Art Licensing: Tips on Negotiating Contracts

Everyone negotiates in their daily life to reach an understanding, resolve a difference, gain an advantage and ultimately reach a compromise. The same is true in the business of licensing art. When an artist is given a contract by a manufacturer (or agent), it is open to negotiations. Many artists new to licensing think they have to accept the contract as is. As Dave Ramsey states in his article "4 Things to Remember When Negotiating Contracts," ". . . everything can be negotiated in a contract. If you don't like a certain detail or requirement, ask to have it removed. Likewise, if you want something added, request it. Drive the negotiation so your contract meets your needs."

But there are limits to what and how much can be negotiated in the contract so you need to be ready to compromise on what you want or walk away from the deal. For instance, if a manufacturer NEVER gives an advance toward royalties then you will not be able to get an advance no matter how hard you try. But if the advance is not in the initial contract, it is wise to ask for one. You just might get it. On the other hand, if your policy is that you will not sign a contract unless you get an advance, you may not get many licensing deals. Less and less manufacturers are now offering them.

Being prepared is important before starting negotiations. You should have a strategy besides knowing the goals of both you and the manufacturer, what contract terms can be traded, and what you are willing to give up or not give up. This makes compromising smoother so that the negotiation is a win-win for both you and manufacturer. Some negotiation terms in the art licensing contract may be: the territory (US, worldwide, Canada, etc.), royalty rate, product categories, advances, sample approval, number of samples provided, and exclusivity.

Negotiations with manufacturers is not normally cut-throat as shown in the ABC TV reality show "The Shark Tank." However, the show demonstrates what happens when an entrepreneur is not prepared when they negotiate with the investors. The entrepreneur will not get the deal if she/he does not know the value of her/his company, know what kind of company the investors are looking for, and have already sold enough products so that the investors will be interested in partnering with them. The same can be true in negotiating an art licensing contract. If the artist is not prepared, she/he may not get the best possible terms.

Read the following articles to get information and insights on negotiating tips by experts from various businesses.

• "The Art of Negotiating - Business Negotiating" from Entrepreneur.com

• "Contract Negotiation Strategies" by James Bucki of About.com

• "Basic Negotiating Tips" from Bacial & Associates

• "Win-Win Negotiation - Negotiation Skills" from MindTools.com

• "10 Rules for Negotiating Work Contracts " from oDesk

• "5 Things You Should Never Say While Negotiating" by Mike Hofman of Inc.

• "Negotiation Strategy: Six Common Pitfalls to Avoid" from Stanford Graduate School of Business

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Photoshop Tip: Using Blending Modes to Enhance Images and Backgrounds

Photoshop blending modes allows you to non-destructively blend and change the pixels in the images on the layers. You can easily create special effects, change colors and hues on the layers, blend a pattern into an image, add black (or white) logos on the painting that appears to have a transparent background although the background is actually white (or black), add contrast to images, and much more. Not only can you save time by using blending modes but you can create some amazing results to enhance your art.

There are over 20 different blending modes but the most used are Screen, Multiply and Overlay. The blending modes are located on a pull down menu in the upper left corner of the Layers pallet. You can quickly scan through the different blending modes by using keystrokes Option (PC = Alt) & Shift & Plus sign (+).

According to the Photoshop help reference,
• Screen "Looks at each channel's color information and multiplies the inverse of the blend and base colors. The result color is always a lighter color. Screening with black leaves the color unchanged. Screening with white produces white. The effect is similar to projecting multiple photographic slides on top of each other."

• Multiply " Looks at the color information in each channel and multiplies the base color by the blend color. The result color is always a darker color. Multiplying any color with black produces black. Multiplying any color with white leaves the color unchanged. When you're painting with a color other than black or white, successive strokes with a painting tool produce progressively darker colors. The effect is similar to drawing on the image with multiple marking pens."

• Overlay "Multiplies or screens the colors, depending on the base color. Patterns or colors overlay the existing pixels while preserving the highlights and shadows of the base color. The base color is not replaced, but mixed with the blend color to reflect the lightness or darkness of the original color."

