How to read a video budget without your head exploding

understanding a video budget
How to read a video budget without exploding your head | © Illustration: FreePik

Every client for an image film or video, who is presented with a budget or an offer, tries to understand where the biggest cost drivers lie. In most cases, despite all efforts, a question mark remains. Here we tell you how to read a video budget .

A good video production usually works with detailed offers. This allows the client to see where the costs are incurred. Usually the expenses are additionally divided into cost blocks on a cover sheet to ensure a better overview.

That is good and right. But is it helpful for the client? In most cases not really. Because in order to be able to read a video budget correctly, you need prior knowledge. This article explains the most basic points.

You need to know about a video budget that

  • The prices for film technology / film equipment and skilled personnel are easier to check in a quotation than the compensation for creative key positions.
  • Salaries for film technicians are fixed for producers in many countries by industry agreements. They therefore often have a mandatory character.
  • Those who possess and have demonstrated above-average talent sell themselves as film technicians at market prices rather than list prices. Here, the market value determines the amount of the compensation.
  • Markup, trading costs and profit are usually calculated as % of the costs, unless hidden in individual prices or priced in a lump sum. Professional video productions openly show these figures.

Understanding a video budget

There is no legally prescribed form or structure for a video budget. Theoretically, and also practically, every production can structure an offer as it wants. In practice, in most countries, producers’ associations have drawn up templates (as well as general terms and conditions of contract) that are used by their members.

The purpose behind this is to guarantee the inquirer a better comparability of different offers. This is only possible if the offers are comparable in their structure.

It is therefore worthwhile for clients to clarify the form in which the offer will be submitted when first contacting the video production company.

ATechnology / film equipment

No film without technology. Whether for recording or for image processing and digital effects, every video requires a certain infrastructure. Usually this can be divided into hardware (camera, microphones, etc.) and software for post-production.

Whether iPhone and laptop or Hollywood cameras and highly professional editing suites and sound studios: the charging of equipment and infrastructure in a video budget follows business principles at the end of the day. At least it should, not least in the interest of the client.

Turned another way: These budget items can be easily understood by any trained accountant without too much trouble. All you need to do is to underlay purchase prices, payback period and a few other, few factors. Then you can estimate how decent (or even indecent) the prices are in the offer.

BMarkup, trading costs and profit

Markup and / or profit and action costs can also be compared well in most cases. It only becomes problematic if these markups are not openly shown, but are included in the individual unit prices or in a lump sum.

The responsible client acknowledges that a professional film producer must earn something from video production. Only narrow-gauge film makers work at hara-kiri prices. In doing so, they endanger their existence and their economic advancement. If they go hopping, they also deprive their former customers of the opportunity to produce new versions or adaptations from the footage at a later date.

CVoodoo is what you do

Faithful readers know that Filmpuls has been preaching the same mantra over and over again for four years. Because what applies to the entire creative industry – and not just to this one – is also valid for video productions.

Workers in the creative industry not only have a price, but also a value. This market value is always made up of three factors. They are these:

  1. Knowledge
  2. Experience
  3. Talent

Knowledge can be acquired through intelligence and diligence. Experience can also be gained by showing perseverance, humility and openness to criticism. Talent, one has that. Or one does not have it.

Talent is nothing more or less than the unspeakable. It is neither democratic nor fair. But it guarantees that the sum is greater than the parts. Because a video consists of an infinite number of decisions, 90% of which the filmmaker has to make from the gut and often situational. If this were not so, there would only be outstanding films.

Whoever offers his services as a director, cameraman or composer sells his talent, knowledge and experience at the same time as his life.

DGuide prices and trade unions

The reverse conclusion from the triangle “know-how, experience and talent” can be painful for the reader of a video budget:

Anyone who works as a filmmaker at tabular benchmarks is unable to rise above mediocrity in everyday professional life. Excluded from this, of course, are film technicians and related professions, where the creative aspects of their work are less important than the executive character of their work.

However:

Film technicians are also generally unionized. As members of the union, they have undertaken not to undercut the rates negotiated by their interest group with the producers.

The video producer, who offers his client a professional film crew, is therefore far less free in his pricing than many a client believes.

Read three learnings about the video budget

1Observe association guidelines

Clients are well advised not only to ask for quotations. They also need to find out about associations and their (often mandatory for producers) specifications. If the prices in a quotation fall below the target prices, this may be an indication that the production process does not involve proven specialists, but rather autodidacts or beginners.

2Talent before technology

At the same time, as a client, it is important to be aware that outstanding videos are not the result of the technology used. The decisive factor is talent. If a producer puts technical data in the foreground (6K! UHD! 3D!), caution is advised.

3Ensuring comparability

Because efficiency is essential on all sides, the shrewd client of different video productions can have the offers made in a comparable structure of the offer. In most cases, these video budgets are made of sample templates provided by producer associations or third parties to professional video productions.

Carlo P. Olsson
About Carlo P. Olsson 67 Articles
Carlo P. Olsson accompanies the production of films, videos and TV series on behalf of companies, agencies and production companies. In his free time he plays ice hockey and is engaged in baroque sound drama.

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