We get several inquiries that start out this way. It’s a good question, too. How much does a video cost? And, more importantly, why does it cost this much? And what am I getting for my money?
The short answer: it depends.
The long answer? Let’s start with a story…
Once upon a time, a brand was talking with a top-tier digital video production company about making a series of videos for them. The videos would highlight a few athlete ambassadors that the brand was aligned with and how the brand’s products were used by them.
The production company’s portfolio was terrific and the brand was confident they would do a good job.
The idea was simple: make the brand look good. These guys do this everyday. It shouldn’t be too hard, right? Just go and shoot our athletes doing their thing. Follow them around, ask them a few questions, edit everything together and let me see the final product.
It’s easy to think this way, and it’s easy to assume that making a video is a straightforward process that doesn’t require much foresight or thought during pre-production. The story continues…
The production company is curious about the brand and the details of the project. Eager to learn more, they speak with the brand’s team and ask about their products. “What sets you apart from the competition?” they ask. “What’s unique about these brand ambassadors? Share with us some of their backgrounds. How do your products improve their performance?” They talk with the marketing team about what works, what doesn’t and how these videos will fit into their strategy.
During these conversations, light bulbs are going off in the minds of the production company’s creatives. They begin to see the project taking shape. They start imagining shots, transitions and the overall tone of the videos.
The production company can then get to work. After brainstorming every possible creative approach and eliminating any ideas that aren’t up to par, they create a custom proposal including the information and insights they learned from their research.
The proposal explains how they see the project playing out. It describes how they’re going to capture and bring the story to life, and what the final deliverables will be. They include quick descriptions of potential shooting locations and creative elements like slow motion and aerial drone footage to increase production value.
They explain their process and what it’s going to take to capture the necessary footage and bring their vision to life on the screen. They continue with the “why? – why they’re going to shoot it this way and the purpose behind all their creative decisions. For example, they feel that strategic slow motion shots will highlight intensity and match the effectiveness of the brand’s product.
As the brand reviews this, they’re nodding their heads up and down. They feel the production company understands them – their ideas and desires expressed in initial meetings for this project match perfectly with what the team had in mind.
The next part of the proposal? The budget.
The production company thinks about what they’re really delivering to the brand (hint: it’s not just Quicktime files). They think about what impact these videos will have on the brand. They think about the target audience and the brand’s customers – how will they interact with these videos? What kind of impact should these videos have on sales, marketing and brand value?
They consider what tools will be required to complete the job, and how many specialized people will be needed throughout the process.
For the purposes of our story, let’s say the budget comes out to $50,000 – no small number, but certainly not the most expensive video project the brand could pursue. The production company is confident that they’re the right team to do the job and they know that the brand will be able to make a bunch of money off their video campaign.
So what happens?
The brand’s CEO reviews the proposal and agrees with the production company. He cordially invites them to return next week to sign the contract, pick up the deposit and begin work.
He’s confident that he has the right partner, and he’s excited for the outcome.
Then, it happens…
Between the verbal agreement and the scheduled kickoff meeting, another player enters, offering the same professional services.
The new player offers to bid on the same scope of work and delivers a proposal that comes in at $5,000.
“What a steal!” the CEO thinks and cancels the agreement with the first production company.
That brand was a potential client for us. And the top-tier production company? Yup, you guessed it – that was us.
The above tale is a true story. I wanted to take the time to outline a few things that will better your understanding and experience of working with any professional service provider.
You might be asking yourself how one company can charge $50,000 when another will do it for 1/10th that amount. The thing is, we’re talking about two completely different projects – we’re not comparing apples to apples. What goes into a video production, including, crew, cast, equipment, etc. all effects the budget. How, you ask?
In the example above, when the brand informed us that they were going with someone else – which is totally fine – but I wanted to find out what made them change their mind suddenly. When I found out the only reason was budget, I responded by saying that what we would deliver would look completely different and would be a much more polished, substantial product for the brand. The CEO had thought that he was going to get the same quality product for a tenth the price.
This didn’t take a lot of convincing, as it was pretty obvious to the CEO once I pointed out the differences in the two proposals. However, it did delay the project.
This is completely understandable from the CEO’s point of view. As someone who doesn’t work in this field frequently (it was actually their first foray into video) he had no indication of what to expect or how to compare proposals.
The purpose of this post is to help you, the business owner, marketing manager, VP of business development to better understand what to expect and how to gauge a proposal.
When seeking multiple bids, it’s difficult to compare just the bottom line. You must take into consideration many different elements, such as:
- Fit (do I see myself getting along with these people?)
