how to break the news

WhiteOpus

WhiteOpus

hey there guys, i am asking for some advice here.

I did a music video for a rock band about 4 months ago. It was one day of shooting, one location and about 20 hours of editing. Being one of the first paid projects I'd ever done, I charged them a flat rate of 200 dollars (we settled on the amount before even shooting it).

Since the last video I made for them I have recruited two members to my team, purchased a better camera (while keeping the old one for secondary angles), purchased video lights, and most importantly have become better at creating quality material with a portfolio to prove it.

Fast forward to now: they want another music video, this time with probably three to four days of shooting, two locations and a few more hours of editing than their previous video (they want it somewhat VFX heavy).
We have a quote meeting scheduled on Friday to talk about the pricing breakdown; the problem I have is that they are expecting the same flat-rate, roughly 200 dollar price as last time. I think they feel that we have a rapport and therefore my prices will never change because it's a "friends and family" type discount.

How do I break the news to the band that I need to charge more? Should I just tell them that we need a larger budget to successfully accomplish what they want? I don't want to seem shady or greedy, I am simply trying to transition this video hobby into a business and I know that I have to start charging more (for a greater profit, but more importantly to legitimize the business as professional). How can I do this professionally while still keeping that "friend" vibe?

Second question: should I start charging hourly on any of the services we provide (such as shooting=$x/hr, editing=$x/hr, etc), or is it better as a small (three person) business to just charge a higher flat rate? Or alternatively, is it better to do it case by case, based on the budget and needs of the client?

Help!
 
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I would be honest with them. Say that since the workload has doubled then the rate will have to double and that it's nothing personal. Stress that it'll still be significantly cheaper than most people would charge
 
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WhiteOpus said:
I'm thinking that 500 is a fair price?
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More than fair. I mean, you are not even getting $10 an hour. ($25 - $50 an hour is "about" the going rate, for freelancers, in my town.) You're new, so charge at least $10 an hour. 30 hours editing (with your VFX) would be $300, plus $100 for shooting a 10 hour day, would be $600 for 3 days or $700 for 4 days. That's a really good deal.

You need a formula to calculate your rate. Hourly rate is a common way. If the location is far, you may want to figure on the price of gas, food (for you and your crew), etc.
 
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Always depends upon the resources deployed.

Flat rates are fine for some things, not for others.

You should consider developing a tiered system, offer them a choice, low medium, and high. It fosters some sense of control.

Seriously, all your new equipment and crew aside - WHAT could you provide them for $200?
How many hours of work, including equipment overhead?

Then figure out how much you can provide at the (seemingly arbitrary rate of) $500 level?
How many hours of work, including overhead?

Then you start figuring out how to upsale them every which way you can.
Welcome to business and marketing. :)



Break down for yourself exactly what it is you're spending money on and what they're spending money on.

What does it cost you to transport, set up, shoot, and break down your gear for a shoot?
What does it cost you to prepro and post?
What your general hassle fee?

For $200 you can provide... what? 2-4hrs of shooting & editing?

If they want props and smoke and silly sh!t - cool. They're paying for it.
If they want a dude with a camera & lights & an editing suite - cool. You da man.

You get what you pay for when you buy equipment.
You get what you pay for when you buy services.
When they book their shows they get paid per night, right? More nights = more pay.
They understand this real good.
You're doing the same.


What will help you with this band is... if you can charge other bands the same or similar amounts.
If their business is the only business you have going on then... They have all the control of their money.

If all they got is $200 then that's all they got and it's your choice to let it go somewhere else to some other dude with a camera.

Now, if you got skilzzzz then sell them.
If they HAVE $500 but only wanna spend $200 of it then show them what $500 will buy anyway!
Impress them.
Get that money!
But you gotta EARRRRRRNNN it.

Show them how you earrrnnnnn it.
This includes you sitting down and spending more time discussing options and cultivating a deeper personal relationship with them.


Just fer fun show them what $1 or $1.2k will buy them.
Start developing your real-live grown up production services package. :yes:

http://www.smalltownmarketing.com/selling_services.html

http://trustedadvisor.com/articles/ten-myths-about-selling-intangible-services

http://www.entrepreneur.com/article/159488

http://smallbiztrends.com/2012/08/selling-your-services-first-5-days.html

Maybe they can't use your services this go round.
Maybe you don't have time for them, either.
But what you do want most of all, other than their cash, is for them to think of you when either they DO have the money later or when they are talking to someone else who DOES have the money and they can send their business your way.
cash-smiley-emoticon.gif

SCORE!


P.S. See what you can do about weaseling out some references for other bands from them.
See if you can schedule a meeting or shoot where they play their gigs at, see if you can get the venue manager interested in participating somehow, maybe he or she knows other bands looking for a dude with a camera.
cash-smiley-emoticon.gif

SCORE!
 
