It's waiver season over at SAG-AFTRA ("SAG"). This spring SAG has issued both the new Dynamic A.I. Audio Commercials Waiver and another update to the Low Budget Digital Waiver ("LBDW").
Dynamic A.I. Audio Commercial Waiver
Dynamic audio commercials are audio commercials that use technology to dynamically customize their content at the time of delivery to reflect a listener's personal circumstances (such as location, weather, or time of day). A dynamic commercial, for example, might include body copy like "coffee brand X is making coffee your way" that is customized by adding "good morning, Duncan" or "good evening, Duncan" based on the time of day that it is delivered to the listener.
The Dynamic Audio Waiver, which has been in place since 2019, sets the rates payable to talent who perform in dynamic audio commercials. The Dynamic A.I. Audio Commercial Waiver is new and applies to dynamic audio commercials that include content generated through digital voice replicas generated from A.I.
The Dynamic A.I. Audio Commercial Waiver provides the following terms:
- Consent of the performer is required to create and use their digital voice replica, regardless of whether the replica is created during a designated recorded session or by using preexisting recordings of performer;
- The commercial producer may make one or more commercials using performer's digital voice replica but must obtain the performer's consent for each original commercial created that includes the digital voice replica;
- The performer must be paid one session fee ($550) per commercial created using performer's digital voice replica;
- The performer is paid 50% of a session fee for the creation of customization elements using the performer's digital voice replica;
- The customized versions of the commercial would be considered a single commercial for usage payment purposes;
- The producer will pay the applicable usage fee as provided in waiver. This waiver covers digital use only, not use on terrestrial radio;
- The producer must separately bargain with the performer and with SAG for any additional uses of the voice recordings;
- The producer must take commercially reasonable steps to ensure the security of any digital voice replica material created under the Dynamic A.I. Audio Waiver. If the producer learns of unauthorized access or use by a third party to the voice replica material, the producer must (i) make good faith efforts to retrieve, take down, and or prevent further unauthorized access or use, and (ii) promptly notify SAG and the affected performer(s) of any unauthorized access or use; and
- The producer must cease all use of the digital voice replica and delete all copies of the voice upon the expiration of the maximum period of use, unless otherwise agreed upon with the performer.
2024 LBDW
In line with SAG's prior updates to the LBDW (see our previous updates here, here, and here), the most recent update to the LBDW has narrowed its applicability and certain fees that can be freely bargained. In particular:
- Previous iterations of the LBDW allowed the use of the waiver during a "Connected Shoot," which were low budget digital productions shot on the same day as commercials not produced under the LBDW. The 2024 LBDW allows for Connected Shoots, however low budget productions now must be held on different days than the connected full budget commercial production.
- Previous iterations of the LBDW allowed for the negotiation of principal and extra session fees at "Unconnected Shoot," which were stand alone low budget digital productions. The 2024 LBDW removes this ability to negotiate and now requires that principal performers and extras receive not less than the applicable scale session fees as provided in the 2022 SAG Commercials Contract for all spots produced under the LBDW.
- In addition, extras must be paid a scale integration fee for edits.
But it's not all bad news. Indeed:
- SAG has removed the requirement that those wishing to take advantage of the LBDW submit a budget attestation to SAG for its review (although SAG still reserves the right to request such an attestation).
- SAG has modified the maximum period of use ("MPU"), allowing for more flexibility. Under previous iterations of the LBDW, the MPU was one year from the talent services session. Under the 2024 LBDW, the MPU is now the later of one year from the date of first use or 13 weeks after the last production date.
And here are the material terms of the LBDW that have stayed the same:
- Use of the LBDW is limited to advertiser and agency signatories (so not available for use with third-party signatory payment processors).
- While, as noted above, session fees are no longer negotiable, editing and usage fees remain negotiable.
- The budget threshold remains capped at $100,000 per production day.
- Use of content resulting from the LBDW is limited to Traditional Digital media.
- No use of celebrities, stunts or hazardous work in connection with the LBDW.
- All other terms and conditions of the 2022 SAG Commercials Contract apply except as modified by the 2024 LBDW.
The 2024 LBDW goes into effect on June 27, 2024 and will sunset on March 31, 2025 (i.e., at the expiration of the 2022 SAG-AFTRA Commercials Contract).
This alert provides general coverage of its subject area. We provide it with the understanding that Frankfurt Kurnit Klein & Selz is not engaged herein in rendering legal advice, and shall not be liable for any damages resulting from any error, inaccuracy, or omission. Our attorneys practice law only in jurisdictions in which they are properly authorized to do so. We do not seek to represent clients in other jurisdictions.