What is illustration licensing and how does it work?
What is illustration licensing and how does it work?
This is a simple and brief guide to help explain how illustration licensing works. If you’ve not worked with an illustrator before, or have never needed to know anything about licensing in general, then understandably you will have questions and you may even be uncertain or nervous when commissioning an illustrator (btw there is no need to be nervous I am very friendly).
The way illustration fees are worked out is all about usage. There are many factors to consider when working out costs, but the main ones are - How and where the illustration will be used, and who is the client. This is different to how most other industries figure out costs, where usually there might be a standard charge for the product or service, and I therefore understand that the licensing option can seem confusing and difficult to understand.
The guide below should hopefully help clear up any questions you have and explain the options in more detail. I have conversations with potential clients every day, and it’s not unusual for me to spend a considerable amount of time going through and explaining the licensing options. My aim with this guide is to clarify the way that illustration is priced, and to hopefully remove any obstacles that may get in the way when you’re attempting to work with an illustrator. Illustrators want to create amazing work, and clients want to use those amazing illustrations to spread their message. Let’s try to break down some barriers, help the communication, and all get what we want/need in the fairest way possible.
First a quick word on copyright
Every time an artist creates a new, original piece of illustration or artwork, they automatically own the copyright. It’s that simple. They don’t need to apply for it, it’s automatically theirs. The copyright to any artist’s work is an extremely valuable asset, and the advice given to every illustrator is that they should never sell the copyright of their work. However, like almost everything, it can be sold, but when sold, an illustrator should be paid appropriately for it. If they don’t sell the copyright, they should be in a position to be able to bring in a secondary revenue stream from the work they’ve created through various sources including additional licensing.
The majority of illustrators are their own boss, and being your own boss means you have to cover all the benefits of being an employee yourself. Covering all the bills, accounting for an erratic workload and managing all the administration. Why would an illustrator give up something as valuable as copyright without being adequately compensated? Unless the compensation is generous, there’s seldom a good reason for an illustrator to sell the full rights to their work.
Selling a license to a client instead allows the illustrator to be fairly compensated as a ‘freelancer’, and for the job to proceed within what are usually tight budget constraints for most clients.
What is an illustration licence?
An illustration licence agreement is essentially a contract between an illustrator and the client. This contract should clearly set out the work that has been commissioned and the terms for its use. It is intended to make everything clear and to provide transparency, so that everyone knows where they stand in terms of usage, rights and ownership. Without it there might be confusion and assumptions, and different people trying to use the artwork in non-agreed ways over time. The fee attached to the licence covers the creation of the illustration and its subsequent agreed usage.
What does an illustration licence look like?
Once an illustrator has quoted on a potential project and the fee has been agreed, before starting any work, there needs to be a contract document created, sent and agreed upon. This document is essentially the illustration licence and most professional illustrators should be supplying something similar before starting any work. A straightforward document (usually digital these days) highlighting all the important elements and description of the work, so that we are all clear on expectations from the start.
Why are the costs different for each licence?
Illustration licensing and the pricing of a project go hand in hand. Very simply put the wider the usage of an illustration, and therefore the bigger the audience who are likely to be reached, the higher the value there is placed on that artwork (I think of it as ‘how many eyes on the prize’). The greater the reach and the larger the audience makes it reasonable to expect that this would be reflected in the illustrator’s fee in creating the work.
To give some simple examples - The fee for an illustration to be used on a leaflet for a small, local independent shop would be very different to the cost for a similar illustration being used on a huge billboard and editorial campaign for a big brand. The fee for an illustration to be used on a website by a small local business, only reaching hundreds of people per year would be very different to the cost for a similar illustration being used in the opening credits of a prime time tv show.
The amount of work involved may take a similar amount of time, but how the artwork is used and how many people see it will be vastly different. This should always be reflected in the cost.
What are the different choices of licence?
There are many ways to licence an illustration, and the specifics of why you need the work and how you intend to use it will make your licence unique. However, there are some standard options that make it easier to understand what licence will be right for your project. A lot of the time it comes down to why the artwork is needed, what is the artwork meant to be ‘doing’, and also a simple matter of budget.
You may search online and see a reference to many different terms such as an limited or unlimited licensing, an unrestricted or restricted licence, or a buyout licence. To keep things simple here is a list of the three most common licence options that I work around:
Non-exclusive limited licence
Most licenses that are purchased are non-exclusive and limited in some ways, such as one time publication, single event promotions, time-sensitive advertising, situational marketing, etc. To put it simply it means that the illustration is not exclusive to you (the illustrator can re-use the work), and the licence will allow you to use the artwork for a certain amount of time, or across a certain geographic location, or in other restrictive ways such as certain print runs, or across certain media types (online, print, TV, film etc). There will be a variety of circumstances and uses for each individual commission and the licence will need to cover any way that you plan on using the artwork. A non-exclusive licence is usually sufficient for most illustration projects, and it’s always possible to discuss further options in the future if a client wants to re-use a successful illustration. This option is always the most cost effective way of commissioning an illustration.
