Art Licensing Royalty Rates?

February 24, 2006 10:11 AM

What royalty rate should I ask for from a company that wants to license my art?

I've been contacted by a fairly large producer of swag (shirts, magnets, keychains, etc.) that would like to license my original artwork for a line of products to be sold retail (comic stores, Spencer Gifts, etc.). They sent me their standard licensing agreement, which stipulates a royalty rate of 10%. This strikes me as low - but then I know nothing of these things. Am I being lowballed, or is this standard? How high can I hope to negotiate this rate?

posted by MaxVonCretin to work & money (11 comments total)

10% isn't bad, actually. You might want to counter with 15%, but I think that might be pushing it. Make sure that's 10% of the GROSS. Not an "after expenses" 10%.
Have they supplied any sort of sales projections?
posted by Thorzdad at 10:40 AM on February 24, 2006

Well, with galleries I do all the printing and provide all of the materials and my cut is usually 50-60%. 10% doesn't sound too bad for what would be a lot less work. Just make sure that you maintain the overall rights to your works and have a good escape clause in case you feel abused.
posted by Alison at 10:43 AM on February 24, 2006

It might help to know more about what type of artwork you are doing and more specifics about what they want to do with it.

(I assume it's within AskMeFi rules for you to post a link to your work?)

There would be a big difference between, say, simply printing your designs on a few t-shirts and other items, versus designing an entire branded "line" around your design(s) -- packaging, brand name, advertising, etc. all centered around and using your work.

Do you have a illustrator/artist's rep? I'm assuming they would be more knowledgeable about this sort of thing.
posted by jca at 10:47 AM on February 24, 2006

I'd think information wants to be free, why bring filthy lucre into the whole ART thing? O% is what I'd shoot for.
posted by Meatbomb at 10:48 AM on February 24, 2006

I'd think information wants to be free, why bring filthy lucre into the whole ART thing? O% is what I'd shoot for.

Because there's nothing wrong with money, and getting paid for hard work.

If there's enough money involved, you should consult your lawyer or something to draw up a contract or something.
posted by cellphone at 10:55 AM on February 24, 2006

Yes, it's 10% of gross, but there are no projections. I'll inquire about that.

I'd rather not link to the stuff, but suffice it to say it's mostly of the moronic pop-socio-politico sloganeering variety. Sort of a left-leaning bustedtees.com.

As for how/whether the "line" is branded, I guess that's another point to be negotiated.
posted by MaxVonCretin at 11:05 AM on February 24, 2006

10% is a solid rate. To give you perspective, Spongebob commands 12%, Star Wars 15% and Snoopy a solid 8% on average. Each product category has a different industry standard. Food margins are very slim, so the Yoohoo ice pop maker is kicking 3% back to Yoohoo, while the Dora The Explorer backpack maker is shelling out 14%.

While certainly a key figure in your negotiations, you should also pay attention to the advances, guarantees, territories, term limit, channels of distribution, full scope of licensed products. You should not enter into ANY licensing agreement without at LEAST a guarantee and advance schedule (normal term of a licensing agreement is three years).

A 'standard' licensee contract (you are the licensor) is almost certainly weighed in their favor, with all sorts of sell off, royalty, return, indemnity and other clauses that will protect them at your expense.

Shoot me an e-mail if you want to know more, I do this for a living.
posted by remlapm at 11:12 AM on February 24, 2006

Maybe these links will also help:

Resources for Artists

Licensing Artwork: Negotiating and Monitoring Royalty Payments
posted by jca at 11:15 AM on February 24, 2006

According to the GAG Pricing & Ethical Guidelines Handbook--well, the 9th edition of it--royalty rates for illustration used on display and novelty products (t-shirts, gifts, caps, mugs, game boards, keychains, etc.) run 3-5% for original designs, and 5-10% for licensed artwork. In this case it sounds like the latter would apply, so they're giving you a fair shake. While the edition I'm referencing is somewhat out of date, I'm inclined to think that since they quote a percentage as opposed to a dollar amount, it's probably still valid. You should pick up a copy of the current (11th) edition--the GAG Handbook goes into exhaustive detail about all of the legal and financial details of licensing your art.

On preview: what remlapm said.
posted by Vervain at 11:19 AM on February 24, 2006

Thank you all! Very helpful!

And remlapm, I may be in touch...
posted by MaxVonCretin at 11:23 AM on February 24, 2006

A couple of quick things, for those that might reference this thread at a later date:

Never, ever ever ever, grant exclusivity. All licenses that you grant should be non-exclusive. If anyone tries to tell you otherwise, they should not be trusted. In my companies history, we have granted 1 exclusive license, and it was under very unusual cicumstances. Limit the term to three years so you have an out, and never give a licensee automatic renewal or options.

Projections are wonderful to have, but understand that a company will either inflate or be conservative to sell you/lower their guarantee. Guarantees are the true measure of a company's intent. Guarantees ensure a licensee will pay attention to your products to make sure they recoup.

All of this might sound pushy, but they are making money off of your property, so you control the terms here, not the licensee. Never forget that they need you more than you need them.

if you enjoy reading metafilter, you are smart enough to decipher a licensing contract without a lwayer.
posted by remlapm at 11:38 AM on February 24, 2006