- Portfolio (can I trust that they can complete the job at the level I need?)
- Conversation (are they listening to my needs?)
- Structure (do they have a process in place to get my project done on time?)
It’s important to remember that, when buying video production, design or another form of consulting, you’re buying professional services. Video is a medium on the rise in social and marketing it should be taken seriously and with meaningful respect.
Projects should not be rushed and should have organized goals that can be measured. Iterating and improving should be expected, just like you expect from your website.
This is exactly how we differentiate ourselves in the market.
When talking to a potential client, we ask “why?” We want to go the extra mile and really understand who our potential client is. We can’t just assume that we’re the right fit for each other. Something I’ve learned over the years of doing this is that not everyone is a good fit. The sooner you can identify this, the better.
Sure, it’s more work upfront, but the projects that pan out more than pay for the mistakes we would have made otherwise. Unfortunately, this is a lesson I’ve had to learn the hard way!
Back to the Original Question?
How much a video costs is a very difficult question to answer. If you haven’t been involved with video production, you probably have no idea what to expect price-wise. A friend may have told you that she got this great video made for only $1,500, while another friend’s company spent over $35,000 on their company video!
It’s hard to know what your first friend’s expectations are and how she defines “great.” It’s also easy to think that $35,000 is a ton of money (it is!).
Some larger companies with significant budgets have certain quality expectations and (hopefully) an appropriate and realistic budget. The goal of this post is to help you understand video costs and what goes into them. It all comes down to the video’s ultimate production value.
You can ask five different production companies for quotes on the same thing and get five different answers – and the five bids probably won’t look anything alike. If you don’t buy video production services often, you might not have a good idea of all the options that go into setting a price. So, let’s break it down.
Video Cost Breakdown
A bid is going to be comprised of various attributes, and what you tell the production company is going to affect how that bid is priced. Below are some insights and suggestions for that first initial conversation with a production company that will help guide you in the beginning of your production.
Production value refers to the amount of resources and talent you put into making your video. The higher the production value, the higher quality video you’ll have, and the larger the budget you’ll need to accomplish this.
This takes into consideration a number of things like camera, crew, talent/actors, shooting locations and shooting days, lighting and grip, post production, effects, graphics and so forth. A greater production value doesn’t necessarily translate to a better video, per say, but it typically does and the studies about this are pretty incredible.
Read Marshall McCLuhan’s Medium Is the Message for more details, but to sum things up: creating less stress for the viewer results in greater retention and shorter perceived length. In this case, shorter is always better.
Have you ever walked out of a movie and said to yourself, “Wow, I can’t believe that was 2 hours!” This is production value at its finest.
Some things to consider when considering production value levels:
- Pre Production work required to organize shoot
- Number of shoot days required
- Number of crew required to work effectively (hint: there can be a lot of people on a crew)
- Skill level and experience of crew members
- Where will we use this media – internal communications or blasted out to millions of potential customers?
This is similar to building a house. Not all homes that are 2,000 square feet cost the same to build. If one house has much nicer interiors and appliances how could they?
But cost is usually not the only thing that determines a budget, as most savvy creatives know, it’s based on value.
Set Your Budget Range
As early on in the process as possible define your budget range with your video production company. This will save you tons of time and headaches down the road and make for a smoother process for all parties involved.
If you know what you’re comfortable spending on video production, you should also have an idea of the quality you can expect. Look through a production company’s portfolio and if it matches the quality you’re going for, ask about the specifics of individual projects. See if you can find out what went into a project you like and what the results were.
Don’t be afraid to let a potential production company know how much money you have. I know what you’re thinking, – “If I admit to having $150,000 then I’ll get charged $150,000.” Yes, that can definitely happen. But are you hoping to get a $150,000 video for half or a quarter of the price? This is far less likely to happen. Furthermore, it wastes everyone’s time talking about a video that is priced at $150,000 when your budget is $40,000.
When you tell someone that you have $150,000 for a video and you want something professional and well done that will generate solid results, you aren’t overplaying your hand. You are saying what you want and what you expect. Don’t be afraid to verbalize what these expectations are and if you have a marketing plan in place.
Full disclosure here, the product we deliver for a client with a budget of $150,000 is going to look very different than the product we deliver with a budget of $40,000. We’re not going to charge you $150,000 just because we know you have it. However, it wastes everyone’s time talking about a $150,000 project when your budget is $40,000.
Mule Design has a great post about setting your budget and the reasons for disclosing it.
Expectations & Goals
What do you want to happen as a result of this video campaign? Sign up 1,000 new users? Sell 500 pairs of jeans? Get 3,000,000 views? Without setting goals, it’s hard to measure the success of your project.
