How much do you charge for video production? Should you offer a flat fee or charge by the hour?
You’ve pitched your services and have organizers behind community event, school performance and dance recitals interested. You can do the job. Now you must submit a bid that works for them and makes you a profit. How much do you charge for video production? Should you offer a flat fee or charge by the hour? This article will help you decide what works best for different video gigs.
Even hobbyists want to make money producing video. How can they generate funds for equipment needed to continue passionate pursuit of video production? Many of us have moved beyond video for fun. We’re ready to make some money after all that learning, acquisition and sweat equity. Pricing is all over the board for video services. Competition is huge. Here’re a few things to consider that can mean the difference between working for minimum wage and actually making money.
Weddings, sports, what’s the difference?
Here’s a common question we receive: I’ve been producing videos for a while now. I’ve been approached by several organizations to shoot their events. Hooray for me! But I have no idea how much to charge. Does a multi-camera high school sports event call for higher fees than a wedding should?
Before we answer that, there’s another question.
How much does doing business cost?
Before deciding what to charge for any event or gig, it’s a good idea to figure out what it’s going to cost you up front for providing video production services and determine what you need to make per hour to break even or make a profit.
Cost elements have to be factored in, totaled, then divided by the hours you have available to do video work before you can come up with an hourly rate that won’t leave you bleeding red on your profit and loss ledger. We’ve all, more or less, occasionally bought in on the idea that X amount of dollars for a few hours work is good pay; that the going rate is good enough. Probably not.
Before we get into pricing that high school basketball game, before we price that wedding gig, let’s see what it really costs per hour to produce video.
There’s that equipment you bought outright or are still paying for. Vehicle and/or travel expenses, insurance on your business, home office, car, equipment and yourself. You’ll have license fees, taxes, parking, utilities and more related to video production. There’s supplies, batteries, bulbs, hard drives and … depreciation. That stuff wears out eventually. You want to factor in costs for repairs and replacement, upgrades and more.
Do not despair. Add all the cost factors you can think of, then divide them by the total number of annual hours you can put into video production. Full-time is easy, 40 hours a week, times 50 weeks a year. You’ll work more … or less, but plan on putting in more hours if this is what you’ll do for a living. Say your living expenses, business expenses, retirement fund, insurance, wages, everything, comes to $38,000 a year. Divide that by 2,000 hours: 40 hours a week times 50 weeks. You need to make $19 an hour; $760 a week.
The above can be more detailed or less but for simplicity’s sake, let’s go with that. You need to charge $19 per hour for every hour you give video production, from acquisition to editing. Now, you have a base from which to establish your rates, flat fee or by the hour.
Sports? Weddings? How much?
It depends. It depends on if you’re doing all the work or paying others to do some: running a second camera, assistant editing, etc. It depends on how many hours you spend covering the gig, how long is a basketball, football, or baseball game? How many hours are you going to be at that wedding? Both types of coverage depend on the clients’ available budgets and your basic hourly rate. Factor in the hours, times your rate and provide a flat fee.
But $19 an hour times the 12 hours you’ll spend covering a wedding? Well, $228 isn’t going to cut it. There’s anywhere from 10-to-40 hours editing. Don’t forget to estimate based on man hours (number of people working times $19 per hour), so two people working that 12-hour gig is 24 hours times $19, for $456, plus 25 hours editing, another $475.
Many independent wedding video producers charge more, with tiered flat fees based on hours of coverage and services provided for both coverage and editing. Others base services on an hourly rate. Some clients like a flat fee, others like paying for a set number of hours.
Sports event coverage works the same way. The competition is just as tough. Know going in what you have to make to break even, cover expenses or make a profit. Use that to determine how low or high to go.
Shooting fees, editing fees, oh my!
Do I charge more or less for editing than shooting, since editing usually takes longer? At an event like a wedding, they can see how long I’m there. Should I charge hourly? But nobody knows how long I take to edit. How do I manage that?
