There’s been a lot of push back and confusion about where over $6k/Ninja episode figure comes from, and honestly that number is low — it doesn’t take into account salaries for me and Douglas.
There are a huge number of costs associated with doing something as a business. It’s not always easy or simple or cheap. If it was, everyone would just do it and be financially successful. Anyone can upload to YouTube, but only a small handful will make it a career.
Here’s a list of the below the line stuff that Douglas and I used to do all by ourselves:
- We used to do all of our own legal work. Douglas was a paralegal at Disney for seven years and had a lot of experience. But we signed a couple of crappy deals and then we hired a lawyer and got real agents to negotiate better deals for us and a manager to help find work in Hollywood.
- We used to do all of the editing. But I hated myself, so we began collaborating with people like Damien Somerset.
- We used to do all of our merchandising. But we didn’t know how to do it as well as Amplifier.
- We used to do all of our web designing, but I only had a 1995 understanding of HTML. We moved to Drupal and hired developers.
- We used to do all of our publicity, but we didn’t have relationships with the media. So we could take what came to us, but not drum up more coverage than that.
- We wanted to get into the book business, so we got a book agent that helped us craft a good book proposal.
- We used to have my sister do the bookkeeping, but she wasn’t a CPA and couldn’t give us good tax advice, so we hired a good business manager.
- We get hundreds of Myspace and Facebook requests a day, we now have help managing that.
- We knew that if you have a business, you should have insurance. So we bought a production policy.
- We know that harddrives fail, so we buy a lot of them.
- We pay people to go sell ads for us, because we know building and managing a sales force is a difficult task.
After we pay for all of those things (things we used to do), we then pay ourselves and our investors.
We pay those people and companies because we make more money when we can simply focus on the creativity and the funny.
What do NOT outsource:
- The writing.
- The acting.
- The directing.
- The direction of the company. This is a doozy, since we’re our own bosses, it means we decide what episodes to do, when to release them and be responsible for making sure everything is working together. Some times it works out awesomely, some times, well we’re really funny…
And please keep in mind when this started over three years ago, Douglas and I were flat broke.
We both were living at slightly below paycheck to paycheck. We did everything on the show. EVERYTHING. We only outsourced those areas as we could afford to or when we knew that we were using too many braincycles on non-creative activities.
We also basically focused on just learning and doing the show for the first six months, not on how to make it a business. We had dreams and aspirations about everything else, but we basically just did nothing but figure out the character and the audience during that time. I mean we always had a business plan, but we didn’t get serious about it for at least six months.
When revenue began to trickle in, we brought in more people. Our general rule is we only bring someone onboard if they would pay for themselves and add to the equation. And the outsourcing was and is more of a priority than our own personal paycheck. We look at it as an investment in the Ask A Ninja brand, because with IP the short term play for cash is the fool’s game.
Just look at the other project that we’re embarking on, Attack of the Killer Tomatoes. An awesome brand that is 30 years old. They’ve made four films and a children’s TV show. They now have a line of merch and we’re relaunching the film series. That’s a great story of a couple of friends from San Diego who have held onto their brand and continue to make it more valuable.
So that’s that.
I’ll leave you with this, if you can’t afford to put $6000 of cash per episode you produce, you should at least be putting in $6000 worth of time and energy into it.
Grow when you need to grow. Add value to your brand. Don’t be intimated by any of the numbers we throw around. Just make the show you need to make and get it out there.
If you don’t do that you’ll never find an audience and you won’t grow as an artist.
25 Comments
March 26, 2008 at 6:15 pm
Great thoughts Kent and thanks for sharing. Above all, you’re successful also because you have talent as well as the other stuff.
The talent part is not something you learn, the other stuff you can.
Thanks for the posts and insights.
March 26, 2008 at 6:25 pm
You are so correct, put every once of yourself into your creative projects and once you can afford to pay people to do the things they are good pay them so you can put more energy into doing what you are good at.
March 26, 2008 at 6:26 pm
Right on Kent! Grow when you need to grow. This is the best soundbite saying I have heard in months. The big thing is knowing when you need to grow.
March 26, 2008 at 6:30 pm
It’s only when you start to have a little success that you realize how much everything costs.
Success is rich with irony. I believe the philosopher Biggie Smalls said it best when he uttered, “Mo’ Money, Mo’ Problems.”
March 26, 2008 at 6:33 pm
Yes, I can see how that would all add up. I can also see how hard it can be for people who have no experience doing this stuff as a real business to understand what these costs are. It’s funny, when you take a hobby and turn it into a business it suddenly becomes much more expensive and time consuming than when you were doing it for fun. Money changes everything. I used to scratch my head when Drew at Rocketboom would say that it only cost him about $25 a day to make that show. I think that number was misleading because it probably didn’t include any of the stuff above. And without including that stuff it’s not a real number.
That said, I would expect that even at $6000 per show, Ask A Ninja has very favorable profit margin.
Looks like you’re doing everything right though. More power to ya!
March 26, 2008 at 6:34 pm
I also heard Ninja’s are hard to get to sit still and answer questions. Some of that 6k has to be spent on some super secret Ninja tracking skills. That and all that fancy schmancy business talk you mention.
