Concert DVD price war

[David Cleverly]

Hi all,

One of our regular clients got us to film a mid-year dance concert recently. We have been producing for this client for perhaps the last five years. We do two concerts a year for them...one mid year and one at the end of the year. They have been in business 20 years. We have had some minor issues with this client being caused by, what I believe to be, them being overwhelmed with their workload and simply forgetting details. One time they also simply couldn't pay us after organising to pick up the DVD's because they had spent the money before they gave it to us, but they did eventually pay. Our dealings sometimes get a bit messy but it always works out in the end.

For some background info, we have always charged $45 per DVD sold. It's risky (because we might sell very few) but normally we do ok. We do a three-camera shoot with one main manned camera and two fixed angle GoPros. It ends up looking pretty good but the whole process is indeed a lot of work as you could imagine.

A week before this concert, the principal rang and asked me "will the cost of the DVD's be the same this time?" I explained that yes, they will be the same. To me, that meant $45. However, on the night of the concert, the MC announced that the DVD's will be for sale at $35 each.

The next day I contacted the principal and questioned the amount thinking that perhaps my wife had made a different arrangement with him (one time we just handed over the copies and they packaged them themselves) but he said "no, when I spoke to you, you told me they would be $35 each".

So what to do?

I know I wouldn't have said $35. In fact I remember simply saying they would be the same price, which was $45 and I guess there is nothing in it for them to quote a lower price...

The principal's thoughts are that if we now say they will be $10 dearer than advertised, people won't buy them and pirating will be almost guaranteed...

I am to respond before he does anything.

I was tempted just to cop it on the chin, but I believe the business will be out of pocket somewhere to the tune of $1000 because of their stuff up. My opinion is that the dance company should foot the shortfall.

How would you handle this?

Many thanks.

[Don Bloom]

Not to sound like a holier than thou guy but this is another reason I have ALWAYS used a written service agreement with any client I have ever done any kind of work for. I had a client for 16 years, 12 to 14 seminars a year and while the basic agreement spelled out the typical details if anything was to be different in the scope of work, a new agreement was done. Even if it meant getting it signed at the time of the seminar.
In your case, without anything in writing, it his word vs. your word. It certainly doesn't cost $45 per DVD unless you're counting your shoot time in that and use that as a figure to recoup all your cost plus profit. If you charge seperatly for the DVDs than I would see if he's willing to come up to the $45 or possibly split it with you ($35/$45=$36.50) otherwise I would do it for the $35 with the understanding that there was a misunderstanding and that from this point on all pricing shall be agreed to prior to doing the job.
Sometimes you have to draw a line in the sand and not let them cross it.
But that's just me! ;-}

[David Cleverly]

Thanks Don,

I agree with your agreement stipulations. Have never had to concern myself with this for this client, but here I am again being bitten because of the fact that there is no written agreement. Not the first time with small clients that usually just require a verbal. Just goes to show that even the small "almost-not-worth-it" type of client (if there is such a thing anymore) needs to be treated the same as the corporate big guns.

And, yes, the DVD price to the school ($45 each) also has to cover my time on the shoot, editing, printing, duplicating, packaging and delivering. Almost not worth it considering we may not sell many DVD's, but - as I said - we normally do just "ok" out of it.

I guess verbal agreements work until they don't, huh?

Thanks for the input.

[Tim Polster]

David, you are stuck in the situation and a contract would not help you much. In this type of sales situation the school nor the principal is your client, the parent who purchase the DVDs are your clients.

I have learned to approach these types of events in two ways:

1) Pure sales. The institution does not pay us, the revenue comes from customer purchases. In this setup we always handle the sales at the event. All dealings with orders, money and delivery are through us. We make the order forms and pricing is visible.

2) Preset price. The institution pays a set fee and we deliver a set amount of DVDs to the institution. They sell the DVDs through their channels at whatever price is good for them. A contract is more important here.

As to your current issue, I would guess nobody wants to pay any money to resolve the situation. I would say just go with the $35 and protect the job for the future. Any lesson you could take away is to always try to control what you can with regards to your product. Printed order forms and your own sales table at the event. Always try to limit your risks through practices and proceedures.

