What to charge for web videos
 

Hi folks,

Just finished outputting to hi-res MPEGs six short (1min. to 6min.) videos to be put on a client's website. The client's IT dept. will convert the MPEGs into whatever web video format they desire. Worked over 60 hours on the videos, including revisions, audio mix, a temp VO, etc. etc. (We normally would charge $45/hour, but gave them a break of $35/hour, on the assumption that we'll produce more webisodes.)

My question is: is this hourly rate competitive to what others charge?

Thanks,

So, the numbers above are for the whole project- or just encoding for the web? For the place I currently work for, if someone comes to me with video they want encoded specifically for the web, I charge them based on an estimate of how long it will take to encode. Usually, its a 30-min. minimum, and in most cases, web clips are fairly short, so we rarely charge more than $40-$50 to take something straight to the web. However, if we've been working on a whole project that required shooting and editing, I'll just work in my estimate of how long it will take to encode to their quote. Nothing over the top or anything, but I'll pad on an extra hour or so to compensate, depending on what I'm doing. Once you start to get into the $1000 or more as your total cost, and extra $50 added into the mix isn't anything to balk at. Those that do quibble over something like that send my red flags right up!

As for being competitive with that rate, well, it comes down to a few variables, the main one being your market and the other being what you're looking to get out of your business. If my employer charged the rates you're charging, he would go right down the tubes and out of business in no time. If I charged those kinds of rates in my own business, I wouldn't go under, but I definitely wouldn't be able to get ahead. $45/hr for me would basically cover my most basic bills, but I wouldn't have much of anything left over at the end of the year to upgrade equipment or make repairs, etc.

Then again, my neck of the woods is different than yours. If I were you, I'd try to poke around and find out what the local competition is charging. You'll have to sit down and make a reasonable assessment of your skill levels and equipment and compare yourself to your competitors. If they're charging a lot more, see if you can figure out why? Do they have a large office or studio space? Do they have the latest and greatest equipment? Are they seasoned pros that have been in the industry for 20 years?

I'm pretty new to the whole entrepreneurial thing myself, but I'm a quick learner and every day teaches me something new. I'd suggest checking out the Rate calculator on FreelanceSwitch Hourly Rate Calculator to see if you're charging an acceptable amount. Hope this helps.

I am struggling with rates for web work as opposed to DVD or broadcast delivery.

I know from our end, the work is the same, but from the consumer/client end it is a different story.

So many people have a Youtube opinion of the internet that spending any real money for a project seems to them like they are over paying.

I think some credibility for the medium has to be established before people are comfortable spending.

So I am prepared to get a little less in hopes to secure market share as I think the web will continue to be a growth area.

And as bandwidth becomes more commonplace, well made video will be able to be distinguished from the horrid examples that often float around now.

All in a round about way of saying your are not alone in trying to to figure out what to charge for web work.

You can only charge what people are willing to pay, otherwise you are sitting at home with a high rate.

So all you charged them for was your time @ $35/hr? What about your equipment, software, etc. that made the edit possible? Standard rates for video editing of SD run in the $100-$150/hr. range and HD can run as high as $200-$250/hr. How it's delivered is immaterial to edit cost. The footage and audio must still be captured with a professional camera and operator (hopefully) and edited using a fast computer with expensive software and your skills of course which are the same whether your editing a doc for Nat Geo or 30 sec. commercial for cable.

If you charge less just because it's going to the web you're just cutting your own throat.

Also, if you start out charging a client less you will never be able to raise your rates. Good clients get discounts AFTER they become good clients not before. Great lie of television #7 "Cut me a break on cost now and I'll make it up to you later." Never happens.

That's why it's SO important for us to inform and educate our clients when they approach us with outlandish notions like that.

In my experiences, I've learned that its better for me to turn people away than get an extra few bucks along with heartburn, grinding teeth, and about a dozen gray hairs that weren't there before I met them. Then again, you gotta do what you gotta do.

