Licensing Art - There is no such thing as a typical deal.

Every licensing contract is unique. There is NO typical deal (contract, agreement) in art licensing because it depends upon the manufacturer, industry, products, the notoriety of the artist, etc. which affects the terms and payment. Also negotiations between the property owner (or representative) and licensee (manufacturer) affects the contract.

Licensees that often offer licensing deals to licensors (property owners /artists) normally have their own contracts that they want licensors to sign.. A manufacturers that is new to licensing or infrequently offer licensing deals often ask the licensor to supply their own contract. So it is wise for every artist to have a contract before it is needed. Hire an intellectual Property (IP) attorney knowledgeable about art licensing to create a generic licensing contract that can be customized for each licensee. Also hire an IP attorney to review contracts before accepting ones offered by licensees especially if the deal involves a large amount of art and/or multiple SKUs.*

*SKU (pronounced skew) means a stock-keeping unit and is used by retailers to keep track of individual items for inventory.

If you do not want to spend the money to hire an attorney to look over a contract, think again. Contracts can be complicated. Ideally the contract should benefit both licensor and licensee. But missing terms, placement and incorrect use of words, rights given to the licensor at the beginning of the contract but later taken away with confusing terminology can make a big difference in the contract and ultimately benefit the licensee and not the licensor. Don't be foolish and risk losing revenue or even your art by failing to hire a reputable art licensing IP attorney. Read "Hire a Lawyer - but Which One?" for information on hiring lawyers that specialize in art licensing.

Contract Terms
Below are comments about some of the terms in a contract. Also read "The legalities of Licensing" by attorney Joshua Kaufman for information and definitions of terms. Note: This article was written in 2004 and amounts stated for royalties etc. are no longer accurate.

• Advance: A non-refundable advance payment against royalties to the licensor is sometimes given when a contract is signed. It shows that the licensee has faith that licensors art on their products will sell. In the past, advances were often given but recently there are much fewer. Advances can range from a low $100 per image to $30,000 or more for multiple images and/or SKUs in a product line.

• Artwork: Contracts should list the art that is being licensed. The contract should not state or infer that all the licensors artwork is being llicensed.

• Exclusivity: Some licensees want to have an exclusive arrangement with the licensor. That way the licensor does not license their unique work to the licensees competition. Usually this is when the licensee wants to introduce a large line of art by the licensor. An exclusive arrangement could be beneficial to the licensor if the licensee markets the art, has a large customer base, and continues to license more art. It is not beneficial to the licensor if the licensee only wants to license a few designs because then other licensing opportunities are lost.

• Guarantee: Guarantees on the monies to be earned during the length of the contract are now rarely offered to artists unless they are a well known brand with a proven track record in being able to sell products with their art.

• Length: The length of the licensing agreement depends upon the type of product, how long it takes to manufacturer and get to market, and how long the manufacturer anticipates that it will be sold. Most contracts last two to three years.

• Payment: There are three basic types of payment agreements in the licensing industry (on-demand, flat-fee and royalty). Licensors and licensees agree that each have their place in licensing art. They are discussed below.

• Samples & Sample Approval: Samples of the product are not always offered to the licensor especially if the product is produced only when ordered by the client. Sample approval by the licensor before the products are mass produced and sold to retailers is not always given. In fact, licensor sample approval is not possible for many licensees because of tight scheduling in producing the products and shipping to retailers.

• Territory: The territory of the contract is usually United States or North America with additional countries listed separately. Listing world-wide as the territory is unwise if the licensee does not sell their products world-wide because it limits the potential of licensing the art to other countries.

On-demand Payment
This type of payment means that the licensee does not manufacturer the product until it is ordered by a client. Thus the licensor may not receive a fee if no product is ordered. It allows the licensee to secure the use of art without investing in it. A quarterly royalty rate is the fee normally given for this type of payment. The pros for the licensor is the art gets visibility which MAY result in sales. The cons for the licensor is that the art is not available for licensing of the same product (unless it is non-exclusive) during the time of the contract with no guarantee that the product will ever be manufactured and sold. It is up to the licensor to determine if the visibility and the hope that the licensee's clients purchase the products out weights the cons. Unfortunately this type of payment is becoming more common.

Flat-fee Payment
A licensing flat-fee (usually just called flat fee) gives the artist all the benefits in a licensing agreement but instead of getting royalties the artist gets a one time upfront fee that MAY range from $500 to $2000 per SKU. A licensing flat-fee is usually offered by a licensee that does not want to be bothered by tracking sales of licensed art on products or does not have an established bookkeeping system to manage royalties. The cons to this type of payment is that the artist may lose revenue if the product is popular and has multiple printings. The pros is that the payment is made up front instead over a period of years or not at all if the product is not made or does not sell. Some licensors recommend taking this kind of deal if the licensee does not have a large customer base or if the theme of the art is a fad and retailers may not order and reorder enough products. Note: When you hear the term "flat fee" in the licensing industry do not confuse it with the term "flat fee" used by some illustrators and artists. Flat-fees in that case means selling all rights to their work including the copyright. In art licensing, flat fee means a one time payment in a licensing agreement.

Royalty Payment
Receiving royalties is usually the choice of payment for most licensors because the most revenue may potentially be made with this type of payment method. But the licensor takes a chance that the product(s) will sell well. If they do not sell well, the licensor may not make any revenue or very little. I have heard that one artist only made $25 for one image during the two year length of the contract. Another artist made "many" thousands of dollars in the same time period.

Every licensee offers different royalties depending on the type of products they sell and are paid quarterly. The average art licensing royalty is in the 4-6 percent range but can be larger depending on the product and how well known the licensor. Royalty rates can be found in the following publications.

"Graphic Artist's Guide Handbook of Pricing and Ethical Guidelines" (published September 29, 2010 - cost $26.39) This publication can be read at some public libraries or purchased. It includes the pricing for many kinds of art and illustrations and includes royalty rates for "some" art licensing industries.

"The Licensing Letter Royalty Trends Report" (2010 edition - cost $319.00) This is a comprehensive report on royalties for the entire licensing industry including art licensing. Note: I have not purchase this report so I do not know how much information it has on the art licensing industry.

When deciding on whether to sign a contract or not, do not just judge it only on the offered percent of the royalties but on all the terms. Also find out how large the licensee customer base, licensee estimate on number of products sold, and if an advance is offered. At first glance a six-to-eight percent royalty may sound better than a four percent royalty. However, a four percent royalty deal for products selling to big box retailers with a huge number of stores could yield ten times the revenue that a six-to-eight percent royalty deal for products sold to a modest amount of gift stores.

The actual calculation on how royalties are paid differ from licensee to licensee and the terminology in the contracts can be very confusing. Royalties are not often based on the wholesale price of the product but on the net price that can include discounts, shipping etc. That is another reason why an attorney should review contracts before they are signed by the licensor. Read "Royalties Rates: Not as simple As you may think!" by attorney Joshua Kaufman to find out more. Note: This article was written in 2002 and amounts stated for royalty rates are no longer accurate.

I believe that knowledge is power. Learn as much as you can about licensing contracts. Become familiar with what should be included in them and read the articles linked to this post so that you are aware of the pitfalls before signing a contract. And always be willing to negotiate a contract that is not beneficial to you.

Comments are welcomed. Please click on comments and write them in the comment window at the bottom of this article.