Good luck.

[David Cleverly]

Good points, Tim. Thank you.

This got messy because indeed it was one of those situations that evolved over a few years into something that just "happened" each year without too much discussion...they handled the videos; took the orders and passed the numbers required onto us. "Our concert is on such-and-such a date this year...can you do that?" and that was all we heard until just before the concert.

But we were shocked to hear the price of the dvd's they quoted, because we have NEVER charged them that in the 10-odd concerts we have shot for them.

I am guessing taking the pressure off the school re handling the orders would make them happier, anyway.

Thanks again.

[Tim Polster]

Yeah, I know and have been there myself as well. I want to operate on a handshake all the time and that has got me into trouble at times.

We have found that the schools would rather not handle anything so I would agree that it would not be a tough sell to change the format. It is your business and they often do not want to be responsible for services outside of their control.

I like operating under option #2 in my post but that does not happen very often in my experience.

[Dave Blackhurst]

The interesting question here is will you "make it up on volume"...?

The theory probably was that with the tight economy (I presume worldwide...) perhaps there would be an INCREASE in total sales if the unit cost was lower... so as this transpires, will you sell enough additional units to compensate, or just the same # at a lower price, cutting your returns?

This may or may not work out - it's just as easy to "pirate" a $35 disc as it is a $45 one... and those prices seem a bit high, but not sure how Aussie $ relate to US$. Is there enough quantity to justify mastering and short run duplication to save you time, or is it too small a run?

I'm watching a somewhat similar situation where another videographer did an "up front pricing" special with nearly a 50% discount on "multiple orders"... I'm guessing there'll be bald spots before that one is all over. I had scheduling conflicts so I passed, and with the "discounting", I would have passed anyway, as the economics of the total job wouldn't ahve worked out. Sure, a cheaper "up front" price to generate orders is a good idea, or a quantity discount, or whatever, but if the "discount" is too high, someone goes home without a shirt...


Unfortunately, you're probably in a tough spot - somewhere along the line "memories" didn't line up with reality, and with no paper contract, you've got a tough dispute should it come to that... worse yet, the actual CUSTOMER (the parents bying the DVD) aren't going to be happy should the price increase, nor will they likely care who did what... meaning you're on the hook to deliver, at the lower price... hopefully in sufficient quantity to make the bottom line work.

I'd suggest a sit down with the "client", and a contract, even a minimal one, be put in place so there aren't any future "misunderstandings". Presuming this was an "honest mistake", not a misguided way to "bargain" after the fact, you should make sure it doesn't happen again. While "handshake deals" are great, having some written notes or preferably a written agreement is better as you get older!

Who knows, maybe you'll "get lucky" and sales #'s will be "way up"!?

[Allan Black]

David, imo you'll have to wear it this time, but next time they might quote $35 again, so after you deliver this order, just casually mention that next year you'll email the price.

You haven't mentioned whether you make the DVDs but check around the city, you can get good quality for a few bucks in qty with 4cl. sleeves.
I know of an outfit that orders a large number to get a lower price, then they have some for re-orders or just swallow them.

Cheers.

[Reed Gidez]

Last year I ended up in a somewhat similar situation with a school. I had provided coverage for their grammar school graduation ceremony for a few years and ALWAYS had a signed contract for XX DVDs. 50% on signing and the balance due at delivery. Never had an issue until last year when they asked me to also produce a video yearbook for the class to be shown immediately after the ceremony.

In previous years, the video yearbook was done by a faculty member for a fee made up of stipend from the board of ed and a contribution from the graduation committee fund (funded by parents). I agreed to do both videos for the same fees they had been paying in the past. Stipend from the board of ed, contribution from the committee, and the same fee for the graduation. Contract very clearly stated the monies due from the committee for the graduation and the yearbook and that it did NOT include the separate stipend from the board. It clearly stated the committee's obligation.

