Discover the essentials of how to license your art and unlock new income streams. From rugs to puzzles and beyond, learn how artists turn their creative designs into lucrative licensing deals, boosting their visibility and revenue while keeping artistic integrity intact.
License to Succeed
By Daniel Grant
author of The Business of Being an Artist
You probably don’t associate Albert Paley with designer rugs, and for good reason: he’s a sculptor, known primarily for outdoor installations in public settings.
So why are we talking about rugs?
“A local Iranian rug dealer, Reza Sattari, whom I have known for 20 years and who has always liked my work and design sensibility, suggested translating some of my designs into rugs,” Paley says. “I have a huge inventory of monotypes, and I was intrigued by the idea of taking a flat image and turning it into something that you touch.”
Paley’s arrangement with Sattari, owner of Oriental Rug Mart in Victor, New York, is a licensing deal — and it’s not unique among gallery-oriented artists interested in adding a revenue stream to their art income. Designs by Chuck Close, Alex Katz, and Kiki Smith are also available in limited-edition tapestries produced on a computerized loom in Belgium, and Kehinde Wiley recently signed an agreement with a Los Angeles-based licensing agency for the use of his painted images on products yet to be determined.
A MULTI-BILLION-DOLLAR BUSINESS
The range of products on which an artistic image can be reproduced is enormous. “My artwork has been licensed out for many products,” says Tucson, Arizona, painter Jenny Newland, “including limited-edition plates by Bradford Exchange, puzzles by MasterPieces, greeting cards by Leanin’ Tree, fabrics by David Textiles, tapestry throw rugs and pillows, Advent calendars, walking canes, coasters, sublimation flags, music boxes, canvas prints by AllPosters.com and iCanvas, wall mural prints, keys by Howard Keys, cross stitch by Mystic Stitch, as well as a movie promo by Columbia Pictures in a Spiderman film.” (There’s more, but you get the point.)
Licensing of one thing or another is a huge global industry, producing $275.9 billion in sales of products and services in 2021. The majority of licenses are for cartoons, brands, motion pictures, and characters, but “licensing art images is the fastest-growing area in the licensing industry,” says Charles Riotto, executive director of the New York-based Licensing Industry Merchandisers Association.
Back in the 1990s, at LIMA’s annual trade show, which takes place in June in New York City, there were just a handful of licensing agents who handled artwork, he notes. By 2000, there were approximately 100 art-oriented agents, and currently there are more than 200. “Licensees — manufacturers — like the idea of licensing a design because it’s less expensive than a celebrity’s image. And a design won’t end up in the newspapers for getting arrested after a fight in a bar.”
Certainly, no fine artist begins a career with the thought, “Gee, I’d like to see my work on a throw rug or plate.” The idea that one’s artwork might have other uses than sitting on a pedestal or hanging on a wall somewhere comes later and requires a certain tolerance and maturity on the part of the artist.
Newland notes, “I did have some initial trepidation about licensing my work. I had many questions about my rights to keep my original paintings, where my art would be sold, would I be involved in every decision concerning my artwork, and how we would split the money.” Selling her work at art fairs and galleries in and around Pasadena was Newland’s primary goal as a fine artist, but raising children started to take up much of her time and energy, and “the revenue from my paintings was far from affording life in California.” So she began to look around. Ultimately, she made a deal with Jack Appelman, chief executive officer of the Manchester, Vermont-based company Art Licensing.
“I’m always on the lookout for artists who can do what our clients are looking for,” Appelman says, adding that his roster of artists (primarily painters, photographers, and sculptors) averages 700 at any one time. These manufacturing clients have a wide assortment of products requiring artistic imagery, including stationery, greeting cards, jigsaw puzzles, posters, figurines, and Christmas tree ornaments. “There are more than 800 different products we put images on.”
THE ICING ON THE CAKE
Most of the artists with whom Art Licensing works do not rely on licensing as a primary source of income, but rather as supplemental earnings. Appelman says 80 percent of them earn less than $2,000 per year, with a few earning up to $250,000 annually. He adds that, for most artists, money doesn’t start coming in right away because of a sometimes-lengthy production process on the manufacturer’s part and the need for sales to generate royalties.
It isn’t surprising that Newland had some initial apprehension about having her work reproduced on household products. Many artists have the same worries. “I don’t think I would want my images to be reproduced on cheap products, like T-shirts,” says Susan Rios of Glendale, California, another of Art Licensing’s stable of artists. Abraham Hunter, a painter in Gatlinburg, Tennessee, agrees that he wouldn’t want his artwork to be part of something seen as cheap and disposable such as “shower curtains or paper plates.” He says, “You want to do justice to the quality of your art. On the other hand, a ceramic plate is something you keep and has value to it.”
Hunter, who works with Hopkins, Minnesota-based MHS Licensing, notes that he has rejected certain licensing opportunities based on the type of product or the poor reproduction of his imagery, and that veto power is part of his contractual agreement with MHS.
