the number is all they hear and THEN no matter what you say it's going to be WAY over their budget.
Now please bear in mind this is what I do and it's pretty much always worked for me. YMMV
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Old February 25th, 2011, 02:12 AM   #9
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re: pricing help. two 7 minute product promo videos

Quote:
Originally Posted by Dave Morgan View Post
Good info. thank you. Yes I want it to be an actual business. Considering I would charge at least 600 for a 30 second commercial 400 is way to low.
David,

If you really want it to be an actual business, here's how commercial pricing REALLY works.

First and foremost, the cost of a commercial is traditionally keyed to a MEDIA BUY. After all, a commercial is useless unless it's put in front of an audience. The media buy is the plan that determines how many people will see the spot - how many times they'll see it - and what type of people will be targeted. (age, sex, income level, etc. etc.)

After the media buy is set, a PERCENTAGE of that is set aside to produce the actual commercial(s)

Your assumption that a few hundred dollars is appropriate as a production budget is woefully uninformed.

That would indicate that the company is spending such a minuscule amount on getting the commercial in front of an audience that the entire effort is DOOMED to failure.

Without an adequate media buy, the commercial can't produce results. And if a proper media buy is being done, then the budget for the commercial will be understood well in advance of the production schedule. In other words, the client will always SET the production budget in advance of any real commercial production. That's the way things work in the real advertising world.

Commercial production should actually NEVER cost any company money. The only reason you do them in the first place is that they're part of a carefully designed plan to drive economic results that generate a LOT more money then they cost - and unless the people involved understand the complete process of how to do that - campaign design, message testing and creation, market analysis, audience targeting, etc, etc, etc. they're playing over their heads and the likely result is burning up a good bit of money without much hope of a return.

I hope I don't sound harsh - but as an ex advertising agency owner I know how easy it is to waste vast amounts of money by coming at the advertising business without understanding how it actually works.

That's a bit of real world advertising in a nutshell.

Commercials that are done for hundreds of bucks, are kinda like planning a cross country road trip - and budgeting $500 for the car that will take you on the trip.

Not particularly wise.
Hope that helps.
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Old February 25th, 2011, 03:37 PM   #10
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re: pricing help. two 7 minute product promo videos

DV info is an awesome place.

If I could ask a few questions out of curiosity, does the media buy control everything technical about the project or are they just the dealer for the airtime ?? Is this a contractual thing where everything is spelled out, airtime cost, production cost etc. ?? What happens if a client and producer approach a media buy with a finished project ?? Who owns the advertising time, Comcast or NBC ?? Thanks for the education Bill, Don and Garrett.

P.S. I never even thought about setting up a teleprompter, something new to have to learn, thanks a bunch Don :)
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Old February 25th, 2011, 08:17 PM   #11
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re: pricing help. two 7 minute product promo videos

Quote:
Originally Posted by Bill Davis View Post
David,

If you really want it to be an actual business, here's how commercial pricing REALLY works.

First and foremost, the cost of a commercial is traditionally keyed to a MEDIA BUY. After all, a commercial is useless unless it's put in front of an audience. The media buy is the plan that determines how many people will see the spot - how many times they'll see it - and what type of people will be targeted. (age, sex, income level, etc. etc.)

After the media buy is set, a PERCENTAGE of that is set aside to produce the actual commercial(s)

Your assumption that a few hundred dollars is appropriate as a production budget is woefully uninformed.

That would indicate that the company is spending such a minuscule amount on getting the commercial in front of an audience that the entire effort is DOOMED to failure.

Without an adequate media buy, the commercial can't produce results. And if a proper media buy is being done, then the budget for the commercial will be understood well in advance of the production schedule. In other words, the client will always SET the production budget in advance of any real commercial production. That's the way things work in the real advertising world.

Commercial production should actually NEVER cost any company money. The only reason you do them in the first place is that they're part of a carefully designed plan to drive economic results that generate a LOT more money then they cost - and unless the people involved understand the complete process of how to do that - campaign design, message testing and creation, market analysis, audience targeting, etc, etc, etc. they're playing over their heads and the likely result is burning up a good bit of money without much hope of a return.

I hope I don't sound harsh - but as an ex advertising agency owner I know how easy it is to waste vast amounts of money by coming at the advertising business without understanding how it actually works.

That's a bit of real world advertising in a nutshell.

Commercials that are done for hundreds of bucks, are kinda like planning a cross country road trip - and budgeting $500 for the car that will take you on the trip.

