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Insights Buyout

In the modeling and advertising sectors, the term "buyout" is particularly important. "Buyout" is a general term and usually refers to a one-time payment to compensate for rights to a specific item. In the context of a model booking, the buyout is the payment made to the model for the usage rights of the media production. As such, the total compensation is divided into the model fee and the buyout.

The buyout is derived from copyright law and specifically refers to the personal rights of the model and the right to one's own image. By accepting the buyout payment, the model agrees that their likeness can be used, for example, to market a product. Since the distribution of images and videos varies depending on the usage type and client, buyout payments are typically adjusted to the specific contractual purpose.

Buyouts are determined using three dimensions: geographical – in which region will the advertisement be shown? Temporal – for how long? Medium – through which media channels will the distribution occur?

Example of a buyout clause:

Model fee: €1,000.00 plus Buyout: 350%

Region: Germany Media: TV, Cinema, and Online (paid & unpaid media) including Social Media Duration: 3 months for TV and Cinema, Online and Social Media unlimited

In this example, the model receives a €1,000.00 fee plus a €3,500.00 buyout, resulting in a total compensation of €4,500.00. This amount is reduced by the negotiated agency commission rate.

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