
You've decided you need an explainer video. You start Googling, and immediately hit a confusing split in the market: some companies call themselves an explainer video agency, others call themselves production companies, and a third group seems to use both terms interchangeably. Are these actually different? Does it matter which one you choose?
The short answer: yes, there's a meaningful difference. An explainer video agency and a production company approach your project from fundamentally different starting points, offer different levels of strategic involvement, and are optimized for different types of clients. Choosing the wrong model won't necessarily result in a bad video-but it might result in a video that underperforms its potential.
This guide explains the real differences between the two models, when each one makes sense, and how to determine which is right for your specific situation. By the end, you'll know exactly what to look for-and what to ask-so you don't end up in the wrong engagement.
Before comparing them, let's define each model clearly. The industry uses these terms loosely, so precision matters.
An explainer video agency is a full-service partner that handles both the strategic and creative sides of video production. Their work typically starts well before any animation begins-with research, messaging strategy, audience analysis, and creative direction. They then manage the entire production process through to delivery and may also advise on distribution, testing, and optimization.
The key characteristics of an agency model:
Agencies often position themselves as extensions of your marketing team. They invest time in understanding your business, competitive landscape, and growth objectives. The video is the output, but the strategic thinking is the real product.
A production company is a craft-focused partner that specializes in the execution side of video creation-animation, filming, editing, sound design, and post-production. Their work typically begins after the strategic decisions have been made: you provide a brief, script, or creative direction, and they bring it to life.
The key characteristics of a production model:
Production companies are often exceptionally talented at the craft of animation and video production. According to Black Box Productions, many companies operate fluidly between both models-stepping in as a production partner when the client has their creative direction locked, or taking on a more strategic role when needed.
Both handle core production. Agencies extend into strategy; production companies extend into technical craft.
Let's break down the specific differences that matter when you're choosing a partner:
Agency: "Tell us about your business, audience, and goals. We'll figure out the right video approach together."
Production company: "Send us your brief or script, and we'll bring it to life."
This is the most fundamental difference. An explainer video agency starts with the question "what should this video say?" A production company starts with the question "how should this video look?" Both questions matter-but the order in which you answer them affects the final product.
Agency: The team typically includes strategists, copywriters, creative directors, project managers, designers, and animators. Strategic and creative roles work together throughout the project.
Production company: The team is primarily composed of artists and technicians-animators, illustrators, sound designers, editors. They may have a producer or project manager, but strategic roles are rare.
This difference in team composition directly affects the type of input you'll receive. An agency will push back on your messaging if they think it's wrong. A production company will execute your messaging whether it's right or not.
Agency: Pricing is typically higher because it includes strategic services-discovery, research, messaging development, creative direction. A 90-second explainer from an agency might cost $10,000-$25,000+ depending on the level of strategic involvement.
Production company: Pricing is often lower because it covers execution only. The same 90-second video from a production company might cost $5,000-$15,000. But if you need to separately hire a strategist or copywriter, the total cost may be comparable.
Agency: Your involvement is heaviest at the beginning (strategy and messaging) and lighter during production. The agency takes ownership of creative decisions and presents options for your approval.
Production company: Your involvement is heavy throughout. You're providing the strategic direction, making creative decisions, and managing the narrative. The production company executes your vision.
Agency: Accountable for both the strategic effectiveness and the production quality of the video. If the video doesn't convert, an agency will typically work with you to diagnose and fix the issue.
Production company: Accountable for production quality and deadline adherence. If the video is beautifully produced but doesn't convert, a production company would argue (fairly) that the strategy wasn't their responsibility.
Agency: Often builds toward longer-term relationships-retainers, multi-video engagements, or ongoing content partnerships. They invest in understanding your business because they expect to work with you repeatedly.
Production company: Typically project-based. They do great work, deliver, and move on. Repeat business happens, but the model doesn't inherently incentivize deep business understanding.
Agency: May advise on video distribution, paid amplification, A/B testing, and performance optimization. Some agencies offer these as additional services; others include light guidance as part of the engagement.
Production company: Delivers the final files and the engagement is complete. Distribution, testing, and optimization are entirely your responsibility.
An explainer video agency is the right choice when:
A production company is the right choice when:
In practice, the distinction between agency and production company is increasingly blurred. As Winter Summer Media notes, many companies offer both strategic and execution services, adjusting their level of involvement based on what each client needs.
This hybrid model is becoming the norm, especially among mid-size studios that serve SaaS and B2B clients. They can step into a full agency role when a client needs strategic guidance, or operate as a production company when the client brings a well-defined brief.
The advantage of hybrid companies is flexibility. The disadvantage is that you need to be clear about what level of service you're engaging. If you hire a hybrid company expecting agency-level strategy but only pay for production-level service, you'll be disappointed. Be explicit about your expectations during the sales process.
