The idea of giving up complete ownership of your work isn’t so enticing for most art licensors (artists). Especially when you’ve experienced how great a good art licensing relationship is – you get paid AND get to keep your artwork.
So why do some art licensors dabble in these arrangements? Are there any circumstances where you should at least “consider” a full buyout of a piece of work?
For complete transparency, I don’t do buyouts at this point in my career. I’d say about 95% of my business is royalty-based licensing and the other 5% is where I agree to do a flat fee (see below.)
However, it can be important to have some flexibility when you’re trying to build an art licensing business. So let’s take a look at a few reasons why you might consider this type of contract.
But first, some quick definitions:
- FULL BUYOUT - A full buyout is where the buyer obtains complete ownership of the art, including all rights to use and reproduce it. A buyout is a permanent transfer of ownership, whereas a license fee is a temporary agreement. A full buyout should command a high price.
- FLAT-FEE PAYMENT - A flat fee payment is a one-time payment that the artist is paid for the right to use their copyrighted work. This type of payment is typically seen when the use of the artwork will be limited, such as with a single product. The artist retains the copyright of the art. However, if the product is very successful you could miss out on the full amount it could have paid in royalties.
*A full buyout should always be far better paid than a flat-fee payment as the licensee can make money from your art for life.
So why might you consider selling your art outright? Why do some artists choose to do so?
1. You Get Paid Immediately
Agreeing to a full buyout with a client means that you get paid upfront and immediately. Even if your art doesn’t sell, you’ve been paid. This is the same as a flat-rate fee, but you’re looking at a much higher fee with a full buyout (more on that shortly.).
With this kind of deal, there’s no waiting around on royalties. Yes, we all LOVE royalties. It’s like Christmas every time they show up. But in reality, they do take some time, and it may be time you don’t have right now.
After you sign an art licensing deal it can take a year, often longer, before you see that first royalty check. And depending on the scope of the licensing project, it could take several years to start to generate good money across many stores. So though the money might be there, it can be a slow trickle for a while (which is why we all love to have multiple licensing deals!)
Now because you should be paid handsomely upfront for full ownership of your art, this injection of funds can provide you with some much-needed financial security to really focus on pursuing your licensing career. As well as the ability to invest in any equipment or resources you need to better build your business. We all know how nice it is to focus on our craft without that constant worry of income uncertainty.
2. Buyouts Command Larger Prices
In a good fair deal, buyouts should always demand the highest price. Because you are giving someone your artwork permanently and they could use it to make money next week, next year, in a decade, or even in 50 years. And you won’t get a say in how it’s used, whenever they use it.
If your artwork becomes very successful, say a big popular brand is buying it, you also need to be fairly compensated for that potential success that you won’t get royalties on.
As mentioned above, a buyout could be a wonderful injection of much-needed cash on a piece of artwork that you’re okay with handing over. But you need to ensure that you’re getting the best deal possible. This is where it’s often great to have an agent on your team.
3. You Can Get Exposure with a Dream Brand
Some markets and brands don’t license. If they’re someone you dream of working with this might be the only way to work with them. These companies are more commonly larger, multi-national corporations – apparel brands are a big one – and they have some substantial reach. They may be able to showcase your work to a very large audience.
The increased visibility you can get from this partnership could lead to more and more opportunities and ideally more licensing down the track. If they’re a famous brand, you can leverage their reputation to lift your art licensing biz and get noticed by agents and licensees.
However, you must ensure you’re getting paid justly for that piece of art.
4. You Could Use the Opportunity to Experiment
I have a friend from years ago that became prolific under multiple pseudonyms in the art licensing world. This way of operating gave him the freedom to take risks with styles outside of his “signature style.”
Buyouts could present an avenue to experiment away from your main brand. You could play with different techniques, push the boundaries a bit, and then sell the artwork and see what happens. You may not be as attached to those pieces of work as you are to your signature pieces.
As mentioned, I don’t personally like to do buyouts at this stage of my career. So I’m not here to sell you on the cause. But, I do think it’s essential to understand all facets of the industry and what could come up. If you’re ever offered a buyout-only deal you can assess the situation with more knowledge, and a clearer list of pros and cons.
Finally, if someone approaches you with a buyout deal, you can always request to sell some designs, but license others. Many artists find this more palatable if they can get this option on the table.