I totally agree with Rick here as well. Although, I wish my market would support the whole $200-$250/hr for HD gear!

Hi Folks,

Thanks for your replies!

Shawn--The numbers I posted was just for post/editing (I actually did not charge them for encoding/exporting/uploading/etc.). We did indeed shoot the videos, and already got paid shortly right after (which was very rare for us :). I understand what you mean about the variables. Since we've been only in business for a little more than a year, we thought keeping our rates low and competitive will drive more business. So far, we've been lucky getting as much work without any real advertising/marketing; just word of mouth.

We've been to the other end of the market spectrum, after our years working in LA. Being in the southwest, specifically El Paso, the market (and the resources) is definitely small.

Best,

Hi Tim,

I understand your frustration. This is the first time we've produced specifically for the web. But we're keeping our rates for video production the same, whether or not we output to DVD or to the web.

For this specific client, they wanted videos of a training manual for gardening to be put on their website. But they also want to cover as many web venues as they could (i.e., You Tube, etc.) and possibly drive traffic to their website.

But as you said most people have low opinions about the You Tube venue, mainly cause they're uninformed. And it turned out that way for our client. I had to let them know about the different flavors of web video, file size vs. quality, bandwith, hosting, etc. Also, after we're finished with this web video project, we can go to other potential clients and show the web videos as a marketing tool.


Best,

Pricing Info
 

Hi,
I found this on the web:

new image media, inc. an internet video company
Complete Web Video Productions as low as $400.00
In our earliest visions, we knew our pricing model needed to be drastically different from traditional video production companies for a product and service that is competitively professional and creative with fast turnaround times that are extremely effective and easy-to-implement. Mission accomplished. Pricing starts as low as $400.00 for a complete, professional web video solution. For a sample $400.00 production click here.
Contact us for details.

Yep, that seems to be the trend.

Internet Production - anybody with a camera that powers on.

I don't want to have lower rates, but educating clients is a tricky area.

If something is so complicated or "new" that is needs to be explained, people often don't feel comfortable spending thousands of dollars.

I work with a web developer and we are giving this market a real shot. But a lot of the reactions are "that sounds great, but we are only going to go with this..."

It is just going to to take some time for this medium to mature some more imho.

When I mention Youtube, I am really speaking to the trend of do-it-yourselfers. It is the same mentality of the MP3 downloaders of ten years ago, gimme everything for free.

That is their seemingly permanent attitude towards the internet.

While I agree we want to steer clear of these type of clients, just trying to point out that this space is filled with this type of thinking.

Hi Rick,

I wish I could charge my clients those rates! As it is, most of them are rural communities, and businesses that think spending money on marketing/advertising (or spending money on pretty much anything) is a complete waste of, well, money. Through word of mouth, and by seeing the product we've done for other clients, most clients think my work/product/rates are worth it. (Maybe I need to target Microsoft or Virgin Atlantic/Galactic?) But like I said before, we charge for video production the same whether the output is DVD or the web (which compared to other markets is low enough).

Best,

Hi Kim,

Thanks for that info! It would seem like $400 for a web video is a great deal, until you scroll down a bit and check their "a la carte" services. Yikes. Makes our MadJava company seem like a charity. (If some of my clients saw that, they'd run away and hide in the desert hills :)

But those rates are not unreasonable either, probably even competitive, compared to most high or middle markets. In small market communities, where their marketing budget gets cut up like a pie, promo videos usually don't get the biggest piece. (Ummm, pumpkin cheesecake pie...)

Best,

your rates should have a 1 in front of them. you are putting yourself out of business. all you do by charging lowball rates like is :

1. devalue production work in the area in general, and your own specifically
2. you leave money on the table
3. you set yourself up for a downwards spiral in pricing

you work more for less money. you're not doing yourself a favor, or your clients by giving it away like that.... none at all.

Let me ask everyone, what difference does it make how the finished product will be used--broadcast, DVD, web, whatever?