Art Licensing: The Reality AFTER Getting a Deal

So you licensed your art and now the money will roll in! Well, not always OR right away OR maybe you do not receive any revenue. First of all, the products must be produced, then they must sell, and then you must wait for the quarterly report and check from the manufacturer. Believe it or not, after the licensing contract is signed, it can take 18 months or more before you can start earning revenue. Although, if the contract is for a flat fee or the contract includes an advance toward royalties, the fee will usually be paid within a month after the contract is signed and the art transferred to the manufacturer.

It is wonderful when a contract yields a substantial amount of revenue but it does not always happen. And worse, sometimes the contract does not yield any revenue because the products do not sell and/or the contract is cancelled. Below is a discussion about the causes of low licensing revenue and some contract statements that artists/agents may have difficulty enforcing.

Licensing Revenue
Ten years ago many artists could live on the money they earned by licensing their work. It is different now and fewer artists can live on the earnings of their licensed art. Consumers no longer purchase as many non-essentials as they use to. They continually want new products at a low price resulting in manufacturers limiting the production of their products, charging retailers less for the products, and retailers leave the products on their shelves for a shorter time. Thus, artists earn less licensing revenue.

• Reasons why low revenue
Art that is created with popular art styles and themes for the mass market usually sell more products than those that are better suited for niche markets. For instance, images of realistic African animals usually earn lower revenue than whimsical birds and butterflies with flowers because they are not as popular to a wide range of consumers. Below are more reasons why licensed art may receive low revenue.

– Niche market and themes
As mentioned above some themes are suited for a niche market and do not sell as well as themes for the mass market. Also art that can be used on products for everyday use earns more revenue than art for minor holiday themes such as Mardi Gras, Valentine's Day, and Saint Patrick's Day. The amount of revenue also depends upon the type of product. For instance, Valentine's Day art is more popular on greeting cards than on decorative flags.

– Type and number of products
Successfully selling different types of products (ceramic figurines, greeting cards, decorative flags, jig-saw puzzles, coloring books, calendars, etc.) often change as consumer interests change. So revenue earned from certain products is less than from other products.

For instance, collectable figurines were very popular 10-15 year ago but not so much now so the amount earned from a contract for figurines may be small. And, even though getting a contract for wall art has a large royalty rate of 10-15%, the amount of revenue received is normally small. The reason is because the amount of each image produced is not very large. Also, even if the wall art is framed, the artist often only earns royalties for the print and not the entire product.

Other products that are purchased as a collection such as dishes and associated tabletop items earns more revenue because more SKUs (stock keeping units) are sold.

– Use of text on products
Words on products can help sell the products but they can also limit the selling power that reduces the revenue artists earn. For instance, if a greeting card is aimed at a specific person and for example uses the word grandmother on it, the amount of cards sold will be low and thus the artist earns a lower revenue than cards that do not mention a specific person. Unfortunately, what words placed on cards and sometimes other products is out of the control of the artist because most manufacturers choose them and not the artist. The same is true if the art is used for a blank greeting card or another occasion instead of the more popular birthday occasion. Fewer cards will be sold and therefore less revenue earned.

– Mistakes made in art selection
Sometimes the manufacturer art director makes mistakes when selecting art to be put on products. The consumer may not purchase it if the art is not popular, the art is not well executed, or the art is too similar to other art all ready seen on the same products. Thus, the artist earns low or no revenue.

– Manufacturer's distribution small
If the manufacturer has a small distribution of their products, not many products are sold and hence the artist earns a small royalty fee. That is why many artists prefer getting a flat licensing fee when the manufacturer is a start-up and their distribution is not yet very large.

– Short shelf life
At the present, consumers are constantly demanding new products. Thus, products often have a short shelf life especially in chain stores resulting in less royalty revenue for artists than they use to earn. In large chain stores, the products may have a shelf life of three months or less and then the products are put on sale. In the past getting a licensing deal that places the product into large chain stores meant the artist received more revenue even though the royalty was smaller than if it was placed into "mom and pop" retail stores. The reason why is that large chain stores can sell more product because of the larger distribution. Now because of the shorter shelf life in large chain stores that may not always be true.

– Limited production of product
Many manufacturers produce products to sell for only one season even if the contract is for two years. The second year may include a sell off period of the products or to give the manufacturer time to reproduce the product if it is exceptionally popular. Thus, artists usually get the majority of revenue for the first year of the contract and maybe a little or none the second year.

– POD
Print on Demand (POD) licensing deals often earn low revenue for artists but of course there are exceptions. Many POD manufacturers depend upon consumers purchasing their products from their Internet website while others sell only wholesale to retailers. In any case, the artist does not earn any revenue unless the product is sold and the amount earned depends upon how the manufacturer markets their products, how large their distribution, and whom they sell to (consumer or retailer).

• Reasons why no revenue
– Products do not sell
Sometimes products just do not sell and the artist does not receive any revenue unless the manufacturer gives an advance toward royalties. Also, some manufacturers license art either for their catalogs to be shown to retail stores OR to present to their key accounts. If art is licensed for key accounts and the manufacturer is unable to sell the product(s) to them, then the products are not produced and the chance in earning revenue is dead.

– Test the market
Some manufacturers license the art, makes a small production run of the product, and then tests the market to see if it sells. If it does not, further production runs are not made and the product is dropped.

– Cancelled contract
Sometimes manufacturers change their mind for whatever reason and decide to cancel the contract. Or sometimes the art was licensed for a manufacturer's key account client and the client decided they do not want it and thus, the contract is dead.

Unfortunately, manufacturers do not always inform the artist/agent that they are not going forward in producing the product. Thus, the contract is not cancelled so that the artist can try to license the art to another manufacturer that sells the same type of product. Artists/agents need to be vigilant when the quarterly royalty statement does not arrive and should find out why. It may be that the manufacturer is not going ahead in producing the product.

Difficulty Enforcing Some Contract Statements
• Samples
Most artists love to have products of the art they license. However, not all manufacturers offer artist free samples of the products such as manufacturers who produce products for fund raising organizations or POD. And, sometimes it is like "pulling teeth" or impossible to get the samples from manufacturers even when the contract states the artist will receive samples. Not all manufacturers automatically send the samples and the artist/agent must ask for them. But even asking for them does not always mean they will be received. For instance, if the manufacturer produced the product for a key account and forgets to include the number of samples the artist should receive in the amount being produced then the artist will not get any samples.

• Royalty statements and payments
Royalty statements and payments are usually quarterly and sent the month after the end of quarter. However, they are not always sent on time because the manufacturer is waiting for its clients to pay for the products they purchased. Sometimes it takes months before the manufacturer is able to pay the royalty fees. Or, the manufacturer has major cash flow problems and eventually files for bankruptcy.

Note: The above discussion is not meant to discourage you in licensing your art but to inform you on the reality that as in every business not everything is a bed-of-roses. 

Artist Comments About Licensing Contract Realities
Artist Jill Meyer
"Once again, Joan, spot on with every point! Art Licensing is by no means a straight path. I think I have had all or most of the situations mentioned in the article happen to me. One learns, from these things to be sure. Often licensing is a question of a "good news" bad news" sceanario. I just received word that one of my paintings had been licensed with Walmart for Halloween, 2016. That is the good news, the bad news is that it will be almost an entire year before the painting is on the shelves, and as Joan points out, it is a seasonal painting, so although the distribution is large, the shelf life will be short! In licensing, you always need to adopt the long view as your perspective, keep your sense of humor, and definitely be prepared to take the "bitter with the better"! Off my soapbox now! :-)"

Artist Collene Kennedy
"Joan! Great article if not a very pragmatic perception! It's a loooong lead business and when it works, it works well. But one thing that can also happen and did to me when I was doing very well with greeting cards is a company can mismanage their funds and therefore not pay out royalties! Yikes! I learned a lesson... tooo late of not allowing so many eggs in one basket! Live n' learn ...n' create!"

