Thoughts On Licensing For Artists

I’ve made my living as a freelance illustrator for thirteen years and counting. I’ve tried just about everything a commercial artist can do—children’s books, storyboards, magazine illustration, toy design, marker comps, comic books, character design, animation, even courtroom sketching. One of the few areas where I haven’t yet dipped my toe in the water is in the murky but potentially lucrative field of art licensing.

Last week I spent four days in Las Vegas at the International Licensing Expo attending classes, walking the show floor, and shaking hands in an effort to better understand that particular industry. I wanted to find out what real opportunities, if any, existed for me there.

Unfortunately the short answer (for me at least) is “not many”.

Retail Slump. For starters, the licensing industry is tied closely to the fortunes of the retail industry. In licensing an artist makes money by creating artwork and then making deals with manufacturers to print and sell the art on their products. Everything from t-shirts to tablecloths and toys to toothbrushes can be decorated with artistic designs. When those products are sold in stores, the manufacturer and the artist each get a percentage of the profits. Unless you’re last name is Van Winkle you know that the American economy has seen better days. Retailers are really feeling the pinch. The last couple of years have been downright brutal for many in the licensing industry.

Heavy Competition. At the same time there’s been a surge in artists who are interested in entering the biz. From a creative standpoint the competition is getting fierce at the same time the industry is sagging, both of which make it difficult for an artist to stand out from the crowd or to gain a lot of leverage when negotiating a licensing contract.

Complicated Legal Issues. Speaking of contracts, I attended a seminar on licensing contracts where the overall tone was “artists beware”. As a freelancer I’m used to writing and negotiating my own contracts for basic illustration services. But when it comes to licensing, things are anything but basic. The legalities and nuances can make your head spin. I also got the distinct impression that the licensing biz has more than its fair share of bad apples who will not think twice about taking advantage of an artist if it means greater profit for them. One experienced licensing artist warned me bitterly, “Its a corrupt industry”. I’ve been around long enough to know that you take a comment like that with a grain of salt, and I’m sure most people in the biz try to handle their dealings honestly. But I heard enough warnings at the Expo to make me at least raise an eyebrow of caution.

For most illustration work I’m very comfortable handling my own contracts, but if I ever decide to enter the licensing biz I would seriously consider getting an experienced agent to advise me and watch my back.

Heavy Investment. Yet another downside of the licensing biz for artists is the high barrier of entry. You have to do an enormous amount of prep work just to step onto the playing field.

In most fields of commercial art a client will hire the illustrator first and only then does he/she sit down in the studio to create the artwork. In licensing (as in fine art) the reverse it true: First you create a robust catalog of artwork, then you try to find someone to pay you to use pieces of it. Most licensing agents won’t give you a second glance unless you’ve first built up a thick portfolio of samples. Of course the upside is that you have a lot more creative freedom to create your own designs.

Tight Deadlines. If an art agent likes your portfolio its not uncommon for them to ask you to make changes to a piece (usually minor) or to create a new sample to complement a series you already have. But several people told me the deadlines can be insanely tight. That’s fine with me. Some of my clients are in the advertising industry where everything has to be done yesterday. Apparently the licensing industry is no different. It’s not uncommon for you to have just a few hours to turn around a new design or revise a piece of artwork.

High Risk. For all the hard work you put into creating your illustration or design, there is no guarantee that any of it will sell. How much you make will be determined by whether the product bearing your artwork flies off the shelves or if it gathers dust. You could see a boom and rake in the dough, but you could just as easily see a bust.

There is enormous profit potential for artists and a few do make extremely good livings in the licensing industry. But the majority struggle and have to do something else to supplement their incomes.

It’s A Fickle Biz. Licensing can be a very fashion-driven industry. What’s cold one year might be hot the next, and then vice versa. I heard of one artist who went from making $30,000 one year to making $300,000 the next. Suddenly her style became very hot. But just as quickly it could cool off.

Slow To Pay. As I understand it there is very little up-front money in licensing. Usually you won’t see a dime until after the product sells. Because of the long production cycle and the fact that licensed merchandise is often manufactured overseas, it usually takes 18 months to two years from the time you sign the contract to the time the first royalty check arrives in the mail. If you want to venture into licensing, don’t quit your day job just yet.

Not Character Driven. Finally, I was advised by one agent that licensing thrives more on patterns and designs than on cartoon characters. Of course if you already have a character that you’ve established as a solid brand in another arena (movies or TV or comics) licensing can be a gold mine. But if you are starting from scratch and no one has heard of your character, it will be a real challenge to make much money just from licensing. The reason (I was told) is that what sells in licensing is basic, straight-forward designs that have a “cute” or “pretty” appeal. Products that are personality driven are less likely to have that broad mass appeal. People want pretty designs to sprinkle around the house, which is a role characters aren’t usually designed to fill. For me as a character designer, hearing that was the straw that broke the camel’s back.

The Upside. If it sounds like I’m painting a pretty bleak picture I want to make clear that the licensing biz is not all bad. In fact, there are many artists who thrive in it, enjoy it, and make good livings in the industry. I say more power to them.! It can be a fun and exciting way to make money selling your art. It offers tremendous creative freedom and, if you are successful, there is enormous earning potential. I want to be careful not to leave you with the impression that licensing is a bum industry or a waste of your time as an artist. For some it’s fantastic!

But I also want to be realistic and point out that it’s not for everyone. From my perspective as a cartoonist/illustrator there are a lot more ways to make money that are less risky and more stable.But that’s just me. If you have a knack for making pretty designs and cute icons, licensing might be the perfect fit for you.

If you want to learn more about the licensing biz and what it can offer, here’s a few resources to check out:

I’m sure at least a few of my blog readers have experience in the licensing industry. If you have any thoughts to add, or if your perspective is different than mine, by all means please leave a comment and let me know what you think.