The cost to produced a video is the same regardless of what it's final destination is.

For example, I may ask a contractor to build me a 3,500 square foot house. Is he going to base his price on how I use it? Perhaps I'll live it with my family. Or maybe I'll just use it to store hay.

How will my usage of the structure have any impact on what it costs the contractor to build it?

another great point. a day of shooting is a day of shooting. doesn't matter whether it goes to the silver screen or the little one. same for editing.

in fact if they are using it for web and DVD, isn't that 2 uses, so shouldn't you get +more+ ?

what about when you shoot a news peice, but it doesn't air ? that happens all the time. I worked on a promo for a 60minutes interview with a notorious celeb. interview was to be shot as I was cutting promo from library shots. guess what ? celeb declined the crew at the door, but my work was already done.

since none of it got used, and this was for national network TV, does that mean I don't get paid ? the crew that showed up for the interview doesn't get paid ? of course not. everyone got what they were supposed to. you can't think, just because its web, its any different.

if you let clients devalue your work, they will if you will let them. get paid what you are worth.

He certainly won't base his price on how you use it, but he will base his design on how you use it, and changes to the design can affect the final price of the house, to stretch your analogy a bit :). I agree that many of the costs are the same for web video, or any other medium of video, and that should be reflected in the price. However, there are other differences which can cause you to offer a lower price for web video.

If you know that the video will only be viewed at a low quality compression, or only in a small size window, then that can change your workflow, reflecting savings back to the customer. If you can afford to use a cheaper or lower quality camera, and that allows you to double-book a shooting date while an associate uses another camera at another event where capture quality is more important, then that can affect your cost, since it means they aren't preventing you from being at a larger variety of other events.

If you are able to edit at a lower quality, meaning you can use a laptop instead of a desktop, or render times are reduced, that faster or more portable editing means you can get more done on their edit. If you're traveling somewhere else, and you're able to knock out their editing on a laptop in transit, when normally you wouldn't be able to work, that's could be reflected back to the customer.

Just my 2 cents...

I shoot and edit in HDV (XLH1) and most of it ends up on the web. Most of my clients want a delivered price, not an hourly rate. When I quote it, I'll break it down at 50.00 per hour. I usually work solo, If I have an assistant, I'll charge them out at $40.00 and pay them $20.00 per. I can't work for any less and I really can't charge any more in my market. I'd rather my gear and I were busy at $50 per, than collecting dust at 150.00 per. But hey if your market supports those kind of rates, by all means. And if you've got alot of overhead, you've got to charge accordingly.

In the end, you want a satisfied customer that you can do repeat business with, or provide an excellent referral.

You won't get rich at my rates but I love what I do. And I've got other get rich ideas...

Check out Buy wine online at Wine Library Click on the wine library TV tab. This guy has somewhere around 600 wine tasting videos on his site. Gets like 80,000 viewers a day and sold 45 million worth of product through his site, and has been featured in the Wall Street Journal. The videos are not well produced, yet people are compelled to watch.

If it's getting rich that you want, we won't get there even at 150.00 per hour. We just buy more gear anyway...

This is something I've heard lots of people talk about, and I think its a slippery slope. Its important to not charge your clients solely on the equipment you use. People are, or at least should be, coming to you for YOUR expertise, skills, and quality- not because you have a cheap camera and can therefore figuratively "give away" production.

All I can say is that if I have to drag around my laptop and edit on the fly right there- on top of the rest of my camera gear, lights, and audio stuff, the client will pay a premium for that. 9 times out of 10, I can't think of anything outside of breaking news that would be so important and time-sensitive to warrant such speedy editing and delivery. The vast majority of time, I have to rush to get something done because the client doesn't plan accordingly, and so they come to me at the last possible second. Sure, I'll bend over backwards to make you happy, but poor planning on your part does not constitute an emergency on my part. I can work fast, but video production is not fast food. You can't just walk in, demand a commercial for $100, and then walk out an hour later with a shiny tape or disc. This isn't to say that editing and delivering a disc/tape right there on location is bad, I just consider it to be a premium service. Compare it to FedEx Ground Service vs. FedEx Priority Overnight. Sure, your box will get there just the same, but one is going to cost everyone a whole lot more.

