How do film and video production companies determine their prices?

This is one of the most frequently asked questions from customers and people in the production community, especially as the price of video equipment and editing software drops.

So why does video cost what it does, and why can prices vary so much between providers?

The closest analogy I can think of to a video production is a kitchen remodel. (This will make sense. I promise.) In both cases, there is a general contractor (producer) overseeing a variety of specialists (writers, directors, cinematographers, editors, composers) to complete the job. Both the contractor and the producer present a creative solution, a budget and manage the time and schedules of the specialists.

As with a kitchen remodel, the decisions you make when planning a video determine the price. Here are some things to consider.

Experience – How experienced are your growers and crew (contractor and subs)? Is this your first project or have you been doing this type of work for years? An experienced production team can be of great help in the creative development of the program. Such proficiency enables a contractor or producer to effectively anticipate and resolve problems, saving time and money.

Director – Like a great chef, a director knows what to do to achieve the best results. A good manager costs more than an inexperienced manager, but it can be the difference between Chateau Briand and dog food. Additionally, an experienced director can be instrumental in planning a realistic number of shooting days to bring the creative vision of the project to life.

Equipment: The quality of actual recorded images varies as much as models of refrigerators, ranges and dishwashers. Today, cameras are ubiquitous and inexpensive. But the real cost of quality production cameras remains high due in large part to cutting-edge technology and professional-grade lenses.

· Artistry – What should your video look like? The answers are as varied as the many options facing a construction project. In a kitchen, does food taste better if it’s cooked on a Viking stove instead of a KitchenAid?®? Will the cabinets be handcrafted by a skilled woodworker or bought from a super store? Will they be cherry or oak? The answers are determined by brand identity and corporate culture, which can be key drivers of creative direction.

Audience: In general, the larger the potential audience, the larger the budget. Commercial kitchens and television commercials serve a broader demographic. A program for internal use generally costs less than a marketing vehicle.

Information vs. Marketing: A program intended to inform, such as a video press release or employee benefits video, is more effective if it doesn’t look and sound like a commercial. Both can be entertaining and both can be intelligent, but “flash” tends to undermine the credibility of an informative video just as direct information doesn’t necessarily make for a good commercial.

The Script: When preparing a great meal, the ingredients you choose are crucial. The same can be said for the ingredients that are part of the script. A good script is the recipe for an effective video. (Okay, even I’m getting tired of the kitchen analogy.) But the key purpose of the script is tell a story. Indeed, the importance of history cannot be overestimated.

· Scope of the budget: in most cases, the budget defines the quality and the quality is determined by the budget. The narrower the range, the more your provider will know that you know what you’re doing. If you give a producer or contractor a range of $20,000 to $100,000, you’re setting yourself up for dramatically different results.

The Floor Plan: The script for a video project is similar to the floor plan for a kitchen remodel. In both cases, plan changes can be expensive. Adding scenes while shooting is like moving a wall back 10 feet after framing. Such changes are the main cause of cost overruns and should be avoided. Keep in mind, however, that some changes are unavoidable and it’s wise to include at least a 10 percent contingency for the unexpected.

The market for video production services has become much more crowded in recent years. Budgeting for film and video production can be a confusing process, but just like remodeling a kitchen, a proven professional will deliver a great product at a fair price.