One of the most difficult parts of becoming a game music composer or getting a game sound design job as a freelancer is answering one of the very first questions you are asked when you meet a game developer. You know the deal-- you've got a great conversation going, and then the developer asks you:
“...So, how much do you charge?”
This can be very difficult to answer, particularly when the developer (or film director) is “indie” and is obviously on a tight budget.
Before you answer, think carefully; the first words out of your mouth can make a huge difference...
The “Anchor Price” and the difference between value and price
Suppose you are in the market for a new string library, and your budget is $500. In your research you find 2 libraries, “Super Strings” and “Big Orchestra Strings” with very similar features:
-- Super Strings sells for $450.
-- Big Orchestra Strings sells for $750, but is currently on a 4-day holiday sale for $495.
Which do you buy?
If you’re like most people, you’d opt for Big Strings, even though it costs a bit more. Why? Because, you think to yourself, I can get a $750 library for just a bit more than a $450 library and it’s still within your budget. In our subconscious mind, we associate the value of Big Strings as much higher than that of Super Strings, even though rationally we may realize that the two libraries are probably pretty much the same. In marketing and psychology terminology, $750 is called the anchor price and is the value we automatically associate with it. By contrast the anchor price of Super Strings is $450. And it is very hard to now consider these two libraries on equal footing, since one is ‘worth’ $300 more than the other.
How does this apply to your game composing career and your interactions with game developers, particularly indie game developers?
When discussing price with a small game developer or indie film director, separate the value you offer from the price you quote.
Your goal is to set your own “anchor value” appropriately high and disconnect it from the fee you will charge. Your anchor value is how much value you will bring to their project as a composer, and will be the amount the game developer (or film director) will have in their head associated with your skills, technique and quality. Chance Thomas in his book “Composing Music for Games” lists some realistic “per minute” music rates for composers at various stages in their careers from $250 to $2500 per minute (much higher if you have ‘star’ status). That is a good range for your anchor.
You set your anchor by ensuring that the first number they hear associated with your services matches your value, even if it is not the price you will ultimately quote them.
"My normal rate for this style of game is $1,000/minute of music for a full buyout. However I really like this project concept and understand you’re on a tight kickstarter budget. So I’d be willing to offer a less expensive license, and also discount my normal rate for you, which I’ll reflect in my quote."
When setting an anchor, it is important that your (higher) anchor value be the first number you mention. So don't say:
Since you are an indie, my rate is $100/minute, although I usually charge $1,000 for this kind of work
It may seem like a trivial difference, but many studies have shown it is literally the first number you mention that will become your anchor value.
Discussing your rates in this way does three very important things in your relationship with the developer.
It establishes your anchor value. You are a $1,000/minute composer (and not a $100/minute composer)
It shows your excitement about the game or film idea
It shows your realization of the developer’s budget and willingness to be flexible
When you later come back with a proposal, you can also reference your anchor price in your formal quote. This further cements the anchor value you set:
Project X Music: 10 Minutes @1,500 $15,000 (Buyout Rate)
License Only Discount -$7,500
Indie rate discount -$3,750
Project X Music Package $3,750
One important note: An Anchor price is NOT simply an inflated value over your regular rate; it should reflect what you would normally charge if their budget weren't so tight. So if you are just starting out, with few or no credits, setting an 'anchor' of $2,000/minute will backfire, since that is well above any reasonable "just starting out with no experience" rate.
Using an anchor price has an added benefit: It provides a point of contract negotiation for the case where the game does well. It is perfectly reasonable to ask, if the game sales take off, that you get back the discount you offered. After all, you are discounting your rates because of their budget situation; in effect you have become an investor in their game. And like any investor, you would expect to be paid back as the game generates revenue. (there are other issues to negotiate with an indie developer, which we will cover in a later article).
For music composers and sound designers, setting an anchor value is especially important. The value a composer brings to a game or film is always high. There are no situations, no matter how low budget the film or game is, where the value you as a composer bring to the product is zero or only a few hundred dollars. If all you do is quote a low price, you are setting value of your services to that low-ball rate, and that is probably not how you would like you or your work to be considered. People have lost gigs by quoting too little . That is not because their price was too low; it is because in the mind of the developer, their value was too low.
So, the next time you are talking to a game developer or director, be sure not to accidentally set your value low by simply quoting a low price. Establish your value first… and then talk price.