When you start out in the business, you’re going to want to know exactly what kind of work you’re being offered and exactly what the client expects from you.
That’s where production contracts come into play.
They cover your butt when it comes to services and completely outline what’s expected of you so you can charge more for things outside the parameters.
And they help you make sure you hit every bullet point within the contract to keep the client happy.
Contracts, in general, can be a bit of a learning curve for any Producer or Client. It takes time and experience to fully understand their importance and to learn how to write them.
Some Producers may slip by their entire profession with a handshake agreement.
But a large majority of Producers start implementing contracts straight out of the gate or learn the hard way after getting burned once or twice.
Contracts will tend to grow larger with experience as bad business deals uncover the need to protect not only yourself, but potential clients and most of all, time involved.
What are the two most important video production contract lessons?
There’s two big lessons to remember when dealing in any contract.
1. Be wary of video production companies who fail to present some form of agreement.
- There are some exceptions to this notion including basic video camera rentals. But if a video production company does not operate with terms and conditions then chances of them being unqualified are high.
2. Be wary of Clients who fail to fully read & sign the video production contract.
- If the Client doesn't have any questions, that is one thing, but if YOU the Producer has to constantly remind the Client to send a signed version of the agreement back to you prior to a production initiation, WATCH OUT!!
There are many things that both the CLIENT and PRODUCER need to look out for in every video production contract.
Here are a few tips for both sides of the spectrum to consider…
5 things to watch out for in every video production contract
#1 - All parties are determined and authorized
It is very important to determine the different authorized roles of this production. Who is labeled Client, and who is labeled Producer?
By taking this precaution, you are not only protecting your company but you are protecting your future Client's business as well.
If for some reason a potential Client were to fraudulently represent a business, it is the Producer’s job to protect themselves with a solid contract.
Here is a very strong and simple statement I use to accomplish this security.
"The parties agree and acknowledge that the undersigned are authorized representatives to execute this agreement on behalf of their respective companies."
#2 - Every aspect of video production is covered
Even after years of running a company, this task is still being refined with just about every video contract I do.
More complicated and larger productions require the exact same style of agreement but with larger amount of details.
Okay, let’s dig into the individual things everyone involved in a production contract should consider when they read the document.
- Producers: Pre-production is vital to a video/film's success. It involves several weeks, sometimes months, to coordinate everything properly. Producers make sure to include your standard office wages for the time it takes to complete all coordination. Do not sell your-self short.
- Clients: Be sure to read the production details very carefully. It might be more common nowadays for some production companies to offer half-days of production in some places. Clients this is strictly half-day of the producers or video crew members’ time. There is no such thing as a half-day equipment rental. So spend wisely.
- Producers: There are thousands of Producers out there who are being taken advantage of by businesses producing their company videos for minimal cents on the dollar. Don’t be like them. If you go back and forth a few times and your client still does not have any viable video content think twice about your approach. Try to separate gear and operator costs. There are a lot of successful seasoned camera operators that do not and never will own their own gear. The amount of money it takes to rent the right gear does not change for half days from full days. Only the hourly wages owed to the camera operator should reflect the number of hours he or she worked that day.
- Clients: It is important to determine if the production companies half-days are 4 or 5 hours, and full days are 8 or 10 hours. We all obviously know that most production crews work very long days that are not %100 officially tracked, but there has to be a breaking point for most of you cameramen, sound engineers and especially gaffers out there. Budget a little extra here.
Tangent: How can I avoid hidden costs in production contracts?
Clients do not like additional fees just as much as Producers do not like working additional time for free.
Stop charging for half days and then work full days for no additional charge.
Determine your FINAL HOURLY RATE for everything involved!
Whether it be a single cameraman with one video camera rental or an entire production crew filming a movie. If time goes way overboard… negotiate the additional charges with the paying client on set as it is happening.
Even if you do decide to include a full day complimentary as a first-time customer courtesy, make sure they are aware of the real costs associated with the project so they do not continue to take advantage of you.
Post-production is by far the video service that is never fully accounted for. Video editing, color correcting, video rendering, sound design, sound mixing, sound replacement, visual effects and mastering all for one corporate video production!?
YES!!! And there is a different program and process with long rendering lengths for each! So both Producers and Clients tread water lightly in Post.
Let’s get back to the countdown.
#3 - Additional foreseeable expenses
Do your Client a huge favor by mentioning storage space along with any additional expenses in the very beginning.
I don't care if the final bill includes 3 extra hours of production and 3 extra days of post production, or just an additional $100 external hard drive expense…
Everyone needs to be aware of the fees involved after reading your contract so that there are NO SURPRISES!
If there are any additional fee's, bring them to your Client's attention before accruing such fees.
#4 - Deposit requirements and billing schedule
This section of the contract usually goes by an industry standard of %50 down and %50 upon completion.
But really the payment terms can get as detailed as your production itself. For larger productions, I have had to separate production coordination from production and keep both completely separate from post production.
This created 2 separate 50% down and 50% upon completion payments along with one 50% down, 25% percent upon first review and %25 upon final review payment…
… ALL within one LONG contract!
Although writing the contract and terms might get complicated, most Clients work better when details are in place and make this process quite simple if they are holding their end of the contract up.Example: Task A is complete, Task A needs to be paid, Task B is complete, Task B needs to be paid, and so on and so forth.
#5 - Payment processing fees
A lot of independent production companies do not have the luxury of eating this additional fee.
This kind of puts some of those companies in between a rock and a hard place.
The bigger clients want to use credit cards and frown upon additional payment processing fees, but the expense of offering merchant services is very high unless the demand is comparable.
This forces a lot of production companies to use services like Paypal so that the convenience of a credit card is available to their clients but not necessary for them to operate their business.
How does this look on either side of the contract?
If you are a Producer eating these costs, I bet they are starting to add up.If you are a Client that is using a credit card and you noticed these fee's were not included in the production contract, make sure to ask the Producer what his or her process for accepting payment truly is.
Summing up the 5 Things to Look for in every Video Production Contract
Now that you know what you should be looking for, let’s summarize the roles of each person involved.
- Producers: As any producer grows, they learn why budgets are always considered "under budget." But at the same time, companies always do have an available amount of cash flow devoted to this project they might hire you for. So although you are trying to cover your time involved across the board, you do not want to overvalue this estimate and lose the potential gig. No one wakes up rich after one job, so be conservative and flexible!
- Clients: Have you ever had a really bad experience with a video producer getting upset and not finishing the job? Remember that most of the talent behind the lens is artistic and not business. Therefore a majority of independent producers do not have business sense to avoid confrontation. If they do not like how things are working, they simply just won't deliver. A combination of understanding how much time is involved for the Producer and their role in this production is absolutely crucial.
I said it in #2 and I will say it again… Clients do not like additional fees just as much as Producers do not like working additional time for free.
Be sure to grasp the time involved for both parties and appreciate the learning curve it takes when you are putting way more time into a project you aren't being paid for.
It takes several years of never turning anything down to understand the power you obtained from working overtime for free.
I will truly never stop working overtime, as most entrepreneurs are always "clocked in."
So get out there and get your contracts signed.
The only way to learn is to do it!