Establishing value-based pricing and decent margins for a sustainable and healthy motion graphics industry is not (in our opinion) the biggest issue challenging studios that make pictures for a living. In a business where the successful completion of a project is in the eyes of the beholder and the beholder holds the chequebook – the biggest issue we have is managing change requests. Essentially how do we develop a solid project-management culture that deftly circumvents the “doing-too-much-work-for-too-little-money”, avoids the run-on projects, and successfully navigates the jobs that are seemingly impossible to complete on-time and on-budget. This industry-wide problem is a studio-killer and the current business model has few defenders and many victims.

http://insidemovies.ew.com/2013/04/05/peter-jackson-hollywood-fx-crisis/

Somewhere between the agency model where every paper clip and sushi lunch finds it’s way onto the client’s bill, and the vfx model where hapless artists do a shot 3 different ways when the client is only paying for 1 – there must be a happy medium.

We work on a smaller scale than billion dollar-grossing movies, but the problem is universal. Everyone who works in a design studio, deeply understands the conundrum of managing fixed budget projects that have no standard for completion other than “Yay – now we love it”.
Here’s a straight-forward recipe:
1) Set budget
2) Translate dollars into days & hours
3) Allot days & dollars to each deliverable
4) Confirm/sign-off the budget allocations with the client
5) Keep clients informed as costs are incurred & flag budget items that are at risk of going over before they actually go over.

Then watch the world unravel. As the organic nature of art & design comes into full-swing, we horse trade, negotiate costs for run-ons & add-ons, drop elements if new requests are taking us over budget, and try our best to manage the smart change requests that take us into the red, the inane change requests that spring from ego not excellence.

Most of our clients are absolutely fantastic, and readily agree to the budget reality checks. Yet the sense prevails across the industry that a piece isn’t finished until the client is happy – regardless of how much work you have put into it. There are many shades to this problem: requests that make a lot of sense but arrive too late, new direction that changes the foundation of the project, the boss’s boss weighs in a day before delivery, an opaque approval process or chain of command, slow creative, struggling to be brilliant. The trickiest problem is when we are of the opinion we’ve been doing a bang-up job and the client remains mystifyingly unhappy. Thank god this is a rarity.

And all horror stories aside, not being able to manage change requests can be catastrophic: not matching the work to the budget results in a steady erosion or sudden implosion of sustainable margins. As Peter Jackson points out “… when we talk ‘profit,’ it’s not about the owners buying a Porsche at the end of a big movie — it’s about having a nest egg to ride out the slow periods.” Being able to re-invest in studio infrastructure and reward the wonderful design team that makes up the studio.

Ultimately the question is the client paying for your time, or for results only they can deem acceptable? Well …. both. We own-up and pony up when we realize we are not producing at the right level. We must call ourselves out. And when a massive change request comes in that is out of line with the budget and the production process we’ve been mutually engaged with – we try to address it immediately, with as much direct eye contact as possible.

Managing change requests is not simply a one-sided communication problem or budget management failure. Most studios with a strong design core are picture-driven. Our ambitions to produce work at a certain standard and magnitude will often take us places heedless of budget restrictions – yippeekaying all the way to the Emmy or Oscar stage as the studio crumbles behind us.

What we need to be most mindful of is that underneath all this top-tier activity of budget management, picture ambitions and art direction, lies the expectation that because “finished” is subjective, a designer will keep working until the beholders are happy. This hasn’t worked in the past and won’t work in the future, yet it remains the biggest bugbear of our industry.
Comments, discussion, insight – most definitely welcome

cartoon by andrew loos