can we survive falling rates?

mountainman wrote on 6/6/2006, 7:57 AM
I just saw in another post about a production company that works for 35 bucks an hour. For that rate you may as well go dig ditches, you will be way ahead. With 4 thousand dollar HDV cams, 500 dollar edit programs, and a willingness to work for 35 an hour, will any of us survive? i just read an article in Wired about stock footage houses that sell stills for a buck. Are we doomed? Should I go back to being a concrete finisher? How can we make a living in this new era? End of Rant. JM

Comments

Jay Gladwell wrote on 6/6/2006, 8:00 AM

Anyone who is in serious need of serious, professional quality video production will not have someone such as this produce their video. You get what you pay for.

Remember, just because you own a scalpel doesn't mean you're a brain surgeon!


mountainman wrote on 6/6/2006, 8:29 AM
Jay, at one time I would have agreed with you. Now I'm not so sure. I have seen some awful producitons that client accepted. Why, cause the price was right. My feeling is because video is so commonplace, it is losing it's percieved value. Anyone can do it. Not well of course, but they can get an image on video.
I have clients that come to me and say "We had a guy shoot this, the audio is kinda low, can you fix it.," When they realize the project is useless it takes them out of the market. They still don't see the value of paying thousands of dollars for my work, when they can buy a camera for $300 dollars. jm
Laurence wrote on 6/6/2006, 8:40 AM
We are definately going through a transition. Equipment prices are dropping and our economy is about to nose-dive (thanks largly to our current government). It's strange but I see a time in the near future when a fluid head costs more than the camera mounted on it, and where editing can be done on the cheapest PC from Walmart. Prices are going to drop, there's simply no way around that. Things like event coverage can be done pretty cheap these days. I think the only defence we have is to give customers a quality difference worth paying for.
Jay Gladwell wrote on 6/6/2006, 8:57 AM

I'll say it again, just because one has the tools, it does not mean they are capable of using them in a professional manner. Those who are not capable of delivering a quality product will die by the wayside.

The video you are fixing now, how long do you think the outfit that shot it will stay in business at that rate?

I, too, am fixing a video made by a supposedly "high-end" production house. They got sloppy and gave the client a ship-load of grief in the process. This unhappy client will never go back to them nor will he ever recommend them to anyone. And when anyone asks him for a referal, he tells them to stay away from company X. So how long can they last under those circumstances?


dornier wrote on 6/6/2006, 8:59 AM
Hehe, I'm hijacking this thread...just this once.

You guys are scaring me. I'm a furloughed airline pilot who worked for a low-cost carrier for nearly 10 years. I started getting into this because I've found a market here for photo restoration and small vid production; that and it's nice to do all your hobbies daily.

Yours is not the only industry where there are those who would accept dirt pay for the job.

Regional airlines (Unitex Express, Delta Connection) start between $15 and $20 per hour.


That's flight hour, not duty time. I averaged between 300 and 400 hours of "on-duty" away from home a month. My pay was based on the 75-hour "flight schedule".

I can name two major legacy airlines who pay first year guys $2500/mo (gross) and a flat $26,500/yr (gross)--I'm talking guys flying Boeing 777's across the ocean. Think about that the next time you're waiting on a delayed flight.

Yes, the money there goes up after 4 years or so, but my profession takes around 10+ years or so just to get on with those companies. A lot of investment, and it's eroding fast.

It takes a lot of effort to keep your profession alive. That takes policing and communications. You can make more as a tennis instructor.

***Since we're on the topic what do you folks consider to be a good hourly rate for a "one-of", 25-minutes slide show compilation? Custom 3d graphics/menus, restored photos, themed & timed to suit the customer...not just a 5 second stock transition.

(the thread has been handed back, thanks)



filmy wrote on 6/6/2006, 9:05 AM
The issue of rates come up a lot - but remember that the prices of gear has falling a lot as well. For me the backlash of low priced gear, and the ability for any 10 year old to be able to shoot , edit and turn out a full featured DVD at home, is that you find yourself in compititon with...well, the 10 year olds out there. Why should someone pay thousands of dollars to a "pro" when they can get their 15 year old nephew to do it for a hundrad bucks?

