Usage, Rollovers, Buyouts, in Perpetuity – What Does it All Mean?
Posted by StarNow on 10 May, 2018

Usage, Rollovers, Buyouts, in Perpetuity – What Does it All Mean?

You've nailed your first TV Commercial audition and you got the part – congratulations! But all of a sudden, terms like usage, rollovers and buyouts are getting thrown around, and you've got no idea what they all mean! Never fear, we've got you: here's your helpful guide to knowing what's what.

There are two things you should be paid for when doing commercial work:

  • Your time and skill on the day.
  • The exposure you will receive when the work is seen (bear in mind, if you're seen all over TV in a McDonalds commercial, it's unlikely you're going to be cast in a KFC one in the near future).

Day Rate This is the basic fee that talent receive for their time on set. It may be called an hourly rate, a day rate – this covers you for your time and skill on the day.

You might also be offered a flat fee. A flat fee is an agreed amount, that covers your time on the day, and the exposure you may get, with no other fees coming your way. If you're getting a flat rate, you'd expect this to higher than a simple hourly rate.

Bear in mind, small, independent companies can have very small budgets, so they sometimes offer flat fees to keep things simple and affordable. These companies can be great to work with when you're just starting out. For more established companies (think McDonalds again), you'd expect to get a payment relating to usage.

What kind of additional payments could I expect? If you're being paid a day rate for your time, and you're working on a commercial shoot, you could expect an extra payment to cover the exposure you'll get from the job.

This is where usage comes in! Usage is a fee for commercial work (e.g. TV commercials/Photo shoots) that pays for the final product to be used for a certain period of time and shown on various platforms (e.g. Broadcast TV, or online). Usage is paid on top of the fee you receive for the actual work you did on the day – so basically, it's extra money that an advertiser pays for the 'use' of the final shot material – makes sense now, right? Usage is also sometimes referred to as royalties or residuals, depending where you are in the world, but it's the same thing.

As a rule, the more exposure you'll get from the job (e.g. if it's showing for a long time, in lots of places), and the higher the usage should be.

Alright – so what's a rollover? In most cases, Usage will only cover a period of time, e.g. 6-months use for a TV commercial. At the end of 6-months, if the brand wants to keep using that commercial for another 6-months, then they'll need to pay you that usage fee (or a percentage of that fee) again – this is called a rollover.

You might also get additional fees if the work you performed in is then going to be more widely used that first agreed, like if you were paid a usage fee for a stills shoot that appeared on a website, but now they want to put it on a billboard. Rollovers have a bunch of rules around them (e.g. how many you can get; how much each rollover is worth) that will be outlined in your contract. Take note: You don't get rollovers if your contract says that usage is ‘in perpetuity’.

Wait a minute, what does 'in Perpetuity' mean? Basically, in perpetuity means forever! If you agree to usage rights 'in perpetuity', then the brand can use the finished product for as long as they like. This doesn't automatically mean the brand will use the material constantly until the end of time, but it gives them flexibility if they want to use the material again in a future campaign (this happens quite often with stills shoots). If you've agreed to rights in perpetuity, then the advertiser will only pay you the one usage fee – this is called a Buyout.

A Buyout – Ok, does that mean they own my image and I can't work for other brands? Nope! While it does mean they own the material you shot and you can't claim any more usage/royalties for it, it doesn't mean you can't be in other commercial work. Having said that, if you're currently on screen as the lead in a Pepsi commercial, it's unlikely Coke will want to hire you, but receiving a buyout doesn't actually restrict you from doing any work you might be cast in. So keep auditioning and just let the casting director know if you have any commercials currently on air.

How much should I be paid for usage or a buyout? That's a tricky one, as it really depends on the work, how it will be seen, how long it will screen for, and how featured your role is, so it can vary a lot.

In the past, these fees were calculated based on the estimated size of the audience who will see the finished work and as a rule of thumb, the bigger the audience, and the bigger your role, the bigger the usage fees. So for a TVC playing on primetime television for a year, you might expect to receive higher usage, than for a stills shoot that appears only on a brand's social media site for a couple of weeks.

Calculating usage has got a whole lot trickier, as we watch so much content on the internet, or skip ads altogether by recording programmes, or using streaming services. This means it's nearly impossible to work out how much something may have been seen.

Your local acting union will often have guidelines to give you an idea of what you might be offered as a usage fee, depending on the project and medium. These are great resources, but it's important to remember that for small independent producers, who are not using union issued contracts, these are guidelines, not legal requirements for employers. While having industry standards give you a great reference point, bear in mind that what was standard a few years back has changed, and rates are evolving to keep up with the swiftly changing industry.

For more info about how usage is changing check out our blog.

Good luck with your auditions!