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Licensing Commercials for Internet Radio – Part Two

October 8, 2008 at 10:56 am Jennifer Lane Leave a comment

There’s been a lot of confusion around the question of whether an advertiser can run broadcast commercials on an Internet radio station. The answer is straightforward – the right to use the commercial on the Internet is compulsory and the advertiser or agency must pay a license fee for new media use. It’s very simple now to obtain that license. It does not require renegotiating a contract or rewriting a contract, it simply involves a review of the original contract for talent production to determine the original session fee, and payment of an additional flat fee for new media use.

There are two important distinctions between AFTRA’s standard broadcast contracts and contracts for using commercials on the Internet that were initially made for use on broadcast radio:

1. Internet contracts for use of these commercials are one-time up-front fees that do not include per-use fees.  They cover unlimited usage on an unlimited number of sites or stations during the contract period.
2. Depending on the details of the original contract, the initial term of the contract period is for 12 months or until termination of the Maximum Period of Broadcast Use .

These two facts are important to keep in mind when considering the costs of licensing such commercials for use on Internet radio.  The standard rate for an AFTRA performer for these commercials is 300%, or three times the session fee paid for broadcast use.  If the session fee for the broadcast spot is $249.50, then the cost to license that spot for Internet radio use is $748.50 for a one year period. There are no additional use fees as there are with broadcast.

The bottom line is this: there is nothing unclear, undecided, or complex about licensing a commercial for use on Internet radio.The right to use commercials produced for broadcast on the Internet is compulsory. The steps for licensing are clear and easy to follow and the flat fee is easier to compute than the use fee that broadcast commercial licenses require. You can read more about it on AFTRA’s site here. 

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