I know I like to fancy myself as a pro who for sure knows how to do things better than a 10 year old, or even a 50 year old in many cases. But the reality is that if 20 years ago i might have been asked to put together a slide show for someone the reality is that now anyone can psend a few bucks on a program like memories on TV and do it for nothing. How much I know really has nothing to do with it because what took skill to do now can be done with a few mouse clicks.

Just look at Cinescore. A while back I sopke about the "template" based editing that Pinnicale had. Thye included a basic SmartSound package along with pre made editing templates so you could just dump in raw footage and select and editing style and let the program edit for you. Now we have CIncescore which is sort of a like a dumbed down version of acid. Just dump some footage into it and select a theme and the program assembles the loops for you. So here is the answer to the question of "can we survive"....maybe.

Depends on what you do. I have maintained for years that the ability to DIY is great but also it is a great burden on everyone who has been doing it for years. As learning tools what is out there is awesome. But most everyone who is working full time and makinf decent money at it, at some point those learning tools give way to "pro" tools...at least they used to. More than ever the consumer and prosumer stuff is blurred - camera that are exactly the same except a "pro" version has timecode for example. And when many pros are using this same consumer/prosumer gear it even blurs more.

What someone charges should be based on how good they are, how long they have been doing it and what the market calls for in their area. But also between Hollywood, California and New York, NY there is a vast tract of land called the United State of America and they think paying 35 bucks and hour is just fine, if a bit pricey. The overall salary average in most areas is still under $40,000 a year - for two working adults. A person who makes $100,000 a year in some areas would be like making several million a year in others. Where I am at now I am making about the same as I did 15 years ago and, sure, it bothers me, but I also relize I am not living in Los Angeles these days and my break even point is a lot lower and the cost of gear is a heck of a lot less than it was - so much so I can afford to use my own gear, as opposed to 20 years ago when the price of whatever I needed was part of a package price that included rental.

And, IMO, rates are always something that needs to be adusted. Remember that person who is getting 35 an hour now, if they keep at it, logicly will adust their rates over time. If they really suck than there shouldn't be too much to worry about anyway because most people would be willing tp pay more for something better. And that is the key word - better. I go back to the slide show example. If I said to someone give me all your photos and I will create a slide show by "hand" and burn it to DVD and I will charge 500 bucks for doing it but the end result would be almost the same as someone who, for 100 bucks, would simply dump it all into a program like Memories on TV, or even Pinacle Studio using the auto editing templates, I can't say I can agrue with why they would go with the person doing it for 400 less.
Jay Gladwell wrote on 6/6/2006, 9:38 AM

When it's all said and done, you have to remember no one is going to make $35 per hour making videos for 2000 hours a year (that's 50 40-hour weeks). You can't sustain yourself and a video business on $35 an hour--that's only $70,000 a year before the legal plunder. Then there is everything else that has to be taken into consideration: rent/mortgage, food, utilities, insurance, auto and its accompanying costs, health, clothing, equipment, hardware/software, expendibles, and on and on it goes.

There is nothing to fear from someone trying to make a living making videos at a flat $35 an hour.





johnmeyer wrote on 6/6/2006, 9:57 AM
A few nuggets from a semi-retired techy:

Don't be afraid to charge what you are worth. Best advice I ever got in my life. Too many people undervalue their services. Of course, you better be able to prove your value compared to someone who is trying to undercut you.

Differentiate. Find something you are good at, and make sure people understand what it's worth. Stonefield has his girls; gmElliot has his camera "moves." Spot has amazing audio. I can guarantee that if any of you tried to beat them on their turf, the customer would not pick you, even if you were half price.
filmy wrote on 6/6/2006, 11:06 AM
>>>... You can't sustain yourself and a video business on $35 an hour--that's only $70,000 a year ...<<<

And I go back to what I said - depends on the area you live in and what the market is in that area. $70,000 a year for the area I am in would be above average. For that money you could won a nice chunk of land, a house, pay the bills and still have money left over for food and such. Add a second income onto that and as long as you lived within your means you would be doing very well for yourself. However after September 11 lots of people started moving around here and as a result things like land and homes costs up. Add in the bush war and the cost of building has gone up as well - so in the coming years 70,000 may not be enough around here. But the job makrt around here is not one that calls for a lot of film work either. Being a contracotr on the other hand - huge demand for that now. And that goes back to what I also said about basing price on the demand in the area.

