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Legal Talk: UGC Usage Rights vs Perpetual Rights

June 6, 202310 min read

UGC creator creating brand content after settling on UGC usage rights.

If you’re giving away full usage rights as a UGC creator willy nilly, it’s time to have a re-think.

Usage rights aren’t just for your video. They’re for your face. You’re letting a brand use YOU in an ad.

Not only does your image deserve (financial) recognition and respect, but the risks of allowing a brand to use your likeness for life, mean that you should be fairly compensated from the outset.

So, if you’re wondering “what are usage rights?” and more importantly “what should I charge for usage rights?” — let’s dive in.

What Are Usage Rights?

When brands collaborate with creators, they require the usage rights for the content.

Usage rights just refer to the permission granted by the creator to the brand to use their content for marketing purposes. This typically includes using the content for advertisements on platforms like TikTok, Instagram, Facebook, or Google ads, but also might include digital billboards or television.

To ensure transparency, brands need to disclose their intentions regarding content usage and specify the duration of the ad.

For example, a creator may include 6 months as standard as part of their base fee. A brand can utilise this footage across that 6 month period, but thereafter, they don’t have the right to use the footage.

If they want to use the footage forever, you, as the creator have the right to charge more.

Why Brands Pay for Usage Rights in UGC

When it comes to UGC, understanding why brands pay for usage rights is more complicated than a standard influencer. With an influencer, brands are paying to reach an influencer’s audience as well as the content.

The ability to use the content on their own platforms is an added extra, so to acquire the necessary permissions, brands are willing to pay influencers for the usage rights.

In UGC, the same rules don’t apply.

In UGC, creators are being paid to create the content solely for brand use. If the brand can use it, what’s the point in paying for the videos in the first place?

Don’t burn bridges before you’ve crossed them.

As standard, you should have some amount of usage rights built into your standard pricing packages. Your rate should include a set amount of months a brand can use the content that is based upon the campaign goals and is sufficient for its intended use.

In UGC, brands are paying to extend the usage.

Generally, you can approach usage rights in the following time increments:

  • 1 to 3 months – No incremental fee; negotiated into the baseline fee.
  • 3 months to 1 year – Small to moderate incremental fee; can raise fees from 20-50% for experienced creators.
  • More than 1 year – Significant incremental fee; can raise fees exponentially for creators.

What are usage rights in perpetuity?

Have you every come across usage rights in perpetuity? If so, run.

Brand may use and amplify published content, as well as any derivative works, on brand’s website or any of brand’s digital channels, including their newsletter. All content shared by brand will be in connection with this program and will include attribution to Influencer in the form of a ‘@username’ tag via a social platform. Duration: Perpetual.

UGC creator creating brand content after settling on UGC usage rights.

You hereby grant us and the corresponding sponsor of the campaign a non-exclusive, worldwide, gratuitous, fully paid, perpetual, irrevocable usage and copyrights, with the right to assign and sublicense, license to copy, display, upload, distribute, store, modify, create derivative works of, and otherwise use and exploit the content that you publish through the platform.

Has anyone else got a headache? I do.

This is a term that you REALLY need to be on the lookout for as a UGC creator. This is something built into so many contracts, but that could cost you a lot of money down the road.

OK, so what’s perpetuity? Well, if you see the word “perpetuity” or “in perpetuity” in a contract it implies that they want to use the content you create FOREVER. And, as they please.

So essentially, if you sign a contract in which a brand lists “usage rights in perpetuity,” this means they will own the video forever and can do whatever they want with it.

Post it to their social media and run it as an ad. Place it on their website, a billboard, print ad. If they want, they could resell it. You get the idea.

And they have the legal right to do so.

How Much Should You Charge For Usage Rights?

While there is no fixed formula for pricing usage rights, industry standards suggest that creators typically charge brands 20-50% of their overall project rate for additional usage rights.

For example, if you charge a brand $250 for a sponsored post, the industry standard would be to charge an additional $125 for unlimited usage rights, or you can specify a duration such as 3 months, 6 months, or 12 months.

However, it’s important to note that you have the flexibility to set your own rates. Do what you feel comfortable with, but avoid p

To ensure fair compensation and avoid any disputes, you would have to keep track of the agreed-upon usage rights in a spreadsheet. Note down the brands you partner with, the start and end dates of the usage rights, and regularly audit to ensure brands adhere to the agreed terms.

🔥 Hot Take
UGC Madi, a creator racking up $$$$$ every month takes a different approach. She offers, unlimited usage rights for her content, which is built into her rate. She believes it causes less friction for the brand, as it makes things easy for them. Plus, it reduces her workload to keep track of timelines for every single organic video she films for a client. My favourite analogy of hers is this one: “If I bought a bike and someone wanted to take it away after 6mo I wouldn’t buy it in the first place. I’d buy it from someone who wouldn’t take away my bike.” In a competitive industry, that’s worth considering.

How Much Should You Charge For Rights In Perpetuity?

If a brand says they want to own the rights to the content you create in “perpetuity,” they better be prepared to pay for it. Otherwise, a video you create that a brand pays you—say, $100 for today, may still be run as an ad on Facebook 5 years from now and result in a million dollars in sales— and yet you were only paid $100.

What should you charge a brand for usage rights in perpetuity?

A lot, or don’t do it.

To be totally transparent, there is no exact science to pricing perpetuity. And there’s a lot of room for interpretation and negotiation.

So, realistically, the final rate you charge is 100% up to you, but in my experience, I’ve found that many creators charge 3x their “original” rate for the content. So, for example, if you charge a brand $100 for a video, you could charge them $300 for usage rights in perpetuity to own full image (or video) rights.

But remember, you could be seeing that video in 5 years time plastered everywhere, with no way to escape. Would it be worth it?

The Importance of Communication

When brands approach you for brand deals, it’s essential to discuss content usage early on.

Brands should clearly communicate how they plan to use your content and whether they require it for advertising purposes. As the creator, you retain ownership of your work, and brands are expected to compensate you for the rights to use it.

Understanding these rights is crucial for new UGC creators.

By charging brands for usage rights, you can significantly increase your income and ensure your creative work is properly compensated.

Remember to discuss content usage with brands, set reasonable rates based on industry standards, and keep track of agreements to protect your rights as an influencer.

Kirk Axley

Kirk Axley is the founder of The UGC Club. With nearly 10 years of digital marketing experience she set out to create a community that helped UGC creators learn the ropes (without having to spend a penny).

Tagged In:#Brand Work, #Legal,
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