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  • Hey all, just changed over the backend after 15 years I figured time to give it a bit of an update, its probably gonna be a bit weird for most of you and i am sure there is a few bugs to work out but it should kinda work the same as before... hopefully :)

Why lower your rates and equipment down to nothing just to kill the industry

There will always be low-ballers and it can be frustrating...what people charge is equal to what they think there work is worth. If your work gives your producer's actual value (and they are smart enough to realize that) it won't matter if someone undercuts...you should still be able collect the fees you feel appropriate. One rule of great boutique businesses is to never compete on price, but on service. (doing great work) When the airlines in the US started their price wars a few years ago, it almost bankrupt them all. It does the industry no good as a whole.

As far as gear rentals; owner/ operators are not rental houses and in some cases can't offer the volume discounts or 2 day weeks, but can offer much value added to many productions as the owners work with the same packages frequently and have the complete set of tested tools ready to go without the added time and cost of equipment coordinating, and camera prep.
 
It's all about where you are and what you need. When I was in my 20's I had an arri SR package, and I rented it out to DPs I ACed for for a little less than market rate. When I was in my 30's I had a varicam package that I initially let go cheap to get me a job. Now that I have been doing this for 20 years, I don't have clients who are going to nickel and dime me for a package or a rate. They book me, then ask how much it's going to cost so they can work out their budget. When a good client says they have a job and the budget is lowish, I adjust the rate accordingly. I have $ amount that I need to make per day to make it worth my time and to make my nut. If a good client has a job, and they want a basic package, I bring a few extra lenses, or a few extra lights that will make the job better. Some clients I just bill for the extra stuff if we use it. Some clients, I use it anyway to make a better product, so their client is happy, so we all get more jobs. But it all comes down to what it is worth for you and your time. I don't take the jobs where they are not paying my minimum, which is at the least full book rate for everything minus 10%. That's the minimum. I don't begrudge somebody giving a good deal on a package rate, if the producers want to hire that guy over me, they are going to get what they paid for and come back to me next time. That's just the evolution of a career. The other thing is that the low ball guys are going to need stuff from the other guys at one point, and they aren't going to get any help. Then they learn, and evolve. It's not a new thing. It's been going on as long as the film biz.

Nick
 
Here is a slightly related anecdote. In a way related to gear, so apologies for the tangent...

This morning I submitted my shooter rate for a new client for a major worldwide telecommunications campaign. I was to shoot the Tokyo portion and having liked my reel and past work I was selected by the American agency. My client responded to me saying that whilst they loved my work, my rate was far too low so they would have to increase it to nearly DOUBLE what I requested. For a bit of history, they didn't need me to shoot it on my Epic, but my 5DMK3 which I was more than happy to do.

This has really surprised me, and was an eye opener. DOUBLE. For a long time I was in the low-middle, then middle end of the market. It took about 6 years of pecking away to be able to charge these rates, just for my skills and not my gear. They in fact could not have cared less about my kit. So now I am going to charge as much as I can when I bid. If people want what I can bring to their table, then they have to be willing to put up the cash. Otherwise they can go with the next guy who does paparazzi video etc (no offence if you do paparazzi). Unless they are mates of course, and I am always happy to give mates nice rates :)

For the longest time I struggled and gave bargain basement rates to people because work was hard and competition was fierce. Sometimes it was effective. Often it wasn't. Generally people ended up taking advantage of me for my gear, then when they found somebody cheaper they ditched me and went with the next gullible fool. Which I will not forget. It taught me as much about them as it did about myself.

In the end it was all entirely based on my work, reel, and my own confidence and respect of my work. Not my gear. When I met Señor Mark Toia one day here in Tokyo, he gave me this exact same advice which I will not forget... because the moment I actually pulled my thumb out and started following it is when my rates doubled for several consecutive jobs in a row.

Sure gear was an important "in" for me, I can't deny that. For many people giving dirt cheap rates they see their gear as a bargaining tool as well. But in the end the most successful was doing a good job and not being afraid to market it. Renting out gear for cheap in the hope to get good gigs for the reel only really continued the illusion that I was the "red guy" they could call when they were looking for a bargain...

