You can borrow an iPhone, shoot some video and upload it to YouTube – all for free. Or you could hire James Cameron to write, produce and direct your video where you’d be looking at a budget just shy of half a billion dollars when you include marketing costs and Hollywood accounting. Both options would result in a finished video but you’d probably need special glasses to watch the more expensive option.

The good news for businesses looking to engage a corporate video production company is that many of the factors that affect the price of a video have been going down over the last few years. Assuming you find a company that does great work (this is a critical first step by the way – if the company doesn’t do great work it’s not worth paying anything for) the first question to be answered is  ‘how much does a video cost?’ There is no simple answer to that question but here are 12 factors (ranked in order of importance to the overall quality of the video) that affect the price of a web video:

Corporate Video Production Expertise. Doctors, mechanics, lawyers, videographers… whatever profession you care to mention, experience and expertise matters more than any other factor and, all things being equal, you do tend to get what you pay for. There are many, many moving parts in the creation of a video but at the end of the day you are paying for the expertise and experience of the key people responsible for your video.  
Costs: You can pay $25/hour for a recent film school graduate or $250/hour or more for a top flight video veteran. On average most production companies will charge between $75/hour and $150/hour for the people involved in key activities such as shooting, editing and directing a corporate video. (TV commercials are an exception where A-list professionals can be an order of magnitude more expensive depending on the budget.)

Concept / Script / Storyboard – Doing video for the sake of video is a waste of money (although it’s great for the video production industry!) What measurable business objective are you trying to achieve?  How is this video specifically going to achieve that objective? And of greatest importance, do the people creating your video have the experience or guidance to create a video that will help move your business forward? Lighting, sound, framing and editing are all important but they don’t matter in the least if what you are creating has no value to your intended audience. Like companies that spend $10,000 on website development and little or no money on content for the site, many companies waste a lot of money on beautifully shot but otherwise meaningless video.
Costs: Expect to spend between $60/hour and $150/hour for an experienced marketer (does it make sense to have an entertainment script writer or video production assistant develop your marketing script?) to develop a concept, script and storyboard that serves as the blueprint for you video.

Editing/Graphics. The editing process is highly nuanced. Editing is where you create the style and substance of the video – you sequence all of the available assets into a cohesive story that communicates your key messages in a clear and engaging manner. Editors arguably should be the most highly paid (and skilled) in the entire process – quite often they are not. I have included graphics and animation into the editing process because it is often difficult to separate the use or importance of graphics and animation from the editing process.  Some videos require simple graphic elements and some videos are completely animated – the entire video is animation. High-end 3D animation can run in to many hundreds of dollars per hour depending on the complexity and skill required in the project.
Costs: Typical editing costs run between $60/hour and $175/hour. (Complex 3D graphics or key frame animation can cost between $100/hr and $300/hr).

Actors/Presenters. Do you need to hire professional presenters, actors or models to improve the quality of your presentation? Not everyone is good on camera. You may need to make difficult decisions about who should represent your company. In a broadcast commercial quite often it is not someone in your company. Even in a corporate video you may decide that hiring outside talent is the best decision.
Costs: Presenters, models and actors can range anywhere from $50/hour to $500/hour or (lot’s) more depending on experience, demand and union costs. {Special Note: This factor could easily be listed as either the most important AND/OR the most expensive if you are hiring specialized talent such as celebrities or well know experts.}

Camera. The quality and flexibility of the camera you shoot with can make a considerable difference in the finished quality and editing options for your video. Are you shooting on a $ 500 DV camera, a $2,500 DSLR, a $10,000 Full feature HD camera, a $25,000 RED, a $60,000 ARRI or are you shooting on Film? The pace of technological advancement in film and video is breath taking and the features and capabilities of cameras are changing weekly.  Bottom Line: You should be able to see the difference in the final output quality in more expensive cameras. If you can’t, then it’s not worth paying for. Your final delivery channel will also determine the need for specific cameras. Streamed video on the internet (where the vast majority of corporate videos are seen) doesn’t require high-end camera’s to capture your content because a lot of that quality will be lost in optimization for the web.
Costs: You will spend between $25/hour and $400/hour or more depending on which digital camera package is used. Film cameras, lenses and stock will take you well over $1,000 /hour.

