An Emergency E-mail arrived and I know that a lot of artists find themselves in this position at sometime or another:
“I found your blog a month ago and have been reading it religiously. You give such great information! But now I have an EMERGENCY:
I have a friend that has created some characters. She had an interview at a collectible/toy company. She showed her characters and they loved them and want to sell them.
The problem is my friend doesn’t have a head for business. The company wants to pay her a flat fee for a line of these characters. I’m not even sure if they’ve talked about her retaining the rights to her work. This company licenses many other big name properties like Star Wars and Avatar.”
First things first: The company doesn’t decide how it’s going to work with your copyrights. The artist does. In a licensing deal, the artist ALWAYS retains rights to the copyrights.
And in my personal opinion, an artist should NEVER, EVER, EVER sign away their copyrights. NEVER.
But that’s another blog post. I’ll stay focused on the immediate need here.
It’s good news that the company is accustomed to licensing from other entities. This means that they understand how licensing works. Companies that understand how licensing works are easier to deal with, because they know that they are expected to pay an advance up front, royalties later, and that the artist retains all rights. This is good.
Here’s what your friend needs to do, in this order.
Forget that you don’t have a business head. It doesn’t matter. There are certain ways that things are done, and all you have to do is follow the steps. I’m giving the steps below. If you follow them, you’ll do just fine on your own, business head or not.
Educate yourself on how licensing works. I recommend the book called Licensing Art & Design which is listed here on one of my posts: https://mariabrophy.com/business-of-art/five-must-read-books-for-artists-looking-to-uplevel-their-career.html
Order that book immediately and start reading. You can also read some tips on licensing that I’ve written:
LICENSING YOUR ART TO A SKATEBOARD CO. OR ANY COMPANY
WORK SMARTER NOT HARDER – LICENSING 101
FILE YOUR COPYRIGHTS: Be sure that you have filed copyrights. TODAY. It’s your duty to yourself and your licensees to have all of your works copyrighted. Do that right away, if not already done. You can go to www.copyright.gov. It’s cheap and it’s easy. Just follow the directions.
DEALING WITH THE COMPANY (LICENSEE): First, ask the company the following:
- How many of the Licensed Articles (the product) do they plan to produce? (They should have a ballpark idea of how many they’ll produce)
- Where will they plan to sell them?
- What will be the retail price and the wholesale price?
- Ask them to submit a deal memo, which will detail the advance and royalties that they propose to pay, and for how many years they are asking for the license, etc.
In the licensing world, Deal Memos are always used in the beginning of a licensing discussion. It’s what you use to make sure that you are all on the same page before you go to the contract phase of the deal.
Review their deal memo and see what you agree to and what you don’t agree to. And then e-mail them back letting them know what changes you’d like to make to the deal. There will be a little going back and forth, which is completely common.
IF THEY WANT TO PAY A FLAT FEE: If they are offering a one-time fee that you are happy with, that’s okay too. But they should pay the fee up front, not later. Also, be sure that your licensing agreement states the number of years that they are allowed to produce it, and that you retain all rights. There are about 50 other little details that the agreement should touch on, and a good art licensing attorney will help you with that.
IMPORTANT: If it’s a royalty arrangement, always get an advance of royalties up front. The amount varies depending on how many of the product will be produced. We always ask for a minimum of $5,000, which is payable at signing. This way, our attorneys’ fees are covered as well as our time.
NOTE: It’s also vital to have an agreement in place BEFORE giving over any artwork. Even for sampling. Don’t give any artwork until you have a written agreement.
Once you agree on the deal, have an attorney put together a license agreement for you. I use an attorney that specializes in Art Licensing.
DO NOT USE A GENERAL ATTORNEY. Or your uncle Joe who does divorces. Art licensing is very specific, and general attorneys know NOTHING about it. Trust me on this.
One of the biggest mistakes artists make is the reluctance to pay for an attorney. It’s vital to have representation. I don’t care if you can’t afford it. Borrow the money. Otherwise, you’ll be whining later that you got screwed over or that things didn’t go the way you thought it would. And I won’t feel sorry for you. If you’re not willing to play the game right, then go get a job where you’re safe and don’t have to take any risks. (Drives me insane to hear people complain that they got into a bad deal, then to admit they didn’t use an attorney.)
Once your license agreement is drawn up, send it to the company. They may make changes to it, and if so, you’ll have to have your attorney go over their changes and let you know if they recommend your agreement.
Sometimes you’ll get lucky and a licensee won’t make any changes, they’ll just sign it. I love when that happens!
Be sure to include in your agreement that you get a dozen samples of each Licensed Article. Also be sure to require your name and/or logo or signature (whatever you use to identify yourself) is marked clearly on the Licensed Articles.
And be sure to write into me any other questions that you have!
Happy Licensing – Maria xxoo
