#Do artists make money through licences license

This is generally not advisable for an artist unless they suspect that the products will not sell as well as the licensee hopes.

#Do artists make money through licences license

Some license agreements are structured to provide a one-time license fee rather than periodic royalty payments. The agreement likely will provide that the artist needs to refund the advance only if they breach the terms of the agreement.Īdvance against royalties = an upfront, lump sum payment made to the copyright owner, which is typically credited against future royalty payments If you do not earn that amount in royalty payments, you do not need to refund the advance.

It will be credited against future royalties, so you will receive lower royalty payments initially. This is a lump sum payment made by the licensee to the artist when the agreement is finalized. One of the issues that may be especially important to the artist is the advance against royalties. The complexity of these agreements varies widely, but there are certain basic issues that they tend to address. These types of payments usually are worth arranging only if you are building a long-term relationship with a reputable entity.Ī licensing agreement will contain several types of provisions with specific terms. If the earned royalties fall short of the guaranteed payment, the artist will not suffer any losses unless the agreement provides that a shortfall will be applied to future guaranteed payments. The artist then would receive any earned royalties above that amount at the end of the year. This means that the licensee will pay the artist a fixed amount at the start of each year, which will not vary depending on sales. If an artist has a strong bargaining position, such as when their work has substantial popular appeal, they may want to arrange a guaranteed minimum annual royalty payment. This is known as a per unit royalty.Ĭopyright owners can sometimes bargain for a guaranteed minimum royalty payment. Sometimes royalties are calculated not according to net sales but according to the total number of products that are sold or manufactured. The percentage will vary, but it is usually 10 percent or less unless the licensee is selling posters or prints of the artwork. Generally, royalties will be a percentage of the net sales of the licensee’s products.

This allows them to receive more money immediately, but they will not receive any further payments when the assignee sells products based on the work. Royalty payments are usually defined as a percentage of the money that the licensee makes from selling the products.Īs an alternative, some artists assign their copyright in an artwork for a lump sum payment. Also, you will want to monitor the licensee so that you receive all of the payments that you are due. You should review your royalty contract carefully to make sure that you understand its terms.

This means that they offer someone else the right to copy their work in exchange for payments, while they retain ownership in the work. While some artists sell their work, other artists get money through royalties from licenses.