There is no limit to the different ways your art images can be sold through licensing. The only limit is your imagination! Start by looking around at different uses of images on everyday objects. These include such items as the obvious: greeting cards, note cards, paper products (plates, napkins and cups), calendars, stationery and video games. And the not so obvious, such as kitchen décor, house wares, apparel, textiles, toys, beverage and food packaging are also opportunities to profit. Interior designers also work with licensed products using design, illustration and photography. One of my personal favorites is the use of beautiful nature photo images manufactured as floor tiles at a local art school where I teach.  

How do you know if you are ready to explore licensing? You are ready and marketable if you have imagination, technical skills, passion and persistence. In addition, product design capabilities, including the ability to translate 2-D illustrations to 3-D products, are in high demand.

For some expert advice, we talked with Jeanette Smith, owner of J’net Smith Marketing, Licensing & Publishing (www.jnetsmith.com). Jeanette has more than 20 years experience in the marketing and licensing industry. Her credits include building the DILBERT® brand from its infancy to a global corporate icon while Vice President of Licensing for United Media. She has represented, consulted and coached hundreds of licensed artists, including Tara Reed and Becky Denny. Her strategic marketing expertise has led to character development and branding projects for such clients as Father Flanagan’s Girls and Boys Town, America’s largest privately funded organization for severely at-risk children. Jeanette also lends her talents to the Animaticus Foundation, a non-profit organization, dedicated to the preservation, education and evolution of traditional 2D animation in a digital age.

Why look at licensing as a profit center?

Jeanette Smith: “Licensing is more important than ever to manufacturers, as it’s a key way to create a competitive advantage in the retail industry.  According to a recent study commission by the International Licensing Industry Merchandisers’ Association (LIMA), manufacturers paid $6.04 billion in licensing royalties in the U.S. in 2006 (up 1.5 percent from 2005). Most important to your readers is that the art licensing segment, while a small percentage of the overall licensing pie, had one of the largest growth rates in the industry.  Art licensing grew in 2006 at a rate of 4%, with an increase of $7 million to a total of $182 million in licensing royalties according to the LIMA’s 2007 Annual Industry Study conducted by Yale School of Management and Harvard Business School.  The term ‘art licensing’ includes all types of creative: from design and illustration to painting, photography and collage. “

What are some of the qualities or skills needed to be successful in licensing art?

Smith: “The number one quality is artistic and marketable talent, with an eye toward trends. Many manufacturers want something traditional, yet fresh, so they don’t do trendy or ahead of the curve but they do look for designs and art that are already ‘in trend’ will appeal to a very broad audience. 

Also, I always ask artists if they do holidays.  Remember that for many manufacturers and retailers, Christmas, followed by Halloween designs; far exceed sales of any other product lines. So if you do holidays, it’s a great way to get started in the licensing business because there is such a constant and high demand for new art and designs in these themes.

For some cutting-edge designers, their work is marketable but to such a small and sophisticated audience that most manufacturers may shy away.  But don’t be discouraged, if this is your artistic niche; take the time to explore alternative manufacturers who are the right fit for your style.”

Should artists try to get an agent for licensing sales?

Smith: “That’s a relatively complex decision with many variables.  It boils down to: your goals, the speed in which you want to accomplish those goals, your personal talent and skill sets and what you are willing to do to achieve those goals. 

Here are some important factors when considering a relationship with a licensing agent.    

• What is the cost?  It’s usually in the range of 40-50% of licensing royalties.
• What exactly does the agent do for that? For example, some agents include legal advice and others charge extra for it, and the same goes for trade shows and business travel.  Make sure your agreement is very specific.
• What’s the projected timeline for the agent to produce results?
• Where will they market your art? 
• How many artists do they represent?
• Do you trust them to handle your money and develop your business? 

How do you find an agent?

Smith: “Finding a really great agent is as difficult, if not more so, than licensing artwork directly to manufacturers.  I suggest that artists consider learning enough about licensing to do-it-yourself for the first deal.  I know representing yourself won’t be for everyone, but it’s a great way to learn about the industry, the process and what it really takes to get a licensing agreement. Having done so, you will be better prepared to find an agent, as well as being a more appealing prospective client to licensing agents. The licensing industry is somewhat veiled and difficult to get concise answers without some insider knowledge and assistance but you can do it yourself. Today there are more and more artists who want to market and license their artwork to control their business success.  This is a growing trend as more and more professional creators, artists, illustrators, photographers and graphic designers develop marketing-savvy.”

How do you make money in licensing?

Smith: “Licensing specifically means ‘permission to act’ and, in this case, being paid for the use of your copyrighted or trademarked artwork for use with products or services.  The typical licensing payment model is based on royalties, which are computed on the manufacturer’s net wholesale cost.  Some manufacturers offer a flat fee, as a way to keep their costs down.  I recommend artists consider this for their first deal or two, but not to accept this as a standard licensing model, because it’s not.

Many manufacturers will offer some form of advance payment, which is technically an advance against the royalties that will be paid according to the agreement terms. The artist, in legal and industry terms called the licensor, is accepting an advance that then must be earned through sales of the product.  The licensor won’t receive any further royalties until enough products have sold to generate enough royalty income to cover that advance amount. When sales produce the first dollar, after the initial dollar amount provided in the advance, then the licensor will begin getting paid royalties based on the schedule indicated in their agreement, which is usually semi-annually or quarterly.”

Regarding marketing tactics, how do artists market themselves and whom do they promote to?

Smith: “I recommend sales and presentation materials which can be sent via email.  While some may get caught in a spam-filter, artists will know that their intended audience didn’t receive the email when they follow up with a phone call.  One can always resend the material or mail hard copies, if the clients prefer.  Artists will save time and money if they do it this way. 

When preparing a target list of clients, be sure to review their web sites carefully.  Many manufacturers and publishers are putting instructions on their web site for licensing submissions.  If a client requests a printed presentation or has other specifications, by all means follow their wishes. 

The contact person varies with every company. Ask for the name of the Licensing Director. If they don’t have one, which is quite common, ask for the marketing, product development or creative executive in charge of making licensing decisions. There is no substitute for calling to get the information. 

A consistent approach to self-promotion is important for this business.  Send newsworthy press releases with photographs to the trade magazines and newsletters in the product categories you have targeted, such as giftware or stationery, as well as the licensing industry itself.”

In Conclusion

Should you add licensing sales to your business? Is selling reproductions of your work the right thing for you?  Would you like to add another profit center to your business? As a creative professional, cast your eyes ahead for sales opportunities. Licensing your art could be one of these chances. Start by looking around you and really seeing these opportunities. The world (both print and virtual) is overflowing with manufacturers and publishers that require design and art for their products. The key point is to find a specific image or style with a very broad range of applications. Your work can be licensed for a tremendous diversity of usages. To succeed, you will need to find your niche, plan your research and above all – be persistent.