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Article #2: Agent's Commission rates Art Licensing
In a recent "Art Licensing
E-Group", which I listen in on, someone posted a question about the "fairness"
or "unfairness" an agent taking 70% commission. This sparked off a very
vociferous dialogue within the group which lasted days!
In the good old days, back
in the early '80's there were only a handful of licensing agents- I know
because I was the first agent in Europe to issue a full license/contract for
each design I sold in 1979. In those days there were artists agents but they
knew nothing about licensing. Their expertise was in advertising; book jackets;
corporate brochures; children's books, film posters and promotional work. They
acted basically as the rep for the artist and commissions averaged around 25-30%. At this time the only
"Agents" licensing work were photo libraries and "Licensing Agents" in the
entertainment/character industry. As one of the first "Art"
Licensing agents I drew upon my experience in the Photo-library business and
used very similar terms. Basically libraries worked 50/50 with their
photographers on all licensing revenue less any costs for duplicate
transparencies. They also sometimes charged for catalogue entries in their
glossy promotional brochures. This was basically how the
art licensing business evolved and most new agents followed suit although in
the early days agent's commission rates varied from 35-50%. This basically
depended on the overheads each had and how they operated. The same goes today
and these rates still vary from 35-75% depending on how each agent runs his or
her business. On the surface an artist
sees just a rate but it's not only unfair to judge an agent on their rate of
commission , it's very unwise as I will explain. Agents vary so enormously
in their experience, staffing, overheads, operational activities, it's
important to know all these things before making a judgment. For example some
agents work alone with an assistant. Some have three or four licensing
executives on salaries of $50K and over with cars and expense accounts and have
offices in So how much is FAIR. To
ascertain this we still have to consider another very important factor. The
experience of the artist.
Most artists are not in
this second category and rely on the agent either totally or partially to help
them with their projects. So WHAT IS FAIR? As you can see unless you
take all these factors into account it is impossible to judge on commission
rate alone. Unless one sees the work, knows the artist and what his experience
is, as well as knowing exactly what kind of operation the Agent has and his
experience, no one is able to comment intelligently about what is fair or not. As a rule of thumb 50/50
is regarded as a fair rate. If an artist has the experience, a track record and
proven ability, then an agent may look upon that as a great asset
and work for a little less. It's important however to know how much
experience an agent has. It's all very well getting the Agent down to 40% but
if he's only been in the business a couple of years or if it's one of the new
agencies attached to a publishing
company who simply want to earn extra revenue then you might not be with the best
agent for your work. Someone who has contacts, experience in the industries
your work is suited for and who visits or has a booth at trade shows is essential
if the artist wants good representation.
That's actually one of the
reasons I wrote the book "Art Licensing 101" Character merchandise and
properties which already have great exposure through children's books, TV and
Film are a whole different ball game and involves more complex issues, however
"Art Brands" as well as "Artist Brands" are becoming big business and as such
more creators would like to develop artwork which can be licensed across a
range of products. These products can eventually can create revenue streams which
in some cases have equaled the kind of revenues only previously generated by
film and TV properties. Brands such as
Kinkade, Lassen, Debbie Mumm, Tracey Porter, Mary Engelbreit and Ann
Geddes. These properties create
retail sales of between $25 and $250 million each! Precious Moments, out of
interest, has generated up to $500 million a year! In such cases an Agent
plays a much more important role than just signing licenses. The concept starts
merely as an idea or just a collection of artwork, and the Agent quite often is
the driving force behind the whole strategy of the property and as such the
artist may be simply following the
agent's directions. This begs the question of how much the agent deserves as
his compensation, particularly if he is financing trade shows, PR, promotional
advertising and basically building a business around the property. These situations often go
beyond the scope of general representation
agreements and may involve transfer of ownership of the property or may even involve the
formation of a separate company as has happened with many major art brands. In conclusion it should be
apparent that you have to compare apples with apples to have any real idea of
what is fair. The problem is that this industry has evolved so much in recent
years and the professionals in it gain their experience in ways which are as
diverse as the industry itself. A major agency who successfully license a major
TV series may have no idea how to license a new art brand and vice versa. If you are an artist,
getting educated is the key, so the right questions are asked. I welcome an
educated artist it makes my job easier. If I'm asked to reduce my percentage
I'll think about it seriously.. and then say how much is 30 years experience
worth to you! Michael Woodward now runs
an artist's management and licensing company based in Available from www.licensingcourse.com Art Licensing
International Inc Tel 941 966 8912 Email artlicensing@comcast.net Having been in the industry since 1974 I have licensed at the last count over $600 million in retail products from art and design licensing. A few years ago I decided to write a manual to help artists learn the fundamentals of the licensing industry- "The Licensing Course". I have also condensed some of this information into a book now called Licensing Art 101. A new revised edition will be available April 2006 . This is what artists have said about the course and book. What a blessing you are for those of us who aren't living in
where information seems to be more available (I lived there
for 16 years, thank goodness . Just for the record, I want you to know
that since I ordered your book (at Barnes and Noble), I see that they now carry
them regularly! I've been a children's book illustrator for 25
years, making enough money doing educational work to support myself while I do trade books
...Anyway, I've been trying to educate myself about other markets, and have
been learning about the surface design arena, which is very tied into
licensing... I just want to thank you for your books, this class and your
efforts to reach out to artists about an important aspect of the publishing world. You are helping people like me gain access
to important knowledge and tools to be better business people, and more
effective bread-winners! Thank you
for your tremendous service to all of us. Sincerely, Roberta Collier-Morales Illustrator/Calligrapher/Writer "BRAVO... Art Licensing 101
by Michael Woodward is without a doubt the most comprehensive and entertaining
"how to" book I have had the opportunity to read. Well thought
out...well written and well organized... full of actual useful
information that is easy to comprehend and apply in the Art Licensing Markets.
Not only does the book contain information about the business, but
it takes the "How To" genre to new heights with actual
"contacts" within the business. I have recommended the book to
every artist (or would be artist) I know. Congratulations and Thank You." Details of the Licensing Course and book can be found at http://www.licensingcourse.com/ Michael Woodward also runs a specialist artists management
and licensing company based in Out of the Blue http://www.out-of-the-blue.us/
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