a VJ's guide to working out pricing (Part 1)

by Cindi Drennan - Illuminart.com.au

“How to not go into debt doing what you love” – a VJ’s guide to working out pricing (Part 1)

© 2012 Cindi Drennan

Part One: working out costs

This document has been prepared for people wishing to trial VJing or considering generating income from VJing, to have an idea for how to set your price. It’s also useful for those who are on their way, wishing to evaluate the cost of what you are already doing.

This document has been written with the following assumptions:

  1. that VJing is a performance based artform where income is derived from performing at events (called “gigs”)
  2. that VJIng is a valid form of generating income as well as being an artform, hobby or form of creative technology / audience research
  3. that VJing in its basic form is a solo practice for a single operator with own equipment working from a small home office and travelling to and working at live performance venues
  4. that other forms of multimedia performance that involve audiovisual content production, or additional operators / performers, or equipment installation would not be called VJing but may also use the model provided below as a bench mark for costing calculations.

In Australia the fees offered for VJing often do not cover operating costs, as unfortunately (like musicians and painters) it is too often assumed that VJs do it for love, not financial well being. This document outlines three cost-based pricing scenarios, that that solo VJs doing under 30 gigs a year should be charging over $450 per gig just to cover their overheads (and not go into debt) for low end gigs. Fortunately most professional VJs regularly charge this and more, but beginners don’t have much idea about what to charge, or only have access to low paying opportunities.

The three possible scenarios below will help VJs who wish to know how to calculate cost based pricing. Our first scenario is a professional practitioner who makes 50% of their income from VJing. The second is a part timer who doesn’t need to earn a salary but still needs to cover their expenses. The third scenario is a student/hobbyist/emerging practitioner who is investing their own time in to develop their skills, but still wants to ensure they don’t go into debt.

THE COST BASED PRICING METHOD

Working out your costs and charge rates based on your actual cost, helps you set a minimum price base that ensures you are at least covering your costs. Once you have considered this, and the marketplace, you can also investigate demand based pricing and competition based pricing… which should realistically be higher than your cost based pricing.

The examples below show methods of working out the cost of VJing and an hourly rate of cost. Don’t set your rate based on these examples! They are intended to show you how to work it out yourself.

Scenario 1: Full time professional audiovisual practitioner.

There are some VJs who practise solely as VJs and command good prices for appearances, but for most cases VJing forms a percentage of your business practise. This example assumes that you “the professional self employed sole trader” are working as a self employed graphic designer or video maker which offers you other related opportunities while you are VJing on the side within the same business (ie you using all the same tools for VJing as in your other work).

In order to stay out of debt you need to cover your overheads for your total business which includes VJing.

For this example we will assume that the professional’s VJing activities are intended to be 50% of the total activity (although this is probably higher than most contexts in Australia).

The costs for the equipment and plant in this example are: high end laptop, peripherals, IT and phone, rent, insurances, software, self promotion, and video stock. Then for each gig you need to cover specific costs for that show (transport, creation of new stock etc). And for each gig you are hoping to make enough to contribute to your annual income (ie salary for a self employed person).

Here is how we calculate:
1) calculate your Annual Overheads (plant and operating costs / aka “indirect costs”) and then divide by the percentage for your VJing activity. 

  • High end Laptop (amortised over 3 years plus our maintenance costs) $2000,
  • peripherals/devices $1500,
  • Software $1000,
  • Video Stock $1000,
  • Rent/Phone/Utilities $2000,
  • Insurances (public liability, professional indemnity, equipment, workcover) $1000,
  • Self Promotion $500

the total annual overheads are 9000, and we calculate for the VJing component (50% of that total).
In this example the annual overheads for the VJing component of the business are $4500 

2) 50% of your Annual desired self employment salary:
Our self employed professional plans to earn $40000 (divided by 2 to give 50% to be earned by VJing) $20000

