Rental Rates..

[Ed Watkins]

Kinda an odd topic to post about, but what is the consensus on rental rates for the RED?

To make it simple I'm wondering about a basic production config, no lenses, with EVF, Drive, batteries and tripod.

[Chris Gearhart]

Odd or not, it's been batted around a bit. If you search the forums you'll hit the various discussions. My summary of the consensus as it stands: You have those who want union-esque price . . . , er, shall we say, "standards"; then you have the market-shall-decide types. The number I seem to recall most often is between $800 and 1100, and as low as 450 (body only) per day, depending on kit size.

The problem Red introduces is the same one it solved--amazing function at an incredible price point. We are on the front end of how that will affect the rental market.

My take is we'll have to wait and see how the market forces react to Red's presence and charge what we can.

Hope this helps get you going.

[overlandfilms]

Are you talking casual "consensus" or industry-wide price fixing? If you're talking consensus, then anywhere between 10 and 30 rentals to current-market cap-ex is typical.

e

[Zakaree Sandberg]

yah id say 400 body, battery, hard drive...
800-1000+ for fully packaged out with lenses and everything...

the only think that will be hard to determine is how to work the workflow situation for the renters

[Ed Watkins]

Thanks for the replies, I'm definitely not talking Industry price fixing.

I just wanted a casual consensus on what a RED could rent for. It's such a new system, there is not much to compare it against for a fair rental price.

[overlandfilms]

No, but the rental formula is pretty much used industry-wide and holds true for most rented assets.

So, a working RED with variable prime or a couple of primes and recording media, VF, two batts and charger and so-forth is $30k. Naturally, if you're in a lease on the gear, you might not feel the burn to recoup your investment so quickly. A $30k lease for 36 months will likely cost you $1.2k/mo., so you would need a few rentals to recoup your fixed expenses.

10 rentals $3k/d or $9k/wk
20 rentals $1.5k/d or $4.5k/wk
30 rentals $1k/d or $3k/wk
40 rentals $750/d or $2250/wk

If you project your rates to 40, 50 rentals and beyond to recoup your investment, you're shattering industry cost-to-recoupment standards for figuring marketability and cost.

It depends on how you figure the depreciable life of the kit as well. Might be that the body has a three-year depreciation, while the LCD and batteries have one or two.

Talk to your finance people on it - they can offer you some good pointers.

We use Direct Capital (http://www.directcapital.com).

[Rick Darge]

I'm thinking $1K minimum day rental which will include

Red body
EVF / 2 Batteries / 320GB Drive / Pro Grip Outfit
Red Zoom

If you're riding along as a DP, then it should be $1750 and up depending on your experience and the job - This ain't no HVX

[Nik Manning]

I think the rental rate will be around $1K a day for a $30k kit until around February 2008 then rental prices will drop as the camera becomes accessible to many. With 3,500 units on the street there should be some great rental deals being made.

I am thinking $700 for a kit will be the standard. Some will be lower http://www.indierentals.com/cameras.html

I predict as low as $400 in some cities as folks will have to rent it out to pay their credit card bill.

[Stephen Williams]

I think the rental rate will be around $1K a day for a $30k kit until around February 2008 then rental prices will drop as the camera becomes accessible to many. With 3,500 units on the street there should be some great rental deals being made.

I am thinking $700 for a kit will be the standard. Some will be lower http://www.indierentals.com/cameras.html

I predict as low as $400 in some cities as folks will have to rent it out to pay their credit card bill.

Hi,

$400 is still above the 1% a day that rental companies have historically earned.

Stephen

[chuck colburn]

Hi,

$400 is still above the 1% a day that rental companies have historically earned.

Stephen

Hi Stephen,

I brought up the 1% per day rate a while back and was informed that I was out of touch with current pricing trends. Which may make sense with video cameras as they are very exspensive and don't seem to have a very long life due to changing technology. RED with it's "modular" concept might change that though.

Chuck

[overlandfilms]

Where did you get 1% a day?

[Stephen Williams]

Hi Chuck,

I think the rental companies have been charging 3% +for cheaper DV type gear. I don't see that justification for Red One cameras or their lenses as it's not a throw away item. With so many cameras sold at a very reasonable price, I cant think there will be many people wanting to rent rather than buy a year from now. At that point I think DP owners will get thrown in with their cameras.

Stephen

Edit 1% is the standard figure used for most of the past 50 years AFAIK. Above 1% it seems like easy money so another rental company opens, their price then falls below 1%, and they go bust.....

[chuck colburn]

Hi Chuck,

I think the rental companies have been charging 3% +for cheaper DV type gear. I don't see that justification for Red One cameras or their lenses as it's not a throw away item. With so many cameras sold at a very reasonable price, I cant think there will be many people wanting to rent rather than buy a year from now. At that point I think DP owners will get thrown in with their cameras.

