What Should I Budget for Making a Professional Video?
A Smarter Way to talk Money with your Video Production Company
by Michael Kolowich
One of the most challenging questions we at DigiNovations have to answer — just about every day — is “What will my video project cost?” It’s challenging because the correct answer is almost always: “It depends.”
That sounds like a cop-out, but it’s also honest. Anyone who can quote off the top of their head what a five-minute video about X will cost is either being naive or deceptive.
An Alternative Approach to the Budget Conversation
But what if there were an alternative, better way to have the budget conversation with your video production company? In our experience, there is. And this article will take you through a step-by-step process to do just that.
In my experience, video project budgeting is the result of a bit of homework and a couple of important conversations with your video producer. And it requires a spirit of partnership between you and a trusted video producer.
Most importantly, though, don’t play “Guess my number” with a production company. If you already know exactly what you have to spend, skip all the way to step 4 below. There’s still an important conversation to be had.
Step 1. Homework: Browse Video Portfolios
Chances are, you’ve found a video production company by searching online or by a referral from someone who’s worked successfully with them before. The most experienced production companies will have extensive online portfolios that show examples of their work. (For example, our video production portfolio has more than 50 examples of client examples, across six different categories.)
We recommend that you spend some time with these portfolio examples, which represent a wide variety of objectives, styles, and budgets. Find examples that seem to fit your preference and mission. Take notes about things you like and don’t like. And also take note of how your project might be different — particularly in the areas that might affect production cost:
- Number and distance of shooting locations
- Number and availability of interviews or voices
- Need for animation or special effects
- Anticipated final length of the video
Step 2. Conversation: Calibrate your Budget Expectations
Next, have a conversation with the company that created the examples you liked and ask, “What was the cost of this project?”
Discuss how your project might be different. For example, “we may need more interviews or voices in our project, but the good news is that they’re all in one place and maybe we can arrange all the interviews in a single day.” That’s important information for your video producer, and they’ll be able to give you a sense of how that might have affected the budget of the project you’re discussing.
At the end of a good, open discussion, you’ll be reasonably calibrated on what a certain type and style and complexity of video project might cost.
Step 3. Homework: Choose a Target Number
This is usually the point at which you’d pop the question: “What’s it going to cost?”
But I would contend that a more useful question for you to ask yourself is this: Based on what you learned in your Calibration Conversation, “What do I want to spend?”
Only you know what your organization can afford to invest in a project in order to accomplish your objectives. You may be hemmed in by budget constraints or a project might be so important and the stakes so high that you’ll spend what it takes as long as it gets the job done.
The important thing is to pick a target budget that you can take into the next critical conversation.
Step 4. Conversation: Communicate your Budget — with a Twist
Let’s say, based on your homework and earlier conversation, that you feel that you’re willing to spend somewhere between $20,000 and $30,000 on your video project. Here’s what I’d do:
Ask your production company this question: “What is the best possible way you would spend a $25,000 budget to accomplish my objectives? What creative approach would you recommend, and how does that translate into recommended shooting days, interviews, use of animation, etc.?”
THEN, ask two more questions:
- “If I could come up with 20% more budget ($30,000 total), what would you add to the production?”
- “If I needed to cut 20% out of the budget ($20,000 total), what would you subtract from the production?”
The answers to these questions will help you understand what more or less marginal spending on your project would yield, and whether spending more would enhance the project or spending less would compromise its ability to deliver.
And the best production companies should be honest with you: if your budgeted number is just too small to get the job done, they’ll level with you. You don’t want to find that out after the production is finished.
Conclusion
The folks at Wistia ran an interesting experiment a few years ago, in which they commissioned a Hollywood production company to make three 2-minute web videos about a new product — each with a radically different production budget: $1,000, $10,000, and $100,000. Compare them for yourself:
- The $1,000 budget video
- The $10,000 budget video
- The $100,000 budget video
The important thing to remember is that a good production company can work with just about any reasonable budget to communicate a concept. (But no, you won’t get any production company to work on a $1,000 budget; that’s strictly DIY territory!) The projects in the DigiNovations portfolio had budgets that ranged all the way from about $5,000 to nearly $150,000 (they probably average between $15,000 and $25,000), and we’re proud that each of them accomplished objectives that we agreed on with our clients (though with lower-budget projects sometimes objectives needed to be scaled appropriately).
My point is that once you’ve found a video production company that you trust (or even as part of the process of finding one), having an open conversation about budgeting, avoiding “hide-the-number” games, and exploring increases and economies on the margin can ensure that your production ends up in a “budget sweet spot” that will make your investment in video as effective as possible.