>>>Don't be afraid to charge what you are worth<<<

When I first came here one of the first jobs I went out and quoted a price of 5,000.00 and the clients eyebrows raised and they said somehting to the effect of "ThHat is really a lot of money. I would feel much more comfortable if I paid you per hour" End result? They ended up paying about 6,000.00 for the project. I have had to re-think how I do things for local clients and when you get into the thousands people tend to squirm. I had a talk with the supertendent of schools a short while ago and they commented on how they were making fairly good money and I said they were making *very* good money for this area. I also pointed out that i would be making their money and a lot more if there was a demand in this area for it. My poibt being I am realist - I know asking for several thousand a day isn't going to cut it here unless you are talking about 100% of the package going along with it. I am talking about an individual - and my other post was based on that as well.

Yoyodyne wrote on 6/6/2006, 11:41 AM
"With 4 thousand dollar HDV cams, 500 dollar edit programs, and a willingness to work for 35 an hour, will any of us survive?"

That's a pretty good question. I'm thinking the low end is going to be a pretty tough place to be. Costs for grip trucks, lights, sound gear, stages, etc are pretty constant and not likely to come down anytime soon. For the kid with a cam, tripod and a bootleg version of FCP...he could work pretty cheap because his costs are almost non-existant.
Dach wrote on 6/6/2006, 1:00 PM
There have been quite a few comments made so far so I won't go into great lenght on mine.

The geographical area that you are located in is the key, along with what is your service or product that you are producing. Does your area have a market.

We all can change the oil in our vehicles but we choose not to. For the majority of people who are serious about wanting a production they will pay to have it done... done right and or more effeciently than themselves.

A per hour fee... can range for anyone it all depends on what you need your billing rate per hour to be for the business. Mosts people would be happy with a $40K to $60K salary all you need to do then is cover your overhead.

Always remember to .. we may be a good to great editor... that doesn't make us a great business person or salesman. A business will fail due to poor leadership / management... (and other reason to.)

Chad
Jay Gladwell wrote on 6/6/2006, 1:05 PM

As long as the kid lives at home and daddy's still paying the bills he'll do okay.

There is a Catch-22 here. This is exactly like real estate. Most people can't afford housing in a section of town where they'd want to live. On the other hand, they won't live in the section of town where they can afford housing because it's too undesirable.

The same is true with trying to make a living with video. If you lived where $70,000 a year before tax and all else would support you and your business, there wouldn't be enough business there to support you. Yeah, I could live like a king in Lizard Lick, North Carolina on $70,000 a year. But there ain't anyone or any business in Lizard Lick who needs video production! That's the Catch-22.

mountainman wrote on 6/6/2006, 1:25 PM
Glad to see I'm not alone here. 15 years ago it took about $100,000. to get into a produciton suite. Because of this rates had to be reasonable to pay the bills. Now, for all the reasons mentioned above, this is no longer the case. Are we going to end up like the stock photo people? People doing the work just for the glory of being a video producer.
Come to think of it I'm guessing this is what the film people went through 5 to 10 years ago. Video got good enough and cheap enough to easily undercut them.
Time will tell, meanwhile it's back to editing. John Murphy
kkolbo wrote on 6/6/2006, 3:39 PM
I hate to say this, but I think folks are missing the point. If you are in this business for real, then you have to accept that we are in a high technology, emerging technology field. If you are still doing things that someone else is doing for $35 an hour, then you have missed the boat. You can not be an 'X' type techie in this industry and not evolve. You must stay better, faster and cheaper to survive.

If you are doing photo montages, then you had better be using Ultimate S or another tool to do it faster. The market doesn't want the long way of doing it. They may think they want it, but they do not want to pay for it.

You had better have moved into the pipeline for HD. You say that no one wants HD? Then you had better cultivate clients. They didn't want DigiBeta when BetaSP was cheaper, but they learned to want it. Your worked should be marked by being properly lit and well staged. In other words, run and gun stuff is now for the cheap guys. You have to be known for the whole production. No one will pay for it? Then you have to sell it.

You have to create the need and educate the client. You have to be doing the things that the cheap guy can not. To do that, you MUST learn and advance as fast as the industry is changing. You must stay one step ahead of the cheap guy. DSE could sit there and say "I am a guru of DV." He would be out of business. You look to him to be using, producing and inovating with the latest in time saving, quality enhancing tools. Your client have to view you the same way.