HTH.

Ivan
 
Vincent Laforet recently wrote an article on the cost of doing business (C.O.D.B.)... the daily rate a business needs to charge to be profitable in the industry. While I understand both the desire to maintain market value as a whole, I also understand the willingness to undercut the competition to gain the business. Perhaps if all owner/operators were aware of their CODB, things might level off. Those charging below their CODB can't sustain and are either forced to raise their rates or are forced out.

http://blog.vincentlaforet.com/2013...eative-long-term-know-your-c-o-d-b/#more-8777
 
Matt Ryan said:
What you're recommending is called price fixing, and it's illegal.

In addition, there are 30,000+ Epic camera's in the US alone. That's a lot of cameras competing for rentals. If everyone charged the same as rental houses, only rental houses would get business. It sucks but it's the harsh reality. There's not a lot of money to be made in the rental business especially in Los Angeles where there are tons of cameras available.
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Robert Ruffo New said:
No, there are not 30 000. Maybe 800 in the entire world, likely less (How do I know this? Well, I have a way...)

Price fixing is illegal and not. What is minimum wage? What are union minimums? Both are legal, needed ways of protecting people against their own desperation and the venality of those who would seek to exploit it unduly.

Here in Montreal there are two standard rates: Indy and Rental House - people just stick to those rates out of mutual respect and to prevent things devolving into an unsustainable business. If all these guys go bankrupt, who will Red sell to? Its' not good for anybody.

I have no problem with price fixing.
Click to expand...


Well, Matt has exaggerated at the very high end, but sorry to have to tell you Robert, but your way is well, WAY OFF, as they should be more then 5000 RED EPIC cameras shipped already... ;)
 
... pricing vs. value ...

people tend to ... forget | ignore | not be aware of ....

1) ... there is no ONE market ... but a rather infinite number of markets.

2) ... the ability to realize pricing has to do with perceived value ...

3) ... which has to do with valuing "self" and being able to communicate "value" to clients.

4) ... offering value, is kinda necessary ... what "value" is, is VERY elastic.

5) ... 80/20

6) ... choosing clients wisely is crucial.



:-)




putting it in another way:

It does not matter, who is offering what at which price.

Buyers attracted to low price points, do reflect their thinking as well as sellers attracted to low ball offers.

The trick is,
to ignore this all.


Focusing on value.

Pick your price, pick your market ....


:-)




first published: http://mytimevalue.com/on_pricing
 
I recently shot and edited a music promo for an up and coming British artist that my pal Directed. I did it pretty much for nothing because I felt I needed some more nicely composed shots of women in my showreel so everyone got something out of it. As expected there was all the talk from the management about how the next prom would have a proper budget etc. In truth at low rates my time and gear for the shoot and edit would have been about 3 times the entire production budget but that's all cool.

Promo was finished and has been released. It's not great but it looks nice and it have many many views and has now been featured on SPin, Rolling Stone and Vice along with places like Der Spiegal. The artist's album has launched and she is getting lots of attention.

And then a few weeks ago I get told the artists and manager would love to have the same team on board to make the next one. I immediately ask about the budget and am told it's exactly the same as before which is ostensibly nothing at all for about 10 days work in total. I immediately said no and implored the Director to say no as well. The fact is we're making a money-making tool for an artist and for them the artist and their album is the product but for us the promo is the product. It's is imperative that the artist and manager don't get to be allowed to believe that zero money = those production values.

Director understood my reasoning but still agreed to do it because he wanted some more stuff for his reel. And that's the problem... There's always going to be someone that will do the job for nothing or next to nothing but you have to have a base sense of your own worth as a professional.



The only words wisdom I can give this:

Never ever work on a promise of a future gig. Make sure that whatever the job is you're getting what you need out of it. They either have to pay you or make it worth your while, not down the line with a maybe job, but for that particular production.


Oh, and there's an irony that he hired a bunch of my lenses and DSLR support to do the shoot at a respectable rate and I'll probably have made more from that shoot that I was in no way involved in than I did from the actual shoot I worked on properly.
 