At the end of the day, despite signing the contract, the responsible parties on the committee did not read the paperwork, assumed the board stipend was included in my quote, and shorted my $800 +. They then tried to make it seem as if I was double dipping ("how did you know about the stipend?"). They spent the $800 on other stuff and really had no money left to pay me all of what was owed.

As I also live in the town, it wasn't worth generating the ill will and ugliness in trying to recover all that was owed me. This year when they asked me to do it again, I politely declined. In this case, a signed contract did little good but I still won't do a job without one and I try to make sure it is backed up with an email that clearly states the terms up front.

[Tim Polster]

These situations really show the mix of reality and theory when it comes to being a service provider, doing work and having contract obligations. Sadly, many times a contract is not worth anything in the end as people often "hire" you based upon good will. Even if they are part of an unethical practice as displayed by Reed's example. (It is amazing they had the guts to ask you if you wanted to do the job the following year).

[Silas Barker]

Sounds like there was a misunderstanding about the pricing of the dvds so thats difficult. I would try to work things out with them to keep their business and make them happy but in the future here is what I would do:

Use a Contract. On the contract clearly mention that if a certain minimum of dvds is not sold for the show, then the dance studio must pick up the tab. PS- MAKE THAT REALLY CLEAR UPFRONT! That's what I do and it works great. It also encourages the dance studio to try to help you make sales. If you ve been working with them for a long time then it might be difficult to start using a contract and changing anything but in the long run you will be both be happy. I actually have the same situation - dance company I ve been working for for 7 years - never used a contract. This year I plan to start doing it to insure continued satisfaction on both mine and there end.

Hope this helps!

[Christian Brown]

I once had order forms with a typo at a chorus concert. Half of them said $30, and the other half said $25 (whoops!). I accepted both.

In your situation, I would simply email the person you talked in order to clarify. "Hello, I heard that the MC announced the wrong price the other night. We will still be selling the DVD at $45 like the past years so we can hopefully cover our time."

I'm curious... how many DVDs do you sell? 5? 50?

[Mike Watson]

I have had a very similar situation, down to the emcee announcing the wrong price and the venue trying to enforce it. I just said to the guy at the venue, "I'm sorry for the confusion, the price is and always has been $45." Most people paid it. Some folks raised a ruckus. I turned them toward the venue. In the end, the venue ended up coughing up the $10 difference between the advertised price and the actual price. The guy at the venue was pretty pissed.

I don't know where you place the blame, you seem split between whether it's a miscommunication or an intentional low-ball. I was pretty confident mine was intentional, and I wasn't about to back down. They stopped calling me after that incident, I don't know if they found someone to do the gig at the price they thought was fair (I mean, you can buy DVDs at Best Buy for $10, that $45 price must be gouging, right?) or not, but I will say that moving on from that gig is a move I don't regret.

[David Cleverly]

Thanks everyone for the replies (apologies I was not getting reply notifications for some reason after a while)...

We sell about 80-100 DVD's for the concert.

The price of the DVD's includes the setup for the shoot (which, by the way, has to happen 2-3 hours BEFORE the show begins), a pre-show "backstage" shoot to be used as an intro on the DVD, the shoot (2-3 cameras including one manned one), the edit, me doing the duplication, colour printing on DVD's and full colour photographic quality DVD insert in DVD cover. The end product looks great and they all love it.

In the scheme of things, $45 is a bargain, but, yes, still perhaps a little high for each family to spend. Hey, they don't need to concern themselves with the production costs, do they? ;-)

Now, the client has informed some of the customers of the mixup and there have been no issues with the extra cost so far.

But I think I know where the $35 came from now:

For this same mid-year concert last year, the school got me to simply hand them over duplications for an overall fee. No packaging; just the discs. They packaged and did the rest. I am guessing they charged the families $35. Looking at those figures, I am also guessing the dance school made a tidy $1000 profit AT LEAST on that deal!

Yes, this is a goodwill deal and contracts are no good unless you are willing to legally enforce them. And that, in this situation, would mean the end of the relationship, guaranteed. In reality, a contract probably won't be needed as they appear to be doing all they can to resolve the issue themselves.