Equipment. The more experienced video production companies tend to have a wide variety of tools and equipment on hand for each shoot. Do you need a track dolly or a jib-arm to create a shot with movement? Do you have a high quality field monitor to know exactly what you are getting (or not getting) as you shoot? Do you have all the necessary audio equipment (lav’s, direction mics, booms etc) to capture the audio you need?  Lighting and framing are everything in video. Do you have lights – lots of different lights to accommodate a wide variety of shooting scenarios? Do you have a variety of lenses to create the specific feel you are after – wide angle, fixed focal length or Cine lenses for narrow depth of field, etc?
Costs. Equipment cost can run anywhere from $25/hour to $100’s/hour or more depending on what specific equipment is required.

Crew. If you’ve ever watched a movie or television show being filmed you might wonder why you need so many people standing around idle on a set. Most business web video productions don’t require more than two people (and sometimes one is enough) but depending on the complexity of the shoot you may require a crew of three or more. If you are conducting man on the street interviews as an example, you need a cameraman, a sound man and a directer or interviewer. Concept videos like commercials will often require more people to help with the logistics of the shoot. A field production engineer who has his own equipment (i.e. field recorder, mics, boom pole etc.) typically costs between $50 and $75 per hour. A lighting technician may cost between $ 30 and $50 per hour.
Costs: Expect to pay between $ 25 and $75/hour/person for experienced crew.

B-Roll / Cut-away shots. Most videos benefit from the addition of footage that supplements what is being said on screen. If you are interviewing a business owner who is talking about their new equipment you should cut away to shots of the equipment as they speak. Showing the viewer what is being described in the video is more informative (show me, don’t tell me) and also helps to keep the attention of the impatient viewer.
Costs: The length of time and equipment used to capture the b-roll will increase production costs. You can add anywhere from 10% to 50% of the total shooting costs if you need to supplement interview footage with b-roll footage.

Locations and production time. Where are you shooting? How long will each scene/interview/shot take? Are you shooting in one location or many? What are the specific requirements and constraints of each location? Are you indoor or outside? If you are shooting outside is weather a factor? If so what happens if it rains? How much set-up time is required? Are the locations close together? The most important factor is the total amount of time required for production. There are few economies of scale for time – but with good planning you can do a lot within a specific period of time.
Costs: This cost is arithmetic. Two days of shooting is twice as expensive as one day. {If shooting extends for many days or is regularly scheduled then most companies offer a discount}

Studio shooting. Do you require the use of a sound stage or studio? Do you need a controlled environment to shoot in? Are you shooting green screen and keying out the background in edit? The use of a studio has to be factored into the overall cost of the production one way or another. Larger companies may include studio time in their shooting costs and other companies include it as a line item as studio rental time.
Costs: Factor in between $100/hour and $ 400/hour depending on the size of the studio. (If you need a studio you will be charged for it – one way or the other)

Set, props, equipment, extras. Aside from video production equipment are there other special props or pieces of equipment that need to be included as part of the costs? Do you need to rent a van, rent furniture, hire extras, hire a plane or helicopter for an aerial shot or bring in special equipment for the shoot? These all have to be factored in to the cost of the shoot.
Costs: Depends on what is required.

Digitizing, transfers, rendering and uploading. Video takes on many forms during the production process. If you shot on film you have to transfer it to a format that works in your editing system. After you edit it, you have to render it to a presentation format (for web, for broadcast, etc.) and depending on where it’s going you may have to upload it somewhere (your web server / YouTube etc). All this takes computer and human time and you generally have to pay for both.
Costs: Sometimes these costs are buried, sometimes they are line items. Tape transfers are still very expensive ($100’s of dollars).  Rendering and uploading time are usually buried in the costs but can also be charged out at an hourly rate ($30 – $75 per hour).