jan 9, 2019 - Responded to Questions
Description:
Hi Marie,
Hopefully, this answers your questions but if there is anything that you have a problem with please let me know.
1. Confirming that that contract is $90,000 annual price. Each project is charged based on the amounts in the Production Breakdown section and could exceed or fall short of the $7,500 monthly fee?
Correct, the contract is $90,000 annually, billed $7,500 / month. Every production project that is approved is charged based on the length of the project according to the production cost table. For example, if you approve a 60 second video, then $375 would be removed from your production balance (as your rate is $375 / finished minute). Any unused funds will be rolled over for use in future months.
2. What is the threshold and pricing information for volume discounts?
Volume discounts generally apply for clients that request multiple studios or know that their production plan will exceed $7,500 / month. Some clients commit to $120K or $144K annual contracts and then can receive a reduced per minute production rate on every project (eg $350 / finished minute). These volume discounts are negotiated independently, so if you think you have a need for more minutes…or, if you begin use and find that once the studio is up and running, a more aggressive production plan would be beneficial, we are happy to discuss a lowering of your per minute rate based on a higher monthly commitment. If you would like a cost breakdown for multiple studios I can send that as well?
3. Is the intent that unused monthly production amount will be accrued and available for 12 month after the month it is billed and forfeited if not used within 12 months following the month the unused amount was accrued? If minutes are not used in a given month, they will be accrued to use. After 12 months of that accrual, unused minutes are forfeited. So minutes in January need to be used by the following January, and before contract expiration, or they are forfeited. However…this is a VERY rare occurrence. When we bill production minutes against your balance, we always take the “oldest minutes” first.
For example, you are be billed $7,500 in January and do no production, so you would have a $7,500 rollover. You are then billed $7,500 in February, but complete $7,500 of production. We would apply those charges against the January accrued balance. You would still have a $7,500 accrual moving into March, but they would be “February dollars”, not January.
Or in other words, the only way unused minutes expire…outside of contract expiration… is if you would accrue over a year worth of unused production.
4. Will unused monthly production amounts continue to be available for the 12 months after it is accrued even if the agreement is renewed?
Abosolutely. If the agreement is renewed and you still have an accrued balance, all unused minutes remain for your use under the same terms.
5. Will there be a separate agreement for projects requiring asset hosting, campaign management and customizations?
The general answer is yes. If there is a project that you want completed that falls outside of the general On-Site day to day service offerings…for example, field production, 3D animation services, etc…we certainly can assist but would quote those services out and provide a specific agreement for that individual project. That language is included in the agreement to clarify that those “specialty projects” are not included on the per minute rate table. Most times, we will still apply those specialty charges (less any out of pocket costs) against your balance if you desire, but we will discuss them individually as needed.
For example, we recently sent a crew to Houston to do a live interview of a client at a location that did not have an On-Site Studio about a clinical trial they were launching. This project had 3 types of charges. The first was out of pocket plane fares, lodging, etc. that were billed separately. The second was our staff time, equipment rental, etc. for the field shoot. This was outside of normal OSS scope, so it was quoted separately but still applied against their accrued balance. And the third was the actual editing of the project after the footage was captured, which is in our regular workflow and therefore billed at the same finished minute rate. When this specific project was finished, they received a bill for the out of pocket costs and had their accrued balance reduced by the other two charges.
Note that On-Site will also store all of your completed videos on our server free of charge as part of your agreement, but that that storage is only a repository for your team, not for public access. You can download those completed videos at any time and post them to your website, social media, Youtube, etc. at any time when you are ready to share those videos. So as a clarification, “asset hosting” for you is free and included with the package, but when you are ready to push those videos to the public, you need to download those videos and release them in the appropriate channels.
I just wanted to reiterate what we said in the meeting that we will help you throughout the process of developing and implementing a plan and making this as easy and effective as possible.
Thanks again,
Added to timeline:
Sales Timeline With CMH
Date:
