Charging an Hourly Rate vs. Charging per Song

The question of how to charge for professional audio services can be a confusing one. The decision only becomes more weighty when we take into account the confusion that prospective clients can feel when they compare engineers or studios that have seemingly incompatible price structures.

It’s important to provide our clients with the clearest, most accurate estimate of costs that we can, so let’s look at some of the advantages and disadvantages of charging an hourly rate versus charging per song.

The Hourly Rate

Charging an hourly rate is a long-standing tradition in the commercial studio world, but that doesn’t mean that it makes the most sense for everyone. So, when does the hourly rate (or day rate) shine?

  • When ‘Time’ is the unit of sale. The aforementioned commercial studio, for example, sells time in the room. The majority of clients will be expecting the rate to be expressed per hour or per day. For the small group of prospective clients who are unsure (or too sure) about the amount of time they need, simple formulas can be devised and tweaked to help accurately estimate the time needed to accomplish their work.
  • When you want to provide value for the clients who have done their homework. The strength of the hourly rate in a specialty like mastering, for example, is that clients are encouraged to bring in the highest level of preparation. Simply put, a mastering engineer won’t need to spend as much time on excellent mixes. Everyone’s work sounds better, and the client probably saved a little money. Conversely, for those clients who choose to rush the mixing process, mastering billed hourly will prove to be more expensive. The hourly rate excels if it’s O.K. that your dream clients see you as affordable and the least prepared folks see you as kind of pricey.
  • Anytime a project lacks a clearly defined finish line. Working on a ‘per song’ or ‘per project’ basis may sound simple, but it can get very complicated if there isn’t a clear definition of completion or clear limits to the time frame. Charging for the time ensures that if work continues, or the scope of work changes, you’re still getting paid.

Charging Per Song

There’s no question that charging by the song or by the project provides the simplest estimation of costs for your clients. Unfortunately, when your underlying assumptions about the project prove to be wrong, you end up effectively paying part of the bill. Here are some good examples of situations that typically lend themselves to billing per song:

  • Commodity music should be priced as a commodity. Many of us are confident enough in our experience to admit that we’re not always making fine art for art’s sake. ‘Spec’ work can pay the bills. When these clients pay their bills they expect to see simple unit pricing. If you ask a butcher how much the lamb costs, he doesn’t tell you how many hours it took to raise it.
  • All of the typical ‘unknowns’ are known. When you’re familiar with the material, the players, and the production environment you can be confident that your estimation of work time will be accurate. Some projects just aren’t complicated. These are great opportunities to work in simple terms with your client.
  • Sometimes you just want the gig. Working per song with lots of variables can mean accepting a highly variable rate of pay. If there’s a project that’s worth the risk of working at an unknown rate, a song rate or a project rate can often provide the assurance that a self-financed client is looking for.

Set the Rate and Do the Work

You won’t meet too many people who enjoy thinking about money, and even fewer who enjoy talking about it with their clients. However, a little forethought about which pricing structure works best for a particular project can help. If you’re confident in the rate you set, and which type of rate you’re using, you’ll be more prepared to pass that confidence on to your client with a clear and accurate estimate of costs. Then you and your clients can get on with the real goal: making music!

Chime in with comments about your own experiences of charging per hour versus per song.

Rob Schlette

Rob Schlette

Rob Schlette is chief mastering engineer and owner of Anthem Mastering, in St. Louis, MO. Anthem Mastering provides trusted specialized mastering services to music clients all over the world.
  • http://epicsounds.ca Jon

    I advertise a combination of the two.
    For example $40/hour up to $500/song.

    What your competition is doing is another factor. If the basement beat makers are charging $15/hr or $50/song, you can charge at least double that.

    On thing I’m realizing is that I should have been advertising myself and what I can do as the product/service rather than the room and equipment which is irrelevant until you’ve got something really impressive.

    They don’t teach you how to write ad copy in recording school!

    • http://www.anthemmastering.com Rob Schlette

      The ‘not to exceed’ song rate is a good idea, Jon.

  • http://www.essentialsessions.com Jason McGlone

    A good engineer friend of mine had a good point…

    You should address the “echelon of client”.

    “John Hiatt for example would not expect the engineer to have his own studio. Whereas an indie band certainly would. In Los Angeles it is a given that an engineer and/or producer will choose which studio to work at. No one questions it. Engineer costs $X and studio costs $Y. Total cost would be $Z.”

    Just another example that could be useful to others.

  • http://www.brandonsass.com Brandon Sass

    Responding to all entries:

    The studio environment is built on value, each artist (who should be treated individually), is an experience. Charging per song, like Rob mentioned, is great for some clients. Those who are interested in keeping takes that are imperfect or “raw” are great for this approach (generally speaking). The ones who are more interested in a more specifically arranged, layered product may appreciate an hourly approach, as they have prepared for it.

    It’s an interesting balance we have to find, as engineers, to make these differentiations for the artists, but that’s what makes it fun! Deciding how the pricing structure breaks down is all a part of that fun; it’s all about everyone in the room enjoying the process.

    Advertising yourself is an important entrepreneurial skill, but it’s more important to understand your clients’ needs. For us, in the music industry, everyone needs to feel like someone understands their art, like in any art form. Let us, as engineers, understand our musicians.

    Thanks to everyone for their insightful responses,

    Brandon

    • http://www.anthemmastering.com Rob Schlette

      Brandon- I couldn’t agree more about treating clients like individuals. Folks in our business are sometimes too quick to point out that they have ‘their way’ of doing things or that they’ve seen it all before. That kind of attitude is not respectful of the client, or their investment in their art. You’re right; it IS supposed to be fun.

  • John Peters

    I have had some less desirable experiences with charging a single sum for all editing and mixing of a few projects I hadn’t recorded. There ended up being a lot of undisclosed work (mainly production ideas hidden in the client’s brain) as well as lots of editing/file recovery to fix bad DAW management by the engineer. All in all I was able to get a little more money out of the deal, but not as much as I deserved.
    Reading above comment by JON, I think I could have benefited from a similar not-to-exceed rate on the whole mixing project, starting with a base rate of what is SHOULD cost if properly prepared…Allowing me to handle unforeseen work and for them to know that they are getting charged for this time.

    • http://www.anthemmastering.com Rob Schlette

      Jon, I can sympathize. Post facto file management can be a real time killer. Whenever possible I like to sit down with clients and their files as early as possible (certainly before we settle on the scope of work). A ‘free’ hour of meeting time or remote desktop could save hours down the road.

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  • http://www.redpillonline.com Jacob Detering

    I can think of few other business that would ever work on a ‘by the song’ basis. I find making records akin to building (and/or repairing) a house. Carpenters always work by the hour. Why? Because you never really know what you’re going to run into. Fact, I gutted my sister’s bathroom last weekend; a job that I felt would take three days. Two hours into demo I discover that the toilet flange and drain assembly is completely shot and must be replaced. Naturally, this adds labor and material cost to the job…

    Records are almost always the same way. Even when you think you’ve got a grip on the artist’ talent, ability and readiness levels, there’s still the whole qualitative end of things. How solid is your level of value alignment with the client? Is your notion of ‘good’ the same as yours? Is their ‘good’ your ‘good enough’? Naturally, the inverse could be true, too.

    This can lead to serious issues when trying to manage the relationship with your client.

    Now – if you’re super into an artist and you really want the work, bid for the entire record. But make sure that you can really live with the trade of your time vs. the paycheck. If I know I can count on a client to keep me busy for three weeks, I’m more than happy to lower my day rate. But if I’m coming in for three hours, you better believe you’ll be paying premium.

    Anyone working for fifteen bucks an hour needs a lesson in business. That is, unless they are content making minimum wage. All in all, be able to explain your value to your prospective customers – if they don’t get it, the relationship is likely doomed to fail anyway.

    J.

  • http://www.realstrings.com Pete Whitfield

    I’ve gone round in circles with this one, as I expect everyone has. An hourly rate gives me a sense that I’m treated fairly, but a fee per job is what the client wants to see – the best I can hope for is that there is a little flexibility in that figure as the job evolves. To protect myself from screwing up, I try to get as much background info about the job and the client as possible. If they expect to be able to make multiple revisions then I have to build that in, if they are going to be happy with what I do then the figure may well be less. As John says, clearing up someone else’s mistakes is one to try and avoid when you aren’t getting paid for it! Jason refers to it as the “echelon of client” – like it!
    Set the rate and do the work is a great phrase to have pinned above your workstation too, on those occasions when you find yourself getting pissed about doing more than you expected. If I’ve agreed to do a job, I just need to get on with it and do it properly, whatever the financial arrangement. Great post – found you via Twitter.

    • http://www.mixing-mastering-online.com Online Mixing

      I charged regardless of track count at the moment which can even itself out in the log run but does hit hard when the 100 track project lands!
      I’m certainly thinking of changing things around though as there has been a few big editing sessions that really cut into the profits..

  • Pat Kahn

    I’m in sort of the kindergarten phase of my studio, however I’ve now had opportunities to try out a number of different pricing structures. Of course I’m being undercut by basement studios, however I’d say 50-60% of my clients so far have come to me after lousy results from such outfits.

    When you have rent to cover and nothing on your plate in terms of references or a portfolio, charging very low, package rates can give dubious musicians the incentive to go for it. Too much uncertainty makes them nervous (and believe me, from being on both sides of the fence now I’m well aware of how much though the majority of musicians put into this kind of expense), and since your entire business setup is shrouded in uncertainty when you start out you have to sort of make up for it.

    Down the line, hourly rates (especially for tracking) are simply the best to work with. It’s fair pay, and makes the work you put in seem more worthwhile. There’s nothing more frustrating when you’re working with a package deal than a musician who’s dithering, doing too many takes, simply asking for too much.

    The catch is that even once you’ve established yourself and your business, artists on a tight budget, or those who are completely new to the world of recording are terrified of the hourly rate. In pre-production meetings I bring it up and watch their smiles turn into disappointed frowns. At that point I like to whip out the hybrid deal — a package rate including limited tracking hours, and a steep hourly rate that kicks in once said tracking hours are used up. This benefits both parties, the artist feels they have a chance to get their project done on budget, and the engineer has a safety valve built in should the artist decide they want to embellish upon their original plan (which so far, ALWAYS happens).

  • chris legacy

    in my area, we happen to have these same issues. I have a well rated studio but client base is quite low. The smaller PC home studios seem to get the jobs. And ofcourse their final production, nothing to write home about. The clients still complain about our 180 dollars per song charge. Our final output is great & they agree but they just find it difficult bringing out the money.
    Pls what do i do?

  • http://www.optimizestudios.com Alex Bondi

    I setup rates by track number. This way if someone is on a budget they can create stems. Check out my rates page http://www.optimizestudios.com/rates-for-online-mixing-and-online-mastering

    This method seems to work for a lot of younger clients who record at home and have a modest budget

  • Ron

    What I tend to do to the client is charge 170$ per song. Depending on how many songs they want I will set a limit. When the day passes the limit I will then charge 20% of the sum per hour which is reasonable. It pleases both parties and seemed to work.

  • logic the mad conductor

    Beware of the new breed of engineers like myself. I own a small basement studio n my rates murder big studios but my sound keeps my clients around. Some of my mixes sound better than big pro studios. The plugin game was the great equalizer. If there if one highly skilled young engineer in ur area. Even one…he will take a lot of ya money. Do urself a favor n hire him.

  • Innuksuk

    What if you’re the only up-coming producer in the area and you want their music to be distributed/heard?

  • http://www.facebook.com/LanceWConrad Lance W Conrad

    Reputation! It took some time, but by limiting myself to working with clients that I love and can be inspired by, I built a portfolio of quality music. Sure, there were a couple years where it was difficult to make ends meet, but now I’m booked up solid with great acts and more amateur bands that want in have to play the waiting game. I typically ask for 200-300/song for mixing alone after they’ve payed 50/hour to track everything. My clients understand that I will mix their songs in my studio’s down time and so it will take longer than if we were to book out hours for it, but they would end up spending 500/mix if they paid me for the actual hours spent mixing!

    It’s an investment that a lot of clients feel confident about because it means that I will deliver exactly what they’re expecting, or more. They can either pay someone a lower rate for a decent product, or step it up for a timeless product.

    Oh, and ditto on the DAW management complaint. Interns are a huge help when it comes to pre-mixing and organization of sessions!

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