Production companies need to know what the best outcome of the project is, as this sets a bar that needs to be met or exceeded. Having specific, measurable goals established early on will give them a better idea of how to bring your story, commercial, or other project to life.
If a production company has already proven they can achieve something similar to your expectations, then you know they can repeat it and – get this – probably improve on it.
They can also let you know if your goals are realistically aligned with your budget. Getting several millions views on a project that cost a few hundred dollars is not very realistic. It has happened though, we did it with this viral video.
The production companies with more experience are usually going to require more budget. Judging from their portfolio of past work, you can see what kind of work they’ve done and the clients they’ve worked with in the past.
Working with someone who’s new to the game and working out of their parent’s basement will be a different experience than working with a production company in a professional office setting. The price they charge will be appropriatelyadjusted, too. The professionals who have been doing this for a long time inherently bring with them more value, and will deliver a product that works harder for you, engages your customer more and overall, increase ROI.
So how much does this cost?
No two projects are the same. No two companies are the same either. Identical projects for a non profit next door and Nike would have completely different budgets attached to them.
Usually, it doesn’t come down to an equation of “time x materials x profit.” Some production companies may work that way, but the ones who care about the impact that they’re creating won’t.
How can a production company price like that if they’re generating millions of dollars in revenue with the projects they create?
At TAR Productions, we price projects based on a few things, but the biggest determinant is the value created for our customer. Our costs, time and labor are considerations, but they’re only base guidelines.
Since we work on strict confidentially agreements with our clients, we can’t disclose exactly what we charge for other projects. But questions we ask during initial conversations are about budget, expectations and goals. Budget isn’t the single most important element of a project, but it is important.
Here are some rough breakdowns on our past projects:
Great article ? Very TRUE!
Happy you found it valuable. After putting value pricing in place, let me know how it goes with your clients.
Thanks for a very informative article!
Great article. (Couldn’t get the examples to play though.) Like you say overheads are a big factor. Offices, crew, etc. Some of our own clients over the years have mentioned the “CEO with his new camera” scenario…..who will do it cheaper. It’s a tough game. Thankfully years spent in the industry, knowledge of people, and profit, have always helped us through.
Broadcasters budgets have also been slashed over the years making that sector particularly tight. The ups and downs of the corporate sector (Harrods to Poundland) and their budgets, like you say, can range vastly.
Thanks for posting.
Videos should be playable anywhere, we don’t have any restrictions. Here are the direct Vimeo links:
Yikes! We r a small production company/crew; started producing a Creole Christian TV show in Haiti where we r missionaries. La Bonne Nouvelle went viral; 10 yrs later we r on 80 stations inc Boston, NY, Miami w an estimated 2 mil viewers a week. And the best part is no stations charge us airtime b/c the content is in demand by Haitian audiences! So 10 yrs & 86 episodes later, we improved r productions & now we r getting RFP from big orgs. They want a proposal for short videos; I write the quotes w a flat rate per post production minute. Isn’t this the industry standard for small productions, to charge by the finished minute?
I’ve heard of a few people pricing projects that way but it has never made sense to me. You might want to check out this post: http://tarproductions.wpengine.com/2015/08/03/why-you-should-avoid-rfps/
This one http://tarproductions.wpengine.com/2015/08/03/why-you-should-avoid-rfps/? Just read it & sending to hubby as he sent me ur first one – yes we’ve successfully bid 0 as in nada RFPs. I get sick just opening them & refuse to compromise price or quality! When u ask them, “Who’s ur target?” They have no idea; this is government money & they want a video that is all they no; but when some hack under bids w a home video camera he gets the job! I hate it & hubby thought I bid to high. Thanks for great posts, I’m vindicated.
Glad it was helpful, Yvonne. Please share with others who you think will enjoy.
As we speak just got one of those bids! This is a big deal since we have never monetized r show; we do it to promote the image of Haiti that no media shows – a beautiful Caribbean paradise and then we minister a short scripture message. So a paid gig is a big deal, thanks for your posts.
This is a part of the business that often stresses me out.
It is also a process that we rarely discuss with our production friends that we may someday be in competition with.
It can become a mind game within ourselves. Self doubt can enter the picture, and diminish the confidence of even a twenty year veteran.
Do I low-ball the bid in hopes of getting more work, and maybe raise the rate later when they appreciate my work?
Do I bid higher in hopes of concentrating the appropriate time, energy and equipment on the shoot?
I have worked both types, and can note a few points:
Low-ball shoots are rarely worth the effort.
