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• Exclusive agreement with an agency
The majority of art licensing agencies in the United States require that their artists agree to an exclusive representation. That means the artists use only one agency to get them licensing deals in ALL product industries worldwide. Although, if the agency does not license art to foreign manufacturers, the artist may hire another agent to only represent her/him in foreign countries. Note: The reason agents want to do exclusive representation is to avoid the confusion if several agents submit an artist art to manufacturers. Not only do the manufacturers think it is a waste of their time to view the same art shown by several agents but if they are interested in licensing any of the art they would not know which agent to contact.
Some agencies do non-exclusive representation because they concentrate only on particular products such as fabric or wall art. Thus, some artists do have several agents. However, it can get sticky if one of the agents decides to license the art for products that they were not hired to.
• Exclusive agreement with a manufacturer for a specific product industry
Some industries are very competitive and want to use artist brands to sell their products. For instance, many fabric companies that sell their products to the quilt industry require their artists to be exclusive to them since they are showcasing and promoting the artists. That means those artists are not allowed to license their designs to other fabric companies. As artist Tara Reed points out in "5 Things to Consider Before Signing an Exclusive Art Licensing Agreement", an artist may decide to enter an exclusive agreement if they will ". . . guarantee a certain amount of sales per year (hard to come by at the moment), guarantee that they will bring out a certain number of products, promote you and your brand in specific ways… you want something in return for cutting off other opportunities for a few years." Also read art licensing agent Maria Brophy's article "Should you Sign an Exclusive Agreement - What to Consider". It has excellent examples on when Maria DOES NOT and when she DOES sign exclusive agreements.
• Exclusive agreement with a manufacturer for a specific image(s)
The most common exclusive agreement in the art licensing industry is when manufacturers license an image for their products. In fact, most product licensing contracts have this stipulation in it. The agreement requires that the artist NOT license the SAME image to other manufacturers in the SAME industry until after the contract expiration. The purpose of this exclusivity is so that the manufacturer is not competing with other manufacturers that are selling to the same consumer base. An exception is in the wall décor industry where non-exclusive agreements are offered. That is why the same image for posters and prints may be in many print-on-demand wall décor Internet stores.
However, the same image may be licensed to different manufacturers at the same time and for the same product if their customer bases are different. For example if the image was licensed to a manufacturer that sells only to general retailers it may be okay to license the same image to a manufacturer that sells to the mass channel (chain stores) and to non-profit companies. Of course, you should inform the companies that are involved to make sure they have no objections in licensing the art to another manufacturer. If you do not inform them, you may be infringing on contracts since you may not be aware that besides selling to general retailers the manufacturer also sells to chain stores.
Note: A difficult situation could occur if an artist license VERY similar looking images to different manufacturers that produce the same products. Manufacturers want to sell art that is different from their competition. They would be unhappy if the images are so similar that customers would mistake them for the same art. It is always wise to inform the companies involved to make sure there is no conflict.
• Contracts/Agreements
Read all contracts and agreements closely and make sure you understand all the terms and clauses in it including "exclusive". If you are unsure, I recommend that you hire an attorney experienced in art licensing legislation to look it over before you sign it. It is less expensive to pay an attorney to make sure the contract is fair to you than to find out later that you signed a contract with clauses unfair to you.
Your comments are welcome. Click on the comments section (below) to write your comment. Note: Some people have a problem in leaving a comment. The most successful method is to comment as Name/URL (your name and website or blog with a "complete" URL address. For example: http://www.joanbeiriger.com/
Thanks Joan, good information!
ReplyDeleteHow about sales? How does an artist who licenses exclusively be able to track sales from their art? Leaving it to the mfg. is a trust issue. Not acceptable. Have had real life experience from this.
ReplyDeleteJustine, I'm curious on what is the difference in tracking sales if you have an exclusive or non-exclusive deal with a manufacturer? Don't you have to trust a manufacturer either way? Joan
DeleteJustine - Trust and exclusivity are two separate issues. The trust part is part of your thorough investigation of the licensee, but the Audit clause in your agreement covers your ability to check up on unreported sales. Generally speaking, most companies who license IP frequently will not want to take the chance on cheating anyone. It would hurt their business and reputation (and pocket) if found out. However, there are errors in bookkeeping sometimes, so monitoring is a good idea.
DeleteHere is the issue. You have no idea who is buying your art online and how many orders there are.
DeleteTrust with an agreement is a wonderful idea, but not in the real world. I agree, investigation of the licensee is important, but how can this be done? How do you check up on unreported sales? Go to Majic Murals and look up my husbands work....Victor Valla. In this example he has no idea what is selling. Please advise. thanks.
Justine, Unfortunately I know of no way to check up on unreported sales so trust is all artists have besides investigation of the licensee. If that is not acceptable to the artist, then the artist should NOT license their work to manufacturers!
DeleteA very good and balanced article as always, Joan. Well done!
ReplyDeleteI generally use the analogy when discussing use of the same art by two competitive companies that it just isn't a good idea to date two guys on the same football team.
If you're seeking a long-term and financially successful relationship with a licensee, it makes sense to do everything you can to help them make more money with your art, and not to undercut them in any way.
There's another factor that comes into play when considering exclusivity with an art licensing agent. That's enabling the agent, who is investing a lot of money in establishing and promoting each artist, to actually get to the point where they're no longer in the red and are making money from the relationship. See my article "Who Pays What and To Whom" on my site, address below.
To see Lance's article click on his name at the beginning of his comment.
DeleteA good read and informative since I am just exploring licensing opportunities after of years of lurking but not actively looking to license.
ReplyDeleteIt is now time to begin to be active in finding that agent to represent my art. This article helped make the move.