Buyout – What Does It Mean, How Is It Calculated, And How Is It Monitored?

Image rights are a valuable asset, especially in the media industry. But would you have thought that this also applies to images and video content that have been explicitly commissioned? Here too, clients are not allowed to freely use the material produced by models and actors . This is only possible after a prior buyout. But what does that mean? How much is the buyout for models and actors? And who ensures that clients comply with the usage rights?

What is a buyout?

A buyout is basically a technical term for the granting of usage rights in the media industry. Models or performers grant clients the rights to the image or video material produced. Without this explicit permission, the material may not be used commercially due to the right to one's own image, which also applies to models. A client must therefore pay not only for the model or performer’s service, but also for the rights of use as part of the contract. The buyout is therefore a fixed part of the fee. The contractual agreement often stipulates where, on which channels, and to what extent the material may be used. Explicit exclusions for certain purposes or a total buyout are also possible.

What is the significance of buyouts in practice?

In Germany, rights of use are typically transferred for a limited period of time. This means that clients can use the material for a limited time for TV, online, and poster advertising all over Germany, for instance. Fortunately, it is possible to extend the rights of use beyond the original time period. In this case, however, further remuneration is due. At the same time, exclusive contractual agreements are also possible. If a client wants to make a model the advertising face of their brand, for example, this exclusive buyout licence can prohibit collaboration with competing brands. Companies pay very well for such exclusivity.

How a buyout is calculated

The rate of the buyout, like the fees for models and actors, depends on several factors. In addition to the period of the assignment of the usage rights and exclusive agreements, this also includes the model's level of recognition. If you already have experience or have already made a name for yourself in the industry, the buyout for the rights of use will also be higher. The same applies to the client. While the buyouts are modest for smaller, lesser-known clients, they can easily reach larger sums for larger clients and well-known brands. However, if you do a good job, you can quickly increase your personal market value and gain access to larger projects from notable clients. However, the following factors are the most important for calculating the buyout:

- Time: the longer the material will be available to view on a specific media channel, the higher the price.

- Media: The number of media channels in which the material is published is decisive for the value of the buyout. This includes not only cinema, television , and print, but also, websites, social media, billboard advertising, and streaming platforms.

- Countries: the number of countries in which the image and video material will be used is also essential. The rule is: the more far-reaching the campaign, the higher the price. In addition, publication in countries with a strong market is generally more lucrative than in countries with smaller markets.

Who is responsible for the calculation and monitoring of the buyout?

The buyout is originally calculated with the help of a buyout list, and then negotiated with the client and the models. Thanks to our extensive experience, we, at starboxx ensure that you are paid adequately for the work and buyouts so that you do not have to worry about this yourself. In addition, starboxx also deals with monitoring the client’s compliance with the agreed usage rights.