Some videographers charge the same for shooting and editing, all based on total estimated hours for any given project. Others charge more, as much as $250 an hour or more for shooting, then quote hourly editing rates of $40-$150 or more. Again, it depends; on the competition, your clients’ budgets and your business costs. It’s good to be able to estimate how many hours you’ll spend editing and give your client an estimate of the total. You can advise them when you’re nearing his or her budget limit, giving an option to pay more for more production or wrap it. This is over-simplification. There are many factors involved, including what you promised to do. Sometimes, in spite of best efforts, we’ll take a loss. It all depends on what your agreement stipulates, and what the market will bear.
What other stuff costs money?
I have a lot of gear. Should I charge more if I use more? What if I have to hire contractors?
It’s an industry-wide practice to base rates on an hourly amount based on the cost of doing business. Additional equipment, extra production value, extensive editing beyond a certain point and the costs for hiring contractors should be added to your base rate. Many in the video production business total their rate, plus additional costs (use commercial rental fees for that extra equipment) for rent and contract, then add a 10-percent buffer.
In spite of your best efforts to hit it on the head with time and production estimates, you’ll find that even 10 percent won’t always save you. Others, in the spirit of being fair, will cut bids too close, nearly always losing money on a video production. There’s a big difference in being fair and being practical. Give an honest bid but don’t underbid to get a job that could very well be the start of going out of business.
How can I make this work?
This is scary, what tips from the pros can you offer me?
Cinematographer Ryan E. Walters has a powerful blog post that delves deeply into the process, focusing primarily on establishing a day rate. He notes that trying to figure out your rate is perhaps “one of the most challenging aspects with any creative endeavor” and that it’s particularly true when you’re first starting. He talks about “reactive or proactive” pricing strategies, noting that reactive focuses on current market pricing and prices services accordingly. He notes that proactive factors in time, effort and resources, “then adds a value-added cost” setting a price based on those factors.
A later blog by Jonny Elwyn points to the Walters resource, offering up a few pointers of his own, noting that “being able to negotiate your daily rate or project price is an important skill and one that you can only really acquire with practice.”
Twenty-year-old freelancer Remington McElhaney makes some valid points about bidding and pricing. McElhaney said, “I didn’t want to be pressured into taking jobs I normally wouldn’t take.” He was first prepared to go three months without income because he was selective in finding work.
“If you are getting desperate for work and your bills are stacking up, you’ll take anything,” McElhaney said.
He suggests writing extensive bids, being flexible, confident and willing to “seize the opportunity“ when it arises. Being able to jump on a job at the convenience of a client and turn it around on short notice are the key.
Any money in selling copies of video?
How do I charge for copies? If I give them a YouTube link I can’t make any money selling Blu-ray discs. What do I do?
YouTube isn’t the only option. There are opportunities to sell your videos online, special interest or individual client. See Viidya, where you can upload videos, set prices and embed them on your website through many of the popular social sites.
Vimeo offers on demand options via its Vimeo PRO membership program, $199 a year. In addition to Vimeo On Demand, PRO members can create a Tip Jar and receive viewers money at their discretion.
In addition to online offerings you can still sell significant numbers of Blu-ray or DVD copies of your video productions for a reasonable amount. How’s that? Packaging. True, even with your best efforts to copy protect, the technically informed can figure out how to make a copy, which you’ll likely be powerless to stop. While many can duplicate, few can copy your custom graphics, rendering their branded silver discs and marker labels ugly. Make the effort to create spectacular custom graphics and packaging. This often generates sales that would otherwise just get ripped.
Videomaker Content Director Mike Wilhelm provides an excellent introduction to Videomaker’s Freelance Video Hourly Rate Calculator, a most useful resource for calculating rates. “The Videomaker Rate Calculator is designed for individuals who plan to do freelance work as their main source of income.” But even if video production is an occasional event, this resource is handy.
The calculator helps figure the value of your personal time’s worth hourly. It factors in special charges for a one-time project and helps establish a base for calculating billable hours.
This tool is extensive and definitive. By simply inserting information in the blanks, video producers can easily acquire a suggested optimum rate for their videography work. Here’s the link. Give it a whirl. You’ll be amazed at the results, simply by entering the most accurate and realistic numbers you can in each of the fields. Great tool!
Contributing editor Earl Chessher is a full-time video producer, freelance writer and published author of resource books on montage and funeral video production.