My two cents again, for a total of 8 cents, plus tax!

right. how does laptop = low quailty for editing ? if its DV, its DV. if its HDV, its still HDV, or what ever other format you shoot on. still the same. if anything, bringing a laptop out on a shoot in addition to all the other gear certainly qualifies as a premium service.

the other bad assumption is you have work falling out of the sky like that to be double booked. then work you schedule better and spread the days out. yes it can happen. I used to get double booked all the time, but that was the good ol days.

just because a camera is cheap, doesn't mean your rates should be.

thats the hugest falicy out there. I've gone from various BetaSP rigs that cost 5X to 10X what my HD100 does, and I'm still charging the same rates. why ? well the camera actually makes better pix then the big old cameras, and I'm still lighting the same ( better :) ), as well as I've invested quite a bit into top end audio gear. so if I can make better pix with a cheaper camera, why should I charge _less_ ?

actually, having not raised my rates, I've actually taken a rate reduction compared to lots of other people who have jobs where they get cost of living increases every year.

how about making a little more profit for the day instead ? why be paying off a camera for 3-4 years when you can pay it off in a few months, and put the money into your own pocket for a change ? especially with less work out there. if I have to work a bit cheaper then I'd like, I'm still making money because I'm not taking $400-500 out of every shoot day to pay for the camera.

I don't know why folks think that charging lowball rates is good, because everyone gets hurt by that in the end, most of all, yourself.

I think that maybe there was a misunderstanding. I didn't mean that you could edit on the spot, on a laptop. I meant that, if you were able to use a laptop instead of a desktop, because you knew you'd be able to edit a proxy which would work fine for the final delivery requirements, then that could mean you were able to work at a time when their project wasn't causing you to not be working on other projects, i.e. while on the plane, etc. Not as soon as you've shot the footage.

By "using a cheaper or lower quality camera", I meant; it's not like you could be using that camera for another venue which, while it might pay more, would require a higher final delivery quality. Therefore, while the client should still be paying you for your talent, your price should reflect that, if you were double-booked, and the only camera you had left to provide was, say, a HV-20, then it's not like you could be at another location with another, better-paying client, because of physical limitations on the amount and quality of cameras you had.

Admittedly, a bit of a stretch, but I'm just trying to play devil's advocate here, and point out that there are, certainly uncommon but possible, situations where a web video could cause you to have a lower price.

I honestly can't think of any.

Content and/or production value is what drives the cost of production, not the how it's delivered to the audience by the client.

I see what you mean Daniel, and there are one or two scenarios where web production could be less expensive. One instance that comes to mind is when a client needs a single camera set up to record say, a podcast. A few lights, white balance, focus, a simple wide shot, hit the record button, and walk away for 45 minutes. Hand off the tape to the client, or encode directly to MP4 or your flavor of choice, and you're done. for something like that, I can see providing a discount or a price break, but it's still a slippery slope.

As for the laptop thing, thanks for explaining. Although for myself, I'd still charge the client more even if I was editing a low-res proxy in transit. I've tried to work on airplanes before, it's not much fun!

Shawn, those same requirements could be for a documentary, a commercial, DVD, even a broadcast. Again, you're talking about the production requirements, not the delivery.

And by the way, any cameraman who would walk away from a running camera should be taken out, and... it's too gruesome to talk about.

Hahaha!

I mean that in the most figurative and NON-literal way, Jay. I NEVER leave a camera just sitting there on sticks, whether it's rolling or not. I know its a heinous crime, but I can still joke about it.

