Pricing FORMULA for Video Production
Okay let me start off by saying this is not the only way to price for video production but this is my method and it’s awesome. I created this video to share my pricing formula for those struggling with proposals and wondering if you’re charging what you should. This is really geared towards middle market corporate video production but the concept can easily be scaled up or down to accommodate your worth. The biggest take away from this formula is that it’s customizable and scalable from 1 hour to 10 hours+ for filming. This gives your client more flexibility and gets you paid for each hour you and/or your crew is working.
- Pre Production
- Post Production
- Daily Studio Expenses
- Cost of Goods / Services
- Company Profit
Your studio hourly rate
What is your hourly rate?
We charge $100/hr for anything related to pre-production. For us this includes:
- Research & Development
- Project Planning & Logistics
- Casting for Actors, Models, & Voiceover Talent
- Script Writing
- Conceptualizing / Brainstorming
- Substantial Phone Calls & Meetings
- Location Scouting
- Story Development & Messaging
- Music Supervision
25% of full day rate is a base rate
75% divided by 10 equals the hourly rate
Base rate + hourly rate = filming fee
What is your full day rate?
If you don’t know your full day rate, you’re going to have to start thinking about it, but most people know what their full day rate is. This number is subjective but if you need a place to start as a DP, this should work:
- Under $500/day – Little experience
- $500 – $2000/day – Average to Experienced
- $2000 – $5000/day – Experienced to Awesome
- Over $5000/day – Top Tier
We price our full day rate based on crew size. These are our 2 main crew sizes
2 Person Crew = $3700/DAY
$950 Base rate + $275/hr
1hr – $1225
2hr – $1500
3hr – $1775
4hr – $2050
5hr – $2325
6hr – $2600
7hr – $2875
8hr – $3150
9hr – $3425
10hr – $3700
3 Person Crew = $5050/Day
$1300 Base rate + $375/hr
1hr – $1675
2hr – $2050
3hr – $2425
4hr – $2800
5hr – $3175
6hr – $3550
7hr – $3925
8hr – $4300
9hr – $4675
10hr – $5050
I have a printed copy of this hourly list right next to my desk and I can easily fire off estimates to clients without even thinking about it.
So the formula is approx. = 25% base + 7.5%/hr.
If we go past 10 hours, 1.5x hourly rate starting on the 11th hour.
How was the formula created?
For me, we generally use two & three-person crews for most productions. Yes, we do smaller and larger, but for the sake of this example, I’m going to use these two examples.
So my studio’s 2-person crew full day rate is $3,700. That includes the rate of the two crew members, daily expenses of the studio, and profit. Now we take that number and we know that that’s 10 hours. Next question is “What is it worth it for my crew to show up with gear and do nothing?” For us, it’s about
Next, you take your $3,700 or your full day rate and you minus the $1,000 or the minimum amount it costs for you to show up and do nothing. In my example, we have approximately $2,700 left. If you do the math, you’ll see that the amount of money it costs for us to show up is almost 25 percent of the total fee. If we take the $2,700 and divide it by 10 hours (full day), we get about $270/hr. So with those numbers, we rounded them up/down and came up with our pricing formula.
When does the clock start?
Every studio or freelancer is different but a common method is what’s called “portal to portal”. Means from door to door. For us, we include up to 1 hour travel time to get to the location. If we are still traveling after 1 hour, the clock starts. Our method is “entrance to exit”.
Single Hired Gun vs. Crew
Many filmmakers can get hired freelance as themselves to show up with their gear and do their thing. Sometimes they are hired by the client directly and sometimes they are hired by a studio. In other cases, it’s your studio sending a full crew to film. In either case, it’s important that you take into account a few things in addition to your “rate”.
Your studio hourly rate
We charge $100/hr for editing and common post production services like coloring, organizing footage, syncing, audio sweetening, etc.
We charge $150/hr for motion graphics.
When giving estimates, it’s our responsibility to give an accurate range of editing time that a project may take to finish
Daily Studio Expenses
Total recurring company expenses for the entire year divided by 365
The simplest way to figure out your daily expenses is to take an entire year’s worth of expenses of your studio (insurance, lease, gear, computers, software subscriptions, email service, web server, utilities, etc). Divide that number by 365 and you have a quick and dirty number of what it costs for your studio to run every day whether you work or not. It’s up to you how much you want to factor into your rate but you need to take this into consideration.
COST OF GOODS/SERVICES
Additional fees charged for the project
This would be any additional costs for the project that you are being charged for. This could be actor fees, location or permit fees, voice over talent fees, music licensing fees, stock footage fees, etc.
The time you spend managing these items should be billed under Pre Production but the actual fee that you are being charged would fall into this category
You’re in business. Always make a profit
After you and/or your crew get paid your rate and you’ve factored in your daily studio expense, your company still needs to make a profit too. Some may call this “markup”. Whether it’s 5% or 30% you need to make a profit.
I got so many questions via email & social after releasing this video so I made this 2nd video to answer the most popular ones.
Music licensed “Superhero” by Chase K