A small communications agency contacts you and would like you to give them an estimate. They are re-branding Broadgate, an area in London, and need 25 images to use for printed materials, social media, web, tube ads and potentially billboards. The license term is five years. They think you can do the shoot in two days.
Additional usage includes the use of 25 images for five years, European market. The brief is quite wide in terms of the printed and electronic media listed, so additional usage is calculated on the basis of all printed and all electronic media.
Prima facie, this estimate may seem somewhat pricey. But a few things need to be considered.
Firstly, this is a notional brief. That doesn’t mean this is fictional estimate. What it does mean is that in the real world, this brief would be commissioned by the company which manages the Broadgate complex – a huge complex of mixed retail, leisure and commercial units. They would have a budget for this and I think that it would extend to meet this and similar quotes, quite possibly beyond.
The images will be used over a five-year period, consequently the Broadgate management company’s accountants may recommend amortisation of the costs in which case at least part of the estimate will be spread over the five-year period.
Secondly, it is an estimate not an invoice. This means two things.
It can be subject to negotiation.
And it is prepared using the accounting principle of prudence (which requires that the worst case is reported). Consequently, the figures are provided are for a four-day shoot – the shoot may only take three days in reality and the cost would, therefore, be less but the higher cost budgeted for.