I know this blog is call “Art Licensing Blog” but I am sometimes asked this very basic, but very important question:
“Why would a company license art when they can just buy art somewhere else?”
Licensing is one of three basic ways companies get art to put on their products. There is no ‘right’ or ‘wrong’ way – it all depends on the preference of the manufacturer.
The three basic ways companies get art are:
- They have in-house designers who are paid a salary to design art for products.
- They buy art out-right. Many artists prefer to sell a piece of art upfront and let manufacturers do whatever they want with it. They usually get a physical, sometimes digital, piece of art and the manufacturer has to adapt it to their product. The artist gets paid and moves on.
- They license art.
In my opinion, licensing is a way for artists and manufacturers to share the risk and reward of the product. If the product does well, the artist stands to make a nice amount of money in royalties, but if it doesn’t their income can be low. With licensing there is also a delay between getting the deal and getting the cash. Sometimes that delay can be as long as 12-18 months. (This is why you should ask for an advance on royalties – but the decision to pay them or not is up to the individual manufacturer.)
Let’s look at the five reasons I think companies choose to license art:
- In-house designers cost money. The manufacturer has to pay the designer a salary, payroll taxes, benefits, vacation days, etc. No one person or small group of people can do all styles of art so they will be limited by the skill-sets of their designers.
- Buying art outright may be less expensive on the surface but there are hidden costs. The manufacturer has to have someone to manipulate the art, fit it to templates, adjust colors, etc. This is sometimes done by artists who license their art.
- There are no salary, benefits, vacation days to pay. Royalties are paid based on sales
so the payments due will be based on the success of the product. If the product sells well, they pay you more. Not as well, they pay you less.
- Variety of Art. Licensing allows a company to work with many different artists without
having them on payroll. It is a cost-effective way to get a wide variety of styles and techniques.
- Name Recognition. If an artist has name recognition in the marketplace, at the retail and/or consumer level, a manufacturer can use that to their advantage by offering products with a known following.
It all depends on their choice and mindset and your choice and mindset. Do you want to create, get a check, and not worry about contracts, waiting for royalties and marketing the same art multiple times? Then maybe licensing isn’t for you. But if the idea of getting paid by several companies for the same art sounds appealing, check out the eBooks, teleseminars and more that I offer at ArtLicensingInfo.com.
P.S. To hear answers to more questions about art licensing, go to AskTaraReed.com – there is a FREE, live call every month! (Recordings of past calls available for a mere $10)