Ben…
March 26, 2008 at 6:40 pm
Kent, great follow up post, and I really appreciate what you say at the end with “if you can’t afford to put $6000 of cash per episode you produce, you should at least be putting in $6000 worth of time and energy into it.”
I think Tim Ferriss author of 4-Hour Work Week would agree with your approach to outsource everything that you’re outsourcing. I think that is a smart business move on your part.
Thinking about the premise of this article, the $6,000 per episode cost is only one half of the equation. To put the expense line in perspective, you really have to understand the revenue per episode side of the equation. For example, if you produce a show and spend $6,000 per episode but make $20,000 per episode revenue, then that’s obviously very different than if you spend $6,000 per episode and make $0 per episode.
If you’re including advertising sales commission in the $6,000 per episode line, then you’d really need to compare that to the revenue side of the equation for the cost side to have true meaning.
Even if you’re living in the same place and driving the same car (which I applaud!), are you turning a profit? If so, that is AWESOME!!!
And the real question becomes: do you think other show producers can replicate your success? And if so, what do you think are the key things that would need to happen for others to do so?
David
March 26, 2008 at 6:42 pm
When I did all of the figures on what I need to produce a video I got around the same figure. But here is where it gets good. Now that you have the people and equipment make another show and now your episodes cost $3000. How many shows can you make with the equipment and people you have?
March 26, 2008 at 6:44 pm
@David yeah I really want more people to replicate our success. That is why I am so open. I want this to become an industry and grow.
When there’s more people bringing new money into the space, then there’s more money for everyone. A rising tide raises all boats.
March 26, 2008 at 6:47 pm
More people need to be talking about the business side Kent – thanks for doing so.
@ Steve Woolf: I’ll take mo’ money and mo’ problems anyday over no money and no problems.
March 26, 2008 at 6:48 pm
@brant yeah, once you have infrastructure it does get cheaper. But since we keep the creative in house, we’re a little burnt since we did the book and now we’re doing the movie.
March 26, 2008 at 6:54 pm
Now that we know, we most certainly will have to be killed.
And yeah, the old view that online video cost nothing to produce royally messed us all up in the end. It’s expensive in time, energy, resources, talent, and money.
March 26, 2008 at 7:04 pm
Kent, it is awesome that you are so open and helpful – much appreciated.
I (and a small team of talented misfits) have a new show in development – goal is for first episode within 3 months. Should be fun. Stay tuned.
Thanks for being an inspiration!
To keep up with our plans for the new show, follow me on Twitter at http://www.twitter.com/davideckoff
March 26, 2008 at 7:04 pm
[...] $6000 to make a crappy video? « Kent?s Official Blog – [action media podcasting ] [...]
March 26, 2008 at 7:27 pm
@kent I understand. It is hard being talent, writer, shooter, editor and on top of all that be the evangelist/cheerleader. A support system is important. Your blog is such a boost to all of us. And for my 2 cents Ninja is not crappy video but pure genius
March 26, 2008 at 9:35 pm
You write great stuff here Kent.
March 27, 2008 at 9:45 am
Love the details here! Thanks for sharing
March 28, 2008 at 6:55 am
Damon Wayans is now trying to get into the internet game.
http://adage.com/madisonandvine/article?article_id=125980
My question, just because you have success in TV, and or Film and you have the talent and money, is it a sure thing to take it on the web? Don’t get me wrong I would love to see something like Living Color on the web. But can the big guys just throw money at it and succeed?
Brant
March 28, 2008 at 6:40 pm
Great perspectives on branding and making it a business Kent. I think the main thing people need to realize, and something that is so simple, is to look at their shows as a business.
Not do a good show and “hope” it makes money or is discovered, actually look at it from a profit and business angle.
Those are the shows currently that are getting the fruits of the dollars moving through this new industry.
March 29, 2008 at 8:56 am
Kent,
Great post and excellent comments in the thread. I feel like I’ve found a new support group.
Hi Steve, Zadi and Lan!
-Warren (“I don’t sleep anymore”) Chao
March 29, 2008 at 9:27 am
Kent,
Your success is an inspiration to us all. Coming from “old media” myself I actually know how much things cost. Even so I was puzzled by the $6000 figure. This list explains it and includes things I never even thought of like a person to manage MySpace. I also see things here that we aren’t doing on our show that we should. This list is extremely helpful.
Looking forward to AotKT. Hopefully the Ninja will make an appearance
April 2, 2008 at 12:50 pm
Very cool read. Maybe its out there already, but would be cool to read how you went from having the Ninja idea, to shooting it, and when you knew it could be profitable, to when that first glorious check came in.
September 29, 2008 at 1:01 am
[...] Kent’s Official Blog: Ask a Ninja creator Kent Nichols reflects on the news and whatever’s going on with his work. This one can be awesome, with Nichols offering strong, detailed, and informative takes on relevant issues — though his experiences may not always be as broadly instructive as he makes them out to be. Good comments too. Sample post: “$6000 to make a crappy video?“ [...]
November 20, 2008 at 2:17 am
so how does merchandising go in the per episode production budget? sounds like you need an accountant.
February 20, 2009 at 3:13 pm
[...] much more than $500 CAD/video. In fact, in a blog post made last year, Kent Nichols explains how it costs $6000 USD to make one episode of Ask A Ninja. The Purchase Brothers admit that they count costumes and guns [...]