3) Chargeable Hours and Chargeable Hourly Rate (50% to be charged to VJing)
Number of days per year (365)
Less
• Sick days (5-8 per yr) Let’s say he takes 4 days.
• Public holidays (not relevant to most VJs) Let’s say he takes none.
• Days not worked (normally weekends, but the VJ takes a different 2 days off) 104 days per year
• Equals 4+104 = 108 days not worked
• Annual holidays (how much can you afford to take) – let’s say he would normally take 20 days.
* Other time where you cannot earn (eg non income earning activities such as study, R&D, promotional tours etc) Our hypothetical VJ decides he needs to take 97 days (funny number, to keep the numbers tidy) for a self funded research project that is going to need to be funded by his own salary and business earnings.

• This leaves 140 TOTAL PROPOSED WORKING DAYS of which 50% (70days ) are for VJ work.

Number of working hours per day: 8 hours
Less
Non chargeable hours (breaks, business management role) estimated 2 hrs per day
Therefore Chargeable hours per year – 6 x 70 = 420 chargeable VJ hours.

4) Estimated “gig specific” costs per gig.
As this is a variable we will “add it on” to our overheads after they have been calculated. These include Equipment hire and installation, Set hire and installation, Customised graphic design, pre produced video content costs, Operating crew, Freight, Travel, Accom, Per diems (meals and expenses when you are travelling), storage, special construction, Other artists fees (eg dancers). As this is extremely variable it is a good idea to assume you will be negotiating any such costs on top of your basic fee.

5) Chargeable hourly rate (NOT including gig specific costs) is:

  1. Annual Overheads (indirect costs) for VJing PLUS Annual desired salary = $24500
  2. Divide total by chargeable hours (420 for VJing)
  3. Chargeable hourly rate = $58.33

6) Costing VJ gigs to produce this income.
Let us assume a mix of low end and high end. Gigs in the low end (eg that require minimal preparation) and the remainder of the gigs in the high end (requiring a day or more to prepare). Each low end gig requires 2 hours to check gear, 2 hours travel, 3 hours operation and 1 hour to bump out and hand cards out, meaning you need to cover 8 chargeable hours for the single show. The high end gig requires double that plus the gig specific costs.
1) Low end gig = 8 hours = $466 JUST TO COVER COSTS
2) High end gig = 16 hours = $933 JUST TO COVER COSTS

Or calculate your “appearances” by hour (including prep and travel)… at a rate of $58.33 this VJ will need to find 420 hours of paid VJ work to cover their intended percentage of overhead and salary costs. 

7) How many gigs (minimum) to produce the desired 50% of annual income?
Approximately 17 low end gigs and 17 high end gigs. That is a lot of “selling” and “travel” so they will realistically want to up the amount included for self promotion.

Now, Add on gig specific costs when you work out your charges.
Your actual at cost charging for gigs goes like this:

“Sure I would love to play your gig – will the screen and projector already be set up for me? Its just plug and play? And just a set during the show – 3 hrs, Cool! It’s in Brissey – will you cover my travel? – great!”

  • Based on that conversation, this is a low end gig. Your fee will be:
    • Your base cost for a low end gig which is $466 (and includes 2 hrs travel) plus:
    • Your travel and accom cost charged on to them is $450 (cheap flights)
    • therefore the total fee to charge that ONLY covers costs and not made a profit is: $916 for the low end gig

“Sure I would love to play your gig – will the screen and projector already be set up for me? Its just plug and play? Oh, right, well in that case I will need to book in the AV supplier and add that to my fee – I’ll get them to quote you? Oh you want me to arrange quotes? I’ll add that on then. And you need specialised content, or just my existing stock? You want new material? For a fixed budget, or flexible? Fixed… ok well we will have to meet to scope that out.”

