How to Negotiate Like Lou Bloom For the Best Video Production Rates
In the 2014 film Nightcrawler, Louis Bloom is a stringer who approaches Nina Romina, a news director, with an exclusive video about a story that has barely broken. During this memorable negotiation scene, Louis makes it clear $15,000 is the lowest he can accept, and Nina is seemingly unwilling to go above $12,000. Then, the dynamic changes when Lou brings up the fact that a competing news organization is interested in his footage. He makes bigger demands, offers to throw in a second story, and in the end gets his $15,000.
Whether you’re a recent film school graduate, a seasoned video producer, or a stringer with access to stories that no one else can get, determining the value of your work is often no easy task. The good news is that once you do assess that value, the negotiation part is far simpler. While not all clients have flexible budgets, you must be able to recognize low offers so you can make a counter offer. The most important thing to know is that it’s totally acceptable to ask for more money. If you do so respectfully and provide sound reasoning, it can never hurt to ask. Ultimately, clients will respect you more, not less, for valuing your abilities correctly. And the reality is that if you’re skilled at what you do, or have unique access, you have a lot of bargaining power.
Setting Your Production Rates
As stated earlier, this is the toughest part. While we set minimum rates for each service offering on Storyhunter, it’s hard for a global industry to establish a standard or calculate average costs due to the variability of video projects and locations. Freelancers’ rates generally factor in experience, market, production type, gear, client type, and more — all of which may vary widely around the world. So to figure out your personal rates, you need to examine what your own costs of doing business are and what the competition in your area is charging.
On a spreadsheet, itemize everything you purchase for your freelance or production company on a yearly basis, your personal cost of living, your taxes, and your desired savings, and then divide this by the number of days you expect to work each year. This will give you an estimate of what your minimum day rate needs to be. You should try to turn a profit as soon as you can.
While estimating your expenses, you should ask yourself these questions:
- Will you charge for pre-production, such as concept meetings, research, scripting, scheduling, or set-up on the day of a shoot?
- Camera gear is expensive whether you rent or own. Can you recoup these costs in your production rates?
- Will clients ask for multiple rounds of edits? Will you charge more if you originally agreed on three edits with a client, but later they ask for more?
- Do your clients have particular post-production requests for audio, motion graphics, or color-grading?
- Will you have to travel?
- Will you have to hire other videographers to help on your projects?
- Will you be expected to purchase and send hard drives with footage?
- Do you have to pay for gear insurance, health insurance, or other production insurance?
- Do you spend money promoting your business or finding new clients?
- How much will you need to set aside for filing taxes at the end of the year?
Plus, you will need to decide on a project-by-project basis whether to charge hourly, day, or fixed rates. When working on a fixed rate basis, determine how much you should charge by working backwards from your day rate. And if you decide to work hourly for a client (many editors do this), divide your day rate by the number of hours you typically spend working on a regular day. It’s normal to offer discounts for longer term jobs assuming the client commits to the duration of the project at the time of negotiation.
The Art of the Counter Offer
As Louis Bloom tells the editor in the beginning of the NIghtcrawler negotiation, “I know your excitement for this product is greater than the amount you’re offering.” This is a nice way of setting up the counter-offer. Louis understands he has something special. That is the key here. Why are you uniquely equipped to handle this job? How badly does the client need YOU for this job? Answering those two questions is key to understanding your leverage. When a client lowballs you, but you want the gig, make a counter offer. This is always best done on a call or in a video chat, if possible. Explain why you’re special. Then, break down each of your expenses for them, so that they understand why you are asking for more and why you can’t afford to take anything less. Let them know the true value of your services based on prior jobs that you’ve done that are similar or comps from colleagues who are working in the industry. This must all be done respectfully, in a friendly tone. This is all about education. Your goal is to respectfully inform the client about the actual scope, expenses, or challenges of the project. Perhaps they don’t know what current rates are for day shoots in Nairobi, or wherever you are, since they’ve never hired anyone there. Assume no maliciousness on the part of the client. This is business, after all, and everyone is trying to get the best deal. You want to firmly maintain your position, and then ask the client, what do you think? Then, listen carefully to their response. Try and get what you want. Reiterate your position again if necessary, while indicating you’ve listened to theirs. Sometimes, a compromise will be in order.
Knowing When to Say ‘No’
One of the most important rules of negotiation is to be ready to say ‘no’ to an offer and walk away. However difficult it might be, you shouldn’t agree to work for a client for less than you’re worth — unless you believe it will lead to a long relationship that brings in plenty of work where you can make up the loss. Let’s refer back to Louis Bloom. He makes it very clear that $15,000 is the lowest he’ll accept for his services. Since Nina stands firm at $10,000, he says that he’ll offer it up to another news station because he knows he’ll get fairly paid. By saying no, you will be able to protect your time, and the client will learn the actual value of their project. If they appreciate your work and unique skills, they will often give you a new offer, like Nina did to Louis.
If Client Can’t Pay More, Ask for More Rights
If a client simply cannot offer you any more for a project, but you want to work with them anyway, then negotiate for more rights. Ask if they’ll let you keep the rights to the footage or the story, so that you have the option to sell the same material again. Or ask for the client to credit you in the video or refer you to their partners, so that at least your name is getting out there to potential clients. That’s what Louis did. $15,000 alone wasn’t enough for him to sell the story to Channel 6. He required that all of his footage be properly credited to his company, Video Production News, “A professional news gathering service”. If you aren’t going to be financially compensated to your liking, then you should at least receive some value from the promotion of your services..
*A note about working on ‘spec’ or for below your minimum:
When you charge too low, or worse, shoot for free, you are devaluing the market and making it difficult for both you and other creators to charge a living wage. If a creator would normally charge $5,000 for a job, but you offer to do it for $1,000, you make the value of that work plummet and let clients get away with lowballing others. Negotiating a fair price for you not only helps you personally, it helps the entire ecosystem.
What other tactics do you use to set or negotiate production rates? Tell us in the comments below!