The future rates NEVER* go up. *(note the emphases on NEVER… ever!)
The client doesn’t become easier to please, nor does he gloss over flaws in my production value, based on the fact that I was so cheap.
My production friends deride me, and blame me for the ruining of the local market.
If I bid higher, I might be told “No thank you, our budget doesn’t support that.”
In my experience, it is better to loose a gig and be respected, than win one and hate yourself for bidding on.
Very well said. This can be applied across multiple mediums, not just video editing. It’s nice to see this explained in a clear and transparent way that I think corporate decision makers can relate to. The hard part, of course, is getting them to take the time to read this fully and then transfer these rules to others in the decision making process.
The whole posting is absolutely brilliant! Thank you so much for clarifying, endorsing, and making, so transparent, many of my thoughts regarding this subject. One has to maintain a professional integrity and respect for one’s expertise at all times, which can prove to be difficult. But, like you say, the ramifications of short-changing oneself is truly not worth it.
Most asked question ever when clients call me
‘How much will a video cost?’
I often ask them
‘How much does a house cost’ or alternatively
‘How long is a piece of string?’
In all seriousness I want to ask them who their audience is,
what do they want their audience to feel hike watching, and
what action would they like their audience to take after watching.
Also what is the distribution method. And yes, I ask them what
their budget is. If their budget is $500, they are not likely to be
a good fit with me, as I don’t dabble in that market. At the very
least I try to get a budget range. It’s the other side of the coin from
‘How much for a video?’……’What value do you put on a video
and what is your budget range?’ If potential clients don’t want to
give me any budget range, they are probably ‘price shopping’ and
not a good fit for me, but out of courtesy, I will give them a price
range…..but it is usually a bit of a range and they don’t always
understand that very well.
Great article, pricing projects is a tough task and you really hit the nail on the head with this post.
I operate a creative production company in the Midwest, called lofthouse films. We do a lot of lifestyle/product experience videos for breweries & automotive companies. We recently had a client approach us about working on a retainer agreement since we create new videos for them every quarter and also provide the tools to measure the video campaigns success.
Have you ever worked with retainer agreement? If so, what was the experience like and would you consider it again?
No, we typically do everything on a per project basis. There are times when retainers make sense, but most of our work it doesn’t fit what we do.
Great article, thanks so much for the transparency. I was wondering – on average, what % of the budget is reserved for the music spend?
Depends on the project. I’d argue that custom music design/score can be more valuable and if you’re hiring composers, musicians, bands and a recording studio you should consider that in your pricing. However, there are some great music options available for licensing for a fair price/value. -Tim
Gotcha. I’m actually working on a product that streamlines the music licensing process for video creators. We’d love to work with video creators that want ‘more than stock music, but can’t afford Beyonce’. Essentially we have Tastemakers in every genre of music handpick a list of great up-and-coming Artists within whatever genre you’re interested. Think 99 designs for music licensing.
We’re just doing more research on who would be good target users for this particular need. Would you be able to eyeball the estimated music budget for each of the pricing brackets above?
– Under $15,000
– $20,000 ? $75,000
This is awesome thank you. How are you actually breaking down costs of the project like this in your estimate? Is it just 1 line (full number) or are you doing something like above the line costs (producer – %) since you aren’t using rate days? Or another way?
Hey Chris, In our proposals we don’t break down or itemize costs. We’re clear on what we’re delivering and how we’re creating it and provide a fee for our services.
It’s crazy because I agree with everything you’ve said in this article…yet, I know hustlers in London who have acquired the same standard video quality as some of your projects (some even better) for FREE. Everyone has a DSLR these days, everyone has final cut pro…the creative industry is losing it’s value very quickly and that’s the truth.
This is futile. Just because you have a typewriter it doesn’t make you Hemingway.
Of course, but if you’re good at what you do then you’ll know your value. I’m just saying, i’m in a lot of influential group chats and i’ve had an insight on the media industry over the past few years. People don’t like to pay lol…I know a lot of production companies and freelancers who get people to do the job for free/barely anything feasible. I know my value so I would never work for free, however I also know how to hustle and would be smart with budgets.
Thanks Tim Ryan.
Again, your insight is greatly appreciated.
Rarely has a discussion of video production costs started with the most important factor–people. Not only should a production company harmonize with the intent of a client, but it should also deliver a production that entices the client’s customers to action. While costs and profit are important for everyone’s success, at the end of the day, it’s all about people.
Wonderful sharing. Thanks.
This is extremely helpful! I can’t seem to download the budget templates though, seems to be a dead link. Is there anywhere else I can find them?