OT: Got ripped off... billing guidelines please

NickHope wrote on 5/11/2007, 2:26 AM
I supplied DV footage to a big international company in Bangkok last year for a one-off promo for an event and the release I gave them detailed this.

Now the company has re-used the footage, plus other footage I had sent them, in a major 6 minute promo that is on display in trade shows, shopping malls and distributed as a DVD.

I have a copy of the DVD and the video is now on my timeline and I'm counting up the seconds so I can invoice them. They are all short clips but they total 59 seconds of the video. And it looks like they're sending the DVD overseas to anyone who asks.

Disregarding the fact that I've been ripped off, can you more experienced footage licensors please answer some questions for me:

1. If (for example) the same 2-second clip is used 3 times in a promo, is it normal to charge for 2 seconds or 6 seconds.

2. If a 2 second clip is played at half speed, is it normal to charge for 2 seconds or 4 seconds? Likewise if it's speeded up?

3. What would you charge per second for this use? On my site I'm showing 80 USD for a 5 licence for advertising use worldwide and 95 USD for a perpetual licence (and 70 USD for single country / 5 years). Are these rates typical?

4. Is it normal to round up to the nearest minute or to have say a 10 second minimum and add per second on top of that?

5. Would you add a damages charge to invoice straight away? I'm hoping to avoid legal action as this is Thailand and the legal process is a nightmare.

Thanks a lot

Comments

Chienworks wrote on 5/11/2007, 2:38 AM
I haven't been in this situation so this isn't a factual response so much as a gut-feeling response. So, take this with a grain of salt ...

1) It's still the same 2 seconds. I'd only charge them once.

2) You supplied 2 seconds. Charge them for what you supplied.

4) I'd say that depends on the amount of material. If you normally deal in 5 or 10 second amounts, rounding up to the nearest minute sounds very excessive. We stopped doing business with one support company because their policy was to round up phone time to the nearest 15 minutes, but most of our phone conversations were 1 to 2 minutes. At the end of the month they had billed us something like 10 hours for about 1 hour of actual time. That was a ripoff.

5) I think i'd start with the attitude that a misunderstanding happened, and you're counting on their good faith to make things right. Is there a language barrier involved? Perhaps they didn't understand that they didn't have perpetual usage rights. Give them a chance to come clean and keep the relationship happy. But, make sure they understand so that you'll have firmer ground the next time something like this happens.
NickHope wrote on 5/11/2007, 4:56 AM
Thanks very much Kelly. I agree with everything you say.

The rounding up thing was something I never considered before until someone told me recently that it was fairly normal and that they'd been able to bill the BBC 2 minutes' video although they'd only used 1 min 4 seconds. What you are saying sounds fairer and is the basis I've worked on in the past.
Jay Gladwell wrote on 5/11/2007, 5:33 AM

Nick, it all depends on what your original agreement with them was. Once you handed over the footage--paid for or not--you're relying solely upon their personal integrity, or lack thereof.

Based on what you've said, it simply isn't worth the time and money that legal proceedings will require.


NickHope wrote on 5/11/2007, 5:43 AM
Thanks Jay, the discussion was very clear that the footage was purely for that one-off project, and the release I supplied them was very clear about that.

Does anyone have a comment on the per-second rates I've mentioned?
Jay Gladwell wrote on 5/11/2007, 5:58 AM

You're understanding of the agreement and their's may be two entirely different understandings, as Kelly pointed out. That's all I was trying to say.

When I deliver the contract at signing time, I go over it paragraph by paragraph (it's short) with the client and ask them, "Do you understand?" and "Do you have any questions?" and "Is this clear to you?"

Looks like Kelly has pretty nailed the time question. Start playing games with people and splitting hairs, and you'll soon not have to worry about it at all.

If I've paid for X seconds of video, I should be able to use it as many times as I want in the piece I bought it for. You are talking about stock footage, aren't you?


johnmeyer wrote on 5/11/2007, 6:45 AM
No comments on the per second rate. However, I have a friend who does extensive business in Thailand. He reports that piracy of video and audio is as bad there as mainland China. Nothing, apparently, in local laws or customs prohibits it. So, if dealing in the future, get all your money upfront, and don't expect any backend kickers.
farss wrote on 5/11/2007, 6:59 AM
While piracy is indeed rife throughout Asia I'd expect corporates to behave a bit better.
That aside I'd first give the benefit of the doubt. There's so many different licencing arrangements these days it's all too easy for people to not understand just what the deal is. I've struck this many times with people handing me music to use that they assure me they own the rights to etc, etc. When quizzed as to just how they acquired these or where a copy of the licence is etc they just haven't a clue beyond "I gave them some money....once...a long time ago...for something". Or the classic "It's OK, I know the band".

Also make certain the guys doing you wrong now are the same as the ones you carefully explained the deal to previously.

Bob.
rmack350 wrote on 5/11/2007, 7:10 AM
To me, the logic of rounding up is simply to cover the cost of entry. The idea is that there's a certain cost to deliver anything at all and so you want to have a minimum bill. I don't know if it makes sense to do this for every single clip, maybe it it does, but you don't want to give the appearance that you're gouging the client.

Rob Mack
rmack350 wrote on 5/11/2007, 7:16 AM
Might also check any contracts they gave [i]you[/]. I'm guessing that your only contact with them was to provide footage, but I've seen clauses in our contracts to edit where the client asserts that they get all rights to footage (in which case they can't be given anything that needs licensing).

We've used a company in SF called Oddball. They might have rate sheets online. They're a pretty small service.

Rob Mack
baysidebas wrote on 5/11/2007, 8:03 AM
It's been a long time since I've done this but I always billed as "per minute, or fraction thereof." This was with CBS, and not a peep out of them, so it must have been standard industry practice.
NickHope wrote on 5/12/2007, 7:03 AM
Thanks for all your feedback everyone.

No comments on the per second rate. However, I have a friend who does extensive business in Thailand. He reports that piracy of video and audio is as bad there as mainland China. Nothing, apparently, in local laws or customs prohibits it.

John, yes piracy is rife in Thailand but they do have proper copyright laws here and as a Thai limited company we have a better chance of success than I would as a foreign individual. If a company has a presence here they can get things done, for example counterfeit Nike and Adidas cloting can no longer be found in Phuket because there are official Nike and Adidas shops here. But copies of brands like Billabong and Diesel are still found. Copy software and DVDs are easily bought in Bangkok and Phuket.

Sadly the Thai authorities usually require a little financial "encouragement" before they will enforce the laws.

If the company in question doesn't pay up I'm tempted to see this to court as a test case to see what happens. I'm pretty sure they know there is no permission to use that footage and I'm angry about the way they've done it.

I've counted up that they're used 55 seconds, of which only 10 was licenced for the previous production. I'm going to invoice them at USD 95 per second, which is our published rate for a perpetual licence for use internationally on any media for advertising purposes. In our position USD 5225 is well worth persuing.
johnmeyer wrote on 5/12/2007, 8:36 AM
But copies of brands like Billabong and Diesel are still found. Copy software and DVDs are easily bought in Bangkok and Phuket.

Yeah, the quantity and quality of the stuff available (my friend brought back a few copies) puts to shame the stuff you get on the street in Times Square. You want 300 now (still in theaters), you can get it, and not some "shot from the front row" hack, but the real deal with 5.1 sound.