Stephen

Edit 1% is the standard figure used for most of the past 50 years AFAIK. Above 1% it seems like easy money so another rental company opens, their price then falls below 1%, and they go bust.....

Stephen,

I'm well aware of that fact! Worked for some of those busted companies over the years. (Think Otto, F&B Ceco and even CP when they were trying to be a rental house with the Movicam).

Chuck

[Rick Darge]

This 1% deal has my mind in a boggle. Most rental companies in LA are charging between 250-350 for an HVX package.. Doesn't that seem high?

I would expect the Red fully kitted would go for at least 1K, no?

[Alexander Nikishin]

A fully outfitted Red kit is worth 1k p/day at least.

Please do Red owners a favor and not low ball eachother.

If we end up giving into deadbeat producer's low ball rates we will all suffer in the end!

[overlandfilms]

I've been on both sides of the rental business for film and video and in no instance have I seen rates lower than 30 rentals against whole cost.

I am really curious to know where anyone is getting this 1% notion from.

As rgdfilms stated, the $250/day rate you're seeing on cameras like the HVX is based upon 20 rentals against $5k - the current price for a base HVX asset.

1% would be a $50/day rental - and that simply isn't a real-world formula. If you base your camera head rental rate on the asset cost / number of rentals, you'd have $875 a day based on 20. On the outside of the formula, $580 against 30 rentals.

[chuck colburn]

Hi Erik,

I think Stephen and I are talking about a different calibre of equipment.
I'm not quite sure what a hvx is, but I think it's one of those home camcorder type things... a different thing altogeather.

Chuck

[Gopher77]

OK so let's put some real numbers to this equation 1 % daily rate, at 75% utilization (standard for rental real estate I don't know camera rental)
will take @ 130 days to break even. Weekly rates (daily x 5) will take @ 27 weeks. Three different red packages;

A basic package for 30,000.00 would have a daily rate of 300 and a weekly of 1500

An intermediate for 50,000.00 would be 500 daily and 2500 weekly

A full meal deal for 70,000.00 would be 700 daily and 3500 weekly

This does not include overhead like insurance, store front, minor repairs (major reairs and loss should be covered by renters L&D ins) and saleries. Maybe you guys who actually have experience in rental can set me straight on this pricing model or provide us with a more accurate model.

Gopher

Update:
Weekly (daily x 3) will take @ 45 weeks for breakeven

Basic weekly = $900.00
intermediate weekly = $1500.00
full meal deal weekly = $2100.00
tomorrow when I'm not falling asleep I'll see if I can find a interest and deprication calculator to get a closer costing then this. Right now this seems a little too generous on the rental company side, I think rates need to be higher then 1%. Personally I don't want to consider my time to pay for the camera, my raate is for me and my family to live on, not equipment. Therefore to justify owning this equipment it would have to perform financially as well as the money in the bank. With that said there maybe an intrinsic or goodwill benefit of getting jobs due to owning the equipment.

Gopher

[overlandfilms]

Week rates on film gear is 3 days against 5 and up to 7. You should change your assumptions accordingly.

[Kevin Halverson]

The weekly on lighting and grip packages in the LA market is typically 2x the daily rate. Camera and sound department items are either 2x or 3x daily rate for a week. I found the same to be true in most other places that have a competitive and active film rental industry to support.

[donatello b]

"Basic weekly = $900.00"

hummm 300 day - i could cancel my RED and make $$ off that rate?
at that rate - i'd sublet from you and rent it out at 1500 week ..

IMO $300 day is tooooooooooooo loooooooow for a RED (30k package)
=900 week ....

[Chris Kenny]

There's no chance a $30K camera package is going to go for $300/day, when $8K packages go for more than that now. One can say that a Red will last longer than an HVX, so a lower rental rate might be justified despite the higher price... but realistically a Red still isn't going to last as long as the film cameras the 1% rate was established around. Film cameras can be "upgraded" by using new film stocks, which doesn't cost the rental house anything. Even if Red offers reasonably priced sensor upgrades, that's still a periodic expense on the rental house's side that needs to be passed along to the customer.

Also, keep in mind, while the supply of Red Ones is going to be very large by digital cinema market standards, it probably won't be that large by prosumer market standards, at least not in the first couple of years. This suggests that if the camera were actually priced similarly to or lower than prosumer cameras in the rental market, demand would significantly outpace supply. (Which would, of course, mean it was priced too low.)

[Ace]

You guys are not factoring in availability and demand. All of which could affect price at least for the first year or 2 from now.

[Stephen Williams]

Hi,

It's clear people want to make as much money renting their cameras as possible. Unfortunately competition brings choice & lower prices.

If your clients were used to paying $250 a day for the previous camera you owned, they will not care that your new camera has 10 x the resoloution and costs more. Remember they were happy with what you did last time, that's why they came back.

