A friend of mine who now works for a major NLE manufacturer recently emailed me with a philosophical question: “I’ve wondered openly objectively if the lower price points of FCPX or other NLEs doesn’t by extension create an expectation in professional circles (on behalf of clients, agencies, prod cos, etc.) that the skill set to drive such systems is devalued as well?”

Yes….yes it does.

But this is nothing new. This expectation came about years ago when Final Cut Pro started encroaching into the broadcast market.  FCP was much cheaper than Avid, therefore the rate for the work done on it must also be cheaper, right?  Because FCP costs 1/10th the price of Avid, your price for services must also be about 1/10th the cost, right?

Wrong.

It took me a while to figure out a good way to explain this to clients…producers…networks.  Just because the TOOLS are cheaper, doesn’t mean that the TALENT is.  Yes, my rates might go down, but not exponentially to match the cost of the tool.  No…sorry.  I am not cheaper because my tool is.  Well, I sort of am, but….

OK, let me put it like this.  Because I ended up breaking it down like this to clients and producers.  When you hire me to work on a project, you hire me.  I have a set cost.  If you hire me to work on your equipment, I am only that cost.  If you hire me AND my equipment, then I bill the same amount for me, and a separate amount for my equipment.  Let’s say, for example, 8 years ago I owned an Avid Meridian, which ran about $70,000 to $95,000 depending on the features you got.  It would be the computer, the Avid hardware, the monitors, a big ass desk, a big ass mixer, a beta deck, external broadcast monitor…the works!  So I would then need to rent that to productions for about $1500 a week in order to be able to pay it off.  And then there was me, and lets use the union scale rate for back then which was about $2500/week.  That’s $4000/week for me and my system.  But that is if they house me and my system. If I have an office, that is additional overhead that doesn’t decrease either. It is a set cost.

Now FCP comes out and it only costs $1000.  But then you still need to buy the equipment to go with it…but all said and done, when you get something comparable to that Avid, it’s about $16,000.  That’s about 17% the cost of the Avid.  Producers would go, “hey, look how cheap this system is…so now you are only 17% as well, right?  Instead of paying $4000/week, we only need to pay you about $700, right?”

Wrong…your math is wrong.

I am still $2500.  I am not cheaper because my tools are.  Actually, with inflation and improved skill set, I might be more.  But let’s keep it simple and say that no, I am still $2500/week.  The only change is that my overhead is lower…my system rental is cheaper.  I am still the same amount, my office still costs the same amount…the only thing that is cheaper is my tools.  So that is where you will save money.  Instead of $1500/week, now it will run you $400/week.  I still need to pay it off, I still need to make money on the system so that I can constantly upgrade it to meet the changing needs of post.

And yes, if you hire me to edit, and stipulate that I have my own system in order to work on your project, there will be a cost for renting my system. Too many producers feel that your system comes with you…and that is a set rate.  No, it does not. Equipment costs money, software costs money…I need to make money towards that in order to buy the stuff I need and remain current.

My friend also said:  ”I’d hate to be trying to make my living or charging for services on $300 software (FCP-X).  And to that point, maybe not on color grade software as inexpensive as Resolve.”

Sure, FCP-X is $299…Avid Symphony is now $1000 (crossgrade promotion) instead of $6000. And Autodesk Smoke might also be cheaper than it’s original $14,000 price tag (we’ll know by Sunday). But there is still all the surrounding equipment needed to run that…and while that too is tons less than the $250,000 Flame rooms of old, it still has a significant price tag.  And the talent to drive it isn’t cheaper. My talent for telling a story, or knowledge in on-lining and delivering a show to network spec has not diminished.  There will be cost savings due to the software and hardware being cheaper. But it won’t be as much as you might expect.