Ben Scott said:
What a ridiculous notion.

People outside big production are increasingly less and less interested in 'good' when 'good enough' can be achieved at a far lower price point.
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Oh well why didn't you say so. Let's all stop 'striving to be the best and one day be able to charge top dollar'.

Jim, quit what your doing, there's no need for Dragon, apparently striving to be the best is a ridiculous notion.

Unsubscribing from post... bored.
 
Tis a blow, but somehow I guess I'll have to find the strength to carry on knowing I've bored you.

Hopefully the thread will solder on without your sterling efforts so far. It IS a ridiculous notion that getting better at what I do, something i strive to do every day of my working life, will suddenly garner a higher fee without a shift in other aspects of the industry.

I earn my regular proper rates from other clients but I genuinely feel the main problem is both the race to the bottom by my peers, plus the seemingly increasing indifference to poorer quality work from my clients or previous clients.

There's no problem with doing a job for free or for cheap but the client needs to give you something worth that regular rate to you, and they need to be made aware of how much it would actually cost.
 
When more of us could finally afford a camera capable of no compromise image quality we rejoiced that we would no longer be limited by our gear or our access to capable rental gear. Some of us soberly realized that without that limitation, there would be a new focus on our skills. The quality of the images and films we produced would vary in proportion to our skills. I still believe this is a tremendously wonderful thing, but there is a flip side to it.

When the cost of the gear is no longer the key factor in the quality of the image, you can not continue to set your rate based upon the perceived value of your gear and remain in business. The market will crush you.

Kacey and Detlev are absolutely right. Perceived value is elastic and has always driven consumer behavior. Now that our skills determine the quality of our images more than the cost of our gear we need to be marketing value of ourselves and our SKILLS. Much of that marketing needs to be tailored to re-educating the customer to the new paradigm. Those who do that well and have the requisite skills will perform best in the new market.
 
I think all of that is great but the fact is someone comes and expects you to do a job for an insultingly low fee, you say no. In an ideal world everyone would say no but without fail someone buys into the lie and does the job, further devaluing and reinforcing the idea that what they've offered is an acceptable rate. And so often the people hiring only see the fact that they've saved some money that will now go to them, as opposed to having spent it on higher production values so they're more than happy. Unless you are pitching yourself in quite specific arenas, and I appreciate this forum is filled with people doing work at just about every level from lowest to highest, I find it is getting harder and harder to make pretty pictures on someone else's paycheck. More and more I'm finding myself doing the regular jobs in order to pay for me to do the fun stuff.

I have CBS and Microsoft as relatively regular clients and seeing their business models is very interesting as I think it is indicative of most companies with a large online presence these days. They dont' really need good content. They just need astonishiongly high volumes of content and it needs to be out the door and broadcast first. And then every once in a while they have some genuinely cool opportunity that they want to do justice to and then I get a call because they want tit to be a Red shoot instead of a DSLR one.
 
You seem to have a pretty keen insight yourself, Mr. Scott. Once your head stops spinning I bet you will figure out how to make that insight work best for you. ;-)

Will you be content to churn 'em and burn 'em? How do you plan to change your own behavior?
 
As it stands right now I'm trying to find that balance. While it isn't 'living the dream' I'll happily provide content that I wouldn't ever put on a reel if it pays my bills and gives me the freedom to take on gigs that actually mean something to me.

last week I was stuck on a roof of a tower block in London at 4am in the middle of a thunder storm to timelapse the London skyline sunrise for a corporate client. I was soaked through and pretty much as grumpy as one can be. And yet I chatted to my colleague who was along for the ride and we agreed that we STILL wouldn't swap this for an office job. It was a view that nobody else ever gets to have and it was all mine for that period. And the industry has afforded me so many moments like that, from meeting heroes to doing crazy to ending up in quite beautiful or fascinating places.

Meh, job security is overrated compared to being about to fall off a tower block in the pissing rain at 3am being attacked by nesting seagulls every time you need to check the shot :)
 
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