Lingo, lingo everywhere! Many artists (I was one!) get rather confused about what some of the terms used in art licensing really means. It is really important to understand the difference between selling your art vs licensing it for a flat fee vs traditional royalty based licensing. Let’s look at all three…
>> Selling your art.
This is not licensing. If you are a “selling artist”, you are selling your art outright to a manufacturer. For a set amount of money, the manufacturer buys the art and all copyrights associated with it. Some manufacturers and industries will only buy art. They want to pay up front for a design and walk away with it — all copyrights included. Then they can take it, tear it apart, change colors, put anyone’s name on it, etc. It becomes theirs completely, you as the artist create something new. You can not use the piece of art in any other way or version, you start over.
So that is “selling your art”. Many artists like this format. They create, they get paid, they move on.
>> Licensing your art.
Licensing your art means you retain the copyrights and control of our art. You “license” the rights to manufacturers, through written contracts, to use your art on their products for a certain period of time. The goal is to license the rights to the same art to many manufacturers so you can earn a nice living.
Traditionally, licensing contracts are based on royalties so artists are paid based on sales. That means you wait, sometimes 12-18 months to be paid, but you share in the risk and reward of the product. If the product does well, you should make a lot more in royalties than you would be paid if you simply sold a design. If it doesn’t do well, you may make less.
“Licensing your art” means you can use your art more than once, you retain the copyrights and you have to wait a little longer to see the money. But once you get projects in the pipeline, you can earn a nice income.
Here’s a video I did about pie that illustrates the differences between selling and licensing your art…
>> Flat fee licensing.
Taking a “flat fee” is often confused with selling but it isn’t. To my way of looking at it, flat fee licensing is like a hybrid car – it has some things in common with selling art and some things in common with licensing. The contract is like a licensing agreement (products the art will go on, time frame for the usage, you retain copyright) but instead of a royalty percentage, you both agree to a set fee. The key difference between this and selling your art is that you still maintain the rights to use the art in other areas, you have simply agreed to an amount of money you make up front.
I hope this helps clear up some of the confusion – here’s to your creative success!
– Tara Reed
P.S. You will notice there is a lot of talk about contracts in the licensing explanations – it is very important that you understand how they work and what they mean to your business and art if you go into art licensing. To learn more, check out the eBook How to Understand Art Licensing Contracts.