Pricing suggestion?

F

firehawk

Veteran
I have a good client that I record events and produce DVDs for. The way it's set up is the client orders XX number of DVDs at $30 each from me. The client marks it up $5 to cover their time and sells to parents for $35. This works out well for us all.

However now we also live stream the events. The Live steam service costs me $495. It also adds some complexity to the job due to extra cabling, time and stress, even though it's a minimalistic live stream.
So I am not sure what is a fair way to handle this now. If I should just eat the cost since it's a good client or work out some sort of deal. $495 is a significant chunk of the total $ I take in.
Suggestions?
Youtube/Facebook free live streams are not an option because the music in the event will probably cause a cancellation during the event.
 
I should bring these exact questions to your client. You and he are in the same boat. Both your service grew and your revenues didn't.
 
You really shouldn't be giving anything away. Sell the added value.

But, obviously, it's always a personal relationship between you and your client.
 
It is a big struggle coming out of the DVD era. You would benefit from revamping your pricing model away from a spec sales approach. That works best with physical media and folks don't even have the DVD players anymore...
 
Thanks guys. This particular client chose to stick with DVDs again instead of digital files or Bluray. I've been figuring it in so that the DVD sales pay for the production without the client having to pay anything, they actually end up making some due to the $5 markup so it's good for them. The client DVDs sales have been increasing through the years so the job has been a good one for me but the pdemic of last year cut it down quite a bit.
This year looks to be better
 
Bassman2003 said:
It is a big struggle coming out of the DVD era. You would benefit from revamping your pricing model away from a spec sales approach. That works best with physical media and folks don't even have the DVD players anymore...
Click to expand...

You'd be surprised. I'm not going to try and flex with numbers here
but let's just say I've done ok selling DVD's over the last few years.
 
It is complicated. I wish things would stay with optical but I hear of more and more folks telling the dance studio owners they do not have a way to play the discs. They will never completely die, but digital is what seems to excite people. Of course that means we have to offer all three! DVD, Blu & digital :(
 
Everything has its time...and DVDs will one day only be a part of history like VHS tapes. In a generation, maybe two.

Some 30-35 year olds (the last generation who grew up with DVDs in their prime) see it as a perfectly viable format (I do).

Some 20-25 year olds aren't exactly sure what a DVD is.
 
firehawk said:
Thanks guys. This particular client chose to stick with DVDs again instead of digital files or Bluray. I've been figuring it in so that the DVD sales pay for the production without the client having to pay anything, they actually end up making some due to the $5 markup so it's good for them. The client DVDs sales have been increasing through the years so the job has been a good one for me but the pdemic of last year cut it down quite a bit.
This year looks to be better
Click to expand...

So, in a way you really aren’t working for the client in the traditional sense, because he isn’t paying you for your production services. You’re only making money off of the DVD sales. If no one bought a DVD from one of the performances, you just did a freebie. Correct? It’s spec work. I’m not judging, I’m just making sure I read the post correctly.

In my opinion, you can’t eat $500. You’re not throwing in a piece of equipment that you already own. You’re forking out $500 cash, regardless if you make a single penny. Someone else has to pay for that(i.e: you bill for it) or it doesn’t get done. It’s like one of my buddies says when he quotes jobs to clients and they say it’s too much and they need to cut X dollars, he asks them what they want to cut out of the package. I’m not saying that most of us don’t have wiggle room in our rates, but once you get to a certain amount, things have to come out. If someone calls me for a shoot with my gear and I give them the quote and they ask if I can do it for $100 less, I’m not gonna quibble and I’ll take the job. If they ask if I can do it for $500 less, that’s a much different story.
 
Right. Originally years ago the deal was the client agreed to buy a minimum order of XX DVDs which ensured me a minimum income on the project and they would then order how ever many extra DVDs needed above that at an agreed price to fulfull the total orders they received from the parents.
Each year the number of DVDs grew (along with the length and # of shows) but the profit also increased so that by 2017 it was a good paying job. I quit even having a minumum order beforehand.
So yeah, it's not like a regular production job where I price it according to time and resources needed and they pay that. It's a strange way of using the DVD sales to pay for their entire production and keep the client from any out of pocket expenses. By 2019 the income actually got higher than what I would have charged if I priced it like a regular production.
2020 it fell off significantly but this year an extra show is added so it should pick up.

The $500 does take a bite out for sure, especially if the sales don't pick back up a lot this year. So I'm thinking of just expaining it to the client. The DVDs cover the price of the video production like usual but the live stream is an extra cost that I need help covering. And really just passing on my $500 direct cost seems like a good deal for them to me because I'm not marking it up any and the live stream adds more work on me. So I don't gain anything from it.



