Licensing dollars: this $70 billion industry is providing effective options for artists wanting to grow their name recognition, as well as their income
Licensed merchandise in the U.S. and Canada–think clothing, posters, giftware, home furnishings and a seemingly endless sea of consumer products–represents an approximate $70.5 billion market. Of that, art licensed products account for about 9 percent of the total, or $6 billion, according to The Licensing Letter, a New York-based publication.
More than 200 of these artists will be found June 21-23 at The Jacob K. Javits Convention Center, site of the 25th L!CENSING 2005 International show, where painters, designers, photographers and illustrators will showcase their designs in the first-ever Art and Design Licensing Gallery.
According to Elizabeth Waiksnis, show director for Advanstar Communications, the show’s producer, the art and design category has become one of the fastest-growing segments in the industry.
And while anyone can license their art, it is important to have an understanding of the process before making the leap. As with any industry, there are many variables. With an assist from some song titles, let’s look at the basics.
1. What’s It All About …?
Licensing is probably the best way for an artist to increase name recognition and income. The technical answer to the question posed by the song title (above) is an agreement between parties to produce artwork on products that will be sold to consumers. To this day, I meet artists who look at me with a blank stare when I say I am a licensing agent. I am not issuing license plates at the local D.M.V. So, how does the art make its way to product?
Most artists utilize the services of an agent. Licensing is a fulltime job. It is unlikely that an artist will have any time to paint if he tries to handle the licensing on his own. An agent will be able to navigate the journey from art to product and should bring a thorough understanding of how the industry works, stellar contacts and knowledge of the legalities involved in a license. Agents monitor all financial aspects of the agreement, as well as the troubleshooting. The standard split in the industry is 50/50. The agent is not paid until a license comes about and may be working for a year before a deal comes to fruition. It is important for the artist to understand that there is no magic wand that the agent waves to bring in a license. To be sure, the work is hard and the competition fierce. There must be a written agreement between the parties that clearly spells out the terms. Some agents work on a 75/25 split, with 75 percent going to the agent. If less than 50 percent is offered to an agent, it is usually with the proviso of a retainer being paid to cover the agent’s expenses. Publishers without an in-house licensing department should expect to pay an agent a fee for their services, along with a small percentage of any licenses they bring to the table.
3. Every Picture Tells a Story
Being a great artist is not enough. It isn’t even necessary. Some of the most successful licensed artists may not be considered the most technically proficient. But what is important is the ability to “see” their work on products in a realistic way. Important questions to ask include: Does the artwork translate to product? Is it within current design specs? Artists may create imagery that is extraordinary, but that does not mean it will translate to product.
As Lyndsey Fischer of Indianapolis-based Hindostone Products, Inc., puts it, “An artist that is flexible in regards to manipulating the artwork to fit the product is wonderful to work with.” Some artists are willing and able to create roughs or prototypes to illustrate to a licensee just how well their work would suit products. Images presented as a series are appreciated. It is necessary to have a body of work to offer, while continuing to produce new and fresh images.
4. Same Old Song and Dance
Those who lived in a cave the past year may have missed it, but most people have probably seen these on hundreds of products: martinis, girlfriends, fashion, wine, tropical scenes and chef images. Once a “trend” is in play, every manufacturer wants to offer their version to retailers. It is important for their bottom lines to do so and for artists to produce the designs that are in demand. Of course not every consumer will buy what is “trendy,” but it is important for a manufacturer to offer a selection of both staple and trendy designs in each line.
Hindostone Products’ Lyndsey Fischer offers this take on the situation: “The tropical theme will always be popular and is a staple in our line. It appeals to consumers who live in coastal areas, as well as people who vacation in them. Coffee and martini themes may not be around as long, or be as strong, as tropical.”
And when it comes to art images that have been featured on products for decades, such as Adirondack chairs with tropical drinks and umbrellas, the challenge is to put a new “spin” on an old subject, perhaps with hot, trendy colors. Among manufacturers, the staple designs most requested year after year are floral, fruit, tropical, herb, wine/vineyards and roosters, along with cats, dogs, and Christmas scenes. It’s all about the image, and not the medium. Whether it’s oil, acrylic, crayon, watercolor or pastels, people buy the image.
Judith Lynn, a former New York City Opera star, agrees. New to the licensing market, Lynn has combined her love and passion for music with her love of fine art to create unique imagery. Many of her images incorporate musical notes with traditional floral designs, such as “Tulip Tune.” As Lynn says, “I take my inspiration from the beauty of the two things I love most in this world–nature and music. Music swirls and whirls like the changing waves on the water. It renews itself and is never the same.”
Publishers of posters and limited edition prints have a bit more leeway in choosing art that is more varied and can include subjects that may not be in great demand for licensed products. Still, classic images are always at the core for publishers of wall art. As Meghan Faulkner of Emeryville, CA-based Editions Limited says, “Staples, like black and white florals–Sondra Wampler’s work, for example–are always popular, regardless of the current trends. Wampler’s work is timeless and therefore is above fashion trends in the market.”
