KEY TAKEAWAYS:
- It’s crucial for content creators to be aware of their legal rights, including copyright, fair use, licensing, and intellectual property.
- When entering brand deals or collaborations, three terms are often heavily negotiated: usage rights, exclusivity, and compensation.
- Having a contract playbook with fallback positions and best practices can help streamline negotiations.
The creator economy has seen exponential growth in recent years, with companies in various industries recognizing its validity and impact. According to Insider Intelligence, sponsored content on social media will rake in nearly $6 billion in 2024 in the US alone, as brands continue to shift their budgets from traditional and digital advertising to creators. So what does this mean for lawyers and contracts professionals working with these creators?
Understanding creator’s rights and the influencer marketing industry as a whole, will be pivotal to facilitating effective negotiations that lead to win-win brand partnerships. In this article, we’ll look at the legal rights of content creators, the three most heavily negotiated terms in brand deals, and how using contract playbooks can lend to more effective negotiations.
Understanding the Legal Rights of Content Creators
U.S. copyright law has long established that social media content is a protectable form of intellectual property. That means that the creators own the IP rights to their social media content. Including the right to license the use of their content and image for fair and equitable compensation. This is where the brands come in.
The brands are usually looking for broad licensing terms, and may even request that the content be deemed a work-for-hire under the contract. A work-for-hire provision would mean that the social media content would automatically and legally become the brand’s intellectual property, instead of the creator’s.
As the creators’ advocate, protecting these rights and finding ways to leverage content beyond the initial marketing campaign should always take precedence in negotiations. However, the challenge becomes finding a happy medium that meets the needs of brands, who will undoubtedly be fighting for those broader licensing rights. These broader licensing rights are better known as usage rights in influencer brand deals.
The Three Most Negotiated Terms in Every Brand Deal
1. Usage Rights
As discussed, usage determines how a brand can use a creator’s content and personal name and likeness under a brand partnership. As an advocate for the creator, you’ll want to ensure that the usage terms are specific and limited. To do this, you should look at two key areas: type of usage and length of usage.
Type of Usage – Because the online space is constantly changing, it’s important to understand how various platforms work when determining the type of usage rights to grant under a partnership. For instance, broad, catch-all language like “in all forms of media” or “all digital media use” will likely not be necessary to meet the goals of a campaign. Moreover, this broader language limits your client’s ability to earn more for usage rights as new media platforms develop.
Instead, consider narrowing the type of usage to what is needed for the particular deal. For example, “on Influencer and Brand Instagram pages, as listed in this Agreement, only ”.
It’s also important to note that not all usage will be organic. If the brand is seeking to run paid ads or whitelist the content, the creator should be compensated for this additional type of usage.
Length of Usage – Once the type of usage has been determined, the next item to sort is the length or time frame of usage. Terms like’ “in-perpetuity” can be a major red flag in brand deals, and be an indication that the usage terms will require a bit of negotiation. Here, it’s important to truly understand the brand’s goals and work towards more collaborative terms. For instance, specifying the length of usage for each type of use can help to satisfy the needs of both parties and move the deal closer to the finish line.
2. Exclusivity
Another key term that is heavily negotiated in brand deals is exclusivity. Exclusivity deals with the other types of companies a creator can work with during and after the term of their agreement with a brand. If there is an exclusivity clause, that means the creator can only work with that brand and not any other competitor to that brand.
As with usage, brands will want broad exclusivity terms to ensure they maximize their results. The agreement should clearly state which companies are considered competitors and for how long this provision will be in effect. Too broad of exclusivity terms can drastically impact a creator’s earning potential if not specified and limited in duration.
3. Payment Terms
Payment terms are important in every deal, but in the influencer marketing space, it has become a hot-button issue. It’s not uncommon for brands to pay influencers net-30, -60, or even -90 days after the completion of services. The growing popularity of third-party agencies that match brands with influencers only further complicates this issue with late payments having become the norm.
Creators take on a lot of upfront expenses (photography, travel, wardrobe, etc.) in order to deliver on a campaign. And often on short deadlines. It’s important that the creator’s pay is negotiated with these considerations in mind, and where possible should require an upfront deposit for services.
It’s also important to discuss the brand’s accounting procedures, including what’s required from the creator, such as invoices and W-9s, to ensure your client is paid on time.
Using Contract Playbooks for Effective Negotiation
Once you start to review brand deals, you’ll find that they carry similarities, with the terms discussed above being the most negotiated. Even so, managing these agreements at volume can become overwhelming. Especially if you represent a talent agency with a roster of creators, each of whom will have their own set of standard terms and non-negotiables.
The most effective way to negotiate brand deals that ensure your clients rights are protected, is with the use of a contract playbook. A solid influencer agreement playbook will not only keep you on track in negotiations, but empower agency clients to carry the weight of negotiations and only pull you in when absolutely necessary. Contact me if you’d like some help with brand deals or contract playbooks!