Artist Sue Zipkin
"I think it’s great that you are sharing so many realities of the art licensing industry. So often new artists don’t know some of these things and are very shocked and become discouraged when they learn that things do not always unfold according to the way a contract is written.   A perfect example is when an artist creates a lot of artwork for a project, then samples are made and shown at a trade show and to store buyers.   The artist automatically assumes that the products will go into production and then sold in stores. Unfortunately when it’s time to get paid they wonder what’s going on when they see no income. Then they find out that their project was killed on the vine. If an artist is aware of these realities ahead of time they won’t be as discouraged. No matter what level you are in the industry  It’s still frustrating when this happens.  I find it happens often with some products and companies more then others."

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/ ).

Art Licensing: What's With the Adult Coloring Book Craze?

Recently there has been a lot of hype about how coloring books is good therapy to relax and reduce stress for those that have stressful jobs and lifestyles, are recovering from surgery, have life threatening illnesses, and even for inmates in prison. With the advent of thousands of adult themed coloring books hitting craft stores, bookstores and e-stores, consumers are gobbling them up as soon as they are printed. People (colorists) are sharing their colored creations on the different social media sites, having coloring book parties, and forming coloring book clubs. So how did the adult coloring book craze start?

History
As with many trends, the adult coloring book craze took a while to built momentum. In the 1970s, Dover Publications published their first adult coloring book (Antique Automobiles Coloring Book) and now sell hundreds of titles. But it was not until a couple of years ago that Dover and other publishers called attention to the therapeutic values of coloring. Consumers rediscovered the childhood joys and calming effects when coloring, the press published the popularity of adult coloring books and its therapeutic effects, and the sales of the books started escalating. And in fact, several adult coloring books are on the best sellers list for major publishers and e-stores like amazon.com.

In 2013, UK illustrator Johanna Basford published her first coloring book "Secret Garden" which was a HUGE success and so far has sold a whopping 1.4 million copies worldwide. When her second book "Enchanted Forest" was published in Feb 2015, the massive amount of publicity is attributed to have caused the recent surge in adult coloring book craze. But, in the United States it could also be due to the intensive marketing of Adult Coloring Books by Dover Publications.

Dover Publications applied to the U.S. Registrar at the National Day Calendar and received the permission that National Coloring Book Day will officially be observed on August 2 each year. Dover sponsors a National Coloring Book Day website. This year they did intensive marketing for National Coloring Book Day and on August 2 had events in bookstores all over the United States. Now that is a great example of marketing outside-the-box!

Note: Johanna Basford's success with adult coloring books continues. She signed with Penguin Random House to publish her next two adult coloring books. "Lost Ocean" will be published at the end of October 2015 and another will be published in fall 2016. For information about Johanna Basford's success in creating illustrations for other products, read "Illustrator Johanna Basford's Success in Marketing Art Outside-the-box"

About Adult Coloring Books
Most adult coloring books have 30 or more pages of illustrations. And, unlike children's coloring books many adult coloring books have more detailed and intricate line drawings. Popular themes are flowers, animals, mandalas, inspirational, spiritual, and geometric shaped designs although all kinds of themes appeal to adults.

Adult colorists tend to use colored pencils, gel pens, and fine tip markers more than crayons. Many of the books are printed on thick paper with the design on only one side of the page so that gel pens, and fine tip markers do not bleed through. Also the thicker paper is more suitable for framing the finished colored image. Some coloring books use vellum to mimic the look of stained glass. Coloring books come in all sizes and shapes including postcard sizes that can be mailed to family and friends. Some companies offer coloring book kits that can be used for parties.

And even though colorists claim that they welcome getting away from their computers and other electronics, there are apps that will allow a person to color designs on computers, tablets, and smart phones. Read "Adult coloring books: yes, there are apps for that" for information about the apps.

Publishing Coloring Books
The adult coloring book trend has spread worldwide and publishers are going crazy publishing coloring books that are marketed to adults for the benefit of reducing stress. Even Hallmark is producing coloring books with sketches created by their in-house artists. Freelance artists are creating and publishing coloring books and marketing them on social media and e-stores. Or, they license their work to literary publishers.

• Self Publishing and Marketing
Artists can publish and market coloring books they created by themselves or with the help of the many companies found on the Internet such as Create Space, Speedy Publishing, and WMC Publishing. Most sell their books on amazon.com, other e-stores, and social media sites.

According to the article "Color Me Happy" artist Jenean Morrison has self-published six intricate designed adult coloring books on Amazon.com since 2012. "In all of last year, she sold 15,414 books on Amazon. This year, in half the time, she has sold 43,420."

• Companies that Publish Adult Coloring Books
Numerous publishers are already selling adult coloring books or plan to. Many publishers only accept manuscripts (coloring books also) from literary agents so if an artist wants to submit art for a coloring book they need to hire a literary agent. However, not all require agents so look for submission guidelines on the publisher’s website or contact the publisher to find out how to submit. Note: Do not forget to ask about the licensing fee. I've heard that at least some publishers only pay a flat fee per project. The fee may not be cost effective when you need to produce many designs for one coloring book.

Below are some publishers that produce adult coloring books.
– Andrews McMeel Publishing LLC (introducing a line of coloring books in September 2015)

– Design Originals (A Fox Chapel Publishing company)

– Dover Publications (been publishing adult coloring books since the 1970s)

– Fox Chapel Publishing

– Global Doodle Gems (collaboration of artists around the world to produce coloring books)

– Harper Collins Publishers

– Little, Brown and Company

– Penguin Random House

– Quarto Publishing Group

– Running Press Book Publishers

– Sterling Publishing

Resources
– "Adult coloring books topping bestseller lists"

– "Coloring Books Grow Up" (what themes are popular, stats on books that are flying off the shelves, comments about publishers selling adult coloring books)

– "Health benefits of coloring books attracting adults to childhood pastime"

• Research by artist Peggy Toole 
8/9/15 After reading this article, artist Peggy Toole did quite a bit research on adult coloring books and the following is what she found out. "The Johanna Basford books were originally published in England and they did a lovely job.  I sell on Amazon so I was going to publish it myself and it ship directly to one of their west coast warehouses from China and let Amazon do all the distribution.

But to do a 'Johanna Basford' quality book would cost in excess of $6.25 per book at 1000 books and at even 10,000, the individual book price is about still close to $3.00 per book. Johanna's book cost about $4.79 in Amazon fulfillment fees for them to ship it. Plus you have storage on books that do not sell. Amazon is selling "Enchanted Forest" for $9.63, so there's little profit if I'm publishing something that large and complex.

Books that make the top 10 at Amazon are selling 4000-5000 copies daily.  I learned somewhere- maybe from the book I purchased that "Enchanted Forest" in it's 4th printing for 2015. So there's real money there but finding a publisher is probably like winning the lottery. I'm having some 2nd thoughts about doing it.  Maybe you could make a fortune, but then again maybe not." 

Peggy contacted Ulysses Press (publisher of Wendy Piersall) and Fox Chapel Press) and was told that they are not taking submissions for coloring books.  Read more on what Peggy Toole has to say about coloring books in the comment section to this article.

