Media Budget Considerations
By Anthony Coppedge

How much should you budget for A/V/L (Audio, Video, Lighting) technical systems in new construction projects?

Determining appropriate media budgets changes dramatically from church to church. Knowing how much your church should set aside for an annual media budget can be a daunting question. The best way to answer that question is to look at what drives the budget.

Budgets for churches are driven by three main components:

1. Vision from church leadership (value - how important is media)
2. Content and frequency (application – what is required of media)
3. Ability and quantity of media personnel (expertise – who can provide media)

These three factors have more importance on the budget total than do attendance, membership, denomination, operating budgets, or location.

There need to be at least five budget line items for media:

1. Hardware upgrades/new hardware
2. Software upgrades/new software
3. Preventative and ongoing maintenance
4. Personnel training (conferences and tradeshows) and education
5. Peopleware – outsourcing of contract labor for projects and special events

It’s not uncommon to see 8% of the total budget allotted to provide a rudimentary A/V/L system. On higher levels, 12-15% of the total new construction budget will provide a solid intermediate system, and 20-22% of the total budget will build a technically-savvy venue. So, for a $1 million dollar new building campaign, anywhere from $80,000 (rudimentary) to $220,000 (technically savvy) can be budgeted for the technical systems alone.

Even though media budgets vary greatly from church to church, it’s safe to apply 5-10% of the A/V/L system cost (if budgeted correctly using the above three averages) as a yearly operations and maintenance amount. So, if you spent $150,000 on your A/V/L system, then anywhere from $7,500-15,000 a year can easily be spent making sure your systems remain in perfect operational order and that you’re getting the software and hardware updates necessary to keep your technology from becoming obsolete.

Once a church hires part or full-time personnel, the costs change yet again, not only for the salary, but also for the increased content and education expenses associated with any employee. This is especially true when dealing with high-technology personnel, where the technology changes so rapidly that a learning curve is always in effect.

Even though there’s not hard scientific data on the “average church media budget,” I will point out one bit of scientific data from a report that I co-authored. This first report points to an initial budget for projection systems. Three more reports are underway (audio, lighting and systems integration), though none will ask about yearly media operating budgets.

The main bit of data shows that of the churches that participated in the survey (about 650 churches), 45% of them spent more than $11,000 on their projection system alone. This data is striking when the average size of the church in the survey was revealed: less than 300 in attendance!

At the end of this article, I will not have given you an absolute answer for how much media budget is necessary. That’s because the vision of the church leadership will drive this amount based on the perceived and felt needs of creating and implementing dynamic content and quality technical performance. The best advice is to get with your pastor and learn how media fits into the overall vision of the church and then develop a budget that helps to accomplish that vision through the application of technology.

Leasing vs. Buying
The short answer to the question, "Which is better - leasing or owning?" is "Yes."

The enigmatic answer means that the decision to lease equipment or spend the cash owning equipment is best decided by some key decision-making factors, including asking these questions about each piece of equipment:

* Will the technology change dramatically in three years?
* Will the venue change dramatically in three years?
* Will our application (how you use the equipment) change significantly in three years?
* Will the technology cost substantially less in three years?
* Can the equipment be upgraded easily for three years?

I pick three years as a benchmark because if you're making enough changes or if your church is experiencing significant growth within that timeframe, chances are a lease will make more sense than purchasing for what I call "high-technology items."

High Technology
Any technology that has a rapid growth curve and/or rapid depreciation value is subject to this group. It's safe to say that computer-based technologies will be less expensive and significantly more powerful within three years. It's also a good argument that non-linear editors (video and audio) will be more powerful, easier to use, and cost less in as little as three years. The case could also be made for automated lighting fixtures or large-format audio mixing consoles.

It might be easier to qualify it with this statement: "I'll be stuck with this equipment and I'm not confident that it is technology that will suit us for five years or longer." The point is that if the equipment you're thinking about purchasing has a good chance of not meeting your needs for at least five years, you ought to consider leasing.

Conversely, if you're going to be in a facility for a number of years and you don't see the application (how you do what you do) changing significantly, then purchasing (owning) certain technologies will make more sense.

Common examples include speakers, amplifiers, microphones, video monitors, video tape/DDR decks, switchers, routers, distribution amps, screens, communications headsets/matrixes, lighting dimmer packs, many lighting consoles and most conventional lighting fixtures.

Most of these devices change somewhat over time, but, for the most part, they are mature technologies that don't see quantum leaps every few years. It can make a lot of sense to go ahead and include these items in a building campaign or capital funds program. You can also add them to annual budget items for upgrades, repair and replacement.

About Leasing
There are three basic lease types:

1. Lease % buy-out
2. Lease $1 buy-out
3. Lease only

The first two lease types can be compared to getting a loan from a bank, except the monthly payment can be lower. With the first type, you'd have a "balloon payment" (large cash outlay) at the end of the lease. The second type is closest to a loan, with a $1 purchase option at the end of the lease.

Personally, I'm not a big advocate of those two lease types for churches. I prefer the third type of lease for several reasons.

First, the idea that changing out "high-technology items" is to keep your church on or near the front edge of the technology curve. Second, when working with a leasing company that specializes in Audio, Video & Lighting, they're going to be able to get you a better rate on the equipment, because they can sell it easier than a standard leasing company. Finally, the whole point isn't to lease-to-own. The point is to keep your church technologically relevant so that you have the tools to support the vision of your church leadership.

It's also important to know you can have leases structured where certain equipment (computers) renews faster than other equipment (automated lighting fixtures) types. These multi-tiered leases generally make the most sense while keeping the church more cash fluid during their growth curve.

Creating a technology roadmap will help your church understand which areas of equipment upgrades that need to be considered over increments of one, two, three, and five years. This roadmap shows the value/cost ratio for leasing vs. buying and is very helpful to churches that are experiencing serious growth in their church and media ministries.

Thinking through the real-world costs of technology are part of today’s growing churches. Having the right information will help your church be good stewards of your money and your time.

Anthony Coppedge is the principal technology evangelist for Church Media Group, a full-service creative agency in Southlake, Texas, www.churchmedia.cc.