By 2018, Cisco predicts 84 per cent of all internet traffic will be produced video. With increasing accessibility and faster internet speeds, more and more people will watch video to learn about a business. So should you get onboard?

According to Forrester Research’s Dr. James McQuivey, “a minute of video is worth 1.8 million words”. With the ever-shortening attention spans of online users, video is one of the most effective ways to quickly engage and inform your audience.

On one end of the spectrum, you could film something on your smartphone, edit the video on iMovie and upload the finished video to YouTube. Unless you have filming and editing experience, the video will appear unprofessionally produced. In some cases, that’s fine. But if the video is the first thing prospects see when they visit your website, you’d want to make a good impression and engage them with professionally produced video.

The cost of professional video production is contingent on the time and resources required to produce your content. In Australia, the hourly rate for professional video production ranges between $50-200 dollars per hour. These rates refer to the production of customer testimonial videos, animated explainer videos, company introduction videos, how-to videos and educational videos.

To address why one-production company charges more than the other, it’s worth learning about the following key factors that affect the cost of video production.

1. Experience

The greater the experience of the production company, the greater the fee. You’re paying for reliability and a proven track record. That being said, emerging production companies can offer great value-for-money prices and deliver marvelous results as they’re driven to establish themselves in the marketplace. Looking at the portfolio of the company will give you a pretty clear idea of the quality of work they are capable of producing.

2. Script

If the production company is doing most the script work – coming up with the creative concept, structuring the script and writing the copy – they will charge by the time required to do so. Alternatively, the client might have the creative concept and be willing to write the script. Some companies offer script consultation as a complimentary service, others will charge for it.

3. Talent

Not all videos require actors, but when deciding between using an actor and an employee, it’s better to invest in the actor. Using an employee or friend as onscreen talent can result in longer filming times and rigid performances due to inexperience.

4. Filming

It takes time, people and equipment to film. Filming times are often billed in half-day (up to four) or full-day (four to eight hours) blocks. For live action videos destined for online distribution, one to three operators are usually required onset. Standard equipment (HD camera, sound recording and lighting) is usually included in the hourly rates.

5. Editing

Like with filming, editing is usually billed in half day or full day blocks. Editing costs are dependent upon the length of the video and the number of shots that need to be edited together. There are often multiple rounds of editing, with the edit going back to the client for feedback.

6. Motion Graphics and Animation

Videos comprised of filmed footage (such as a customer testimonial video) require basic motion graphics like an opening board, titles and a call-to-action. Such basic animation is usually included in the editing rates. Animated explainer videos and 3D animated videos do not require filming and follow a different production process to what has been mentioned. The best way to determine value for money with purely animated videos is to obtain a few quotes and reference the production companies’ portfolios.

7. Music

Royalty-free music is the way to go for most videos. You pay a one-off fee to indefinitely use a track of music in your video and it’s usually cost-effective. Obtaining the rights to use popular music is significantly more expensive and not worth the time and hassle if the video is destined for internal or online distribution.

So is it all worth all the effort and expense?

It’s worth keeping in mind well-produced video is a multi-channel asset that can also be used in your offline channels like trade shows, prospect meetings and much more. When you take into consideration the impact that video can have on viewer engagement and conversions, the investment is well worth it.