5 Reasons a Company Might Choose to License Art

License ArtI license my art and teach artists how licensing works and if they are interested, how to go about it. “Licensing” your art basically means you are granting the right to someone (a manufacturer) to use your art on something (their product) in exchange for royalties based on sales.

The beauty of this system is that you can license the same art to many different companies, as long as they are putting the art on different products. That allows you to earn income from several companies, over time, instead of getting one upfront amount for selling the art outright.

Licensing is one of three basic ways companies get art to put on their products. There is no ‘right’ or ‘wrong’ way – it all depends on the preference of the manufacturer. The three basic methods are:

  1. They have in-house designers who are paid a salary to design art for products.
  2. They buy art out-right.

    3. Many artists prefer to sell a piece of art upfront and let manufacturers do whatever they want with it. They usually get a physical, sometimes digital, piece of art and the manufacturer has to adapt it to their product. The artist cashes the check and starts a new piece of art.

  3. They license art.

In my opinion, licensing is a way for artists and manufacturers to share the risk and reward of the product. If the product does well, the artist stands to make a nice amount of money in royalties, but if it doesn’t their income can be low. With licensing there is also a delay between getting the deal and getting the cash. Sometimes that delay can be as long as 12-18 months. (This is why you should ask for an advance on royalties – but the decision to pay them or not is up to the individual manufacturer.)

Let’s look at the five reasons I think companies choose to license art:

  1. In-house designers cost money.

    2. The manufacturer has to pay the designer a salary, payroll taxes, benefits, vacation days, etc. No one person or small group of people can do all styles of art so they will be limited by the skill-sets of their designers.

  2. Buying art outright may be less expensive on the surface but there are hidden costs.

    3. The manufacturer has to have someone to manipulate the art, fit it to templates, adjust colors, etc. This is sometimes done by artists who license their art.

  3. There are no salary, benefits or vacation days to pay.

    4. Royalties are paid based on sales so the payments due will be based on the success of the product. If the product sells well, they pay you more. Not as well, they pay you less.

  4. Variety of Art

    5. Licensing allows a company to work with m

any different artists without having them on payroll. It is a cost-effective way to get a wide variety of styles and techniques.