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How Much Does Video Production Cost?

"Can you do it for $50?"

This is a question we get asked all the time.

In this post I'm going to break down what goes into video production and hopefully you will leave feeling like you should be paying your video production agency more! (We can wish!)

Lets run through a typical scenario.

You as the customer will likely be contacting the agency because you know you want to use video as part of your strategy. That might be for marketing, training, recruitment or any number of other reasons. You may never of been involved in the video production process before or maybe you have but want to be hands off and allow the agency to take the reins.

You do a quick search for 'video production agency near me' or you've seen some videos you love and find out who created them and contact the agency that way. The initial call or email is where we are going to start the stopwatch for this scenario. This call lasts maybe an hour or you may email and set up a time for a call to discuss your project. Depending on the size of agency, you may be speaking to someone in a business development role or the owners and they will ensure all expectations are aligned by you examples of costs and timelines. Quite a few interactions end here because as quoted above, most don't understand the costs involved and want a Apple Iphone style advert with a Granny Smith Apple budget. This is fine because for many it will be their first time talking to a agency so why would they know?

You're happy with the rough estimates on costs and you arrange a meeting with this production agency and two other agencies to get a total of three quotes. The agencies will then work on a video production proposal. This will include their experience, costs, case studies and ideas for your project. This process will likely take days of their time and involve a number of employees.

Its pitch day! They head back over to your offices and spend a couple of hours presenting their ideas and trying to pursued you that they are the best agency to work with.

Bear in mind that no money has exchanged hands yet! The time and costs have all been absorbed by the video production agency so far. So let's break that down. (I'm going to use one person as an example as this is the absolute minimum, it would likely be multiple people involved)

I'm also going to use the UK average salary of £34,000 per year which is likely going to be a cost of £60,000 to the company when you include holiday, pension, NI etc.

Then we use the average working hours in the UK of 36 per week and we can safely say that this employees time is worth £34 per hour

Time spent communicating with client including travel time to offices = 4 hours minimum

Time spent designing the pitch including creative time = 16 hours minimum

Cost of travel to your office = £20 - £200

So far that's a very conservative cost of £700. Again, bear in mind this is based on a small video agency that may only be a couple of founders. A more established agency would have costs astronomically higher than this!

For the next section I'm going to use an example from one of my previous conversations with a large retail brand. They contacted me as they saw a video we produced for a active lifestyle brand and they wanted something similar. In a nut shell, they wanted the video in the snow with some actors wearing their apparel. they had a budget of £10,000 which sounds great but let's break it down.

Location? - This had to be a certain region of Austria given the time of year and the need for snow - £500 for flights including extra luggage for gear.

Who was going? - It was enough for me and and one other to go over. It would be tight but I was confident we could achieve the deliverables - £5000

For how long? - I planned for 5 days. 1 day of planning and packing all the gear, 2 days travel, 1 day location scouting (I had already done this online but needed to check physically) 1 day of shooting.

Transport? - I'd drive to the airport and we needed to rent a 4x4 because, snow. £800 + deposit

Models? - I'd arranged for a female and male model to be available for one day. £600 + expenses

Where will you stay? - I'd spoken to a hotel close to site who could accommodate us for 4 nights. £1200

What about food and drink? - Austria isn't the cheapest country in the world but with the hotel supplying breakfast we could get away with £50 per day each for lunch and dinner. - £400

I then added in a small 10% buffer for all the unexpected things

So we are upto £10,450. So that's almost within budget right? Well no. These are the costs for just capturing the content needed. Editing is 80% of the work. Whilst we may spend a 1 day shooting the content. It may then take weeks to edit together everything with backwards and forwards with the client to make sure they are happy. Lets say its another 2 weeks of editing, thats an additional £2448 if it's just one editor working on it.

Our current total is up to £12,898. Not a million miles away from the client's video budget! Perhaps we could meet in the middle? Well again, no.

These are just the costs to cover the time and expenses of the team. This doesn't take into account any business costs like equipment, insurances, tax, overheads and we haven't even mentioned profit yet! Cash flow is crucial for any company and if you are only charging enough to cover your expenses then you will soon find yourself in trouble.

So next time you are speaking to a video production agency or videographer, just remember that there's a lot more to it than just pressing the record button!

If you would like to use video in your marketing strategy, please feel free to get in touch and we will happily use some of our time to pitch an idea to you.

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Full Frame Media Video Production Agency

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