Targeting Your Licensing Program

At some point, given persistence and a dose of luck, a licensor’s home-grown program may realize them some degree of success. But to make a program truly successful, you need to inject a degree of consistency into your effort, to increase the rate of successes versus failures. You need to understand a bit more about the business side of licensing, and align your efforts to the needs of the companies you are seeking out.

Develop a clear picture of what sets your property apart from others. What subject matter seems to set your work apart? What age or demographic groups does it appeal to? What key attributes distinguish your work from your competition, and how can explain these differences to potential licensees?

Develop a likely licensing “lifespan” of your property. Is it “trendy” or “timeless”? With this knowledge, you’ll be better able to maximize gains, either by capitalizing on short-term gains for “fad” imagery through prolific exposure up-front, or by carefully controlling exposure over an indefinite time period with so-called evergreen properties.

Determine the most fruitful channels to target for your marketing effort. Knowing the product categories your art works best with, is it most fruitful for you to seek out and approach retailers on your own, or to contact manufacturers or distributors who are already plugged into a network of retailers?

Get a feeling for how “broad” or “narrow” a licensing program you ultimately want. Are you more comfortable with a large number of licensees, each dealing with just a few individual product categories, or with a small number of “master” licensees that each represent a broad line of products?

Understanding Your Property

Prior to considering a licensing arrangement, set a goal for when you want your product to go to market. Then work backwards – what steps need to happen from the time of your initial marketing contact, to the time the product hits the shelves? Steps to consider include negotiations over the licensing agreement, approval of mock-ups, and production and distribution time.

Consider seasonality as it relates to your imagery, as well as to the distributors or publishers you are seeking out. Work this into the overall product development timeframe.

Educate yourself as to how various industries’ product development cycles work. For instance, the calendar industry works on a fairly regimented development cycle, translating to long lead-times – over a year in total. This means your marketing efforts must begin well in advance of when the publisher would ultimately feature your art, but your understanding of this fact also injects a sense of predictability. For instance, you might make a note to always contact publishers of a certain product at a particular time each year.

Understanding Product Development Cycles

Set a goal for when you want your product to go to market. Then work backwards – what steps need to happen from the time of your initial marketing contact, to the time the product hits the shelves? Steps to consider include negotiations over the licensing agreement, approval of mock-ups, production and distribution time, etc.

Consider seasonality as it relates to your imagery, as well as to the distributors or publishers you are seeking out. Work this into the overall product development timeframe.

Educate yourself as to how various industries’ product development cycles work. For instance, the calendar industry works on a very regimented development cycle, and involves long lead-times – over a year in total. This means your marketing efforts must begin well in advance of when the publisher would ultimately feature your art, but your understanding of this also injects a sense of predictability. For instance, you might make a note to always contact publishers of a certain product at a particular time each year.

Networking and Research

Networking is as much of a necessity in art licensing as in any other business, perhaps more so. Utilize and further develop your own network of friends and other artists, and expand your network through art and trade associations, community colleges, and hundreds of other channels limited only by your imagination.

Trade publications can be a good resource for finding licensing leads. Publications such as Giftware Business Magazine publish features on a monthly basis by both licensees and licensors on what’s hot in licensing. These magazines also contain descriptive ads from publishers and your fellow licensors.

Use the web as a resource. Go to google and type in terms such as “art licensing” to get started. Get “virtually” connected with other artists through chat rooms, news groups and other on-line forums, including our own forum.

Set up a web site displaying your work. Have a “gallery” page showcasing your work, and a “licensee” page promoting your artwork and its product applications to companies. If you don’t have necessary web design skills, and can’t afford to hire a web designer, perhaps you can “barter” with some of your colleagues that do have such expertise, for exchange of services. The site should look reasonably professional, but needn’t be perfect. Click here for more resources including sample sites that we like by individual artists.

Promoting And Expanding Your Licensing Program

Away from the home front, there are several ways to expand your licensing reach. Realize that these efforts entail time and cost. Those who make a living from the licensing industry spend a great deal of their time and energy to these programs, but they gain a whole new dimension of exposure.

