How Profitable Is A Video Production Company? (Updated for 2024)
So you want to start a video production company?
And the first question that came to your mind was, “well, are video production companies actually profitable?”
Especially considering:
- You could start a video production company with as low as $15
- Based on our data, video production companies generate an average of $1.94M per year
- You could see gross margins as high as 62% with video production companies
There’s money to be made. Don’t worry.
But, I don't want to spoil it all. Below we’ll cover everything you need to know when it comes to the profitability of a video production company.
Let’s dive in!
Is a video production company profitable?
Yes, a video production company is generally a profitable business. However, you still need to consider several factors since these things always impact the overall outcome.
For instance, since average revenue is $1.94M per year with an estimated gross margin of 45%, you could expect to recover your investment within 7 months or even less.
But of course, it all comes down to how much you earn compared to the potential revenues of your video production company.
To determine whether your business is profitable, you should earn more than your expenses in the beginning months. However, while you're in your first month, it can be challenging to know what to expect.
Therefore, you should maintain a record of your monthly expenses and income to determine whether you're meeting your goals. By doing this step, you can see how your video production company is doing and if any changes or adjustments need to be made to enhance or maintain your efforts.
Is a video production company worth it?
If you’re wondering if a video production company is worth it, the answer is a big YES. With video production companies, you have the potential to earn $1.94M per year (this is based on data reported by real founders).
Further, you could have your initial investment back within months. Simply put, it’s a business worth a shot, especially if you have the resources and make the necessary efforts to achieve or surpass the target.
With a market size of $, it will be possible for you to build something that grows and turns into a flourishing business. As such, it’s the type of business you might want to consider starting.
Of course, you must learn and understand every aspect of running a video production company to ensure success. Still, as long as you have the initial investment and can endure a few months before your actual gains, this business could be worth it.
You might want to consider reading more specifics about successful video production companies case studies.
Examples Of Profitable Video Production Companies
Here are a few examples of profitable video production companies, and a few more details about them:
1. Explainer Videoly Pte. Ltd. ($1.2M/year)
Kasra Design, also known as Explainer Videoly, was founded by Alex Safavinia. With a background in Creative Multimedia, Alex saw the potential in offering animation services to businesses. Starting with email marketing and showcasing their work on social media, the company attracted clients and grew steadily. Today, Kasra Design has completed over 700 projects, generated over half a million dollars in revenue annually, and plans to expand further in the future.
Is it profitable? Yes
How much money it makes: $1.2M/year
How much did it cost to start: $7K
Kasra Design produces customized animated and live-action explainer videos for corporate clients, enterprises, startups, and nonprofits; it generated around USD70k in the first year and currently generates over half a million dollars with over 700 projects completed and over 400 clients from around the world.
2. Lemonlight ($18M/year)
Hope Horner came up with the idea for Lemonlight when he saw an opportunity to bring transparency to the video production industry. With the average cost for a 30-second commercial at $342,000, Lemonlight offered small and medium-sized businesses access to high-quality, affordable video content through pre-built pricing menus and transparent pricing. Since its launch in 2014, Lemonlight has grown to generate $6M in sales per year, with over 7000 videos produced for more than 3000 brands and notable clients including Amazon and TripAdvisor.
Is it profitable? Yes
How much money it makes: $18M/year
How much did it cost to start: $500
Lemonlight CEO, Hope Horner, co-founded an on-demand video production company that has produced over 7,000 videos for more than 3,000 brands, generating over $6 million in sales and growing to a 45-person team, all without taking any outside capital and being recognized in Inc 5000 and Entrepreneur 360 for three years in a row.
3. Filmbaker ($600K/year)
Tarun Lachhwani, along with his co-founders Rakesh R, Gaurav Singh, and Soman Surya Yadav, developed their passion for storytelling while making short films in college. Inspired by their success and their desire to help brands tell their stories, they launched Filmbaker in 2017 with just 4-5 lakhs (INR) in initial funding. Since then, they have grown to serve over 250 clients, including Google and Kingfisher, and are projected to reach 5Cr in revenue this year.
Is it profitable? Yes
How much money it makes: $600K/year
Indian video production company Filmbaker has a clientele of over 250 brands and has grown from an initial funding of 4-5 lakhs INR to clock over 3Cr in FY 20-21, en route to cross 5Cr this year, by providing storytelling services and delivering consistent, high-quality work.
Learn more about starting a video production company:
Where to start?
-> How much does it cost to start a video production company?
-> Pros and cons of a video production company
Need inspiration?
-> Other video production company success stories
-> Marketing ideas for a video production company
-> Video production company slogans
-> Video production company names
-> Video production company Instagram bios
Other resources
-> Video production company tips
-> Email templates for a video production company
How much can you make with a video production company?
With a video production company, you can make an average of $1.94M revenue per year (based on data reported by real businesses).
You can start with an initial investment as low as $15. Then, with proper knowledge and sustained effort, you could have an ROI (return of investment) within 7 months.
How much does a video production company make a week?
Based on our data, average weekly revenue for a video production company ranges around $41.4K. As such, you could see monthly revenues of $166K.
To know if your video production company achieves the weekly profit target, you need to keep track of the total earnings you get per day. Afterward, you'll want to consider subtracting the expenses you have daily.
Learning your weekly profit can also show whether you're hitting your target goal for your video production company.
How much do video production companies owners make?
The income of a video production company owner can vary depending on various factors such as location, size, competition, and the owner's business skills.
But to give you some idea, the weekly revenue of an established video production company is about $41.4K. But this can be lower or higher depending on so many factors - it's almost impossible to say exactly.
While the potential for earning a good income as a video production company owner exists, success in this field requires a commitment to providing quality products and services and building a strong reputation within the community.
Video Production Company Profit Margins
Generally speaking, a video production company can expect profit margin of around 45%. Profit margins refer to the percentage of revenue that remains after deducting all expenses associated with running a business. In the case of a video production company, profit margins can vary depending on various factors, such as the type and quality of products sold, the size of the store, and the level of competition in the area.
However, these figures can vary depending on the pricing strategy, inventory management, and overall efficiency of the business. To maintain healthy profit margins, video production company owners must focus on managing costs, negotiating favorable supplier terms, and providing high-quality products and services to attract and retain customers. By doing so, video production company owners can ensure long-term sustainability and profitability for their business.
Video production company owner salary
The salary of a video production company owner is an unpredictable figure. It's significantly influenced by numerous factors, including the store's location, its size, and the degree of competition. An owner of a well-established video production company, in a prime position, might see an average weekly salary around the ballpark of $18.6K.
But it's worth noting, such numbers aren't always consistent. The earnings can vary wildly, potentially swinging by as much as 80% either way.
Achieving consistent success and maintaining a reliable income stream in this industry requires a deep commitment. It's imperative to offer high-quality products, deliver impeccable customer service, and nurture a trusted bond with the community you serve.
Conclusion
In a nutshell, based on many of our examples, a video production company may be a promising business to start - but the success of your video production company mostly depends on your effort and your approach.
If you focus on these, you'll have a much higher chance of a profitable video production company.
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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