If you are stuck in the rut or think that you can not cultivate your market, then you are marked for extinction. I am teaching high school students to do photo montages and event video as well as broadcast level news. If they can't do that for their presentations as a busines exec in the future, and send it via the internet, then they will be obsolete before they are born. Think about it. The business folks that are now your clients will soon be able to do what you are doing for them, all by themselves. The solution to survival? Get out ahead of them and offer what they can not do if they aren't a professional.

I will now crawl back under my rock.
farss wrote on 6/6/2006, 3:40 PM
Someone can get clients at $35/hour?

Seriously folks, I lost a job last year because I wanted $50/hour (that's roughly USD35/hour). For less money the client got a full Avid suite plus editor. I'm not talking Express DV either, I'm talking Adrenaline plus a rack of DB decks AND I'm not talking a pimply faced kid editor, I'm talking someone with years of experience and no he wasn't working from home either.

The industry is in meltdown in my opinion.

Last year I hired an interstate cameraman, the guy is a full time excellent cameraman, we got him, 709 camera with top shelf glass and a truck load of lighting gear for a days shoot for about the same cost as hiring the camera alone, oh, and he covered the cost of tapes.

It's purely a question of supply and demand. Supply way exceeds demand so people are working for basic wage, depreciation of gear, forget about that, you need to spend the capital just to make a basic wage. That means plonking down $100K for a camera, praying it doesn't need fixing at any time in it's life and just ignoring the question of how you'll replace it in 5 years.

Bob.
mvpvideos2007 wrote on 6/6/2006, 3:59 PM
I'm in northern Illinois. All is very well here. We get $75 and hour to edit. We average $2,000 a wedding, our photo montage and dance recital business has really taken off. Yes, I think it does depend on your market. Here in Illinois, most places are booming. the economy here is booming as well. Every year for the past 6 years, I have seen a good size increase in our business and it looks to keep growing.
ushere wrote on 6/6/2006, 4:44 PM
i posted this in reply to omar's question, but i'll repost it here....

depends on what the project is. you can't really set a fixed hourly rate on a doco unless you're simply editing it together for the client (eg. from an already prepared edl), and know you can knockout around 2 > 5 minutes an hour. of course, this does NOT include creating graphics, sound mix, etc.,

for editing i charge $55 hr

for being an editor $75 hr

for projects i'm familiar with - i charge by the project

for long form i negotiate - with people who are honest and know what they're talking about!!!!! VERY IMPORTANT

for 30' tvc - how long is a piece of string? i try to sus out all i can about what's needed, and quote both an hourly rate AND a project fee. the latter is usually on the conservative side.

most my clients are old friends by now, so we're comfortable knowing what's wanted, and how much it's going to cost.

if i've learnt anything in 30+ years, it's that i trust an old fart more to know what he wants than a bright young star, that it's infinely better to have a regular clientele with repeat business than fishing for glamourous, highly paid one offs, and yes, we're going through the desktop video revolution, but like all revolutions, once the dust settles, the old hands are still there, just that they're playing with a new deck....

and for those of you who've never visited my website, here follows some words of wisdom:


top ten lies of editors

1 It only shifts in preview

10 It's out of safe. you won't see it on air.

11 It won't really look like that.

100 I'll fill out the paperwork tomorrow.

101 I really don't mind working on sunday.

110 oh no... don't go by THAT monitor!

111 It works better as a cut.

1000 It's on the source tape like that.

1001 I'll be home soon...

1010 I think it looks just fine.


top ten lies of producers / directors

1 It's simple. it should only take you an hour or so.

2 I only need a few dubs...

3 Budget? oh don't worry about that.

4 Feel free to be creative with this.

5 I'll be there no later than...

6 The client will love it. they won't make any changes.

7 I'm positive i got that shot on THIS tape...

8 Never had a problem anywhere else i've edited.

9 Could you preview that just one more time?

10 Oh... just paintbox it out...



top ten questions asked by directors

I Would it have been quicker if it'd been logged first?

II Do you mind staying back for a meeting?

III Have you got enough to go on with?

IV Do you think you'll finish it in time?

V Have you got a spare vhs tape?

VI Did you mean it to look like that?

VII Do you need me here for this?

VIII Can i use your phone?

IX Why is it taking so long?

X Should i just shut up?

leslie

TheHappyFriar wrote on 6/6/2006, 6:16 PM
i find it amazing you're making asumptions based on one number based out of a couple page rate card. You don't even know where it's located, average costs in the area, etc.