Note: I imagine all publishers are inundated with artists wanting to license their art for coloring books so some publishers have put a temporary stop to submissions.  If the coloring book craze is not a fad and is indeed a trend, publishers will probably start looking at art again; especially if the art is what consumers want to color and is very unique to what is already published.
 
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/ ).

What is Art Licensing ?

I'm often asked what is art licensing and my quick answer is that "I loan my art to manufacturers so that they can put it on their product(s)." Of course, it is more complicated than that and the word "loan" is very important because the manufacturer doesn't keep the art. They only use it for a certain period of time, on a certain type of product(s), and in a certain part of the world depending upon the terms of the contract. The beauty of licensing is that the artist gets a fee (either royalties on products sold or a flat fee for the loan of the art) and keeps the copyright so that she/he can license it to another manufacturer for a different type of product. Thus, it is possible to have multiple streams of income from one piece of art.

Editorial: The Truth about Licensing Art

There are many positive reasons to create art for licensing because otherwise artists would not license their art. But, just like all businesses' the art licensing industry also has negative aspects. I believe that power is knowing the negatives because you can use that knowledge to be prepared and not have unrealistic expectations in licensing your art. And, sometimes you can convert the negatives to positives.

Negative Aspects
The following is a list in no particular order of what an artist should know about the negative aspects in licensing art. Note: These are my opinions. Other artists, licensing agents and experts in the art licensing industry may have different opinions. It is always wise to get several viewpoints and not depend on only one.

• Licensing art is very competitive. There are thousands of artists trying to license their art. And, the number of artists increase each year. Thus, getting licensing contracts is harder each year.

• Not every artist can make a living by licensing her / his art because of the competition and less retailers selling licensed products.

• Licensing is NOT a 9AM to 5PM job. Artists need to juggle daily personal commitments with creating art and other associated licensing duties. Dedicated licensed artists work more than 12 hours a day especially when a deadline looms.

• Not all art is licensable. There are many reasons why beautiful art is not licensable. To find out why, read "Editorial: Not all Art is Licensable."

• Artists will not be able to license all the art they create. Because of the competitive industry, not all art themes are popular, and the art may be ahead or behind the trend. Also, not every image licensed will be licensed for more than one product. It may not be the right image for other products or manufacturers are not interested in licensing it for whatever reason.

• Not all art licensing agents and manufacturers are honest. Unfortunately, contracts are not always in the best interest to the artist and not every agent or manufacturer pay artists monies owed them. It is always wise to ask others in the art licensing industry if a manufacturer / agent that you are considering is reputable. And, you should have an attorney experienced in art licensing look over the contract before signing it.

• It is difficult to protect art from copyright infringers. Some artists watermark their images and use password protected websites. But, there are downsides to doing so. Many manufacturers will not take the time to request a password from the artist to view the art and dislike watermarks because they detract from the art. But in any case, artists should copyright their art with the Library of Congress so that if they need to sue for infringement and win, they will get legal fees paid beside being awarded statutory damages. To learn more about copyrights, read attorney Joshua Kaufman's article "Filing Copyrights: How and Why or Just Do It!"

• Art directors look at 100s of images for EACH image that is licensed. Thus, manufacturers showing interest in your art does not necessarily mean it will be licensed. For instance, experienced SURTEX show exhibitors know that the reality is that less than 10% (more like zero to 3%) of the art that art directors request for licensing consideration results in a deal.

• Not all licensed art have accurate colors on products. This could be due to the type of process used to print the art on the product, the manufacturer does not have or take the time to make sure the colors are accurate, or the manufacturer purposely changes the color saturation so that the colors are brighter (sometimes done for decorative flags). Note: Not having accurate colors most likely will not affect the sale of the product because consumers have not seen the original art. Although I do grimace when I see some of my licensed art on products.

• Getting a deal does not always mean that the product will be produced. It could be a print-on-demand type of deal which means the art on the product will only be produced if a retailer orders it. Or, the production of the art on the product is cancelled for some reason. Also, sometimes the manufacturer only produces one batch and if the amount sold does not meet expectations it is not produced again even though the contract will not expire for several more years.

• Royalties from a deal can be a very small amount or nothing if the product does not sell well. Sometimes an artist can make more revenue from a licensing flat fee than from a royalty deal.

• More and more manufacturers are pre-selling their products before producing them. That means they may request HiRes art (high resolution) from the artist so that they can make samples for presentations. An artist needs to really trust the manufacturer before sending them HiRes art for presentation because no contract is signed.

• Manufacturers may request that the artist hold art for them so that they can give presentations to their clients. If the artist agrees, it means that she/he cannot license the art in the same category to another manufacturer. Sometimes the manufacturer will hold the art for months and the artist loses the chance to license the art that year if it is not accepted by the client.

• Artists may be requested by a manufacturer to create art on speculation. That means there is no guarantee that it will be licensed. Although, there is always a possibility it will be licensed by another manufacturer. Some artists require that they get a designer fee before starting work on a spec project. Others work on spec under certain conditions such as only designing an art theme that appeals to a broad spectrum of consumers so the chances of it being licensed is greater. Or, the artist already has a good working relationship with a manufacturer and thinks that they will most likely create art that will be licensed.

• Artist are not always able to approved the product sample before it goes into production. Many times the production cycle is too tight and manufacturers are not willing to let the artist approve the sample. Although sometimes they will send a picture of the final product via the internet.

• Certain themes even though they are popular may be difficult to license to some industries. These manufacturers already have artists that are licensing those themes and they are not looking for another. For instance, calendar manufactures already license art from certain artists year-after-year for country, song birds, cats, roosters, wine and coastal themes. Until those artists can no longer produce enough art (normally 12 - 13 images per calendar), other artists will not be able to get a deal with them.

Related Articles
• "10, oops, 17, Things You Need to Learn to Make It in Art Licensing" by licensing art agent Jim Marcotte of Two Town Studios.

• "Editorial: Art Licensing Myths" - Myth #1: License your art so you do not have to work so hard, Myth #2: License your art if you are broke and need money. Myth #3: Any art can be licensed. Myth #4: One design can be licensed for ALL products. Myth #5: An artist will get many licensing deals by signing with an agency. Myth #6: Licensing revenue is always from royalties.

• "Editorial: Art Licensing Myths continued (myth #7 to #12)" Myth #7: An artist must have an agent or manufacturer sign a Non Disclosure Agreement (NDA) before showing art. Myth #8: Agents not only manage the business part of licensing but track trends, guide the artist in what art to create, and critics it. Myth #9: There is a manufacturer art size and file format standard. Myth #10: There is a standard time of the year for submitting art to manufacturers. Myth #11: Manufacturers prefer to license art from agents than from individual artists. Myth #12: Participating in manufacturers call-for-submissions (cattle-calls) is a waste of time.

• "Editorial: Art Licensing Myths continued (myth #13 to #18)" Myth #13: You are not infringing on the copyright if you change someone's art 5, 10, or 20%. Myth #14: Any free clip art and fonts found on internet websites can be used in art and not infringe on the copyright. Myth #15: Art licensing agencies always contact the artist when she/he submits art for representation. Myth #16: A good way to get a licensing deal is to send out e-mail blasts. Myth: #17 A manufacturer keeps producing product with the same art if it sells well. Myth: #18 You only need to follow-up once after contacting a manufacturer.

I have never worked harder in my life than licensing my art. It can be a frustrating business but it is so worth it when product samples arrive with my art on it, I see my art on products in stores, and the quarterly licensing revenue arrives.

