Art Leasing & Commercial Licensing
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The document discusses art leasing and commercial licensing, focusing on the process, involved parties, and key considerations for artists. It outlines the benefits and challenges of leasing and licensing artwork, including potential income through royalties and the importance of contracts. Additionally, it provides resources and checklists for artists to navigate the commercial art world effectively.
Art Leasing & Commercial Licensing
- 1. Art Leasing & Commercial LicensingSpecial Thanks to our Presenters: Michele LaRocco, 360 Degrees of ArtBlakely Bering, Bering Art CollectiveHosted by Spacetaker on July 13, 2011
- 2. Art LeasingWhat is it?Renting a single piece or body of artwork to a business for a pre-determined length of time at a pre-determined rateWhat businesses are interested in leasing art?Hospitals and other medical facilities, corporate offices, restaurants, city or government offices, and moreWhat type of artwork are they looking for?Photography & mixed media does well; work that doesn’t look like any Joe Shmoe could have done it What doesn’t work: anything erotic, overtly political, or anything that could be potentially offensive
- 3. How to enter the world of art leasing as the artistThe process:Be honest about your work ethic, production level, and your boundaries as an artistDetermine whether you want to approach an art lease independently or with the help of a consultantAgent commission is typically 10-20% of lease agreement
- 4. If you choose to work with a consultant…Responsibilities of an art consultant for art leasingCreates the proposals and conducts the presentation to perspective clientsProject manages every aspect of the art lease programSources all works of artContracts and insuranceDelivery and installation of worksPoint of contact for clientResponsible for taking payment from clients and issuing rental payment to artistsResponsibilities of an artist when working with an art consultantUnderstand what your art consultant is doing for youBe patientBe able to follow a production timelineLook presentable when delivering your work to a client
- 5. Understanding the difference between the types of Art Lease programs:
- 6. The 3 C’s:Care, Custody, ControlAn exclusion common to several forms of liability insurance, which eliminates coverage with respect to damage to property in the insured's care, custody, or control. In some cases, CCC has been determined to entail physical possession of the property.In others, any party with a legal obligation to exercise care with respect to property has been deemed to have that property in its CCC.
- 7. Understanding the difference between Retail Purchase Price & Rental
- 8. What to include in the Lease AgreementLease termsStraight Lease 6 – 12 monthsLease to Purchase fixed 32 monthsPayment termsMonthly rent; date due and payment methodAnnual rent; date due and payment methodPenalties if payment received late
- 9. What to include in the Lease Agreement (cont’d)Security DepositHow much and the conditions for its returnOwnership and UseThe rights you grant to the LesseeRepairsShould damage occur, the process for repairs and costsInsuranceCare, Custody & Control (the 3 C’s)
- 10. Commercial LicensingWhat is it?Licensing is a way of generating income from your art. Instead of selling originals or selling your designs outright, many artists will grant the right (license) to use their art on a specific product, for a set time period in exchange for a percentage of sales. This percentage is called a royalty. By licensing your art, you have the potential to earn income on the same art piece or collection several times. (definition from ArtLicensingInfo.com)What businesses are interested in licensing art?Big box chains and corporate stores
- 11. What is the process of Licensing?Submit Art to Art Director/Publishing House (enter into a written contractual agreement)Wait, wait, sometimes more waitingHave work selectedHave work shown to buyersWait for buyer to purchase work after samples have been sent to their headquartersFinally your work is purchased and put into productionOrders take anywhere from 1 week to 8 months to confirm and shipWhat happens when it gets to a store…
- 12. What is the process of Licensing? (cont’d)How do Art Directors choose images?They study the fashion and design industry closely to be on top of the color & style trends of fashion; last season’s fashion tells you the colors for art the next seasonWhat is a Line?A selection of artwork that an Art Director pieces together from a variety of artists to create the best options to take to Market and/or to send to big box stores (after research on what is “hot” at each store)Where do images go once they have been selected for a line?They are sent to reps at various big box/corporate storesWhat is a Furniture Market?Annual buying opportunity; art lines the walls completely; there are 5 major Markets; High Point is the biggest (10-mile radius of showrooms)Who comes to Market?Buyers from chain and corporate stores
- 13. What is the process of Licensing? (cont’d)What do buyers look for in art?Follow current fashion/color/style/texture trends; mass appeal; fresh/newWhy has the market changed so dramatically in the past 2 years and how does it affect American artists?It has become increasingly difficult to work with China as quality control has declined (and takes longer to ship); This has benefited American artistsHow should artists think about color and style trends?Pay attention to trends in fashion & furniture industry, what colors are hot in paint stores, etc.What is regionalization?Being able to adapt your work to “look” like different regions; i.e. They want their stores in Texas to have Texas-theme (cowboys/boots); stores in New Jersey to have North Shore theme, etc.
- 14. Selling Publishing Rights vs. RoyaltiesWhat is the difference?You sell your work (means you sell your copyright) which guarantees a lump sum payment (regardless of whether the company ever sells your piece or not)Royalties offer a % of sales on a monthly or quarterly basis for the lifetime of the licensing termsWhat are the pros and cons of each?Pros and cons vary depending on what type of artist you are, how regularly you produce/re-produce, and whether you want money up front or are willing to wait for royalties.Example: Person who designed Nike swoosh sold publishing rights for $800 instead of choosing to take royalties; if she had taken royalties she could be making mega $What is the industry standard commission structure?5-12% royalties for giclees; lowest is 3%Purchasing outright price varies depending on what it is and who is buying it
- 15. Artist Checklist:Self-RepresentationContract, Contract, Contract; Question, Question, QuestionIf you are going to be representing yourself in the commercial licensing world it is VITAL that you get everything in writing!If you send samples for review or are asked to send samples, be sure they understand what you are granting them permission to do with those samples (EX: are they for "review purposes only", can they show them to clients, etc)
- 16. Artist Checklist:Self-Representation (cont’d)If the publishing/licensing house wants to move forward with you, make sure you understand the terms of use, payment/royalty schedule, commission structure, what they can and can not do with your image. Understand your rights (Intellectual and Copyrights) and if confused, ask questions or ask someone to review the contract for you.Ask who they typically do business with and what type of work moves the bestSee if the structure for royalty differs based on the medium used in production (EX: giclees will be more expensive to produce and therefore typically have a lower commission percentage than posters/prints)
- 17. Artist Checklist:Working with an AgentAsk Questions!How long have they been in business? Is this all they do? If not, what else are they involved in?Get references. If they have happy artists, they shouldn't worry about giving you some people to contact. In some cases, artist and agent sign a confidentiality clause to ensure names are not released. Ask about this.
- 18. Artist Checklist:Working with an Agent (cont’d)How many artists do they work with? What medium and style do they work in? How long have they had their clients? How many publishing/licensing houses do they work with and why?What is their commission structure?
- 19. Artist Checklist:Working with an Agent (cont’d)What if I don’t want certain companies to have access to my work?If you are working with a publishing house, your work could be seen by any company; if you are choosy you should not enter the licensing industryHow long will my work be licensed for?Standard licensing term is 3 yearsWhat does copyright really mean?Educate yourself. Good resource is Texas Accountants & Lawyers for the Arts - http://www.talarts.org/publicationsAsk for an agent agreement from them and make sure you understand it!
- 20. THANK YOU!Visit www.spacetaker.org for more information about Spacetaker’s professional development workshops for artists and other opportunities and resources for artists.