Smart Contracts For Ambitious Producers

Protect Yourself with a Smart Business Video Contract for Ambitious Video Producers

by Hal Landen

How many times have you produced a business video, but found after the dust settled that you made only $10 an hour (or worse) on the project? Well, you’re not alone. It’s happened to all of us. The problem is not with the client or with our work. It’s with how the contract is structured.

When you produce a video for others, you’re renting them your skills and equipment (even if it’s equipment you rent). This means you must charge for your time. The question is how much time and how much money. These are exactly the issues that must be clearly addressed BEFORE the job begins. You may be thinking, “But this is a creative endeavor so it’s hard to say whether it will take 20 hours or 100 to make a good video that accomplishes its goal.”

Estimating and budgeting a job is something you can only learn by doing. So when you begin producing videos, you’re bound to make mistakes in this area. But even after you’ve been doing it for years, there are always variables that harbor hidden dangers for an independent producer.

Production days are pretty straightforward since you know you will be shooting for so many days and your daily shooting rate is or should be clearly established before you begin.

The danger is in the pre-production (scripting and planning) and in the post-production (editing). As you know, it’s the scripting and editing that takes the most time and have the most direct effect on how successful the video is. You need to be able to estimate the time of each of these critical stages. The catch here is that both you and your client want the freedom to change you mind to improve the script and the edit. How do you charge for this open-ended situation?

No client is going to give you an open checkbook to produce their video. They need to know what the cost will be beforehand. You might give them a flat rate for writing the script and planning the production. For argument’s sake, let’s say it’s $1500. And you’re going to do one day of shooting in DV with a complete camera, sound and lighting package with an assistant for $700. You’ll do a flat rate for the editing, say $3000 for the entire editing process.

Hm, sounds like a budget:

$1500 for scripting

$700 for one day of shooting

$3000 for editing

TOTAL $5200

What’s wrong with this? By leaving the scripting and editing open-ended like this, you are inviting trouble that can keep your business in the RED, no matter how good you or your videos are. Even if you are quite skilled at estimating and budgeting, this kind of deal puts the risk entirely on your shoulders.

Consider how others handle this situation. Plumbers, electricians and lawyers charge by the hour and bill their clients for time spent – even if their estimates are wrong.

Here’s where a good contract will help protect both you and your client. It specifies how much time you are selling the client. It also clearly shows your client how you sell your time for scripting, shooting and editing. Before the jobs starts they must know that you are providing them with so many hours of scripting, so many days of shooting and so many hours of editing. They must also know what each of these costs per hour or day.

Now you’ve got the basis for a good working relationship. While no contract can guarantee that everything will turn up roses every time, it does set the stage for a mutually profitable relationship. What happens in the one percent of situations where things don’t work out? Your contract should insure that you are paid for all your work to date.

In the years I’ve been producing business films and videos, I have had a couple of cases where the client withdrew and the video was never completed. This may happen to you, too, in perhaps 1 – 2% of your jobs. It’s inevitable. And no contract in the world can prevent it. BUT if you have a smart contract, you will, at least, be paid your hourly rate for the work you’ve done.

When I hear horror stories from new and even experienced producers, I always ask how their contracts were structured. All too often, the agreement whether verbal or written did not specify exactly how much scripting, shooting and editing would be performed. These agreements did, however, specify the total fees.

So when changes happen, as they inevitably do, it’s the producer who’s left holding the bag. Agreements like these are one-sided. They protect the client, but not the producer.

If you’ve read any of my other work, you know how firmly I believe that the script is the one and only blueprint for the complete video. How can you quote a price for completing a video until there’s a script or blueprint that defines all the elements of that video?

The short answer is that you can’t. That’s why I prefer a two-step contract. In the first step I agree to give the client so many hours of scripting and planning at my hourly rate. After this script has been revised as many times as necessary within the hours I’ve agreed to provide, then and only then do I offer a second contract to produce the video as outlined in the script.

This protects both the client and me from agreeing to produce a project that is sight unseen. The second or production contract specifies so many shooting days and so many hours of post production.

The client has no obligation to enter this second agreement. They are free to take my script out for bid or even cancel the project. Does it sound like I’m opening myself to losing the job? You might think so, but that’s never happened to me.

You see during the scripting and planning contract I get to know the client and their business very well. This is one of the things I’m being paid to do. If I do my job well, they can’t imagine anyone else producing their video.

This two-step strategy works, but it’s not always appropriate for low-budget videos. In fact, as much as I believe it’s the proper way to do things, most of my clients want a complete one-step contract. So I keep both versions on my computer ready to customize for any situation.

What if you or your client decides to expand or modify the project after it’s begun? That’s bound to happen because this is such a creative field. You don’t want the script or your agreement to become a straight jacket. Both you and your client need the freedom to make changes when appropriate. So you need a mechanism to allow any mutually agreed upon changes. And this should be in place BEFORE the jobs begins.

When the job changes, the payments must change as well. I attach a Change Order Form to every contract I offer. This accomplishes two very important things:

1. It provides a straightforward way for the client and me to change our agreement. The form shows how we can change our agreement at any time so that I can provide additional services for additional fees.

2. Even more importantly, it reinforces the idea of how I charge for my work i.e. that the client is paying me X dollars amount for so many hours or work. Even though it may not be used, this form helps protect you from those $10 an hour situations because it makes it very clear how you charge.

No written document can prevent unpleasant things from happening to you. In the final analysis, I believe it comes down to a handshake where two people agree to work together. This ad hoc partnership depends upon the goodwill and integrity of the people involved. The contract is a way to describe and clarify this understanding.


Hal Landen has produced business films and videos for over 20 years. He is the author of

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2 thoughts on “Smart Contracts For Ambitious Producers

  1. Nils Delacru

    Having problems quoting at one price and then doing plenty more work and ending up making about $10 to 20 per hour. Interested in learning about contracts.

    Thanks

    Reply

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