Perhaps art licensing agent Lance Klass of Porterfield's Fine Art Licensing states it best with "I came away from this article with the understanding that what Joan is essentially saying to artists is that they should enter art licensing with their eyes wide open, expecting the best but not being dismayed when things don't work out the way they should. And not giving up when one runs into the inevitable bumps in the road."

Make sure that you read the comments about this article.  Readers have share some useful information!!!
 
Your comments are welcome. Please click on the comments section (below) to write your comment.

Art Licensing: When do you Submit Art to Manufacturers?

As often heard in the art licensing industry "it depends" is the inexplicable answer to the question "When do you submit art to manufacturers for licensing consideration?" Each manufacturer has a different deadline depending on its business model, product line, production cycle, and clients. So, the only way to find out the deadlines for submitting art is to either see the information on the manufacturers website or ask by e-mail or phone call.

Some manufacturers accept all art theme submissions year round and either license art immediately or files it for future consideration. Some have big box store clients and these manufacturers are constantly giving presentations to them. Hence, they request art for the presentations to be put on hold but do not license it unless their clients want the art put on the products. Other manufacturers have specific deadlines that they post on their websites such as greeting card manufacturer Leanin' Tree and will license the art they choose for the following year product line(s). Some manufacturers send art requests several times a year to the artists and agents on their call-out list. However, the majority of manufacturers need to be contacted via email or by telephone to find out their deadlines. Hint: When you contact manufacturers, ask if they have an art call-out list and request to be added to it.

If you cannot find out the manufacturer art submission deadlines (often happens) then you need to make an educated guess. Most manufacturers are looking for specific art themes at least two times a year. Those are for Spring/Summer (approximately March through August) and Fall/Winter (approximately September through February) that includes all holidays and special occasions during those periods. Many manufacturers decide on what art to license 12 to 14 months before it is introduced to retail. For example, art deadlines for the fall/winter 2016 season could be as early as July 2015.

Do Your Homework
The key to licensing your art is to create the right art for products that appeals to manufacturers, retail stores, and ultimately consumers. Finding manufacturers that license art requires research, research, and more research. You need to find manufacturers that are a match with your art style, find out what art themes they want, how they want art submitted and in what format. Find out more about licensing art by reading "How to license art to manufacturers".

Why does it take so long to see licensed art on products and get revenue?
It "can" take 18 months or more before an artist gets any money after a deal is signed unless the artist is lucky to get an advance toward royalties. The reason is because of the many steps involved during the entire process (contract negotiations, art revisions, manufacturing of product, placement on retail shelves) before receiving the first quarterly royalty check. How long it takes depends upon the industry but paper products made in the U.S. usually takes a shorter time than ceramic products that need the creation of molds and are manufactured and shipped from China. Read "Licensed Art - Getting Paid Takes a Long Time" to see an example of a time-line and steps required from submitting art to receiving royalties. Note: Not all licensing deals or getting revenue take a long time.  Each manufacturer is different and some deals can generate revenue within a few months after signing the contract especially if it was a licensing flat fee.  More information about different kind of licensing contracts can be read on "Licensing Art - There is no such thing as a typical deal".

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/ ).

Licensing Art to the Jigsaw Puzzle Industry

People love the challenge in putting together jig-saw puzzles and in over 200 years after its inception it is a thriving industry. Jisaw puzzles were originally manufactured to teach children geography in the 1760s ("Jigsaw Puzzle History"). Today children still learn about geography with jigsaw puzzles. Also, with the vast amount of available images on puzzles, assembling them have become a popular form of family entertainment.

Jigsaw puzzles are not only manufactured in the original horizontal format but as ovals, circles, square, vertical and in various freeform shapes depending upon the images place on the puzzles. Some even are three dimensional shapes such as globes, animals and buildings. And puzzles do not always have just a plain 2D picture printed on them but are embellished with glitter, perfume, or with a 3D image. Puzzles are not only made with cardboard but with wood, plastic, and rubber. Note: Wooden puzzles are expensive to produce and they are usually made one at a time. Many times the licensing deal that those manufacturers offer to artists is to put the artists art on their website. "If" the art is chosen by a customer, the manufacturer will product the puzzle and the artist will get paid (royalty or flat fee) for the use.

Puzzle manufacturers normally want art that:
1. has bright and saturate colors
2. have an awe factor such as cute kittens, children playing, beautiful scenery and florals, or landmarks that generates an emotional response in the customer.
3. does not have a lot of "white space." Too much white space makes the puzzle difficult to assemble. But if the painting is of a popular subject or was painted by a well known artist, the amount of white space does not seem to matter.
4. in a rectangular horizontal format which is the most used. However, some manufacturers produce puzzles in other formats as mentioned above so art created in other formats can also be used for puzzles.

Some jigsaw puzzle manufacturers specialize in producing puzzles for different speciality markets such as colleges, museums, children, teens, or mystery while others cater to the general retail market. In order to find out what type of images each manufacturer puts on their puzzles, you need to check out their websites and call them for their art submission guidelines if they are not listed.

Jigsaw Puzzle Manufacturers List
(updated Dec 10, 2016)

• Buffalo Games
• Ceaco
• Elms Puzzles (wooden puzzles)
• Heritage Puzzles
• Lang
• Masterpiece Puzzles
• Melissa and Doug
• Ravensburger
• Springbok
• Stave Puzzles (wooden puzzles)
• SunsOut
• TDC Games
• WellSpring
• White Mountain Puzzles Inc

If you would like to share information about other jigsaw puzzle manufacturers or comment about this article, please click on the comment section below and type your comment.

Editorial: Art Licensing Myths

Some of the reasons why artists want to license their art is founded on myths and assumptions. They have heard via the grapeline that they can make good money in licensing their art and they assume that once they start licensing their art they can sit back and relax while the money pours in. As artists that have been in the art licensing industry for years know, creating art that appeals to the consumer to get deals is darn hard work and it takes time.

The reason why I am writing this article is that I do not want artists to enter the art licensing industry with misconceptions. Licensing can be rewarding but it can also be challenging and frustrating. Below are my comments on some art licensing myths.

Myth #1: License your art so you do not have to work so hard.
Artists that are new to licensing think that just because they have the art they can easily license it. Licensing art takes a lot of work in researching and understanding the different industries that license art, creating art that manufacturers want, and finding the latest design and color trends. It takes time to find suitable manufacturers and to continuously follow-up after submitting the art. New art needs to be frequently created and existing art may need to be reworked to make it fresh and new. Also the artist must be willing to edit the art to manufacturers specifications and meet their deadlines. To be successful, an artist needs to regard the licensing of her/his work as a full time job and not as a hobby. To learn more, read:

• "Licensing Art is Hard Work"
• "Art Licensing Tip: What does follow-up really mean?"
• "How to Keep Art Fresh & New: Reworking Old Art for Today's Greeting Card Market"
• "How to Keep Art Fresh & New: Continually Evolve Your Work - Part 1"
• "How to Keep Art Fresh & New: Continually Evolve Your Work - Part 2"

Myth #2: License your art if you are broke and need money.
It can take a long time to get the first licensing deal (months and sometimes years) and once the contract is signed it can take 18 months or more before an artist gets any money from it. So art licensing is not a quick way to earn revenue. For more information and see an example of the time line from signing a contract to getting paid, read "Licensing Art - Getting Paid Takes a Long Time."

There is no guarantee that an artist will be successful in licensing her/his art or even make a living at doing it. Rarely is there an over night success story of an artist licensing her/his art. All the well known artists that license their art have been in the industry for 10 or more years before they became an "overnight sensation." For more information, read "Licensing Art – Can You Make a Living Doing it?"