Sounds confusing, huh? Well, using blend modes is really quite simple as you will see when viewing the videos listed below.

Video Tutorials Describing Blending Modes

• "Using blending modes for photographers"

• "Photoshop Tutorial: Introduction to Blend Modes"

• "Photoshop Tutorial: Blending Modes"

• "Multiply, Screen & Overlay Blend Modes in Photoshop"

Video Tutorials Showing Blending Mode Examples

• Blending modes introduction and adding contrast to images

" Photoshop Tutorial: Layer Blending Mode Intro"

"Photoshop Tutorial: Overlay Pt. 2 - High Pass"

"Photoshop Tutorial: Overlay Pt. 3 - Contrast"

•Blending images to create a special effect

"Photoshop CS5 #10: Layer blending options (Flame Circle)"

• Using Blending modes to placing logos on art

"Photoshop Tutorial - Using Blend Modes"

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Editorial: How the Reality Show "Fashion Star" Can Help License Art

The new reality TV series "Fashion Star" that is searching for the next great fashion brand illustrates many of the same aspects that are important in licensing art.  The designer needs to know what appeals to their customers (retail store buyers & ultimately consumers), know trends that appeal to customers, create a variety of designs and still maintaining an unique look, willing to listen to mentors and customers, willing to compromise, and able to connect with the customer to build an enjoyable working relationship.  The designer can have fabulous designs but if they ignore these points they will be eliminated from the competition as some of the designers found out.  This is also true in art licensing.  Artists need to embrace the same points as the fashion designers to have a successful licensing career.

"Fashion Star" is a competition among 14 unknown fashion designers that are vying to win a 6,000,000 dollar prize to launch her/his collections in three large retail chains: Saks Fifth Avenue (high-end), Macys (mid-end), H&M (mass market).  Each week the designers are mentored by three celebrity designers and challenged with a particular task to further develop and expand their brands. For the premier week it was to present three variations of their signature looks.  Week two was to know the retailers and design clothing that their consumers would purchase.  Week three was to design clothing for the summer season.  Week four will be the challenge in designing two variations of the designers look for the high-end and the mass market. Buyers from each of the stores judge the designers creativity, if it will sell at retail, how well it will display on store racks, and whether it can be produced at a profit.  If yes, they offer a bid for the design (starting at $50,000) which can end up in a bidding war among the retailers.  The highest bidder gets the item and the designer is safe for the week.  The designers whose look was not purchased face elimination.  And the designer that makes it through the competition and is judged by all three retailers with the best brand for multiple markets wins.

By listening closely to the comments made by the mentors and retailers, gems of important information can be learned and translated to the licensing industry to improve art. During the show, buyers inform selected designers why their creation was not purchased - not good construction, does not show well, not unique enough, wrong colors and fabric, etc. The mentors offered suggestions on how to improve the look to appeal to the retail market. The designers that ignore the suggestions quickly found out they made a mistake when their creations were not purchased.  Designers that tweaked their look to appeal to the different retailers and widened their range of designs paid off in being recognized by the buyers for their efforts and having their creations purchased.  Others that gave up or thought that staying true to their look is more important were sent home. And several designers found out that there is no room for ego in the fashion industry when they clashed with mentors and buyers resulting in being eliminated from the competition.

 "Fashion Star" has brilliant marketing of products by being on national TV and with a slogan "watch it today, wear it tomorrow."  Consumers like the products and are using  social media to pass the word.  Many articles about consumer reaction to the show can be found on the internet including "Reality Show Fashion Star Boosts Macy's Sales, Builds H&M Brand Image, Busts Saks Customer Satisfaction and Misses Its Own Potential for Shopper-Viewer Engagement (M, SKS)."  And if you wonder how the retailers can offer the products on sale immediately after the airing of the show and who manufactures the products, read "Retail told - That was fast, On TV last night, in stores today."

"Fashion Star" airs on NBC - Tuesday night.  At the time this article was written, there are six remaining episodes with the finale airing on May 15.  Videos of the aired episodes can be viewed on NBC "Fashion Star" until June 14, 2012.

Share your comments about "Fashion Star" and on what you have learned.