by Basil Yeo (@basilyeo)
Know what sticker shock is? It's that frightening feeling you get upon knowing the selling price of a product is way beyond your expectations. On first glance, the cost of making a video might really seem off-putting, and it may seem that the company which sent you that five digit quote is looking to rip you off. However, when you start to factor in the various components that go into producing a video, you'll realise that the cost isn't really that exorbitant after all. Video is expensive, but it's not as expensive as you think. Let us show you why.
Many clients have often confided in the fact that they did not know a video could cost so much, which is unsurprising, given how everyone seems to have a DSLR and seems to be into video these days... But video production is really a whole lot more complicated than hooking up a camera to a tripod and pushing the record button.
So what exactly are you paying for when you buy a video?
Yes, creative work costs money (conceptualisation, scriptwriting, storyboarding, client communication, etc). Most people aren't sure that it does, because they assume they can do it with the snap of their fingers. However, this is the most important part of the video, because it sets a tone that will resonate throughout the entire project from start to end. A weak concept may be saved by excellent execution, but the video's impact might not be as powerful as a strong concept with above average execution. Sometimes creative work also involves market and consumer research, in order to determine the best content strategy that will suit the brand.
Universally understood to be where most of the budget goes to, this is where production costs start to skyrocket rapidly. Production expenditure include manpower (crew and talents), gear, transportation, props, meals, etc, while post-production costs include editing, visual effects/motion graphics animation, colour grading, audio post production, data storage, data backup, client communication, etc. Though type of expenses listed here are more straightforward and 'quantifiable' per se, they are not fixed, and varies based on budget/expectations. More budget will surely equate to higher quality production standards, and also higher expectations from clients. Sometimes paying for just manpower alone may run you into the thousands per day, and that's before you include everything else.
Licensing costs involve the purchase of rights to use third party materials in your video for a specified loading duration. This is where the level of understanding between clients and companies usually ends, but these are exceptionally crucial expenses to ensure your client (and you) don't get sued by an extremely pissed off rights holder/talent manager, or risk having your video removed from YouTube without any chance of filing a rights dispute due to the lack of a license.
To some we've certainly come across as stubborn or inflexible when it comes to licensing, but you can rest assured we have your interests in mind. It can be crazy difficult, but necessary, to explain to clients why it is wrong to take an image off Google and just use it without asking (even with attribution), or why they require a permit to shoot in a park. Lawsuits are a world of pain and it is our job as your video consultants to advise you appropriately. Your teenage nephew who's into video might not.
And finally there are...
Profits. Here's the one nobody wants to admit exists, but it does. Nobody will run a business without wanting to make a profit, and profit margin varies from business to business. Factoring in overheads, employee salaries and also how much the company values their experience & expertise. After all, working in this industry must have some incentives, right?
However, I do not claim to speak for every production company out there, but the fact is that, no matter how big or how small they may be, there is a dollar sign attached to every element of a video production. There has to be. Even if it were given away for 'free', someone had to pay for it. In this case, the cost is levied on the provider. Someone will eventually pick up the tab, somehow.
The bottom line is, videos will continue to be as priced as they are required to be. While a decent budget is often the bare minimum, some budgets can be stretched to produce wonderful content at lower cost, but this should not be seen as an expectation. To illustrate things a little better, you definitely will not always get a Ferrari with only enough cash for a Kia Picanto. The thing that is of greatest importance is that the client understands this and manages their expectations carefully, but this is often not the case. That is where we step in.
If you've a different opinion on this subject, feel free to discuss in the comments section below.
Video production updates and thoughts