Myth #3: Any art can be licensed.
Many artists have created art to sell in galleries, craft and art shows, illustrations for children books, and for handmade and print-on-demand websites like Etsy. They think that a good way to make some extra money is to license their work. However, even though an artist may have a huge portfolio of art it may not be suitable to be put on products. To make the most revenue, the art needs to be licensed to the mass market. Find out the type of art that agent Lance Klass has success in licensing for his agency Porterfield Fine Art Licensing by reading "How to become a Porterfield's artist." And read "Editorial: Not all art is licensable" to find out more about the type of art that is licensable to the mass market. Make sure to read the comments to the article because many licensing experts posted valuable information.

Myth #4: One design can be licensed for ALL products.
Yes, the advantage in licensing art is that the artist keeps the copyright and then can license it for all kinds of products. However, in reality the art may not be suitable for every product because each manufacturer has their own specifications and needs. For instance, an intricate whimsical pastel colored design for a baby will look well on products strictly for the baby and on gift wraps and other paper products but most likely is not right for decorative flags. Most decorative flag manufacturers want bold and simple designs that "pop." Read "One Painting Can be Licensed for Multiple Products - Right?" Also read articles about several manufacturers and their art needs.

Myth #5: An artist will get many licensing deals by signing with an agency.
Agencies choose artists to represent who has the art they think is licensable. But that is no guarantee that the agency will be successful in licensing the artist work. Read art licensing agents J'net Smith and Suzanne Cruise comments in "How Long Does it Take to Get a Contract After Hiring an Agent?"

Myth #6: Licensing revenue is always from royalties.
There are all kinds of licensing deals and payment to the artist can be with a flat fee, by royalty, or payment only IF the product is manufactured (on-demand). To find out more read, "Licensing Art - There is no such thing as a typical deal."

Will you be successful in licensing your art? I do not know. But I think it is possible if you do your homework and learn about licensing art, work hard at creating art that the consumer wants, be persistent & not give up and also have some luck. :)

Read "Editorial: Art Licensing Myths continued (myth #7 to #12)" for additional myth comments.

Any suggests or comments that you would like to share about this article would be greatly appreciated. Click on the comment section below.

Art Licensing: Do U.S. artists need a business license to license their art?

Questions often asked by United States artists entering the licensing industry is if they need to have a business license or a seller permit to be able to license their art? There are all types of business licenses/permits such as seller's permit, federal and state business licenses, and city/county business licenses. Each is for a particular purpose. Artists that ONLY license their art may not need a business license. It depends upon the city and state they live in. See below for discussions on the different ones.

• Seller's Permit
A seller's permit (resale certificate) is needed in most but not all states IF a person sells merchandize at retail (to consumers). The number on the permit issued is called a resale number. Artists who license their work to manufacturers are not selling merchandise at retail so they do not need a seller's permit.

And, whether artists who sell to consumers needs a seller's permit or not depends upon the state. Alaska, Delaware, Montana, New Hampshire, and Oregon do not collect sales tax so a seller's permit is not needed when artists sell their work to consumers in those states. To find out information about seller's permits in the different states, go to the U.S. Small Business Administration website. Hint: Artists are not listed as a business type so use General Licensing. And, to find out more about resale certificates, read "What is a Resale Certificate And Who Can Use One?"

– Internet stores
According to Nolo "Despite what you sometimes hear . . . some Internet sales are subject to sales tax, and even when a site doesn't collect sales tax, consumers are technically responsible for remitting any unpaid sales tax on online purchases directly to their state." Also, " If an online retailer has a physical presence in a particular state, such as a store, business office, or warehouse, it must collect sales tax from customers in that state. If a business does not have a physical presence in a state, it is not required to collect sales tax for sales into that state." For more information, read "Sales Tac on the Internet".

• Federal Business License
A person only needs a federal business license if their business is regulated by a federal agency such as alcoholic beverages, agriculture, aviation, etc as shown in "Federal Licenses & Permits". Since art is not regulated by a federal agency, a federal business license is not needed to license art. Note: Artists may be requested to supply their federal number to a licensee so that they can report the revenue the artist received to the federal and state tax boards. In that case, the federal number is the artist's social security number. 

NOTE: Artist Kiffanie Stahle shared the following information.
"One note on the federal tax ID number issue. Even sole proprietors can request a free employer identification number (federal tax ID number) from the IRS to give to licensees. Licensees will then use this number on your 1099s and the IRS will link it to your individual tax return. Thus keeping your SSN a little safer!  Here's the link to obtain an EIN: https://sa.www4.irs.gov/modiein/individual/index.jsp  "

• State Business License/Permits
Whether an artist needs a state business license or permit depends on the state she/he lives in. Some states require any business operating in the state to register for tax-specific licenses/permits whether based in a commercial location or out of the home. Other states may not require any license/permit. To find out what business licenses are required in your state, read "Find Business Licenses & permits".

– Business having employees
The requirements in operating a business with employees is more complicated because the owner probably will need to file for additional permits and file forms such as employer identification number, registration of employees, business income tax statements, etc. Also they must comply with laws on minimum wages, hours, working conditions, safety, discrimination, etc. To find out information about the requirements in different states when having employees, go to the U.S. Small Business Administration website.

– Limited Liability Company (LLC)
It is not required but some artists decide to form a limited liability company (LLC) to protect their personal finances if their art licensing business is sued for copyright infringement or breach of contract. To do so, it must be filed with the Secretary of State's Office in the state the business is operating in. If the business is a sole proprietorship, it does not need to be registered with the state. Note: Many states require a sole proprietor to use their own name for the business name unless they formally file another name as a trade name, or fictitious name. For more information, read "Register With State Agencies".

– Fictitious business name (doing business as = DBA)
Most states, but not all, require that the owner of a business register a fictitious business name. In some states the business name could be considered fictitious even if additional word (s) are added to a surname while other states do not consider it fictitious as long as the surname is in the business name. Filing a fictitious name often involves publishing in a general circulation newspaper the opening of the business with the fictitious name. Note: Unless the fictitious business name is filed, bank accounts with the fictitious business name cannot be opened. For more information, look at your states requirements on fictitious business names. For more information, read "Register Your Business Name".

• City/County Business License
Some counties and/or cities require any business operating within their limits to take out a business license even if the state does not necessitate one. The license usually requires a yearly flat fee or may depend upon the gross amount earned. If the business is home based, it may require a zoning variance with stipulations on not allowing customers to visit or employees to work on the premises. To find out information about city/county licenses in the different states, go to the U.S. Small Business Administration website.

• Reporting Income to IRS and State
For artists that have a thriving art licensing business, know that they need to report the income earned to the IRS. Also, they know to report income to their state unless they live in Alaska, Florida, Nevada, New Hampshire*, South Dakota, Tennessee*, Texas, Washington, Wyoming. But artists that have just started licensing their work may not be aware that ANY income earned no matter how little may need to be reported to the state and MUST be reported to the Internal Revenue Service (IRS). According to IRS "It is a common misconception that if a taxpayer does not receive a Form 1099-MISC or if the income is under $600 per payer, the income is not taxable. There is no minimum amount that a taxpayer may exclude from gross income. . . Taxpayers must report all income from any source and any country unless it is explicitly exempt under the U.S. tax code. There may be taxable income from certain transactions even if no money changes hands." For more information about reporting income to the IRS read, "Reporting Miscellaneous Income". And, read "States Without an Income Tax" for more information.