Labels can be misleading. Some companies calling themselves "agencies" are really production shops with good branding. Some "production companies" offer genuine strategic depth. These questions help you determine what you're actually getting:
Here's a realistic cost comparison for a standard 90-second explainer video:
The agency model appears more expensive at first glance. But when you factor in the cost of self-managing strategy, hiring freelance writers, and coordinating multiple vendors, the total cost often converges. The agency model offers simplicity (one vendor, one relationship) and accountability (one partner responsible for the outcome). The production model offers flexibility and potentially lower costs if you have strong in-house capabilities.
Situation: Small marketing team (1-2 people), unclear messaging, no existing video content, limited brand guidelines. The video will be the primary marketing asset on the homepage.
Best fit: Agency. The startup needs strategic guidance on messaging, audience targeting, and narrative structure. The marketing team is too small to manage strategy independently while also running campaigns. An agency provides the strategic depth that the team can't.
Situation: Established marketing team with a brand manager, content director, and designer. Clear brand guidelines, established messaging. Need 6 feature explainer videos that follow an existing template.
Best fit: Production company. The strategy is done. The brand system exists. The team needs a skilled partner to execute efficiently at scale. A production company will deliver consistent quality at a better price point than an agency for this type of work.
Situation: Large company repositioning their product for a new market segment. The existing messaging is outdated. The video will be central to the repositioning campaign across website, events, and paid media.
Best fit: Agency. This is a high-stakes strategic project where the messaging needs to be reimagined from the ground up. An explainer video agency with deep strategic capabilities will ensure the video communicates the repositioned value proposition effectively.
Situation: The founding team has a clear vision and has written a compelling script. They need a polished, professional video to use in investor meetings and on their website.
Best fit: Production company. The strategy and script are solid. They need world-class execution to match their vision. A production company focused on animation quality will deliver the polish they need.
At Video Editing Company, we operate as a hybrid-combining agency-level strategic thinking with production company-level craft and efficiency. We scale our involvement based on what each client actually needs:
This hybrid approach means you're never paying for services you don't need-but you always have access to strategic depth when the project demands it.
Want to discuss which engagement model makes sense for your project? Book a free consultation View Pricing and we'll give you an honest recommendation.
Our 20-point checklist helps you evaluate and compare explainer video agencies and production companies. Ask the right questions, catch red flags, and choose with confidence.
Get the Checklist ? See PricingNo. It depends on your needs. If you have strong in-house strategy and clear messaging, a production company gives you excellent value. An agency is better when you need strategic guidance or when the video is high-stakes and requires deep creative collaboration. The best choice matches the model to your actual capabilities and requirements.
Some can. Many production companies have writers on staff or in their network. However, the scripting at a production company tends to be more executional-translating your brief into video-friendly language-rather than strategic. If you need someone to develop your messaging from scratch, an agency is better equipped.
Not at all. Many companies use an agency for their flagship explainer video (where strategic depth matters most) and then work with a production company for subsequent videos that follow the established messaging and visual system. Use each model where it adds the most value.
Ask about their discovery process, who writes their scripts, and how they determine the right creative direction. A real agency will describe a structured strategic process involving research, audience analysis, and messaging development. If their "strategy" is just a 15-minute brief intake call, they're a production company with agency branding.
For a standard 90-second explainer, agencies typically charge $10,000-$25,000+ (including strategy) while production companies charge $5,000-$15,000 (execution focus). The gap narrows when you factor in the cost of separately hiring strategists or copywriters. For projects where you handle strategy in-house, a production company offers significant savings.
Technically yes, but it's more expensive and less efficient than starting with strategy. Adding strategic work after production has begun often means reworking completed elements. If you think you might need strategic help, it's better (and cheaper) to engage those services from the start.
In-house teams make sense for companies producing a high volume of video content consistently (10+ videos per month). For most companies producing a few explainer videos per year, the cost of maintaining an in-house team far exceeds the cost of outsourcing to an agency or production company. As noted by Wipster, even companies with successful in-house units occasionally use external agencies for specialized projects.
The decision between an explainer video agency and a production company isn't about which is "better"-it's about which model matches your current needs, capabilities, and budget.
If you need strategic help, choose an agency. If you need great execution, choose a production company. If you need both, find a hybrid that can flex based on the project.
The most important thing is to be clear about what you need before you start talking to vendors. Understand your own capabilities honestly. Know whether you're buying strategy, execution, or both. And choose a partner whose strengths complement your gaps.
Ready to figure out the right approach for your project? Book a free consultation and we'll help you determine exactly what you need-and deliver it at the highest level.

