Sunday, November 8, 2009 - 11:16PM   
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Some more insight on the stock video business for chasers
Stock video - what is its purpose? Well, it's pretty simple. Stock footage is supposed to save a production company the cost of sending out their own crews for the shots they need. By purchasing stock footage, they avoid paying a two or three-person crew overtime, hotels, airfare, baggage and other fees to travel on-location to gather the specific shots called for in the production. They avoid wear and tear on their equipment and save considerable time in the production schedule. It is a desirable solution, and some productions use stock for a significant percentage of their finished product.
Stock footage is a business like any other: revenue must be greater than costs, or the operation cannot continue. And profit is not a dirty word. A businessman not seeing a profit is one who isn't paying his bills and eating. Every person who gets a paycheck in this world does so because their employers are businesspeople who make sure the operation is profitable and stays that way. If you think profit motives are bad, then just remember that no profit means you don't have a job! Be thankful that someone at your company makes sure that there are profits so you can keep getting a paycheck. With that in mind, stock footage is a business where the shooter must be concerned with making a profit, otherwise he can't keep doing what he does.
There are two ways to approach stock footage: one is to shoot anything and everything at a low acquisition cost, making many small sales at small dollar amounts. This is accomplished by shooting video of cars, people, flowers, trees, airplanes, clouds, etc - things that you can get in your own backyard or hometown. A production company can also get these shots themsleves on the cheap, so they aren't as likely to buy. The second - and best - approach to stock video is to shoot material that is rare, costly and difficult to capture. This is the category of stock video that storm chasing falls under. In storm chasing, the stock shooter usually makes his money by selling one shot only a few times. His production and travel costs, and his profits, are covered by multiple sales. The more rare, dramatic and difficult-to-obtain footage has a higher acqusition cost, and therefore the stock shooter must either sell more licenses or raise the rates to compensate.
So what prices should a stock shooter charge? The answer is simple - figure out all of your costs throughout the year, then figure out how much profit you need to pay yourself a decent wage for the time spent. Add those two together. Now, figure on how many licenses you can expect to sell. For the average chaser, that's about three per year. Divide your costs by three, four (or whatever your typical sales are) and there is your target license fee. That is the true cost of your footage operation - anyone not willing to pay that should not get the license. If you sell footage for less than that number, you are personally subsidizing another business' profits with your own out-of-pocket expense, while you take a financial loss.
It doesn't matter if you are just a hobbyist and not 'in it for the money'. If you're selling stock footage at all, you ARE doing business. Being a hobbyist isn't justification for neglecting proper and simple business practices, IE, not getting taken advantage of. If you don't charge enough to make a profit, you're resigning yourself to either dead-ending your operation (by running out of money), or continuing the cycle of subsidizing others' profits with your own money year-after-year.
You may get the line that your rates are too high. Let's talk about that for a minute. Good storm chasing footage (tornadoes, hurricanes, close lightning, etc) has a high acquisition cost. In other words, if you didn't put forth the effort and money to travel for weeks every year, you would not have that footage in the first place. A production company who needs that footage would have to budget many times more than your cost to send their own crews to attempt the shots - and they don't have chasing experience, and likely would not be as successful as you. It may take them a whole season to get a collection of usable shots - at the cost of high five figures, or more! What's more, a company working on a project in the winter may not be willing or able to wait until spring to get the shots they want.
So, stock footage is a sensible alternative for the production company looking for shots of tornadoes, lightning, hurricanes, and other extreme weather. They are usually prepared to pay rates that allow shooters to cover costs and make a profit, as that is considerably less than what they would pay to send their own crews out - notwithstanding the associated logistical problems and risks. The problem comes when a shooter does not think in 'business terms' - not considering his own time and costs, selling the footage at dirt-cheap rates of only a few hundred dollars or less. Some production companies now budget less than what is needed, because they know it's possible to find someone who doesn't consider the value of their own time and resources.
Stock footage is a product that does not - and should not - follow the supply-demand principle. I can draw a parallel to another expensive product - the professional video camera. Pro cameras cost upwards of $40,000 (with lenses). Demand for these cameras is very low compared to consumer models - which you would assume would also lower the cost. Not so - very few buyers for a camera model means that those few buyers must bear the cost of the research and development of a high-end product. It's also a lot like exotic automobiles - just because Rolls Royce doesn't sell high quantities of their cars doesn't mean they lower prices to increase demand. Their prices stay high due to the costs being spread out over a very small client base.
Good and rare stock footage is the same way. Just because you sell very little of it is not justification to lower rates. Because there is a very small client base, lowering rates will not encourage more buyers. Just like with a Rolls Royce, buyers should be prepared to pay premium rates for footage that takes months, even years, to gather. If someone is not willing to pay for what it really costs to manufacture/produce a product, why should they get it? You can't do that at any store, unless they are going out of business and liquidating their assets at a loss.
A good principle to go by is that you don't HAVE to close every potential sale. Many are just not worth it, and I let many a potential client pass if they are not willing to pay fair rates. If they won't pay what it takes for a stock shooter to profit from his/her footage, then why should they get it at all? Let them pay ten times more to send their crews and get it themselves! One of the most important things I've learned about business is this: the status quo in the business world is that EVERYONE undervalues your product. Expect that. Be more ready to let a deal go than to bend over backwards to close one. Expect to be fed the lines and even flat out lied to. It's unfortunate, but that's the way it is. If you really need extra money, there are far easier and dignified ways to make it than letting a client or production company swindle you out of what is due to you.
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