Not particularly wise.
Hope that helps.
thanks, tho i am confused on the part where you said ""
Commercial production should actually NEVER cost any company money. ""

are you referring to all budgets? or super high budgets from large corporations? Most of my clients are able to afford 600-1200 for commercial production. and then their air time.

take a look at my site, maybe you can let me know if I deserve more than 600
BizComm Media - Professional HD Video Production Cincinnati Ohio
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Old February 25th, 2011, 10:23 PM   #12
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re: pricing help. two 7 minute product promo videos

Dave,
I looked at your site and I believe you are sorely undercharging for the work. Honestly I think the work you show is quite good and you could be and should be charging at least 30 to 60% more than you are. I understand the market is smaller than where I'm at but I would also assume there are fewer people doing what you do. I also get the fact that your client profess to be in the 600 to 1200 budget HOWEVER when people say they have 1200 it really means they have 1600. No one shoots all their bullets up front.
Think about the last time you bought a car at a dealership. Hate to use that analogy as I know a lot of guys in the car biz and have done a lot of work for them in the past but when you go to buy that car you never tell the salesman how much you really have to spend do you. think the same way when your clients want to buy services from you.
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Old February 27th, 2011, 09:35 AM   #13
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re: pricing help. two 7 minute product promo videos

Dave,

I think Bill was saying that commercial production should never cost any money because any production costs should be made back by the success of the campaign with new business.

I am small busniess and I like so many have sturggled over the years to provide quality and value. But what I have always tried to do is charge based upon my skill and production level. I do not agree with starting a business with little experience and charging industry standard rates. That is not ethical imho.

So this all boils down to how you value your work. Period. If a client says they can not afford your rates then either cut the project in half or move on. You owe it to yourself to respect your business and have published rates or itemized quotes that clients can make a decision on based upon their needs and budget. Not the other way around where they have all of the needs but want to alter your budget.

It is getting tougher and tougher to sell to businesses these days. On a local level media seems to be taken for granted like downloading an mp3. Many folks want some production for their website but rates are all over the map. It is sad to say but as you raise your prices you will lose a lot of lower level clients. But you can not just give your services away, it is not fair yourself.

There is another way to look at lower rates. I do not know how long you have been shooting or how to compare your skills, but if you are viewing lower rates to gain experience then that can be a benefit for a certain period of time. This is with the knowledge that your rates should be on the same track as your skill level.

At some point you need to know how to do this or any craft. I was a professional musician in another life and in that world we played and played and played honing our talent. I notice this view is not shared very often in the visual world. Once equipment is purchaed, there is often an expectation of being payed.

For me, it is easier to charge by the day or half day of shooting. I do what Don stated. Ask a ton of questions then go home and decide how much shooting and editing is required to make a great product.

You also need to know who you are selling to. If you are giving a quote for a nationally broadcast commercial, then that client is going to expect some zeros in the number. If they do not see zeros they will think you are not for real. Meanwhile your local clients would spit their coffee out at the same number :) It is quite difficult as a micro business, but pick some numbers and stick to them.

Hope this helps.
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Old February 28th, 2011, 04:08 AM   #14
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re: pricing help. two 7 minute product promo videos

Bill,

I have just one little issue with your statement about advertising bringing in more money than it actually costs. Marketing/Advertising has never been a 'profitable' area for businesses where company X spends $100,000 on an advertising campaign and is able to get more than $100,000 in profit (or even revenue most of the time). Nike spends over $1 BILLION on marketing & advertising each year but their revenue doesn't increase as much and the increase in profits is no where near a billion dollars.

A large part of advertising is building a brand, and that can be very expensive. Do you think Budweiser sees $10 million more in sales just because they had a few superbowl ads - No. They do it for their brand.

To the OP: the minimum price for a 30s political commercial shot in one location with only one setup is $3,000 (I have been involved on both sides - as part of a campaign and making TVCs for politicians). This is done by 2 guys who work for Comcast with SD broadcast cameras so these guys have zero investment in equipment. The lowest I have seen from actual businesses is around $6500.

I totally agree with Don. Your TVCs are good and you should be compensated much better.

To Steve: its nice to see others using the $1k per finished minute estimate.
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Old February 28th, 2011, 06:43 AM   #15
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re: pricing help. two 7 minute product promo videos

This is all very interesting to me; however, the original poster was asking about a 7 minute in house demo and/or customer handout video. Surely, that project is not as demanding as a 30 second spot where one has to shoehorn in all elements into an effective presentation. I would love to get $1k per finished minute but that formula can't be applied to all projects.

I take notes and return to the client with an estimate of cost. In so doing, i let them know that we could come in under budget or over budget depending on their actions and expectations. If they change up the strategy on the first, second, third proof . . . i'm not beholden to the original quote. They pay for the time it takes. I've found that a project can be produced 'by committee' and we all know how that can go.

IMO . . . in small business budgets there are a variety of levels of production quality.
I sometimes render a quote then ask 'What is your budget for this project?" explaining that the more time we put into it the more polished the end product will be.

Just my thoughts.
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