Run&Gun said:
So, in a way you really aren’t working for the client in the traditional sense, because he isn’t paying you for your production services. You’re only making money off of the DVD sales. If no one bought a DVD from one of the performances, you just did a freebie. Correct? It’s spec work. I’m not judging, I’m just making sure I read the post correctly.

In my opinion, you can’t eat $500. You’re not throwing in a piece of equipment that you already own. You’re forking out $500 cash, regardless if you make a single penny. Someone else has to pay for that(i.e: you bill for it) or it doesn’t get done. It’s like one of my buddies says when he quotes jobs to clients and they say it’s too much and they need to cut X dollars, he asks them what they want to cut out of the package. I’m not saying that most of us don’t have wiggle room in our rates, but once you get to a certain amount, things have to come out. If someone calls me for a shoot with my gear and I give them the quote and they ask if I can do it for $100 less, I’m not gonna quibble and I’ll take the job. If they ask if I can do it for $500 less, that’s a much different story.
Click to expand...
 
Publimix said:
I should bring these exact questions to your client. You and he are in the same boat. Both your service grew and your revenues didn't.
Click to expand...

Run&Gun said:
In my opinion, you can’t eat $500. You’re not throwing in a piece of equipment that you already own. You’re forking out $500 cash, regardless if you make a single penny.
Click to expand...

This. If they're a good client and you're worried the relationship would end with any additional pricing pressure, I think the best you can fairly do is offer the service at cost and just eat the extra stress/work on the production day. But not the cash!

But, clearly the client is getting value out of the livestream, no? Your service grew and thus presumably (hopefully?) the value to the client grew? So right now, your client has just received additional value and you've just received a pay cut? That is not a fair or reciprocal relationship.

The real question is, in terms of $$, what is the added value to the Client of this livestream service? $0? $500? $3000?

It would seem acceptable to me to charge $1000 to add the livestream service if your cost is $500. Because you have your hard cost; you have to pick up and return gear I presume; you have extra work day off; you have extra complexity come tax day with write-offs and receipts. And of course, your expertise/knowledge to get it set up, which while less tangible, has inherent value.

Do you know anyone else who would provide quality gear and service for livestream for less than $1000? If so, find their rate and determine if its worth it to you to match them or not.

In either case, if it wouldn't be worth it for the Client to at the minimum cover the hard actual cost of the livestream, then what's the point for either of you? That means it's not generating sufficient value for them and it's bad business. Are you, for example, paying $500 out of pocket for a service that is worth less than $500 to your Client? That would be bad business if so.

Finally, keep in mind your liability on the live stream. I don't mean legally, just relationally. Once a precedent is set that you are the livestream guy, anything goes wrong, you are also the fall guy. If you do it at $x additional cost with the understanding that you're a one man band, all good. But depending on how much more than cost you charge or what expectations are, you also set yourself up to disappoint the client in the event of a technical failure.

I suggest:

A. Become the livestream guy and bill at as a lucrative service to yourself where you take full responsibility, make sure it's profitable. You are running a business.
B. Do the livestream at cost with zero pressure or responsibility for technical failure - sort of good faith favor for the service/labor if client covers cost - but no pressure
C. Refer the client to a 3rd party live stream person and wash your hands of it

I'd go with option A or B if it were me, favoring option A unless the client relationship would dictate that A wouldn't go well.
 
Thanks a lot for all the help. I forgot to mention I already have all the live stream gear needed.
I agree A. or B. are good ways to go.
I peronally do not like livestreams due to the risk of something going wrong (hasn't yet but someday...)
I may toss option B to them as a zero pressure favor because I think they will be happy with that

On a side note I'm also lousy at live switching multi-camera events but a simple 1-2 camera switch is alright and B would be a proposal for bare bones 1 camera stream (with ability to switch to 2nd camera if needed)
 
Regarding the outdated DVD format..
I moved one studio (not the one in my original post) off optical discs last year onto digital download only, which I was glad to do. But this year they want the option of you guessed it...DVDs again! Some parents said they wanted DVDs.
When given the choice 2 years ago of Blu-ray, DVD or flash drive, the DVDs were most popular.
So in the case of that particular studio I'm having the client build in a flat video fee for all the parents and they all get a digital download link. And option to buy a DVD. We'll see how it goes.

It's getting hard to find proper DVD cases, mainly the quality double ones. Can't find the shiny ones anymore.
I somewhat like DVDs for the fact that they give you so much headroom when you shoot in 4K or even 1080P. And I have a duplicator to spit them out whereas Blu-rays take more duplication time so I try to avoid offering those
 
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