As for both Rios and Newland, Hunter’s earnings from licensing images are more supplemental than principal. “It’s like the icing on the cake, not so much the cake,” he says, adding that sales of originals generate the majority of his income. An unexpected benefit of licensing, however, is that some of the buyers of his originals first purchased the same or similar images on products. “The audience of people who see the products is so much larger than the number of people who walk into an art gallery, and some of those people look me up,” finding him on Facebook or by coming to gallery openings.
Marty Segelbaum, president and founder of MHS Licensing, says his arrangements with the 30 or so artists he represents involve only the limited use of images, and artists retain the copyright as well as the originals. “We don’t deal with originals, and we’re happy if the artists can sell them,” he says.
Occasionally, an artist works directly with manufacturers to create products with his or her images on them. The website of Mort Kunstler, a painter of historical scenes who lives in Oyster Bay, New York, offers calendars, jigsaw puzzles, Christmas tree ornaments, coasters, and other products that feature his images in addition to the more expensive prints (offset and digital), books, and paintings. The products promote Kunstler’s name and work, according to Susan Kunstler, the artist’s daughter and manager of the licensing wing, Kunstler Enterprises, Ltd. “Licensing has been a substantial part of our business model,” she says.
Kunstler only licenses his images and takes no part in producing or marketing the items, other than making a certain number of them available through his website. There are many more products for which he has licensed images that the website does not carry, so as not to overcrowd it with such things. By volume, his largest-selling merchandise item is a calendar, of which approximately 100,000 copies are sold annually, and his largest source of income is the sale of limited-edition prints, which are sold principally through his website (original paintings come next, followed by books and then licenses). Like Hunter, Kunstler states that licensing art images makes them “available to everyone and gives us some income.” He says, “I’m proud of my work. If someone buys a keychain or a magnet with my work on it, maybe someday that person will decide to buy a limited-edition print or even an original.”
In truth, for Kunstler and probably many artists, the cost of their originals limits the likelihood that a large number of collectors will move up the ladder from coffee mugs to paintings and limited-edition prints, regardless of how widely the products spread these artists’ brands. Segelbaum says, “It used to be thought that having your work spread around on prints and products would dilute the value of originals, but actually people who buy the painting may buy the coffee mug with the same image because it’s a fun thing to have, more often than someone who buys a mug going out and buying the painting.”
A generation ago, he says, many artists whose work he thought would be appropriate for manufacturers’ products were worried that licensing meant selling out or making themselves seem overly commercial. However, in the past 15 to 20 years, and especially since the 2008 recession, there has been a shift in that sort of thinking. “Now artists say, ‘I can make money doing what?’”
Understanding Licensing Terms
Among the key elements of a licensing contract are:
• Rights (what is granted to the licensee): The art, referred to as “property,” will be defined as a particular image or a collection (for instance, 12 images for a calendar). The products (such as a poster, jigsaw puzzle, T-shirt) on which the images will be used should also be specifically identified; an artist’s work should not be used on a variety of products if only T-shirts were agreed upon. The term of the license should also be indicated, limiting the licensee’s use of the imagery to a specified period of time, after which the art may be licensed to other manufacturers and other products.
• Territory (where the products with the licensed imagery will be sold): An artist may license the use of imagery for one or more products to be sold in the United States, but license the same imagery for other products elsewhere in the world.
• Distribution channels (in what markets the products will be sold): Products may be sold through mail order, at department or discount stores, at gift shops, and at high-end stores. This matters, since artists may or may not want their names associated with a particular marketplace. For example, artists with a prestigious gallery may not want their work sold at Walmart. Artists may also license images for products sold through one distribution channel, while another licensee sells products through a different one.
• Royalties (payment): Licensing royalties are customarily between 5 and 10 percent of the “net sales” or wholesale selling price of the item, which is evenly split between the artist and agent (the division may be 60-40 in favor of the artist when the artist is well-known). The contract should not only indicate the percentage but define the term “net sales” so the licensee cannot take deductions that lessen the actual royalty. There is usually an advance against royalties paid to the artist by the licensee, which ensures that an artist needn’t wait until the items sell before receiving any remuneration. There may also be a guaranteed royalty, stipulating that over a specified period of time, the artist will receive a certain amount of money.
The artist may be paid monthly, quarterly, semi-annually, or annually; the terms need to be written out, and agreed to, in a contract. There may also be a royalty audit clause, permitting the artist or someone assigned by the artist to audit the manufacturer to ensure the artist was properly remunerated. Some contracts also describe penalties if the correct royalties are not paid.
• Approval (of the final product): The artist may request layouts, pre-product samples, or a copy of the actual object to evaluate.
• Marketing date (when the product is introduced into the market): The date for release at a trade show, for instance, should be agreed upon as well as the date when it will be shipped to retailers.
This article is sponsored by ArtMarketing.com and the Art Marketing Minute Podcast with Eric Rhoads.
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