What to charge for web videos

[Jeff Anselmo]

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,

[Shawn McCalip]

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.

[Tim Polster]

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.

[Rick L. Allen]

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.

[Shawn McCalip]

Originally Posted by Tim Polster

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.

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!

[Jeff Anselmo]

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,

[Jeff Anselmo]

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,

[Kim Swift]

Hi,
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[Tim Polster]

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.

[Jeff Anselmo]

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,

[Jeff Anselmo]

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,

[Steve Oakley]

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.

[Jay Gladwell]

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?

[Steve Oakley]

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.

[Daniel Lippman]

Originally Posted by Jay Gladwell

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?

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.