How to factor in AI usage fees for commercial projects
Factoring in AI usage fees is something both agencies and illustration/photo reps are working through right now.
This is not about charging a client for creating work with AI, but about *what additional usage/licensing fee should apply when a client wants the right to use commissioned illustration/photography/artwork in AI contexts* — meaning their systems (or third-party vendors/platforms) can ingest, manipulate, or train on your artwork to generate derivative works.
This is a *new usage category*, similar to when “digital/social media rights” or “OOH” (out-of-home) first emerged years ago.
Why AI Usage is Different
• *Not just display/placement rights* (like print, web, packaging).
• It’s *derivative rights*: client is allowed to manipulate, remix, or train AI with the artwork.
• Once ingested, control and exclusivity are effectively lost (the image can spawn infinite variations).
• Therefore, *AI usage rights must be licensed separately, at a premium, and often *non-exclusive unless you negotiate otherwise.
How to Structure AI Usage Rights
Think of it as a new category in your licensing menu, alongside:
• *Print Advertising*
• *Out-of-Home / OOH*
• *Digital / Social Media*
• *Packaging*
• *AI / Machine Learning / Generative Use*
For AI, specify:
• *Scope* (e.g., “training internal AI systems,” “derivative creative iterations,” “generative content for campaigns”).
• *Exclusivity* (does the client want to be the only one allowed to use your art in AI training? Rare, but could justify very high fees).
• *Term & Territory* (usually 2–3 years, worldwide).
• *Limitations* (cannot on-sell to third parties; must credit original artist; derivatives don’t void your copyright).
Pricing Benchmarks Emerging in Industry
Since this is so new, most reps and agencies are *treating AI usage like an extension of “derivative rights” or “merchandising rights”, priced **as a premium* on top of normal usage fees.
Typical ranges:
• *Editorial / Small Brands* → +20–30% of base usage fee
• *Advertising / Corporate* → +50–100% of base usage fee
• *Pharma, Finance, Global Luxury* (risk-sensitive industries) → flat negotiated fee of *$5,000–$25,000+* per artwork for 2–3 years AI rights
• *Exclusive AI usage rights* (client alone may use in AI systems) → often *equal to full buyout rates*
For Example in a Contract or Proposal
*AI / Generative Usage Rights*
License for 2 years, worldwide. Permits use of artwork in AI systems (machine learning, generative tools, or algorithmic training) for the purposes of creating derivative content within [client’s brand/campaign/project]. Rights are non-transferable and do not grant exclusivity unless specified.
*Fee: +50% of base usage* (or negotiated flat fee).
Why Charge This Way
• *Protects our IP*: AI use isn’t display — it’s replication.
• *Higher risk / lower control*: once used in AI, the art can proliferate infinitely.
• *Market precedent: early industry bodies (AOI, ASIP, Getty, DACS) are advising artists/photographers to treat AI ingestion as *derivative usage requiring explicit permission and premium fees.
• We treat *AI usage rights* as a *new, premium licensing category*.
• Charge *+50–100% of base usage fees* for advertising/packaging contexts (Always to be discussed and agreed upon in advance)
• We Always define *term, territory, scope, exclusivity, and limitations*.
