(Part 1) Defining Classes of Explainer Video Cost
The term “explainer” video has been popularized as the Internet has become a playground for distributing video. Whereas commercials and infomercials have historically been very expensive, explainer videos have have become an affordable alternative. Still, my company’s clients and prospective clients ask about explainer video cost, more than any other topic in video production. Who can blame them? The range of costs can make video production feel overwhelming.
So in this 3 part series I will take a more holistic look explainer video cost. First, I’ll break down the classes, which are based on the types of providers in the space. Second, I will dive into the murky waters of hidden costs. I’ll show that what you end up saving in “production costs” can often come back in the form of future organizational challenges and costs. Armed with that information, you’ll be able to decide on the class that’s right for you. Finally, I’ll help you narrow down your budget with the class you’ve chosen. So let’s get down to explaining explainer video cost.
Breaking down the range
The folks at Demo Duck say that their research puts the range between $1,500 and $50,000. Alternatively, Video Brewery says the range is narrower ($5,000 and $10,000). Clayton Lainsbury from Crowd Content says he self-produced his video for $650. I could go on citing other sources, but for the sake of brevity let’s say that “according to the Internet”, an explainer video costs between somewhere below $1,000 and $50,000. That is a huge range to consider, if you’re new to procuring video production services. So how can you narrow it down?
Just like you can categorize cars by their class, we can objectively classify video production of explainer videos. It’s important to pick a “class” so that you can manage expectations and get bids from the right external partners. Let me outline 3 classes to help break down explainer video cost.
“Economy” Class (below $1,000 – $5,000)
First is a category we’ll refer to as the Economy class. It includes a couple options: 1. producing it yourself with the help of freelancers. 2. outsourcing to providers in another country. Though the exact range is debatable, based on my experience, you’ll find explainer videos in this category cost between a few hundred dollars, all the way up to $5,000.
Producing an explainer video yourself can be a good option if you are a start up and you are strapped for cash. However, be ready to invest a significant amount of time assembling a team. You’ll need to consider support for each phase of production (pre-production, production, and post-production). We actually built a platform (myproducer.io) to help onboard, budget for, and manage your team, since the processing can be daunting. So, check it out if you are planning on managing the production yourself.
One alternative to assembling a team is to hire a freelancer that has multiple skills in production. There are different titles for these folks. Videographers, Preditors, and Animators (the rare ones who both design and animate) are freelancers that act as a one-stop shop. The obvious benefit to hiring them is that they can save you time and money. After all, it’s one person who is wearing a bunch of different production hats. The thing to be aware of is that the best get booked up quickly. So, if you decide to go this route, consider discussing your timeline upfront and in detail.
Outsourcing is another option in the Economy Class. Websites like Upwork have popularized going this route. By creating an account and doing a simple job posting, you can have a laundry list of applicants that same day. The costs are also extremely enticing when you consider that some rates are as low as just a few dollars an hour. The drawbacks to outsourcing are likely obvious, but they’re worth mentioning. First, there is usually a substantial time difference coupled with the fact that you may never have a chance to meet your partner face-to-face. Second, there is often a cultural / language barrier that can be challenging to face. Consider that your explainer video is a communication vehicle. So, if you’re working with someone to polish that communication vehicle, and they speak a different language, you may have your work cut out for you.
“Full Size” Class (about $5,000 – about $15,000)
Next up is the “Full Size” class. This type of explainer video ranges from about $5,000 to about $15,000. The major difference between the Economy and Full Size classes is that the latter should provide you with end-to-end service. With the Economy class, you are often serving as your own project manager. You may have to chase down deliverables, proactively manage your timeline, and carefully monitor costs. Assuming you work with a reputable Full Size option, these project management elements should be handled for you.
Moreover, there should be an element of built in quality control. Partners that operate in the Full Size class are often small production companies or ad agencies. They spend time recruiting and hiring employees and contractors, generally only selecting the ones that are a fit for the company and the clients it works with. As a result, they usually have a team that is experienced in working together.
Working with partners in this class (and above) also provides a greater possibility of meeting your deadline(s). Since you are working with a team, there is greater flexibility for capacity issues that come up. Companies in this class are used to scaling up and scaling down, depending on how busy a particular month is. So chances are that if they take on your project, they won’t suddenly be under water. Look into their history. If they have a track record and have been in business for more than a few years, they have more than likely navigated the tricky resourcing challenges that come with taking on new clients.
“Luxury” Class (about $15,000 – $50,000)
Finally, we have the “Luxury” class. This class ranges from about $15,000 all the way up to $50,000. That being said, I’ve found it rare for many explainer videos to go above the $30,000 mark. After that point, the level of spend is enough to start considering producing a low-budget commercial. I’ll address commercial production costs at a later date. For now, just consider that commercials are a whole animal on their own. Most commercials start in the low 6 figures and ramp up to the millions of dollars for big brands. Can we say Superbowl spot?
The thing about the Luxury class is that it is only luxurious relative to the other classes. I don’t want to mislead anyone who is new to video into thinking that this is the point where you start to be able to afford sophisticated CGI (Computer Generated Imagery) or posh locations for filming. That happens with commercial budgets. Rather, in this class you start to have a little more latitude with what you can do creatively.
For example, if you are filming, you can start to consider options like booking a small studio or a location that isn’t took expensive (though controlling location costs can be a challenge in and of itself). And if you are doing animation, you start to be able to access better creative (e.g. more layers. more complicated design. more intricate animations). For example, when we created the intro of a video for a venture backed tech company, that intro had more than 120 different layers in the animation. It took more than 8 hours to animate this 5 second intro.
Bringing It Home
Choosing which class of explainer video to produce is a very much a personal decision. There are pro’s and con’s to each class. And really, there is no right or wrong answer. Some of it has to do with budget, some of it with timing, and some of it with organizational goals. Yet ultimately, choosing a class is a step in the right direction to establishing your explainer video cost. You’ll start engaging with partners that work well in your budget range, plus you’ll be able to better manage your expectations as well as the expectations of anyone else in the organization.
In the next part of this series, I’ll talk through some of the hidden costs of the Economy and Full Size classes. Armed with that knowledge, you’ll be able to make a decision on which class to pursue, and you’ll go in with eyes wide open.
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