With April 26 marking annual World Intellectual Property Day, recent news from XR (Extreme Reach) helps illustrate the quickly evolving, somewhat murky and increasingly complex landscape of TV advertising as it relates to talent rights and payments amid the advent of AI and use of AI-generated personas or so-called synthetic performers in commercials.
XR helps brands manage advertising creative, from talent payments and rights to ad delivery. Last week the company announced what it dubs a first-of-its kind product for “paying AI-generated performers in ads” – which it claims sets a new standard for ethical, compliant AI talent payments by ensuring they align with the new 2025 SAG-AFTRA actors union Commercials Contract.
“We’re known in the industry for paying actors, talent, celebrities,” said Graham McKenna, CMO of XR. “What we’re announcing is an expansion of that to cover what we’re calling AI-enabled talent that are going to be appearing in advertising more and more, beginning now and into the future.”
On first read, it might sound like this is about AI-generated “actors” (although we shy away from using that term or phrase) getting paid.
However, the crux of the announcement is really about ensuring that when brands and advertising agencies who have signed on to the union commercial contract use AI-modified versions of real actors or fully AI-generated synthetic "performers" in ads (of which more appear to be doing) that human talent gets paid or that SAG-AFTRA’s human members see benefits via payments to the union’s Health Plan and SAG Pension Plan, respectively. It’s also about helping navigate ad creative and talent rights management in an increasingly complex world when AI holds the potential for endless ad creative versioning and the question of exactly who owns what when it comes to AI-generated characters or “performers” potentially becomes less straightforward.
New territory to navigate with Digital Replicas and Synthetic Performers
With adoption of AI performances in advertising taking place, this is a bit of new territory to navigate when it comes to operational and compliance challenges in ensuring talent payments and union contract obligations are met accordingly. And where XR has stepped in with its payment platform to support the two new SAG-AFTRA performer categories of “Digital Replicas” and “Synthetic Performers.”
This is meant to give brands and ad agencies a compliant and scalable payment infrastructure to keep up with changes and ensure they’re aligned with the union contract compensation requirements, whether that’s using AI-powered de-aging and likeness recreation of real actors or fully synthetic performers with no ties to human talent.
For those unfamiliar, a couple of definitions:
Digital Replicas – this is what SAG-AFTRA defines as AI-generated or AI-modified performances that are tied to a real, human performer. This may be a bit more straightforward in the sense of a somewhat similarity to using a human actor’s likeness – but with a range of emerging use-cases tied to AI, such as a living celebrity actor whose performance is enhanced or remixed by AI, and deceased performers whose estates have approved their Digital Replicas for use in advertising. In these instances, XR’s platform handles payments to performers or their estates under existing SAG-AFTRA structures, just as if the human talent had appeared in the ad in-person.
Synthetic Performers, meanwhile, are different in that these are fully AI-generated characters that have no connection to a real person living or deceased. In these cases, XR ensures that equivalent compensation that would've been paid for a human performer is directed to the SAG-AFTRA Pension and Health funds – in accordance with the union requirements. (For a few bullet points on restrictions and rules contained in the 2025 SAG-AFTRA Commercial Contract related to the use of AI synthetic performers in TV advertising scroll further down in this article).
“AI is going to fundamentally change how celebrities and synthetic talent are portrayed in advertising, and agencies, brands, and talent agents must be ready to support this shift,” said Tim Hale, Managing Director, XR Pay. “The rules around Digital Replicas and Synthetic Performers are new territory for everyone in advertising and XR is here to help our brand and agency clients navigate this complexity, ensuring celebrity rights are protected, everyone gets paid correctly, and that all SAG-AFTRA obligations are met.”
Hale also noted that lines can get a little blurry or be easily crossed if a brand, for example, tried to approximate a recognizable person too closely.
“The most dangerous would be, ‘We like Matthew McConaughey’s look and feel. We want something that looks just like him.’ Now you’ve crossed the line, because technically you’re infringing a copyright, so to speak,” Hale explained.
From an XR perspective, the company is helping brands and ad agencies navigate the new process as the first platform to build payment infrastructure for both categories.
It’s doing so by embedding the two new AI performer classifications and payment logic directly into existing workflows so that brands and agencies can utilize Synthetic Performers and Digital Replicas while staying compliant with talent payment structures and rules.
In addition, XR Metadata classifies Digital Replicas and Synthetic Performers accordingly, to ensure that lines don’t get crossed and talent rights are tracked and managed from production to ad delivery.
The scale is also notable as XR’s platform is already used by most of the world’s top advertisers (80% of the market), and it’s now extending that infrastructure to support the use and payment compliance when AI “performers” are involved.
Here are a few of the key new payment platform capabilities XR touted:
- Classification tools for both Digital Replicas and Synthetic performers
- Payment processing aligned with the existing SAG-AFTRA rules
- End-to-end tracking across estimates, cast lists, holding fees and reporting
- Clear visibility and differentiation of AI performer types within production data
- Rights management metadata to ensure talent tracking and compliance from production to playout
Agencies adopting Synthetic Performers
When it comes to Hollywood, the SAG-AFTRA union and changing shifts with the advent of AI, some may first think of impacts related to the use in TV shows and film as the AMPTP trade association representing studios and major streamers negotiates with the actors’ union, and protections around the use of AI were one point of contract talks during dual Hollywood actor and writers strikes in 2023.
