I once worked with a video agency that charged $3k per finished minute of video.

This approach to pricing video content is not uncommon. It is difficult for agencies to help clients understand the complex costs that often go into video. And I hate to admit it, but no video agency wants to provide full transparency into how they do things. They all fear that the client will see and request something be cut that they view as unnecessary — like hair and makeup — and then hold the agency accountable for not living up to the client’s expectations when the result isn’t what they want. In order to meet expectations, some of the process to make good video needs to remain the agency’s ‘secret sauce,’ and so pricing in terms of something concrete like minutes of content makes sense. That also makes it clear that when you purchase higher priced minutes ($100k+ per minute) you are getting better minutes than when you purchase the cheap minutes, right?

But in the age of video content, that approach makes no sense.

Here is a YouTube video. I don’t know the YouTuber that made it, but I assume he’ll be happy for any additional views, so I am sharing it here. It is a good example of high-quality content available on the platform, and it is thirteen and a half minutes long. So we can assume that, if you wanted the agency from the beginning of this article to make it for you, it would cost roughly $40k. That’s $40k per video, on a platform where consistency and quantity of content need to be a part of your business strategy. Math is fun, so let’s say you produced a single episode a week for a year: That’s a 2.1 million dollar video strategy. The YouTuber above publishes a video twice a week, so I guess that he’s creating 4.2 million bucks a year of product for free, right?

Well, no. And No, video companies aren’t just robbing you blind. The truth is that YouTube content is a different beast entirely, that has birthed entire markets of quick and easy video resources to help YouTubers build content with little help, on insanely fast schedules, and at very little cost to them. The platform has effectively opened up whole new ways to create certain types of video content that agencies would’ve previously never considered feasible.

And yet our example agency still charges $3k per finished minute to this day.

YouTube videos tend to be templatized, mass-produced, and rely on the quality of content over production quality (within reason). I would expect that every video agency would (1) take a close look at their own operations in light of the many innovations that happen within that space; and (2) would begin to offer a separate pricing model and a separate production product for YouTube content. But that’s just not what I’ve seen.

Making YouTube content, doesn’t follow traditional video production practices. So why do companies continue to try and apply traditional pricing structures to it? 

Video credit: Potato Jet https://youtu.be/UTtmzQCQnK8