* Must pay interest and dividend income.

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).

Art Licensing Editorial: The Truth About Art Licensing Agencies

WARNING! This is not an upbeat article and is depressing because the art licensing industry is like other industries where people sometimes take advantage of others. The purpose of this article is to warn artists that they need to make sure that they are signing a fair contract or at least know the repercussions in signing an unfair one when they agree to have an art licensing agency represent them.

The truth about art licensing agencies is that there are MANY agencies that are honest, professional, have a fair artist/agency agreement (contract)* and work hard to represent their artists. BUT, there are SOME that are unethical, and/or are not professional in dealing with their artists, and/or have unfair contracts, and/or have poor business practices. Sounds alarming, huh? Well, it is! And, that is why an artist needs to do her/his homework before signing with an art licensing agency. Read the following so that you do not make a bad decision and sign a contract that negatively impacts your income and even worse allows an agency to have control of all your art so that you lose your rights to it.

In the fifteen or so years that I have been in the art licensing industry, I have heard many complaints and some horror stories from artists about the agencies that represent them. Unfortunately, those artists with the horror stores were so pleased that an agency wanted to represent them that they did not read the contract closely enough, understand all the terms, or realize that some terms that should be in the contract were missing. The artist’s big mistake was not to acquire information about the agency's reputation and business practices by asking other artists and not having an attorney that is an expert on art licensing contracts look the contract over before the artist signed it.

* The artist/agency agreement is a contract and is referred to as a contract or artist/agency contract in this article.

Common Artist Complaints about Agents
Most of the complaints I've heard about agencies are not as drastic as unethical agencies and unfair clauses in the artist/agency contract but about the lack of communication between the agent and artist, poor business practices, not getting enough or any licensing contracts with manufacturers, and not receiving enough money from the contracts. Some of these complaints were because the artist had unrealistic expectations such as earning a lot of money from each licensee contract. Read below for more information about agency complaints.

• Lack of communication
Lack of communication and not being on the "same wavelength" between persons is a common human foible. It often results in frustration and may be intolerable when working together. Some artists want to be in constant communication with their agent and feel adrift and slighted if the agent does not immediately answer their questions or respond when new art is sent. Other artists realize that agents are busy and will respond as soon as they have time and are not upset when they do not get a quick response. Although, it does not go over very well if the agent does not respond at all. No one like their emails or art to "drop into a black hole" and not know if the agent received it. Note: Some artists find that if they phone the agent they will get a faster response than if they email her/him. Agents may not have the time in their busy day to sit down and write an email but find the time to chat if their artists phone them.

Some artists expect agents to provide art direction, to send them the latest in art trends, and give feedback from the licensee when art is submitted. Or, there are personality clashes where communication between the artist and agent does not work because they are not on the same wavelength. Not all agencies provide art direction and some depends on the artist to keep up with trends. That is why it is important for the artist to talk with the agent before signing with the agency to see if there are any communication problems, if the agency provide the services the artist expects, and how the agent envisions the artists work will be used on products.

Artist Jill Meyer describes the process she went through in selecting an agency in her very informative article "Finding a New Agent." An important part of Jill's process in selecting an agency was talking and asking lots of questions of the agent before considering hiring the agency to represent her. Also important was talking to other artists about the agency and having an attorney familiar with art licensing agree that the artist/agent contract was fair.

• Poor Business Practices
SOME agencies do not have the best business practices. They are negligent in submitting art, do not make adequate follow-ups, do not keep track of art already submitted or licensed to manufacturers, and do not respond to emails from licensees or send signed contracts back to them in a timely manner. Any of these will damage the creditability of the agency. The following are some complaints I have heard from other artists and licensees.

1. Poor method in tracking art
– Some agencies do not keep track of the art they submit to licensees and thus submit the same art time and time again. Licensees are looking for new art; not art that they already have seen.

– Some agencies book keeping abilities are not very good and they do not keep track of the art that have already been licensed. Thus, they are at risk in licensing the same art for the same product to different licensees and breaching the terms of the contract granted to the first licensee.

2. Poor response to queries and return of contracts
Some agencies do not reply to licensee emails or return signed contracts in a timely manner. Art directors appreciate quick responses and it shows that the agent is professional which helps in promoting future business. Also, a slow reply to a query can mean missed opportunities to license and promote art.

3. Poor follow-up
– Some agencies do not follow-up frequently when licensees show interest in art and thus they may lose the opportunity to license it.

– Also, some are poor in following up when payment of licensing fees are late or contracts do not arrive when expected.

4. Poor method in submitting art
Some agencies submit their artist’s work to their entire client list in what I call a "shot gun method" in the hopes the licensee will be interested in some of them. Instead they should be submitting only the appropriate art for each manufacturer. Licensees do not appreciate getting a ton of art that is not suitable to be put on their products and will eventually not open emails from agencies that submit art that way.

• Not enough deals or pay enough
Artists may not get licensing contracts because the agency does not have a list of licensees that is suitable for the artists work. Of course, the agency should never have signed the artist for representation if they did not think they could license her/his work. Or, it could be due to the impact on the licensing industry with the change in consumer spending and also the increase in competition of artists vying for licensing deals. The change in consumer spending has drastically changed the way retailers sell products. Retailers now order lesser products from manufacturers and the shelf life is shorter. Thus, licensing revenue per image is less than it was before the recession struck in 2008. Consequently it is not the fault of the agency to now get fewer and not as lucrative licensing deals for their artists.

Artists and art licensing agencies are struggling to get contracts and bring in revenue. In the article "You Are Not Going to Make It in Art Licensing" art licensing agent Jim Marcotte of Two Town Studios wrote, "Art licensing today is an industry in search of a workable model. The scramble is on - agents and artists who used to make their money by licensing art are now finding ways to collect from (mostly newbie) artists in ways that run the gamut from coaching to holding contests. Some agencies are accumulating artists, hoping that more people earning less money can make up for the reduced sku counts and short market runs. Branding agencies are taking on artists and art agencies are promoting brands, and both are consulting for manufacturers who are buying art worldwide and licensing art only when they have to. It’s a wild time in the biz." Jim's article is a very "tough pill to swallow" but his aim is not to discourage artists so they quit trying to license their art but to energize them by trying new ways to license it. To get Jim’s perceptive on licensing art in today's market, read his article.

Note: I recommend that you read Belgium surface designer Ine Beerten's article "The Big Contest Dilemma" if you are interested in entering a design contest. Ine wrote a really thought-provoking article about contests. She ended her post with "So what do I hope you take away from this post? I hope you think careful when you enter a contest next time, think whether it’s just an easy way for the company to get free artwork and cheap marketing and whether the prizes are truly fair, or if you can really gain something that is actually worth something to you. By entering these bad contests you only help them devaluating your own and other artists’ work!"

Artist/ Agent Contracts
In "16 Art Licensing Agent Agreement Essentials" by licensing consultant J'net Smith, she states that "It’s easy to get excited about the prospect of finally signing with an agent and forget to make sure that the contract is not only fair to both of you, but includes everything you need. . . Don’t accept the first contract you are given without understanding all the obligations and ramifications of each clause. It may be your first and the most important contract you will ever sign."

Artists may interpret the terminology and meaning of legal terms or poorly written clauses in a contract incorrectly. And, if clauses that should be in the contract are missing such as the date and terms specifying termination, the artist may be obligated that the agency continues to represent her/him forever. That is why it is recommended that an attorney experienced in art licensed legislation look over the contract before the artist signs it. It is less expensive to pay an attorney to make sure the contract is fair to the artist than to pay him/her to try to free the artist from a bad contract even if it is possible.

