Pricing services...time to change?

videone2 wrote on 3/20/2017, 11:32 AM

I may have brought this up last year, but some time has passed and it has come up again.  I'm wondering what everyone now thinks.

 

I have a long time client (20+ years) that has switched from ordering DVDs (around 600 one for each graduate) for a commencement, to now requesting one 2 set DVD (event over 3 hours) for archival purposes and one HD version for uploading to Vimeo.  The uploaded video will be made available to everyone. Also worth noting...in years when we provided DVDs to the graduates we sold over 30 additional DVDs at $29 per disc. Last year was the first year the video was available on line and our additional DVD orders dropped to 3.

 

In the past we based our price on the total number of DVDs needed (this amount also included production/editing time).  The actual cost to produce each DVD in a custom case was about $1.50.  

 

Last year the thought was that what I am producing has not changed, only the method of delivery.  Does that still apply today or is it now time to change?

 

Do I continue to base my rate on the number of graduates, or do I deduct what would have been the cost to produce the actual DVDs?

 

Thanks in advance.

Comments

ushere wrote on 3/21/2017, 6:01 PM

i would say it's now time to change... i haven't produced a dvd for something like 6 years; all is either delivered via usb drive or over the net (intra or web).

fortunately most of my clients are organizations or gov, so my general pricing was based on production costs with a separate element for distrib. media - which was produced for little above cost. (we still do produce usb's).

your situation is obviously very different since your income stream comes from sales... the only answer i can see is charging upfront production fees and letting the client work out how THEY are going to recuperate costs.

not a nice situation to be in, but as they say, the times they are a changing...

JohnnyRoy wrote on 4/9/2017, 7:41 PM

Yup, it's time for a change because no one is buying copies of anything anymore. You should base your pricing on production costs. You need to charge a set fee for creating the content and then anything you charge for delivery is additional profit above and beyond. Explain to the client that going from 600 DVD's to 3 has forced this new pricing model. They should understand. Let's be real... they can't expect you to create an entire 3 hr graduation package for only $29.

Let's say you use a 10:1 ratio (10 hrs of editing for 1 hour of video) your 3 hr video would take 30 hours to edit (about a week). Add in the 5 hours that it probably took to shoot 3 hours of video and you have 35 hours times your going rate. If you charge $80/hr that's $2,800 for the production and whatever you want to charge for copies. Of course, where you live might not support that price so your rates might be different but you get the idea. Make sure that you get paid for your work regardless of how many copies they want. (hint: what did you make when selling 600 DVD's? make sure you still make at least that much now) ;-)

~jr