Don't Get Played: How to Set Fair Rates in the Entertainment Industry
💲Financial Management: Learn how to put a price tag on your services and negotiate like a pro.
Most entertainment industry professionals are passionate about what they do. We want to work and create and collaborate. We fall in love with a well-told story and/or the people behind it. We’re seduced by the prospect of making something new.
And in the glow of that sexy creative promise, it can be so easy to ask for or accept less than we’re worth.
We’re also conditioned to undervalue ourselves. Perhaps the trend was born out of that ridiculous starving artist trope, but the entertainment industry seems to work hard to reinforce a “poverty mindset.” Unless you’re working on Broadway or a studio picture, the assumption too often is that the gig is a labor of love and everyone will work for Hershey kisses.
The poverty mindset is on display everywhere. For one example among many, consider the titles of the SAG-AFTRA theatrical film contracts:
Theatrical ($2+ million)
Low Budget Theatrical (under $2 million)
Moderate Low Budget (under $700,000)
Ultra Low Budget (under $300,000)
Micro Budget (under $20,000)
So many ways to label the lower rungs on the ladder!
Please be assured that I’m not throwing shade at the unions – the great, global wealth divide would be far, far worse without them. But messaging in the entertainment industry too frequently suggests that we are economically deprived. The general conversation is too often about how we need to do more with less.
All of this—coupled with the fact that creative people are often uncomfortable talking about money—can make setting a fair rate for your services super tricky. But it is not only important for you and your career, it is also critical for the industry at large. When enough people undervalue their work, then that lower rate becomes normalized. (Indie producers are a great example of this – check out this sustainability report.)
So how do you go about putting a price tag on your work, your time and your expertise? And how do you negotiate for that rate once you’ve set it? Let’s break both of these down.
Before setting your rate, answer these three questions:
1. What do you bring to the project? You need a firm grip on what your skills are and how much experience you have using them. Your rates can increase as you get more credits and hone your skills, but start with where you are now in your career. If your just starting out, consider the skills that every project needs: positive energy, punctuality and an ability to follow directions.
2. How much money do you need to be making? If you don’t have annual budget for yourself, now is the time to make one. Once you know what your total annual expenses are, divide that number by 50 weeks, and then divide that number by 40 hours (or 32 hours if you’re on the Bernie Sanders’ bandwagon). This is your personal minimum hourly wage.
3. What is a competitive rate of pay for your services? Do your research. Check the union rates (salary plus benefits) for similar work. Look at platforms like Glassdoor and ZipRecruiter to see some average rates for jobs in entertainment. Ask colleagues for insights. This will help you land on a competitive rate. If your competitive rate is significantly lower than your personal minimum hourly wage, then it may be time to work with a career coach or trusted advisor to help you find an alternative career path.
Once you answer these three questions, you should be able to establish a rate for your services that is acceptable both to you and the job market. Depending on what kind of services you provide, you may need an hourly, a weekly and a project rate.
Also, remember, rates can be negotiable. So you probably want to quote a rate that is slightly higher so you have room for negotiation. This will give you some leverage without pricing yourself out of an opportunity.
And speaking of negotiating, here are three tips to be more effective at getting what you want:
1. Focus on your value, not your rate. Frame your fees in terms of the skills and experience you bring to the table, and how those align with the project’s needs. Will hiring you save the project time or money? Are you bringing a unique perspective to the table? Lean in to who you are professionally rather than your rate.
2. Be flexible, but know your limits. Be open to discussing the scope of your services, schedules, billing and payment structures, but know your bottom line and be prepared to walk away if the offer falls below it.
3. Use silence strategically. Don't be afraid of silence after stating your rate. Let the producer, client or department head absorb the information and formulate a counteroffer.
Once you reach an agreement, be sure to get the deal in writing. Check out the Showbizing Strategies archive for tips on creating a solid deal memo or collaboration agreement. And if you’re just starting out in the industry, learn about ways to make low- and no-pay gigs more rewarding.
The entertainment industry thrives on passion, but that passion shouldn't come at the expense of your financial well-being. By following these tips, you can confidently set fair rates, negotiate more effectively and develop a career that is sustainable.