However, major brands and ad agencies also often tap unionized talent for commercials. And an entity known as the Joint Policy Committee (acting on behalf of advertisers and ad agencies that authorized it to do so and agreed to align with SAG-AFTRA) negotiated a revised Memorandum of Agreement to the Commercials Contract in 2025, which includes the two new AI-related categories and related compensation rules.
The importance of ensuring compliance and compensation related to AI use for performers could be a growing need for advertisers and agencies, some of which are showing interest in adoption of synthetic performers in commercials.
According to a separate recent XR survey, 31% of full service agencies led all other respondent types in the use of synthetic performers – suggesting a growing comfort with these applications in agency ad creative production pipelines.
According to the same survey, synthetic talent and digital replicas are currently being used cautiously but in a meaningful manner – with 22% or respondents reporting using synthetic talent/AI-generated people and 26% using digital replicas.
Restrictions on use of synthetic performers in TV advertising
And again here, with concerns over AI as it relates to the use of human talent, SAG-AFTRA negotiated protections and compensation for its members – and where the 2025 Commercial Contract was a major catalyst for the launch of XR’s expanded payment infrastructure, according McKenna.
For those interested, see a few of the general contract rules around synthetic performers in TV advertising here (note, summary bullet points based on the 2025 memorandum) :
- Human performer requirement: Synthetic performers generally may only be used in commercials that also feature at least one human principal performer.
- Economic Restrictions: Producers are prohibited from using a synthetic performer for the purpose of economic advantage over human performers.
- Mandatory Contributions: If a synthetic performer is used in a commercial alongside a human principal, the producer must pay 1.5 session fees plus applicable holding and use fees—equivalent to what a human would have earned—as a contribution to the SAG-AFTRA Health and Pension plans.
- Exclusive Use Negotiations: If a commercial is produced using exclusively synthetic performers, the producer must negotiate in good faith with SAG-AFTRA regarding the amount of the contribution payable to the benefit plans.
- Prompting Consent: If a synthetic performer is created using a specific performer's name, image, or recording as a prompt for a Generative AI system, the producer must obtain that performer's consent and negotiate payment of no less than the minimum session fee.
- Training Data Limits: Producers may not use performances recorded under the contract to train Generative AI systems without the express consent of the Union.
Where did that come from and who owns it?
XR adapting its platform to handle payments and management to comply with new performer definitions and requirements wasn’t necessarily a huge conceptual leap, according to McKenna, as there’s a level of cross-over between what it already manages for real performers and what’s needed when synthetic, computer-created ones are in the mix.
However, provenance – or the official origin behind an AI-generated image or performer - is one aspect that Hale noted as significantly more complex in the AI era.
“There’s an element of provenance behind an AI-generated image or actor performance,” Hale explained. “Being able to know how it originated, whether or not you have the IP rights to that or if they’re shared with another owner, is going to be critical.”
XR already tracks talent rights from production through to ad delivery, including whether a brand or agency has the right to air a spot, where it can do so, for how long and on which platforms.
But now that capability needs to be applied to both new performer categories of digital replicas and synthetic performers – including in a world where a human celebrity may have their likeness reworked into thousands of versions of an ad.
“You’re going to have versions of celebrity talent remixed into different versions of ads, and that needs to be tracked all the way through to play-out as well,” McKenna said.
Scaling commercials for global and local campaigns with AI
Following on that thread - AI holds the potential to help brands scale and localize ad creatives with numerous different versions – but where rights tracking and payments also need support to comply.
Hale gave the example of a global brand running an English-language commercial and extending it across multiple markets with the same creative and talent by using AI to localize the language without the need to reshoot.
This same notion could also be applied to a brand like a major automotive company that has 1,500 dealerships in the same country – where AI could be used for a digital replica of a well-known actor to localize the ad creative for each of those dealers or locations.
But in each of these examples, what could be thousands of AI localized variants still need to be tracked for rights, payment and compliance.
“What we do in that case is we’re managing an exponential growth in complexity and simplifying the process,” Hale said. “Ultimately there’s an audit. Somebody is going to say, ‘I need you to show me all the pension payments made on behalf of that performer for all the versions that were done.’”
What about non-union talent for commercials?
We will take a minute to note here the difference between union and non-union work.
As Hale explained, when an agency or brand signs on as a SAG-AFTRA signatory, they agree to use union performers for covered advertising content.
But the line blurs a bit as many brands today aren’t direct signatories – rather their production partners or ad agencies are. Meaning brands themselves do have wiggle room in that they can still produce non-union content, particularly for digital and social. Per Hale, smaller productions tended not to use union talent for cost reasons and influencers “tend to be non-union.”
Whether or not aligning with or employing unionized actor talent for TV advertising in the age of AI is a route many bigger brands themselves or agencies might eventually take may be a question for another piece, but for XR’s part, it’s agnostic.
“We work with brands and agencies who work union or non-union,” Hale said. “The key element beyond paying the performers and the crew is really around rights management. And so regardless of whether it’s union talent or non-union, you still need to track all the rights.”