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Being a projection designer is a lot of fun, but it is also a business. I always try to be clear about what costs money and why and try not to end up subsidizing my own work. Transparency is a key component of my business as it builds the trust I need to do my work well.

Multiple parties determine the costs of having projections in a show. However, below I have listed what I believe are often necessary components and their associated prices. The list below is by no means a complete or detailed list or one that is universally true, but I hope it gives an indication of the costs associated with a show divided into eight categories.

1. Designer: design fee, plus royalties on commercial shows

This is generally well understood as the projection designer is part of the creative team. Rates are negotiable and there are guidelines from local 829 in the USA.

2. Designer Support Staff:  Assistant, Programmer

These people support the designer directly when a show is implemented in the theater. Designers need assistants because it is a lot of work to implement and keep track of the design. A projection design is generally controlled by computers or lighting consoles; thus, it needs to be implemented by a programmer. As the designer, I have some influence over these costs as I prefer to work with people I know (e.g. my team).

3. Image Production: making and realizing the designed imagery
This is usually the cost that leads to the most discussion or confusion. 
For imagery that has been designed, a company or a group of people with the necessary tools and resources needs to create or build the imagery.  I often use as a comparison the workflow of my fellow set designers to explain what happens here: 

A set designer delivers the design in form of a storyboard, a model box, a prop list, technical drawings or whatever else he or she thinks it necessary to communicate his/her design. It has not been built yet and there is a budget that is allocated to building the set.
 Eventually, a shop or the in-house wood and metalwork shops build the design for which they have a budget. The same is true for costumes. 
Projections require a similar approach with the difference that not many people who budget theater productions are initially aware of are the costs of making imagery.  
Sometimes the argument about the costs of making imagery is confounded by the fact some people do not know that the imagery needs to be made in the first place. I have come across a good number of people who think I download or buy all the imagery they eventually see in the show.
 Regardless of the above, I only have control over these costs if I or my company makes the imagery. This is one of the main reasons I prefer to have my company make the imagery—I know that I can deliver the imagery when I agree to a budget. However, there is always a minimum amount that is required to produce imagery that is in keeping with the production values of the rest of the show (set, lighting, costumes, sound, etc).

4. Projection Equipment: all the equipment required to realize the design in the theater during the run of the show
This includes all Output (e.g. projectors), Playback  (e.g. a media server) and Control Equipment (e.g. a dedicated lighting console) and signal infrastructure. Projection surfaces are often paid for out of the set budget, but there are exceptions. All this can be hired or bought. While I view it to be the projection designer's job to specify what equipment is needed to realize the design and why, the prices are set by rental companies.

5. Production Period Equipment and Staff: extra equipment and staff required during load-in and technical rehearsals
This usually includes extra monitoring equipment for production tables and production computers. All of this can be hired or bought. While I view this to be the projection designer's job to specify what equipment is needed during that period and why, the prices are set by whomever supplies the gear.

6. Installation Expenses
Usually installing projection equipment incurs a one-off fee. For example: the cost of sound proofing projectors or building custom shelves or cradles for them.

7. Technical Staff
These are the people who maintain, service and operate the equipment that delivers the projection design. 

Most technical directors, production managers or production electricians will decide how many people and who they need to service a design. On Broadway and the West End, the electrics (lighting) department is responsible for the projection equipment so they will make sure they have the people they need to look after a design. As the designer, I consult but I don’t decide. Often there is a dedicated technician or a shared operator for lighting and projection.

8. Running Costs Expenses
This is mostly the cost of replacement projector lamps (which can be pricey) and the cost of the staff that maintains and operates the equipment.

Quite often, a lot of assumptions are made about the costs of having projections in a show. When I try to explain the potential costs of the projection design, it is not always clear to my employers, clients and collaborators why certain items or services cost money and even what they are—this is largely due to experience and due to the fact that projection design is a new profession where people work differently from each other. The precedent that one person sets with his/her process may not work for the next person or because the circumstances of the production are different from the preceding one, they may not apply at all. I will always explain all I can envision based on the information I have about the production and based upon my own practical experiences. I believe it is important to be proactive about the provision of this information.

One further note: There are large differences in how companies or theaters can or must budget for projections. For example, regional theaters usually have to make budget allocations far in advance for an entire season when the specifics of a certain show are not yet clear or decided. Commercial producers have more flexibility because they are only dealing with a single production.