Video production has become an integral part of marketing and communication strategies. As a business or individual seeking professional video production services, it's important to understand the different pricing models employed by video production companies. Some companies use one or the other, some use all four models. Let's try to shed some light on the key differences between hourly rates, day rates, half-day rates, and comprehensive project cost models.
Hourly Rate
Hourly rates are a common pricing model in various service industries, including video production. With this approach, the production company charges a fixed rate for every hour spent working on your project. Hourly rates are typically used for small-scale projects, where the production time and scope of work can be accurately estimated. The advantage of hourly rates is that you only pay for the actual time spent on your project, making it a flexible option for shorter or more straightforward assignments. However, relying solely on hourly rates can be challenging for clients, as it may be difficult to predict the total cost of a project upfront. Unexpected delays or revisions can increase the overall expenditure, making budgeting more complicated. Keep in mind, many production companies may offer an hourly rate as a base rate per hour, but still employ a minimum amount of hours they can be booked for.
Half-Day Rate
Half-day rates, as the name suggests, involve charging a fixed rate for half a day's work. This pricing model is suitable for projects that are relatively short or require less time commitment. Half-day rates are commonly utilized for shoots or editing sessions that can be completed within four to five hours. By opting for half-day rates, clients have more flexibility and cost efficiency for projects that don't necessitate a full day's work. It allows for better budget management and can be ideal for smaller projects or companies with tighter schedules. Some production entities only start at half-day rate for any project and build up from there by the hour just the same as a full day rate would.
Day Rate
Day rates are another commonly used pricing structure in the video production industry. In this model, the production company charges a fixed rate for a full day of work, typically ranging from 8 to 10 hours. Day rates are advantageous when the scope of the project is well-defined, and the estimated time required aligns with a full day's work. Using day rates offers predictability for both clients and production companies. Clients have a clearer understanding of the project costs, and production companies can allocate their resources accordingly. It's important to note that any additional hours beyond the agreed-upon daily rate may incur extra charges or default at that point to an hourly rate beyond the day rate.
Comprehensive Project Cost
Project costs are a comprehensive pricing model that takes into account the entire scope of work involved in a video production project. Rather than charging based on time, the production company estimates the project's total cost, which includes pre-production, production, and post-production and all included expenses. This model is often used for larger-scale projects, where the timeline and deliverables may be more complex. Project costs provide a clearer understanding of the overall investment required and allow for better financial planning. It also promotes a long-term partnership between the client and the production company, as they work together to achieve the desired outcome within the agreed-upon budget.
Budget Vs. Cost
Sometimes it can be helpful to tell your video professional up front what you have to spend on your production. It might feel like you are 'playing your hand' too soon, but the reality is by revealing the amount you want to spend can help your video professional determine if you are on the same page or even in the same book. You don't want to spend hours talking about your video concept only to realize that thousands of dollars separate your concept from getting created. When you are looking to buy a house it can help the real estate agent to know that you budgeted for an 3 bedroom 2 bath so they don't offer to show you elaborate mansions.
So What Pricing Model Does Lunarvue Media Use?
Like many other production companies, we use a combination of the pricing models depending on the requirements of the project. We start at a half-day rate since the scale of our productions typically require at least 4 hours. Our half-day rate is just 4 times our hourly rate. We have an hourly rate, because if we end up shooting for 5 hours, it would be our half-day rate + an extra hour. We might quote a full day-rate if we know the project will take 8 to 10 hours. This is a rate we typically use for marketing agencies, corporate marketing departments, or for other production companies when we are brought on to work on various different video projects at one time during the day. We might offer a comprehensive project rate for those larger productions that have a lot of 'moving parts' and may require multiple days to produce and we want to roll it all up into one easy to understand price tag. Keep in mind, for us, all these rates are structured around our basic hourly rates for pre-production, video production, post production, and photography. And for us, if the project takes less time....we bill for less hours.
Choosing the Right Pricing Model
For the production company, selecting the appropriate pricing model will depend on the nature and requirements of your production and your budget. For small, straightforward tasks half-day rates in combination with the continuation of an hourly rate may be more suitable. This offers flexibility and cost efficiency. If your project demands a full day's work or involves a more extensive scope, day rates or comprehensive project cost may be preferable to ensure more predictability for both the client and the production company. Each pricing model has it's own advantages and considerations, depending on the best practices of your video professional, the project's complexity, the project's timeline, and the budget for the production and understanding the key differences helps one to make a more informed decision when hiring a video production company.