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$500 seems too cheap. Do you pay your other two workers and will they be helping out? You said that this is 4 days instead of one. Even $800 is too low. A friend with a good reputation in the business charges $1,500 per day. This is just his rate. If he has to hire more people, it will go up.
 
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There are just so many variables.

Ray's ideas are good, and it's a good way to go about it. But it really comes down to sitting down with them on a personal level, being honest and up front about what they can feasibly get for $200. In my opinion, it's probably an hour's shoot and an hour's edit with one person and an SLR.

I've worked on music videos that have cost $30k+ for a single day shoot with no VFX and simple post process.
I've shot music videos for free when I was starting out, because the band had only $2k and I spent the money on decent equipment rather than shooting on something terrible and pocketing the money. But again, it was single day shoots.

I think I've worked on one music video throughout my career that was more than a two-day shoot.

$500 is super cheap but it depends on what they're getting for their money.

VFX heavy should put the price up considerably, at least if you're going to be paying someone half-decent money to do a half-decent job.

Four days of shooting really depends on who you're employing. Just yourself? $100/day + $100/day for the edit is not great money, but it's okay. Are you paying others?

Usually on the cheaper music videos I did, we would have a bare minimum of a Director, Cinematographer, AC, Gaffer, HMU Artist, often an AD, sometimes a soundy if there were 'scenes' within the MV. Usually shooting on a RED or something that we were able to beg or borrow, or pay a small amount (it's good to get in with the rental houses - if they like you and you're loyal to them, they'll be more likely to give you discounts when you're starting out under the assumption that when you can afford to bring in major work you will go with them).
Plus then there's the editor and colourist.

If you're paying all those people only $50/day, you're looking at 6 (not including soundie) x 4 days x $50 = $1200.

Then if you only have a single day for edit and colour, and only have one person do both, and only pay them $50, that brings you to $1250

That's assuming you're not renting any equipment, buying any props, costumes, hiring locations etc. etc.

You need to ascertain how much they reasonably have to spend, and weigh it up against how much the work is worth it to you.
At what price is the work worth it to you?

Then if they just don't have the money you're asking, you can either look at doing it cheap for them because you think they're worth keeping as a client; or you can do a 'dumbed down' version with less shoot days, and a simpler shoot, or you can be steadfast and stick to your price and let them go away.
 
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I don't want to seem shady or greedy, I am simply trying to transition this video hobby into a business and I know that I have to start charging more (for a greater profit, but more importantly to legitimize the business as professional). How can I do this professionally while still keeping that "friend" vibe?
Click to expand...

You don't. You need to be professional. You can still be friendly and still be friends, though if you want to be a professional, you need to first and foremost be professional.

Second question: should I start charging hourly on any of the services we provide (such as shooting=$x/hr, editing=$x/hr, etc), or is it better as a small (three person) business to just charge a higher flat rate? Or alternatively, is it better to do it case by case, based on the budget and needs of the client?
Click to expand...

I've seen some case studies where the "Pay by the hour" scares people as it's a bill the client feels they have no control over. On the other hand, you don't want to get locked into an all-you-can-eat at a fixed rate, with the work to be determined along the way.

There are many ways you can proceed and the best way really depends on what you want in your business and what your clients typically are. The best way that I've seen is to mimic the age old, and often cut-throat printing industry practice. Printers quote for a particular job. Everything is detailed in an agreement on what will be delivered, on what, with what, by what, by when, responsibilities of both parties etc. etc. If alterations happen (particularly if they increase the work load) then a negotiation on price happens to alter the agreement or rates for those (or most common) alterations are already quoted in the original agreement at a high per hour rate.

It takes a little more work up front, though it does help clarify each persons position and avoid project scope creep. Scope creep is when a project starts as something simple, then, bit by bit, extras are added on until the client wants well beyond what was the original scope of the project. It isn't often a problem unless the work is quoted at a set rate.

What should you do in this situation? You need to make a decision on where you want to go. Early on, business often discount their prices to get to a critical mass of clients (and referrals) . When you start needing to decline business is when you start charging more. It's not the only model that works, but it is one that I see time and again and it works, especially if you can take the hit early on.
 
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Even if your price never changed, which would be stupid by the way, a 3-4 day shoot is obviously going to involve a lot more work than a 1 day shoot.

At the very least I would charge them $200 per shooting day. Thus charge them $600-800. Which is still very cheap for a music video.
 
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WhiteOpus said:
is it better as a small (three person) business to just charge a higher flat rate?
Click to expand...
The way a freelancer comes up with a flat rate is to figure out what
you need per hour. For example I charge $450 for a 12 hour day as
a camera operator. I came to that figuring my hourly rate at $35.
Times 14 hours (8hrs straight time, 4hrs time and a half) that's
$490 so they're getting a deal.
WhiteOpus said:
How do I break the news to the band that I need to charge more?
I don't want to seem shady or greedy,
Click to expand...
You show them the numbers: three people at $15/hr for 10 hours is
$495. Charge them $300/day - “friends and family. Times three days
that's $900 to shoot. Throw in the equipment rental for free as part
of your “friends and family” vibe but let them know that all freelancers
with equipment charge an equipment rental fee. Camera: $200/day,
lights: $100/day – they are saving $1,485 for a three day shoot
because you're giving them your “friends and family” discount.

