I know this is a pretty broad question, but I'd just love to see the different takes on this out there. I've started getting "ins" from companies and artists just in the last couple of weeks. They're interested in having Web promos or music videos shot, and I really don't know how to charge. I don't really believe in hourly rates. I know that's probably the most common thing, but I think charging per hour almost always ends up screwing the cinematographer or the client. I'm more comfortable charging flat rates, and saying (in less direct terms, maybe), "Hey, the product I give you is going to be worth X amount. I'm going to give you something you love, whether it takes 20 hours or 60."

If it helps, I'll throw out a hypothetical and let you guys tell me what you think is fair to both parties:

A small-to-medium-sized marketing company wants a promo to put on their website and show to potential clients. They're looking in the 3-5 minute range, with a shorter (45-second, let's say) cut of the same material, as well. I would bring 2 camera operators (including myself) and about $10,000 in equipment. I would probably rent around $400 in gear, lighting, etc. Let's say there are a few locations (3 or 4) in the same town. We'd need it to be fully legit, so we'd need to pay a song licensing fee. If we go with an indie artist, that'll probably add $100 or so. I realize experience should factor into price. We aren't Philip Bloom or Stillmotion, but we're not recent college grads with a few months of shooting in our friends' garage, either. We're fully confident that we can "wow" the client.

So what are we worth? How do you settle on pricing? At what point does this usually come up in meeting with the client?

Any insight would be hugely helpful. Thanks!

Are you doing it for fun, or as your main source of income? You might want to check with your accountant. Or, you might want to get an accountant...

Whichever accountant you consult is going to tell you that the hourly rate thing is a pretty solid business model, so long as you figure the rate correctly. You have to take into account the cost of keeping the doors open. If you package up equipment and crew, you have to figure what your costs are, and then tack on your profit margin before quoting to the client. Industry standards for post-production factor in around $125-$200/hr. on average depending on the room and your geographic location. If the room is your bedroom, and the equipment is your laptop, well, the price should generally be lower.

I'm going to warn against a flat rate with an open-ended time commitment on your part. Projects like that tend to go wrong in all sorts of ways. Don't do it!

Then, there are the intangibles - how much your client prefers your work to others who may cost less, despite maybe having more or more expensive equipment. Talent and inspiration are hard to price.

Just remember, companies that don't make a profit don't last very long. Get a feel for your market area - what other companies that do similar work charge.

1. How much is your time worth in your estimation? Then do that for the rest of the crew.
2. Add this to the cost of production, all inclusive
3. Add a percentage of the above sum to it - that's your profit from this gig that can be used for future equipment or whatever.
4. Quote this price. Gauge your client's reaction. They might just accept it!

What Eric said is so incredibly true about flat rates. Unless you can't get out of doing it, don't. When people are charged by the hour, they listen and let you get the job done. If it's a flat rate they want you try all of their made-up-on-the-spot ideas and then when all else fails they let you do it right. I know it sounds harsh but I've had some people keep me working until 3:30 the next morning when it could have been done by 11 or 12 because it won't cost them any more.

I think you have two project types that could work out with the hourly or flat fee. However, the hurdle is how much experience you have in determining a budget.

For any truly creative or artistic work, ALWAYS use an hourly rate. It can be adjusted down depending on your level of interest (love of the project) This tends to make everyone happy and no one feels taken advantage of in the end.

For scripted projects like web commercials, I generally do a flat fee and spell out terms very clearly as far as number of roughs and the approval process. If they exceed those limits my rate per hour is then put into effect. This is possible after many years of doing these and knowing how long each part of the process takes. And I always have a good amount of padding "just in case".

I don't have to rent equipment any more and this has made a huge difference in the range of rates I'm comfy working within. If i get a sense that price may drive a potential client away, I can adjust to their needs since all my gear has been paid off and essentially I have no overhead. Dropping the rate is based upon how many projects I'm juggling. If I'm not all that busy, I'd rather take a gig for a reduced rate than sit around twiddling my thumbs! BUT I never give it away!