  • Based on that conversation, this is a high end gig.
    • Your base cost is $933 (high end gig) plus:
    • $150 (your 3 hrs of time for quoting the extras)
    • $1500 (the quote that came back for the AV install and which you will bill for)
    • $2000 (their fixed offer for the content creation, for which you now have to manage the licensing and creation – probably 15 hours of your time and the remainder therein is content licensing and basic animation)
    • Therefore the total fee to charge that ONLY covers costs and not made a profit is: $4583
    • (NOT INCLUDING GST as you haven’t yet earned over $75000 so you haven’t registered for it)

 

Scenario 2: Part time VJ.

You already make your main living income from other work in an unrelated field, so your VJing is not supporting you to eat. However you are serious about having the tools, quality of work and an enjoyment and recognition of your practice, so it needs to be financially viable. Perhaps you would also would like to build it up so *maybe* one day you can work full time in your own practice (rather than “working for dah man”).

YOUR COSTING RATIONALE:

In order to stay out of debt you need to cover your overheads for VJing which are:
Your laptop, peripherals, software, self promotion, insurances and your video stock
Then for each gig you need to cover specific costs for that show (transport)
For each gig you aren’t needing to make your annual income, but you DO want enough cash to know you aren’t going into debt doing this!

Here is how we calculate:
1) Annual Overheads (plant and operating costs / aka “indirect costs”):

  • High end Laptop (amortised over 3 years plus our maintenance costs) $2000,
  • peripherals/devices $1500,
  • Software $1000,
  • Video Stock $1000,
  • Rent/Phone/Utilities $500 (you are only covering your VJ related expenses here),
  • Insurances $500,
  • Self Promotion $500

>> this gives an annual total of $7000 for the year

2) Annual desired salary: $0.
Desired salary is “not applicable”… you already make what you want from your other job. (You probably have a full time position earning you around $45K and you have a little flexibility so you can take the occasional half day or long weekend off.)

3) Chargeable Hours and Chargeable Hourly Rate
The actual number of gigs you can play per year without affecting your “main job” is probably a maximum of two per month, otherwise you are eating into your “life work balance” (another thing that needs to be viable). Let’s assume, therefore… 15 “low end” shows is your ballpark for the year (see point 6 in “professional VJ”.
Therefore Chargeable hours per year – 15 x 8 = 120 chargeable VJ hours.

4) Estimated “gig specific” costs per gig.
As this is a variable we will “add it on” to our overheads after they have been calculated. These include Equipment hire and installation, Set hire and installation, Customised graphic design, pre produced video content costs, Operating crew, Freight, Travel, Accom, Per diems (meals and expenses when you are travelling), storage, special construction, Other artists fees (eg dancers). As this is extremely variable it is a good idea to assume you will be negotiating any such costs on top of your basic fee.

5) Chargeable hourly rate (NOT including gig specific costs) is:

  • Annual Overheads (indirect costs) for VJing = $7000
  • Divide total by chargeable hours (120 hrs)
  • Chargeable hourly rate = $58.33 (this only covers costs, it does not make a profit)

6) Costing VJ gigs to produce this income.
You are already working full time so you aren’t going to be able to take on many high end gigs. Each low end gig requires 2 hours to check gear, 2 hours travel, 3 hours operation and 1 hour to bump out and hand cards out, meaning you need to cover 8 chargeable hours for the single show. The high end gig requires double that plus the gig specific costs.

Basically, hourly work aside, … you need to make $7000 to cover your costs this year, and you are going to perform at 15 low end paying gigs. Therefore you need to make $466 per gig to cover costs.

• Low end gig = 8 hours = $466 JUST TO COVER YOUR COSTS
• High end gig = 16 hours = $933 JUST TO COVER YOUR COSTS (you won’t be able to take on more than a couple of these, due to time commitments of your main job)

Or calculate your “appearances” by hour (including prep and travel)… at a rate of $58.33 you need to find 120 hours of paid VJ work to cover your overhead. 

