Budgets
What changed in 20 years
Cameras got cheaper. Edit software got faster. Delivery platforms exploded. AI arrived. The whole industry transformed.
What didn't
Budgets. Same game. Same questions. Same confusion. And every comms manager still overpaying for the same reasons.
The Insider View
Nobody ever showed you how this works.
I've run corporate production on both sides of the Atlantic for 20 years. Here's what they don't put in the brief.
The Basics
Every production company is the same equation.
01
Internal Costs
Staff salaries, rent, software, overhead. This is the house. It runs whether you hire them or not.
02
Cost of Goods Sold
Everything bought specifically for your project. Crew, kit, locations, travel, music. Hard costs. Mostly non-negotiable.
03
Profit
What's left. Usually under 10%. This is what pays for the next pitch they do for free. And the one after that.
Every shop looks different on paper. People bounce between companies, start new ones, and copy-paste the model. The equation never changes.
What They Don't Tell You
Hire any three companies. You might see the same people on set.
Directors? Freelance. DPs? Freelance. Crew? Freelance. Production is almost always fully outsourced. The company you're hiring is mostly a creative layer and a logistics operation.
That DP you loved on the last job? He's probably working for all three of your shortlisted suppliers.
Which means you're not buying crew when you choose a production company. You're buying the creative director's taste, the producer's relationships, and the account team's ability to not lose your budget in a spreadsheet.
The Negotiation Map
Know where the house costs sit. Know where they can flex.
No wiggle room
Production days. Freelance crew rates are market rate — they don't discount for charm. Travel, locations, kit hire. Hard costs are hard costs.
Pre-production on specialist work (VFX, animation, drama). If it's outsourced, every extra hour is a real invoice.
Wiggle room lives here
Post-production — if they have senior editors on payroll, that's sunk cost. Extra cutdowns and small tweaks cost them almost nothing.
Pre-production — concepts, scripts, treatments are usually sunk cost. The house eats it. That's the pitch investment.
5 editors on staff = they can throw in post value. 1 assistant editor = every extra day is freelance. Zero flex. Learn the org chart.
The Pitch Problem
Pitch theatre looks competitive. It guarantees mediocre work.
9 out of 10 pitches: done in-house, sunk cost. Creatives write. Producers budget. Nobody gets paid. You get three versions of the same idea from three exhausted teams. Here's the part no one says out loud: you shouldn't request a full pitch for every project. It's wasteful for them, wasteful for you, and it leaves a bad taste that compounds over years.
The better play: do a couple of test projects. Find a supplier you trust. Then commission them to develop. Trust built through small work pays dividends on the big work.
The Real Leverage Point
Post-production is where the margin lives.
It's how they pay their permanent staff. Which means it's also where the relationship capital gets spent — or wasted.
Every edit day, every cutdown, every "just a small tweak" is either coming out of their margin or going on your invoice. The difference is entirely determined by how much they want to keep you happy — and how much goodwill you've built.
The best time to ask for a favour is when you're a long-term client with a track record of clear briefs and fast approvals. Not when you're a new client squeezing a budget on day one.
The Test
Pull your last invoice. Ask these three questions.
1
What was hard cost vs house cost?
If you can't answer this, you don't know what you actually paid for. Ask your supplier to split the budget into the three buckets. Any good producer will do it without flinching.
2
How many edit days did it take vs how many were quoted?
The gap between these two numbers tells you more about the brief quality than the supplier quality. Vague briefs cost edit days. Always.
3
Did you run a pitch?
If yes — did the winning idea come from the pitch? Or from the supplier you already trusted? If the latter, you paid for theatre you didn't need.
MrMcK · Budgets
Every production company is the same equation. Learn it.
Internal costs. Cost of goods. Profit. Once you see the buckets, you know where the conversation is.
You're not buying crew. You're buying creative judgment and producer relationships.
The same DP shoots for all three companies on your shortlist. What differs is who's directing them.
Wiggle room lives in post. Nowhere else.
If they have editors on payroll, that's sunk cost. That's where you build goodwill — not by squeezing shoot day rates.
Pitch theatre burns budget and guarantees average.
Trust built through small work pays dividends on the work that actually matters.
mrmck.com
MrMcK · Budgets
If this is
your business,
this is worth
a conversation.
Twenty years building and leading creative teams at the agency and corporate level — across London, New York, and North America.
Advisory work with agencies and production companies on positioning, creative strategy, and the problems nobody else will name out loud.
letsbefrank@mrmck.com · mrmck.com