But I guess I kinda veered off topic there. You're right about production requirements vs. delivery requirements. They're two separate things, but the production shouldn't dictate delivery requirements. I think that's the biggest mistake being made right now, and it's one reason the web is having a hard time justifying itself as a good end-product/format. There are so many people that think just because it's going to be displayed at 320X240 and play back at 500kbps, we don't need to worry about lights, audio, and all those "little" things and basically give away production. Then, when people see a horrible looking video with bad sound to boot, they don't think it's worth it to invest any advertising or marketing dollars in the web.

I'd suggest finding and listening to a podcast called "This week in Media". The panel typically consists of Alex Lindsay, Daisy Whitney, and John Flowers. Alex and John are heavily involved in production, editing, and VFX, while Daisy is a writer for a publication I can't remember at the moment. They frequently talk about video on the web and their own struggles with trying to get people to equate production for the web with production for television. It's really interesting and I highly recommend it. You can find it on iTunes.

You're absolutely right. And we have the YouTube mentality to thank for that!

I'll add a +1 to those above that have stated the cost of production isn't tied to the output and distribution format.

Charge what YOU as a professional are worth and if you want to make a differentiation in output cost then list the output choices as an adders to the job cost.

You as the professional create the value of the job in shooting, editing, and processing the footage into something worth watching and not based on the output format of the work.

I understand where you're coming from on this. My point is that the production requirements are affected by the delivery.

If you plan on releasing nationwide to theaters, you don't want to shoot on a HV20.
Likewise, if you're releasing for a small screen, small file web video, you don't need to shoot on the RED. Of course, there are situations where it will be large screen and a large file on the web. But if you're shooting for youtube, a RED camera would certainly be overkill.

This only affects the choice of camera, however. You do still need high quality audio, you still need to use quality lighting setups, but if you know you're going to be downrezzing the footage, you can use a lower quality camera, and still have the same or similar output for a lower price, something which can be directed back at the client.

Daniel, I've neither met nor known anyone in over 30 years in this business that thinks that way. If that were true, no TV commercial would have been ever shot in 35mm. It's "overkill."

Using your approach, heaven forbid a client come back at some later date and ask for the video to be delivered or DVD or broadcast.

I guess I have a completely different marketing approach when it comes to a client requesting a video strictly for the web. I always try to sell them on the "shoot once for multiple outlets" approach. I've been approached many times by clients who "just want something to put on their website". Right there they are trying to devalue the end product in hopes of a better price. I inform them that no matter where the video goes, the price is the same so why not think a little bigger. What else could the video be used for? Direct marketing? TV spot? Presentations? Trade shows? At the end of the day, I've expanded their thinking and added value to my product and I usually walk away with a much better deal. Not only that, it shows I'm looking out for the client which breeds loyalty.

Mick Haensler
Higher Ground Media

Well, said, Mick. Great approach to the problem, too!

Hi Mick,

Thanks for your post. I quite agree with your statement.

As I've been in and out of town for the holidays, I haven't been keeping up on this thread. But since I started it, I'll at least let you kind folks know how it ended.

From my previous posts, I mentioned that I charged the client what I normally would charge for a full day's worth of video production. For post-prod, I gave the client a discount (since I initially didn't know what to charge for web outputs; it wasn't a considerable discount, but a discount nonetheless). As for the reaction when I sent out the invoice; well, it was much like a polite---"Yikes! It cost that much!?!" reply.

Anyway, much thanks for everyone's input/comments/advice/opinions. Hope the New Year brings everyone much, much financial success. (And no discounts :)

Best,

If a client is only distributing their video via the web, they are already saving money vs. traditional distribution methods, i.e., they are not paying for broadcast airtime or for DVD replication, packaging, postage.

For web video, distribution is where the client finds savings. The savings are not to be found in reducing rates for pre-production, production, post-production when those parts of the project take the same amount of time as you would take to work on a video for traditional distribution methods. Sell the benefit of saving money via method of distribution, but don't undercut your standard production rates.

And Mick makes great points in his post: re-purposing a video for a variety of distribution methods is another benefit to the client.