The Who, What, Where, Why, How and How Much of Art Licensing
When artists first learn about the concept of art licensing, they are full of questions. They want to understand what it is, how it works, and if it is for them. We know you have these same questions, so here are the basics of art licensing to help you on your exploration to determine if this is the right path for you.
Artists who want to share in the “success or failure” of a product versus being paid for their time for the creation of art often choose to license their art.
Traditionally these artists are paid a royalty based on the sale price of a product and the quantity sold (similar to how a salesperson working on commission is paid).
For those individuals who are willing to work hard to create the necessary collections of art needed by manufacturers, to work with the legalities of a contract, who are willing to continually market themselves and their works, and willing to work under a system that does not guarantee immediate income for the work being done, art licensing may be the route to take.
Art that works well for licensing is art that is relevant and relatable to both the manufacturer and the end use consumer who is willing to pay for products displaying that art. The role of the artwork on that product is to sell the product!
Manufacturers and retailers from around the world may choose to get their art by licensing it. There really are not geographic boundaries! One has to be concerned of the legalities of working with manufacturers in foreign countries, but there are opportunities existing. A great place to connect with manufacturers are at trade show where artists exhibit their works, and manufacturers and retailers attend with the purpose of licensing artwork for their products.
Here are the main U.S. shows to consider for exhibiting, as well as a couple of foreign shows if you are inclined to be participate . . .
Links to trade shows
- SURTEX – http://www.surtex.com/
- Licensing Expo – http://www.licensingexpo.com/
- Atlanta Gift Show – https://www.americasmart.com/
- Brand Licensing Europe – http://www.brandlicensing.eu/brand-licensing-europe
- Springfair – http://www.springfair.com/
- Licensing World Russia – http://www.licensingworld.ru/conf2014/
- China Licensing Expo – http://www.chinalicensingexpo.com/en/
Manufacturers and retailers use art and “properties” on products as an added mechanism to help sell to consumers. They know that if a consumer is a fan of a brand or a property (movie, television show, etc.), and artwork from the brand or property is on a product, the chance for a purchase by that customer is significantly greater.
So how do manufacturers and retailers get art for their products? There are four primary ways:
- The use of their own in-house art departments
- The outright purchase of art from artists/designers (copyrights and all!)
- The use of stock art from studios and factories who create their products
- The licensing of art (either traditional royalty based Agreement, or a flat fee Agreement – both Agreements to define term of use, products in which the art will be used, and the territory of use, where the artist retains the copyrights to the art).
Manufacturers often choose licensing for the following reasons:
- Exclusivity – by licensing art, a manufacturer can negotiate exclusive use of an artist’s design for their products; ensuring their competitors won’t bring the same thing to market.
- Flexibility – by licensing art, manufacturers can work with artists with a wide variety of styles that they might not be able to create with a group of in-house artists.
- Cost savings – when a manufacturer licenses art, they pay the artist based on how well the product sells. So while their expense can vary, they are always directly related to the income from sales of the product.
- Design Support – many artists who license their work become like a part of the manufacturer’s design team – working together to get the art just right and often setting it up to templates for production. This saves the manufacturer the labor expense of having their own graphics team doing the work, or at least lightens the load on the in-house team.
- Brand Recognition – manufacturers are always looking to mitigate their risks when making products. Using art from an artist who is well known and has a great following (generally realized by social media statistics) insures some level of guaranteed sales of a product.
When all is said and done, art licensing is a business; and as such, has to be managed as a business, with all of its nuances and specifics. One of these nuances is in the legal nature of the engagement. Art licensing is conducted through legal contracts between the manufacturer (Licensee) and the artist (Licensor). An agreement is structured around about what art is being licensed, for use on what products, to be sold in what territory and for what time frame (among other legal details – including how you are paid your share of the royalties/fees, duration of the agreement, what happens when a decision is made to terminate the agreement, etc.).
To learn more about the legal arena of contracts, check out our eBook “How to Understand Art Licensing Contracts” by Tara Reed and Maria Brophy.
Artists can and should do their own marketing, and can choose to work directly with licensees; or, they may choose to engage the services of an art licensing agent to manage that side of the business.
To learn more about the working relationship with agencies, check out our eBook “How to Find an Art Licensing Agent.”
The “HOW” part of art licensing is quite extensive, with many parts to make up the puzzle; including how to create art for licensing, how to connect with the people who license art, how to negotiate a win-win agreement with a manufacturer, and how to market yourself properly and effectively.
To get a more detailed perspective of the “HOW” of art licensing, we recommend our series of eBooks available on this website and/or attending one of our Art Licensing Academies held throughout the year.
The standard question of most artists is the “How much can I make from art licensing, and how long will it take?’’ Unfortunately, this question is impossible to answer. There are so many factors that go into art licensing, including, but not limited to . . .
How much art does an artist need to create for consideration for licensing?
How many “eyes” can you get to see your artwork – the relationship an artist develops with licensees?
How well your art will fit the market, the product, the manufacturers needs, etc. Are you relevant and relatable to the consumer?
How well the product sells, where it sells and at what price point.
How much you make in royalties or flat fees.
The range of annual income for artists who pursue art licensing varies greatly – some artists who make $1,000 per year, and some who make mid to high six figures. This is both good and bad – the sky is the limit for potential earnings (that’s good!), but there is no silver bullet or easy step to take to create success overnight.
You have to take a long term mindset if you jump into licensing your art. This is a marathon, and not a sprint. While nobody can guess what you will make, you can be pretty sure it won’t be fast money. It can take 12 – 18 months after signing an agreement before you will see any revenues, and 2 – 5 years for a licensing relationship to mature enough to start earning the kind of consistent income you desire.