That's why people loose business... because they don't think they panic. Over nothing!
kkolbo wrote on 6/6/2006, 6:50 PM
******>>>>The industry is in meltdown in my opinion.<<<<<<<*******

Nah, it is just exploding and evolving. Packages now need to include web versions and hosting. Produce Podcasts. Think in new directions.

I personally see a shift of focus for the old guard with great chops from the production side to the content and distribution side. Its cheaper to pay a newbie for the grunt work of production. Use you expertise to produce the great content using their cheap labor and your educated eye and experience. You can afford to genrate the content that you have always wanted to do while you were cutting someone else's crud.

I am just trying to bounce up and down and cheerlead folks into embracing change and using it to do even more. A 30 year vet has some great stuff stored up in his head. Dust it off and break out in a new direction that only your expereince can succeed in. I stopped for a moment to learn web CMS (Joomla!) last month. The result is I now see a whole new outlet and avenue for creative activity combining the desktop video and web CMS systems and I have already had offers of serious pay to put them to work. ( I am staying in my curent position teaching instead; much to the financial regret of my wife).

Carp the old diem! : 0

Keith
filmy wrote on 6/7/2006, 4:45 AM
>>> Come to think of it I'm guessing this is what the film people went through 5 to 10 years ago.<<<

How very correct you are. And to follow with what kkolbo said one of the producers I work for used to shoot in 35mm and when people started shooting on betacam and adding filmlook the *and* the markets started turning he started to get a bit flustered. He actually got out of the production game for a few years because he could not compete with the film vs video market. However a few years ago the price to make a shot on video feature vs the price to sell features combined with the low cost of equipment ownership made him decide to start up production again. Rather than sit around and sulk he just in the DV (and now HD/HDV) bandwagon and is in full swing again. Instead of producing maybe 1 or 2 features a year like he used to he is now doing maybe 5. And as an aside his price has not really dropped at all through all of this. But he also lives in Burbank and the market supports, and expects, the rates he offers/asks.
TheHappyFriar wrote on 6/7/2006, 5:29 AM
I just talked to a forum member sunday & that's exactly what he's doing for his next production. He's not distributing the old fashioned way, he's going to be completly digital from the first shot to the customer. Why? It's cheaper & will have simular sales as if he went traditional roots.
rmack350 wrote on 6/7/2006, 1:33 PM
Here in the San Francisco Bay area we've seen that sort of thing happen periodically, especially to the LA folks. They'll rent out a grip tuck for very little and if it breaks on the drive up here they'll have it towed to the job. This has been going on for the last 20 years, probably longer but I wasn't around to see it before that.

Spots and Features seem like they've been most susceptible to this. They can use a lot of gear for a long rental so there's more room to cut the rate.

Typically, I see people cut the rate on their gear before cutting their day rate for labor. There are good reasons for this - you want clients to see your skills as valuable.

Grips and electricians have a certain advantage when it comes to rates. They work in groups, they talk to each other, and they charge rates that their colleagues will also want to work for. You have to charge comparable rates because otherwise it's hard to replace yourself on a job when you need to. The same goes for gear. If your 4KW HMI Par dies on the job you need to be able to rent a replacement and not take a bath. This isn't price fixing, this is market economics.

People who do post, or do the singleton jobs in production, are in a tighter spot. You're in competition. However, the same concerns apply: if your camera goes down you'll need to rent (or buy) a replacement. If your HDCam deck dies you'll need to rent a temporary replacement as well. If you have a family emergency you'll need to replace yourself.

The only thing I can suggest is to have a local trade organization (this forum is kind of like that). If you have regular get-togethers you can exchange client stories (be careful), talk about rates, how to charge for gear, what you ought to make a year, etc.

And get those low end people on board! You might be surprised to find that they'd like to make more than they do. I certainly found that to be the case when I was working as a gaffer for $450.00/day. The 250.00/day grips wanted to work with me because they knew they'd make 400 or more and get treated better too!

If you can get the ear of the lower end guy then make this point: they can charge a little more, work a little less, and have a little more free time for charity jobs, for family, for recreation, whatever they want. As they get a better rep they'll fill up their schedules and make more money. Everybody's happy and their colleagues in the business stop calling them pimply faced kids.

Rob Mack