Most video production companies use the exact same model for pricing their services. I’m going to share this model with you because it can be an ok starting point and then, I’ll show you a better way.
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The normal model for pricing video work is very much like pricing freelance work.
As a freelance DP for example, I looked around at other DPs that were doing the same type of work as me and I picked a rate that was average. So if some DPs were charging 700 and some 1300, I would charge 1000 or maybe 900 to be competitive.
Because a lot of business owners come from a freelance background, they use the same model.
They take the price of labor for production, add pre-production and post-production hours, and a little markup.
I’ll give you an example.
Let’s say a client wants a marketing video. To create this video, you need to do one day of shooting at their location, about two hours of pre-production time to put together all the logistics, and 12 hours of post-production.
Taking the average model here in Chicago, I would charge $125 an hour for producing time in post-production. I would charge $2500 for production, which includes director/DP, audio tech, grip, and all equipment and I would charge another $125 an hour for editing.
Then, you add all of it up and you add a 20% profit margin.
If you are starting out, this is just fine. But the problem is, you will lose so many projects based on price. Almost every video production company around me can do exactly this. This model is exactly why the cost of video production has barely kept up with inflation.
Your first option here is to raise the price and become the premium option. Now, you have to be in a position to provide premium value or you won’t have repeat customers. But the high prices can be perceived as a higher value.
Another way to look at it is if you sell a full video production service and a final video priced at $1500 to a small business, now that small business may not really care about putting the afford it takes to use that video to generate leads and sales. Their investment was just not high enough to care. But if they spent $15000, you better believe they are not going to let that project go to waste. They will do everything in their power to get results from your video.
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