Attending and browsing at trade shows is one of the best means of assessing the licensing possibilities for your art property. Particularly if you concentrate on those shows most closely related to the licensing industry, such as the annual LIMA show, you will soon get a grasp as to which licensors are doing what, and what is in demand by licensees. Also worth attending are shows that represent the industries you are targeting. There are different levels of participation, including attending and browsing (or “walking the aisles”), or manning a booth, which can bring your program greater exposure, but at significantly greater cost.

Furthering Your Program’s Success

Once your licensing program is in full swing, you might think you can just lay back and let the royalties roll in. While this would be nice, it is far from reality. Depending on the program’s size, administering the program can be a full-time job, and requires a good deal of business savvy. Ongoing tasks for an active licensing program include (1) product approvals, (2) monitoring royalty statements, (3) dealing with infringement and counterfeiting and (4) ongoing business development activities to expand your program and avoid stagnation. Except for the smallest of licensing programs, this is a job in itself, and often the licensor employ one or more full time staff members for this effort.

Use the royalty statements your licensees submit to you to monitor the success of your individual imagery, and to fine-tune your future efforts. Depending on the reporting structure for royalties called for in the licensing agreement, this may be the best “window” into how your ongoing marketing efforts should move forward. Knowledge as to which images are doing best which products in specific geographic regions, at specific price points, etc. is invaluable in assessing future directions for your licensing program.

The sad truth is, if your program becomes successful, chances are you will have to deal with the reality of counterfeiting. The larger corporations with well-know brand identities may devote millions of dollars per year to fighting counterfeiting and copyright infringement. As a licensor, you need to actively and continuously monitor the marketplace for any infringement on your property. And once discovered, you want to put a stop to such infringement. But a proactive stance is always better than a reactive one – and thus your initially covering yourself with full copyright and trademark registration will probably benefit you if and when you do need to deal with counterfeiting.

You may decide that the “business” end of licensing is more of a liability to your productive work than an asset. Assuming your art is “licensable” and that you are persistent, sooner or later you may gain a few hard-won licensing programs. As an artist, do you want to continue to seek licensing business out under your own self-administered licensing program, or are you ready to seek help?

The question is also one of commitment: running a licensing business is time consuming, particularly if you are actively creating art! If you’ve tried this for a few years, you know that taking the time to learn the right companies and industries to approach, cultivating contacts that are genuinely interested from the dozens of others, and establishing long-term business relationships take a great deal of time -- time taken away from creating your art!

Using a Licensing Agent

Many licensors turn to professionals to manage the business aspects of their licensing programs, and with good reason. Experienced licensing agents do business with potential licensees for a living, are attuned to what licensees are seeking, and are often skilled at getting the best out of the negotiation process, all within an accelerated timeframe. These agents are attuned to the licensing needs of companies seeking out art for their products, both in North America and worldwide.

A licensing agent works closely with an artist, selecting and promoting their existing licensable art, and helping these artists develop art suitable for the greatest number of licensees or manufacturers. They will then promote that art on behalf of the artist, through the agent’s network of personal contacts.

Besides finding licensees and dealing with the minutiae of developing a successful licensing agreement, a licensing agent can bring much more to a licensing program. During initial negotiations, he or she recognizes and insists on reasonable and fair royalty rates. The licensing agent typically administers the license itself, assures timely royalty payments from licensees, and is simultaneously on the lookout for other licensees to match up with a property. He or she will also be very keyed in to which licensees can best use your art to sell merchandise in specific product categories.

Licensing agents can often seek out and exploit the “niche” markets and distribution channels that may not be obvious to the licensor (or even the licensee). Many art properties require a marketing strategy tailor-made to rather narrow segments of the market. An agent may be of particular benefit in providing this art with the widest possible exposure, particularly for “start-up” licensing programs.

Licensing agents can help streamline the licensing “timeline”, expediting the product approval process, assuring timely and accurate royalty payments to the artist, and helping to manage the artist’s overall business program.

Of course, the expertise licensing agents offer comes at a cost – agents normally charge a percentage of the licensing income generated by the licenses they help sign for an artist, and usually require a minimum representation period of 2 or 3 years. For many property owners this cost is more than made up for by the agent’s ability to open doors that would have been difficult or impossible without such support.

Often, property owners prefer to utilize a licensing agent for the initial steps of organizing their licensing program and getting it going. Later, when their programs are more established and these artists have developed a comfort level with running their own program, they terminate the licensing relationship or let it lapse, and assume licensing chores in-house.

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