Licensing Basics
- What does it mean to license my artwork?
- Why should I license my artwork?
- Do I need a Licensing Agent?
- What will you do for me?
- What is in a licensing contract?
- How much money will I make and when will I get it?
- What is my relationship with Wild Apple?
- What and when does Wild Apple get paid?
What does it mean to license my artwork?
license (n) – Official or legal permission to do or own a specified thing.
license (v) – To grant a license to or for; authorize.
You own the copyright to your artwork. Unless you specifically transfer the copyright to another party (“convey ownership”), that “intellectual property” is yours. When agreeing to license your artwork, you are authorizing another party to use your artwork in a particular way for a specified period of time. The license restricts the use of your artwork to that which you explicitly agree to in the contract. Typically you are only transferring the “reproduction rights” of your artwork within a very narrow product category.
Why should I license my artwork?
One reason is you make money. Artists deserve to make a living! Manufacturers need artwork to enhance their products and are willing to pay you for the right to use it. Typically they pay a royalty that is anywhere from 2% to 6% of the wholesale price received from their retail customers. It may not seem like a lot per piece, but it is a volume business and adds up quickly. Also, licensing revenues are in addition to your other income, like selling originals. The manufacturers only obtain the right to reproduce the artwork, not the copyrights themselves.
Another reason is the personal satisfaction. Your artwork will grace the products in thousands and maybe millions of homes, giving enjoyment to people whom you could never meet. If you believe that “art improves life,” then licensing will help you improve more lives.
Maybe. Probably.
Some artists market and license their own work and are successful at it. In addition to being talented artists, they are skilled business people and promoters.
However, it is hard to be the creative person generating artwork AND the organizer - promoter - accountant. Most artists are eager to have someone else promote their work and manage the business side so that they can have more time to create art. Or maybe they just don’t like the business stuff. We like it - it's kinda fun.
A good agent already has contacts in the market and can effectively promote your work to them. It sounds simple, but there is a lot to it. At Wild Apple, we offer more than a typical agency relationship with our state of the art digital photographic, design and prepress expertise. This is a brief list of what we could do for you.
- Create a strategic plan, identifying the appropriate retail channels and the right products for your artwork. Create a sales and marketing plan to promote your artwork to the right manufacturers of the right products in the right channels.
- Capture your artwork in state-of-the-art digital format so that we can make custom presentations and product designs.
- Promote your work to manufacturers in a variety of ways:
˜ Present beautifully designed portfolios to the manufacturers at their location
˜ Send high-quality digital presentations to manufacturers via e-mail or a CD
˜ Include your artwork on a private access image database used extensively by licensees
˜ Showcase your new artwork at industry trade shows
˜ Feature your biography and artwork on the Wild Apple web-site
˜ Include the artwork in the host of marketing activities of Wild Apple: public relations, advertising, a regular e-mail newsletter
- Negotiate licensing contracts with manufacturers on your behalf.
- Administer the license:
˜ Send digital files and color proofs to interested license
˜ Ensure that the manufacturer lives by the contract, that royalties are paid using the right percentage in the contract, that all contracted images are included in the royalties and in the the quarterly reports from the manufacturer
˜ Expand the licensing program through the addition of new licensees and/or by adding new images and products to existing licensees
˜ Keep you informed of current trends and themes in the marketplace. We will bring you lots of ideas for art direction based on input from customers and our own trend analysis.
What is in a licensing contract?
There are two different contracts you will sign: one is between you and Wild Apple in which you appoint us as your licensing agent. The other is a licensing contract that we negotiate between you and the manufacturer. Every company using your artwork will need to enter into a separate licensing contract. So what is in it?
Parties to the contract: The Licensor (you, the artist) grants the Licensee (the manufacturer) the right to reproduce your work within narrowly defined criteria.
Permitted uses of the artwork: Clearly specifies the products to which your artwork will be applied, and which of your images are being used.
Term of the contract: When does it start and when does it end? Under what conditions would it be renewed?
Indemnification: Both parties agree not to hold each other responsible for certain things.
Termination: In addition to the contract having an expiration date, there are reasons why either party can terminate the contract – bankruptcy, copyright infringement, non-payment.
Remuneration: When will the licensee pay you for the use of the artwork? Sometimes there is an advance made by the licensee, but most of the time the licensee will pay a royalty on a quarterly basis, equal to a percentage of the net wholesale price of the goods they sold in that quarter. The royalty rate can vary from 2 to 6% depending upon the product category and the licensee. Each contract can be different.
Auditing the records: Because your income depends upon the integrity of the licensee, you (or your representative) have the right to inspect their books.
How much money will I make and when can I get it?
It all depends…
It takes a while for the program to get going, sometimes as long as 18 months from the time the contract is signed. Here is a typical time line.
What is my relationship with Wild Apple?
Wild Apple will be your promoter, business partner, art director, technical guru and friend.
Legally speaking, Wild Apple would be your licensing agent, creating and managing a licensing program on your behalf. We only do well if you do well. We have a vested interest in your success and hope that we can work closely in developing the right artwork for the market and promoting it to the right customers.
We will enter into a contract with you to represent you to manufacturers and do all of the stuff we listed above. Because of the investment of time and resources we will be making, we want to be your exclusive licensing agent.
In negotiating contracts with manufacturers, Wild Apple is only an agent and is not a party to the contract. We can negotiate, but you have the ultimate authority to approve the contract, and the agreement is between you and the manufacturer.
What and when does Wild Apple get paid?
To compensate us for the investment we’ve made, Wild Apple receives 50% of the royalties paid by the manufacturer. We only get paid if you do.