$900 is CRAZY low for a music video.

Now do the same with post production. Without knowing anything
about the post needs if you figure one week of work (60 hours) at $15/hr
with no overtime we're looking at another $900. So a total of $1,800
for a music video shoot that SHOULD low-ball at $3,500 and should
actually be closer to eight large. again; CRAZY low for a music video.

If they feel that's shady or greedy then offer to do it for the $200 and
use in your reel - not to make money.
 
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Rik makes sense.
Not just quote a price. Quote the discount as well. This way you can convey much clearer how much value for money they get.

They probably have no idea what normal rates are.

Let's face it:

- you gained experience
- your crew tripled
- 4 days of shooting in stead of 1
- VFX heavy stuff can easily mean: previous editing time x4 or more
(I'm working on a mildly VFX heavy promo for a software package. Some pieces of 10 seconds took me 2 hours to create.)
 
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A good way can sometimes be to break it down into price per hour, e.g. 'I think there is about 30 hours work here - you paying me $200 means i'm working for $6.60 an hour, which I hope you'll understand is far too low.' I've had a few clients who pushed and pushed until I gave them the hourly brekadown, and then they felt a bit rude once they realised they had been trying to get me to work for £6-£8 an hour.

You can add another $200-$400 onto your price and it would still be a great deal (providing you'e good)
 
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I'm on my way to a similar meeting today. I charged $200 for 7 instructional shorts that shot on one day and I edited. I vastly underestimated both shoot time and editing time, so the $200 came out to just about $10/hr. Much less than I wanted to take, especially since I think she wouldn't have balked at a slightly higher rate. Obviously I wasn't going to change the agreed-upon terms for anything since it was my error in estimation, though. So chalked it up to lesson learned.

My strategy now is basically to tell her that my rate is $40/hr. I'll try and estimate more clearly how long the shoot will take so I can give her a ballpark quote, but will bill based on actual hours on set. The editing I'll still charge a flat rate for, since she can't check up on me for hours, but I will be sure that it is reasonable for me to hit that $40/hr rate.

So my advice is to do something similar. Have your numbers ready of your hourly rate, plus whatever kit fee you want to charge based on your new equipment. Tell them clearly that you believe this will take X amount of days and hours to shoot, and Y hours to edit, plus K - your kit fee and that is how you arrive at Z which is the quote you give them. After the meeting be sure to sum up everything you talked about in writing and email it to them. You can obviously negotiate from there, but you need to be firm in your reasons and they need to understand that you aren't just jacking your prices because you can.
 
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This is actually one of the arguments against doing free or very low cost work if you're trying to make a career or build a business - it's very difficult to charge a client more once you've established a price with them. If you're doing work for cheap in order to get experience or build a reel you'll often have to treat those clients as one-offs and find new clients that you can charge a more sustainable rate from the start.

Even with that approach it's a good idea to account for the full cost on your invoices and then apply a discount to get it down to the amount you're actually charging, so that they're at least aware that they're getting a very good deal. It still won't often translate to them being willing/able to pay full price next time, but if they're referring you to other potential clients at least they do so from a position of understanding your actual rates and not assuming the discount is standard.

That's also the reasoning behind doing low cost or free projects for things like non-profits as a way to gain experience - that way when a business asks why you're charging them more it's easy to explain that you only offer that kind of discount for non-profits. You can make it out like it's a policy - "I do three heavily discounted projects a year for local non-profits as a way of giving back to the community", etc.
 
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Supply and demand. You charge more. Either they will pay it or they won't.

I gotta say that $200 is way too cheap for all of your labor AND equipment. In Hollywood $200 is about how much you should be charging for just 1 day of rental of your equipment OR 1 day of being a DP, yet you're producing the entire thing for $200! No wonder they want to use you again!
 
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Well for one I am very new to all this, and theirs was pretty much the first paid project I'd ever done. At that point I was transitioning between doing free/portfolio building work, and paid reputable work. I started doing video only about 2 years ago (the first paid stuff about 5 months ago), quickly realizing that the money a client spends on a video project is completely justified by the amount of work, time and skill required to create a professional quality product.

Had the meeting last night; they actually came to the table with a much more in depth idea than we'd anticipated (based on what they'd told us about their expectations previously) and so instead of quoting them there, I felt it was best for us to look over their idea, estimate the amount of shooting days/editing/vfx, and give them an idea of the price based on the level of work we are actually looking at.
 
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