• Unethical business practices and contract terms
What I deem unethical is when an agency does not pay monies due to artists for licensing their art or taking advantage of artists by having clauses in their artist/agency contract that takes control of the artists work and denies the artist usage of their own work.

Several years ago two artists told me that their agencies were not paying them revenue for their art being licensed. Their agents insisted that the art had not been licensed and yet the artists saw their art on products in stores. In one case, the artist was able to get monies owed by hiring an attorney. In the other case, the artist found out that her copyright was infringed upon and the art was illegally used. It is important that artists be constantly looking for their art on products in stores and on the Internet. And, getting their friends to help. That may be the only way that an artist finds out that their copyright has been infringed upon.

In the article "Hot Words to look out for in contracts" art licensing agent Lance Klass of Porterfield's Fine Art Licensing discusses the word "assign" and the consequence when used in any art/agency or licensee contract. He wrote ". . . when you see the hot word "assignment", make certain that you're not assigning the copyright or all reproduction rights to your artwork as a part of the agreement. If you do, it's lost to you forever. Other people will control the reproduction rights to your art, and you'll actually have to ask their permission to reproduce the art that you created."

Lance relates a couple of horror stories that artists endured by signing bad contracts in his article "How to Avoid the Most Common Mistakes in Licensing Your Art". In one example, Lance said ". . . This agency, which just happened to be owned and operated by the same people who owned and operated the publishing company, gave itself the exclusive right to publish any or all of the artist's work for the next five years and to sublicense his art to anyone they wished, whenever they wished". He stated, "If there's any one piece of advice I could give an artist about to enter a legal agreement, it is to read every single line in the contract and make sure that you totally understand it. I know that isn't easy for most people, but don't get in the water if you don't want to get wet. If you find that there are sections or sentences that aren't written clearly, don't say what you want, take away a bit more of your rights than you feel you want to give, or if any of it seems confusing or contradictory, have the company rewrite it in plain English. . . . But don't let this stop you from promoting your art for license. Most companies are quite reputable and many contracts are completely understandable by the average human. Just make sure you read every word, and know what it means".

• Unfair contract terms and business practices
Not all agencies have unfair terms in their art/agency contracts but some do. Terms that seem unfair to artists are usually in the contract because of the way the agent decides to operate the agency. For instance, a clause in the contract may state that the agent will make all decisions in licensing the art. That means that the artist has no say-so in what company manufacturers her/his art, will not have the opportunity to approve or not approve the licensee contract or even see it, and cannot approve the amount of royalties or flat licensing fee that will be paid for the use of the art. That is unfair to the artist. But, the artist may trust the agent to do a good job and is willing to sign the contract because she/he wishes to be represented by the agency. What is NOT acceptable is if the artist is blindsided and not aware that the terminology in the clause gives the agency that right. And, that is the reason why an art licensing attorney should be hired to point out unfair terms in the contract before it is signed. Note: Yes, there are agencies that have that clause in their contract.

Below are more contract terms and business practices (may not be in the contract) that may be construed as unfair to artists.

1. Artists do not get to see licensee contracts
A variation on the above unfair term is that an artist does not see the licensee contract but gets to approve or not approve the contract. The agent sends a form to the artist with the basic terms of the deal so that the artist can sign it for approval. Just like the above term, the artist must trust the agent that she/he makes sure that the clauses in the licensee contract is fair.

2. Agencies continues to receive commission after termination
Most agree that the termination clause is the most important clause in the artist/agency contract. In his article "The Artist – Agent Relationship" art licensing attorney Joshua Kaufman states, "The greatest issue of tension and dispute between artists and their agents surround post-termination issues. . . . The issue of how long an agent is entitled to keep receiving its commission after the contracts terminates, is one that is strongly negotiated. Agents of course, wish to be compensated for not only the full term of their contract but for the term of the licensing agreement and of all extensions and renewals. The artist wants to limit the payment to the agent after their contract expires. Agents believe that they secured the contract, they work long and hard, had to wait for their money and should be entitled to their receipts throughout the term of the contract. " Note: Most contracts do give the agency the right to continue receiving commissions from the contracts they obtained for the artist until the contract expires and no renewals are requested by the licensee.

3. Agencies continues to represent the artist after termination
Some agencies have clauses in their contract that allows them to continue representing the artist after the termination of the contract. The representation is for an additional several years after termination and is limited to those licensees that the agency obtained contracts for the artist's work during the term of the contract. There are questions on the legality of this clause according to attorney Joshua Kaufman in his article "The Artist - Agent Relationship". He states "One finds in many agreements prohibitions against dealings by an artist, post termination, with the agent’s clients. First of all there is a question (which depends on which state law applies) whether those clauses are enforceable and to what extent. . . If the agent’s client list is very large, and there is a blanket restriction against dealing with the agent’s clients, and this precluded the artist from doing business or greatly hampered their ability, many states will disallow the restriction."

4. Do not allow any interaction between the artist and licensee
There may not be a clause in the artist/agency contract but some agencies do not allow their artists to interact with licensee art directors. All licensee requests for high-resolution art are sent to the agent who forwards it to the art director. And, all requests for editing of the art go through the agent. This is awkward and frustrating to the artist. It is much easier and faster for the artist to make art changes if she/he works directly with the art director.

5. Artists do not get to approve samples
Not all licensing contracts allow the approval of art on the products before they are manufactured. But if it is in the licensee contract, the agent normally approves the samples and not the artist. That restriction may not be in the artist/agency contract but because of licensee time restrictions it is not usually possible for the agent to ship the sample to the artist for approval.

6. Artists are required to pay part of booth and marketing expenses of the agency
Many agencies do not require artists to pay any of the agency expenses. But, if they do required their artists to help with trade show and other agency expenses it should be clearly spelled out in the artist/agent contract according to art licensing consultant J'net Smith in "16 Art Licensing Agent Agreement Essentials".

Summary
There are many good art licensing agencies. But, do not get blindsided and sign a bad contract. Do your homework and ask agents for recommendations of artists in their agency to talk to and/or look at agency websites for the artists the agencies represent. Select a few artists and find out their contact information from their own website, Facebook or LinkedIn. Either phone or email them to ask questions about the agency. Make sure that you fully understand all the terms in the artist/agency contract. And better yet, hire an attorney that knows the ins-and-outs of art licensing to look over the contract and point out any unfair clauses before you sign it.

For a list of agencies, read "List of Over 50 U.S. Art Licensing Agencies". But, you need to research the agencies yourself because I am not familiar with all of them or their artist/agency agreements (contracts).

Resources:
The above post mentions quotes from the following articles. I recommend that you read these articles because they contain a lot of important information you should be aware of.

• "Finding a New Agent" by licensed artist Jill Meyer

• "You Are Not Going to Make It in Art Licensing" by art licensing agent Jim Marcotte of Two Town Studios

• "The Big Contest Dilemma" by Belgium surface designer Ine Beerten

• "16 Art Licensing Agent Agreement Essentials" by art licensing consultant J'net Smith

• "Hot Words to look out for in contracts" by art licensing agent Lance Klass of Porterfield's Fine Art Licensing

• "How to Avoid Mistakes in Licensing Your Art" by art licensing agent Lance Klass of Porterfield's Fine Art Licensing

• "The Artist – Agent Relationship" by attorney Joshua J. Kaufman

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