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As we discussed in Part 1, Deborah Vinsel, CEO of Thurston Community Media (TCMedia) in Olympia, Wash., knows that it’s not easy (or comfortable) for PEG channels to charge for production services they have traditionally offered to organizations in the community for free. However, for many PEG channels, cord-cutting and the subsequent reduction of franchise fees are forcing them to think differently if they want to continue to provide the community with anything at all.
For example, in the last five years, cable revenue has dropped 25% for TCMedia. “The revenue stream is declining for all of us,” Vinsel explained. “We really need to be entrepreneurial about what we do.”
So, what do you do when organizations request video productions? TCMedia asks them if they have the budget to cover the expenses. If they can’t, then hiring TCMedia simply isn’t an option.
Vinsel points out that there are ways to be flexible and keep your services affordable. Clients can keep costs down by replacing paid staff with a trained volunteer crew, or perhaps limiting the number of cameras (and therefore crew) for the production. Another way to help potential clients is to provide a maximum cost for a project, which can be reduced if the actual number of work hours turns out to be lower than originally quoted.
That said, PEG channels need to be very careful to not undercut the price of their services. Calculating the cost of four crew members on a location shoot is relatively easy, but estimating the costs of pre-production graphics and editing can be challenging. It’s also important to plan for the unexpected. Vinsel advised that any agreement should include language to explain that a change in the scope of work (for example, the client may want to add more cameras) can result in additional charges.
Beyond production services, how else can you generate revenue? One way is to charge a monthly or annual fee for volunteers to have access to your organization’s equipment and facilities. Training fees can also help offset costs. Remember, training costs will likely be higher if you have to hire a guest speaker, so you need to adapt participation fees to compensate.
Vinsel admitted PEG channels have to get “calloused” about some things, but generating funds is literally about survival at this point. She said TCMedia has been charging for its services since 2000 and has earned tens of thousands of dollars annually. The station has also been fortunate to have a contract with one organization that has generated close to 25% of its earned revenue for more than a decade.
Of course, not everything is a revenue stream. For example, TCMedia does not charge for bulletin board announcements. Vinsel emphasized the importance of identifying what services you offer, determining what you will and will not charge for, and then figuring out the cost and pricing your services accordingly.
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