Stephen

[vidalsosa]

Hi,

It's clear people want to make as much money renting their cameras as possible. Unfortunately competition brings choice & lower prices.

If your clients were used to paying $250 a day for the previous camera you owned, they will not care that your new camera has 10 x the resoloution and costs more. Remember they were happy with what you did last time, that's why they came back.

Stephen

Disagree, Stephen. A 35k Red kit and a 20k HVX kit are not exactly the same now or are they? With about 1200 Redones tbr in the market this fiscal year, will not neccessarily kill the demand for 4k originated material, especially at the price it's being offered. I think we (rez holders) can make plenty money using and renting our kits. My 2cents.

[Manfred Lopez]

So how much would it cost for a month's rent? I certainly hope not more than what the camera costs.

[PaulClements]

Disagree, Stephen. A 35k Red kit and a 20k HVX kit are not exactly the same now or are they? With about 1200 Redones tbr in the market this fiscal year, will not neccessarily kill the demand for 4k originated material, especially at the price it's being offered. I think we (rez holders) can make plenty money using and renting our kits. My 2cents.

I don't think that's the point Stephen is making though. I see where he is coming from in terms of if you already have clients that use you with your HVX or other camera and are more than happy with the results, explaining to them why they should pay you more for better resolution, higher quality image etc will work for some people whereas others will say "yeah but it costs a lot more than before, I think we'll just have what we had last time". Some will be open to it others won't.

If you haven't established yourself with a specific camera or are willing to branch into a new area of production and therefore have no client base as such then you won't have that problem. But in return you might have to start lower in order to be able to attract a few customers.

It's all swings and roundabouts. A world class DP armed with a well kitted out RedOne can charge thousands a day, because the individual hiring is looking at the person and knowing that with the equipment they can get the job done at a high level.

Someone who picks up a RedOne as his or her first camera and doesn't have much of a background cannot look to charge that.

I think there are reasonable limits at both the top and bottom of the scale that users can charge. The major factor is though, that if you can show experience and producers have confidence in that you can expect more.

If you are simply hiring the camera out and letting it go out on it's own then I'd expect to charge about 75% of a rental house fee, as a lot of professionals would rather fork out the extra on the reliability and backup of the rental house. In other words if a rental house charges $1000 a day then you ought to charge $750 for the same package.

[overlandfilms]

We broker HD, S16mm and 35mm projects. Savvy producers and clients will have no trouble discerning between the value and return provided by your $500/day XLH1 or HVX package versus your $1k/day RED system.

A producer (and I use the term loosely) who has a foothold in (read: stuck doing) low-no independent films - employing deferrals and other devices to defray cost isn't your market - or shouldn't be, anyway.

You need to establish relationships with commercial houses - they'll surely be the first paying clients to transition into RED from 35mm.

What has changed? The technology is surely amazing, but it doesn't change the fact that most, if not all, independent filmmakers have no money and hope to secure DPs with kit for a thousand bucks a week (or less).

You might stomach one disorganized "loss-leader" (read: "exciting project for your portfolio!) production - giving your kit away for the "experience", but you won't want to make a habit out of charity work with your $30k camera. Fiscal reality will set in at some point. Dunno, maybe you're a Vanderbilt and you do?

I'm working my assumptions based on one or two cameras in secondary markets and dozens in primary markets. Woe be to the RED owner in LA who doesn't already have a roster of regular clients accustomed to renting owner-operator packages from him for their shows.

If you're not already entrenched with them, a major-client commercial house won't roll the dice on you now simply because you have RED.

So, where does that leave you? If users are able to network a professional and transparent network of like kit within the same region, you might take nibbles off the professional rental house market - but don't expect to hurt BandPro or VER or Bexel's business.

They have the clientèle because they can remedy technical issues quickly (read: replacements in hours) and without a hint of panic. Regardless of how bulletproof and solid-state the lump is, no experienced client will leave their twelve to thirty crew exposed to a poor rental decision to save even a third from a reputable house.

It's a sticky wicket and it's the reason we broker CineAlta, VariCam and Panaflex for our clients instead of owning (Panavision excepted, of course).

e

[Bachman]

One company in Wellington, New Zealand already advertising 2 RED's for rent at $370nz pd, thats about $280us. Alot of movies shot in Wellington, you may have heard of them.

http://www.rubbermonkey.co.nz/rental_catalogue.asp

[Kevin Lang]

I dont understand why $30,000 keeps coming up for a package. You are looking at around $26,000 for just support! Sure 30k will get you most of Red's stuff but if you are truely wanting to make a serious rental item out of it you need the proper support. I would like to think a full RED camera package would fetch anywhere from $1500 to $2000 aday.

[Cory Schulthies]

if it weren't illegal Id recommend everyone in their local area gets together with other RED owners and pick a price. that way you wouldn't have to compete dang anti-trust laws.