So, which comes first–the wall art or the product? Faulkner answers, “We certainly visit retail stores frequently and note art, as well as accessories. Furniture and accessory trends are very important; they point to future trends in the art world.”
Royalties vary by product, but range from 3 to 10 percent, with home decor at the low end of the royalty range, and prints and posters at the high end. Obviously, an artist with proven name recognition and consumer acceptance is going to generate more sales and may be able to command a higher royalty. Royalties are paid on a quarterly basis.
An advance and guarantee may be part of the license. When offered, an advance can vary from $50 to $2,500 per image, depending on the product, and a guarantee can be from $5,000 on up, depending on the extent of the product line. This agreement is beneficial for the artist whose work might not sell, but who would still be compensated for the time their imagery was tied up by the licensee.
An artist will earn from zero to $1 million or more in a year. There is no way to predict exactly how much an artist will generate in a given year. If an agent does offer such a prediction, then the artist should be suspicious. Even if all indicators point to a successful license, it is possible it will fall flat. Most companies will have an internal number of minimum sales they must meet in order to keep a design in the line. If the number is not met, the design or designs are deleted.
6. Fame, I’m Gonna Live Forever (or not)
Many licensees conduct product testing in order to assess just how popular a license will be before entering into an agreement with an artist. “We occasionally test market the designs in which we are investing quite a bit of time and money,” says Fischer. “Even though there may be trends out there to support the artwork, we want to be sure the product makes a strong enough statement.” Test marketing is most often used if a number of images are planned for an extensive line of product. This is necessary to the licensee and makes economic sense.
Fischer continues, “Normally artwork that we think will be a big hit does pretty well because there is a trend in the market that backs it up. However, we occasionally have disappointed artists who believe their artwork should have done better.”
7. You’re So Vain
Most licensees have at least one story of the archetypal difficult artist or agent. It is imperative that an artist understands that the licensee is working with many artists. For those artists who are truly legends in their own minds, it should be noted that licensees need cooperation from the artist and agent in order to move forward. An artist who issues innumerable demands, does not provide needed materials in a timely fashion, and is generally difficult, will not have a long licensing career.
“Artists or agents who put limitations on the artwork or who are extremely demanding before we even get a contract worked out, usually end up being difficult to work with in the long run,” says Fischer.
This works both ways, however. That is, licensees must also adhere to their promises in the agreement they have signed.
8. What’s New Pussycat?
Today’s new artist may be tomorrow’s established artist. Carol Lee Walker started her career in licensing with a few cat designs for home decor. Today, Walker has licenses for a variety of products featuring a myriad of subjects. She is, in fact, a licensee’s dream who is known for her versatility and cooperative nature.
“I know how necessary it is to keep up with trends and to constantly supply new work” Walker says. “I can paint anything and luckily, I just love to paint everyday.”
Artist Jeff Wilkie concurs. Although known for his art, which features marine life, Wilkie is equally adept at many subjects and realizes it is necessary to avoid the “niche” label. He is aware that trends do indeed play a part in licensee’s choices.
“I love to paint in general; it is my passion,” Wilkie says. “But I know I have to stay in the loop of what is current.”
9. My Way
If an artist truly won’t be flexible in terms of their artwork, it is best to avoid a licensing career. If an artist does not make licensing a priority and does not act quickly to supply new imagery or make changes to existing art, it will result in the artist being left at the starting gate. An agent cannot work optimally with an artist who is not committed. A better plan would be a gallery focus. This will ensure that the artwork is sold exactly as painted, whether as originals or limited edition prints.
It is absolutely understandable that an artist does not want their work changed at all. But unless the artist is willing to accept this as a reality of licensing, they won’t be happy and neither will the artist’s agent or licensee.
10. Don’t Let It Get You Down
Try, and try again. It is important to keep trying. This is truly a business where tenacity and innovation go hand in hand with talent and luck. If art is not chosen in the first review, go back again with a new look. As Editions Limited’s Meghan Faulkner says, “It’s true that sometimes you can’t predict what people will buy. But I think artists understand this–sometimes it is all just in the timing. A great artist might not sell this year, but may be a big hit the next.”
For reprints of this article, call 800-867-9285.
* Hindostone Products, Inc., 800-288-2191 www.coasterstone.com
* Editions Limited, Inc., 800-228-0928 www.editionslimited.com
* Persistence of Vision, Ltd., 201-287-2598 e-mail: email@example.com,
* Judith Lynn, www.judithlynnart.com
* Carol Walker, e-mail: firstname.lastname@example.org
* Jeff Wilkie, www.jeffwilkie.com
COPYRIGHT 2005 Pfingsten Publishing, LLC
COPYRIGHT 2005 Gale Group