The Production Budget: Your Return on Investment

THE BUDGET: Getting all your bucks in a row.

935756569_18aac96892_nBefore beginning your production you should consider the entire cost of production so you can plan accordingly. There is nothing sadder than a project that has run out of money. And you’ll want to budget your time too. Let’s look at a sample budget and amortization schedule for a single audio-CD.

 

Studio:

Recording digital 2-track: 6 hours @ $95/hour……………………………………… $570

Load recording into computer for editing: 6 hours @ $100/hour ……………….. 600

Editing for content and formatting: 24 hours @ $100/ hour …………………… 2,400

Record introduction, professional announcer: 1⁄2 hour @ $100/hour …………. 50

Professional announcer fee:…………………………………………………………………… 100

Mix announcer, music for intro and ending: 1 hour @ $100/ hour……………… 100

Materials:

SUBTOTAL: ……………………………………………………………………………………… $75

DUPLICATION/REPLICATION ……………………………………………………… 3,895

(300) CDs replicated @ $1.75 each: ……………………………………………………… 525

4-color computer generated labels @ $.25 each:

SUBTOTAL:…………………………………………………………………. 75

PACKAGING: …………………………………………………………….. 600

Cover design: …………………………………………………………….. 350

Printing:……………………………………………………………………… 50

Insert art into covers — (300) units @ $.15 each: ……………………… 5

Shrink-wrap (300) units @ $.25 each:

SUBTOTAL: ……………………………………………………………………………………… 75

SUB TOTAL:………………………………………………………………………………….. $1,120

GRAND TOTAL:…………………………………………………………………………… $5,615

 

Now, using the previous example, if you sell all 300 units at $16 each, for example, you will gross $4,800. Do you want to amortize the entire cost of studio production over only 300 units? If so, you’ll come short of breaking even at the retail price at $16 each. Adjust the numbers until you end up where you want to be. Maybe you need to cut your production costs a little? If you lower your entire production cost below $4,800, keep your retail-selling price at $16 each, then all units you sell after the first 300 will have a higher profit margin because your production costs have already been recouped in the initial 300 units produced.

Shop the country for the right style and price.

In different metropolitan markets, prices will vary for the various services, production styles, and recording and production techniques as well as resources (for cover artwork design). In my opinion, Muscle Shoals, Alabama has the coolest studio rhythm sections in this country, as well as scenery.

Muscle Shoals has its own regional style of production just as do studios in L.A., New York or my hometown of Detroit. This uniqueness will result in a unique budget.

If you have a producer, they will supervise the recording process and keep the project in budget. If you’re acting as producer, try to meet with the production staff, recording engineer or whomever you are working with prior to the billed session, so you can discover their style and plan your budget accordingly. Evaluate them based on their experience with products similar to yours; ask how they did it and how much that project cost. They might even help you develop your budget. It’s in your best interest to go with the flow of the studio or production facility for your project. You’ll pay less in the long run than if you try to design a new process just for your project.

Interested in learning more about professional media services like audio/video? Contact me at 800-647-4281.

This information is taken from my book The Art of Production, which you can purchase from Amazon or you can purchase an e-book version from SmashWords.

photo credit: George is Keeping an Eye On You! via photopin (license)

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