Why do commercials cost what they do?

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One question that we get asked a lot is, “Why do commercials cost so much to produce?” In this day and age, every business can benefit from video — whether it’s a spot to be aired on television or simply a short web video for your company’s website or Facebook page. When it comes to social media, it’s almost impossible for consumers to avoid clicking a “play” button when presented with the option to do so. We get lots of calls from clients wanting a great video to promote their product/service, but often times they have minuscule budgets of $1,000 or less.

The purpose of this blog post is to explain why commercials do not cost $1,000.┬áThe business aspect of video production is something that many people simply lack experience in. This post is not intended to berate anyone — but rather, we hope it will serve as an education for people who plan to enlist the services of an agency or creative studio.

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Making video is a team sport, and a great team usually consists of 7 to 10 people, each with a very specific task. While it is possible for crew members to wear multiple hats for a production, it’s not recommended. The more responsibilities that are entrusted to a single person, the more likely it is that he or she will overlook something that could lead to problems. Film and video crews typically work based on day rates. A day rate is a set amount of money for a set amount of time working a specific position. As with any industry, day rates vary based on experience and ability. And of course, the golden rule of “you get what you pay for” always applies here. When we produce a commercial, we only use production specialists who are true masters of their craft. The combined experience of our crew is quite apparent in the end, but it doesn’t come cheap. And since those crew members are likely to be working 10-12 hour days, they require more than just their daily rate — they need to be fed also!

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So you’re on a production set. If there are 7-10 people working, who can you expect to run into and how much is that person getting paid?

Of course, the first person everyone thinks of is the director. The experience level of the director is paramount. He or she must be familiar with the camera equipment, the lighting equipment, and must be able to evoke the best performance possible from the actors. This person needs to be able to direct everyone on set and be a true problem solver. It’s a challenging position, and so a great director may cost anywhere from $1,000 to $3,000 per day. Not having a skilled director can break a production.

You’re also likely to meet the producer. He or she is responsible for scheduling and making sure that everything needed is acquired in time for the shoot. This often includes locking down a location (after scouting it), coordinating crew schedules, picking up any equipment needed from rental houses, arranging for on-set catering, etc. Lots of productions fall apart because pre-production becomes an afterthought. Producers often make $800 to $1,000 per day.

Another critical individual is the DP, short for Director of Photography. The DP is the one who arrives at a location in advance of a shoot and determines what kind of lighting is needed to achieve a certain look. In a perfect world, natural sunlight could be used in every scenario and the results would be fantastical. But this isn’t a perfect world. Lights are essential, as is someone who knows how to manipulate those lights to maximum effect. Great DPs command anywhere from $1,000 to $1,500 per day.

Beyond that, there’s a myriad other positions like the gaffer, grips, make-up artist, DIT, and boom (audio) operator. All of these people are indispensable. After tallying the day rates of everyone involved, you’re likely to have $5,000 to $8,000 tied up in crew per day. Then you factor in non-personnel expenses, like food, location, and equipment. The producer might assemble an all-star crew, but if those people are working 10 hour days without food, their effort will undoubtedly plummet at some point. A happy crew is a well-fed crew! Securing a great location is also not free — and contrary to popular belief, simply shooting it in the client’s backyard is rarely a good idea. The use of a location can range from $500 to $1,000 per day. When it’s all said and done, it’s not unreasonable to expect a commercial to cost between $20,000 and $25,000.

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So as you can see… a total budget of $1,000 is not going to get much when it comes to high-end production. If a production company presents you with a quote this low… instead of being overjoyed, you should be asking lots of questions about where corners are being cut. We at 323 are always happy to talk to you about our services and will happily offer our advice free of charge. Hopefully this post will provide you with some insight as to why commercials cost what they do. Rest assured that when hiring us for your next video project, you’ll see every dollar you spend up on the screen. We’re not swimming in cash after a truck unloads piles of $100 bills in our front yard; we truly do love creating amazing work at a fair price. That fair price may seem expensive, but it’s only because in the end, we’re worth it.

The photos displayed above are all from a commercial we shot for P&G Everyday. You can view the final spot here:

P&G Everyday — :60 Commercial from Three20Three Productions, LLC on Vimeo.

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