So if you are a part time VJ, if you want to make this VJing thing viable, you’ll need to either be playing gigs that ideally pay $500 or more . If you don’t cover costs you won’t be able to afford to replace your equipment, or if you are cutting corners on insurance you will be at risk, and if you are cutting corners on your stock you won’t be supporting the artform. So you need to get the gigs that cover the cost, or acknowledge that it is an expensive hobby!

 

Scenario 3: Trialling VJ.

You think you want to get into it. You are testing out equipment, experimenting at events, exploring whether or not you enjoy this field enough to take it seriously. You may be a student, or be involved with a band and testing out whether VJ support is viable. You are looking to explore the scene and develop skills and reputation. Budget is a concern as you only have the basic gear (ie a laptop) and little funds for images or stock. But the more you like it, the more you want to do it and you don’t want to make a fool of yourself by having a “bad set” so you need to spend some time practising and testing out. 

So is it viable for you?

YOUR COSTING RATIONALE.

In order to stay out of debt you need to cover your overheads for VJing which are:
Your laptop wear and tear, and a contribution towards your research and testing costs, You also need to invest in content (buying or building your own stock) and as your name isn’t out there you need to promote yourself. Then for each gig you need to cover specific costs for that show (transport)

Based on the above scenarios, the professional VJ will already have more gear, more content and has generated more opportunities for their work. The Trialling VJ is often going in to debt before they even start due to their start up costs.

1) Annual Overheads (plant and operating costs / aka “indirect costs”):

  • High end Laptop (amortised over 3 years plus our maintenance costs) $2000,
  • Peripherals/devices $1500,
  • Software $1000,
  • Video Stock $1000,
  • Rent/Phone/Utilities $250,
  • Insurances $500,
  • Self Promotion $250
  • R & D time off work (see salary)

Therefore your total annual overhead is $6250

2) Annual desired salary: $0. Actually you would really like $10000 as you are a student or unemployed or on a small income – (or on a full time income but need to take unpaid time off to do the research). But you decide you can get away with $0 if you must, as you just want the experience for now.

3) Chargeable Hours and Chargeable Hourly Rate
The actual number of gigs you can play per year without affecting your “main job” or studies… plus a consideration for the fact that most of your time is bedroom boffinning to work out how to do this stuff. As you are just getting started and getting your name out there, realistically you are probably doing no more than 10 shows at 8 chargeable hours work per show, for the first year at least.
Therefore Chargeable hours per year – 10 x 8 = 80 chargeable VJ hours.

4) Estimated “gig specific” costs per gig.
As this is a variable we will “add it on” to our overheads after they have been calculated. These include Equipment hire and installation, Set hire and installation, Customised graphic design, pre produced video content costs, Operating crew, Freight, Travel, Accom, Per diems (meals and expenses when you are travelling), storage, special construction, Other artists fees (eg dancers). As this is extremely variable it is a good idea to assume you will be negotiating any such costs on top of your basic fee.

5) Chargeable hourly rate (NOT including gig specific costs) is:

  1. Annual Overheads (indirect costs) for VJing PLUS Annual desired salary = $6250
  2. Divide total by chargeable hours (80 for VJing)
  3. Chargeable hourly rate = $78.12 TO JUST COVER COSTS

6) Costing VJ gigs to produce this income.
Let us assume a mix of low end and high end. Gigs in the low end (eg that require minimal preparation) and the remainder of the gigs in the high end (requiring a day or more to prepare). Each low end gig requires 2 hours to check gear, 2 hours travel, 3 hours operation and 1 hour to bump out and hand cards out, meaning you need to cover 8 chargeable hours for the single show. The high end gig requires double that plus the gig specific costs.

  • Low end gig = 8 hours = $625 JUST TO COVER COSTS
  • High end gig = 16 hours = $1250 JUST TO COVER COSTS

7) How many gigs (minimum) to cover your costs? 10 low end gigs.

Or calculate your “appearances” by hour (including prep and travel)… at a rate of $78.12 you need to find 80 hours of paid VJ work to cover your overhead. 

Like to know more?

Part 2: Now read the article on using this rationale to quote.


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