Exclusive limited licence
An exclusive licence is very much the same in almost all respects as a non-exclusive, but with the main difference being that the artwork is exclusive to the client. This is usually set for a period of time, although there are other restrictions that may be negotiated or needed, such as location or print types etc. With an exclusive licence the illustration can only be used by the client exclusively in the ways agreed, and not be used by any other client. When the exclusivity is finished the illustration is free to be used in any way that the illustrator chooses. Of course it is always possible to negotiate another exclusive licence before the exclusivity agreement reaches its end. If you choose this option it’s always a good idea to know your dates, timescales or other restrictions so that you can keep control of the exclusive options if needed.
Copyright or full buyout
Upon completion of a copyright transfer a client assumes full ownership of an illustration. The new owner may resell the illustration, alter or create derivative images based on it, license the image, and transfer copyright. A transfer of copyright denotes a total surrender of image ownership and all image rights. The illustrator does not receive accreditation for the image and may not use the image for any purpose, even self-promotion without permission of the owner.
As I already mentioned above the copyright of an artist’s work is an extremely valuable asset. This is obviously the most expensive way to commission an illustrator, and it’s usually quite rare that a client (a) needs the full copyright, or (b) is able to justify the budget to pay for full copyright.
How do I know what sort of licence I need?
This would really become apparent at the briefing stage. Before quoting for the work an illustrator will likely ask various questions to determine how you intend to use their illustration. It’s best to have in mind why you need the illustration, and what are you planning on doing with it. It’s natural to think that you want to have an all-encompassing licence to cover you for all possible eventualities. But, you need to be realistic and decide what do you ‘actually need’ from the artwork. There’s no point in over paying for artwork that you’ll never use in the ways you’ve agreed, or pricing yourself out of being able to commission the illustrator that you really want to work with. I’ve seen many projects fail at the first hurdle due to excessive (and unnecessary) demands for usage rights coupled with inadequate compensation.
Is a licence there for the client or the illustrator?
Both. A licence helps an illustrator safeguard their work, but it is intended to be useful for both parties. In approaching pricing and the licensing of an illustrator’s work in an open and collaborative way from the start of every project, you can remove any ‘grey areas’ as to who owns the work and the permitted usage. Everything is clearly documented and may be referred back to at a later date. This should be fundamental when commissioning an illustrator and a crucial part of delivering a professional service.
If a client has commissioned work for a specific purpose they can choose to have exclusive rights and can feel confident that the work will not be used elsewhere. it’s all about ‘protection’ and should be seen as necessary and useful for both parties.
Unfortunately, not all illustrators will bother with licences and some may be happy to charge a flat fee for their work, which might relate to the time they spend creating the illustration or be calculated in some other way. This is completely at odds with what is advised and accepted within the professional illustration industry, and as highlighted previously, makes it very difficult to sustain a career over a long period. This is definitely not the way that I work and can lead to a multitude of problems further down the line.
Does licensing mean I will need to pay more for the same piece of work?
Possibly, although not always. An illustration licence means that you only need to pay for the usage you need rather than to cover all possible use of that illustration across all media, forever. For example, an ‘All Media, In Perpetuity’ licence would be more expensive than say a 1 or 3 year licence for a specified use. When you take into account that an illustration may have a limited life with regards to it’s topic and fashions, it’s just about considering how long realistically you are likely to want to use it.
Licensing shouldn’t be seen as prohibitive, and intended to overly restrict how you can use the work that you’ve paid for, it’s simply to ensure that that the fees paid reflect the value of the work created.
What if my needs change in the future?
That's fine, it's perfectly feasible that how you want to use an illustration may evolve over time. Licences can be extended at a later date, to allow for a longer duration or to cover additional usage. There would usually be an additional fee to reflect any extra usage, which can be discussed as and when required.
The thought of unknown/additional costs can understandably be worrying and potentially problematic, especially for smaller businesses where finances may be tight or difficult to manage. Every case is different, but generally, illustrators are a friendly bunch, and wouldn’t look to hold you to ransom over additional usage that may have been unforeseen. The most important thing is communication and hopefully coming to a mutual agreement that works for both sides.
You do however need to remember that if an illustration was originally licensed as non-exclusive and you later decide you would like exclusivity, then it’s possible that the artwork is already out there being used in another way. Another thing to realise is that, for example, you commission an illustration for use on a leaflet or flyer, but once it was done you liked it so much that it was rolled out on a range of merchandise to sell, there would justifiably be an issue! Merchandise and sales is generally a very different prospect than simple marketing or promotion. The best approach is to be upfront with the illustrator, check what was included on the original licence and if it’s not included discuss it with them before going ahead and using it elsewhere. It can be very costly to have a load of t-shirts printed up only to find that you don’t have the licence to use the artwork in that way.
What about an illustrator working for hire?
The exception to when an illustrator doesn’t automatically own the copyright is when they’re under a work-for-hire contract, meaning the client automatically owns the copyright to the creations. This arrangement is typical for full-time employees (in-house illustrators) or freelancers working on a character or property where permission has been granted to create derivative work, often referred to in retail as officially licensed.
With derivative works based on an intellectual property (IP), the IP owner’s copyright extends to the derivative work, in addition to the illustrator’s copyright protection of the derivative work if the new creation is significantly different from the original work. Still, with a work-for-hire contract, it will always mean that copyright protection is automatically taken from the worker and given to the employer.
As already mentioned, when you’re talking about in-house illustrators, the employer will own the copyright to the employee’s work as part of their employment contract. And as part of their agreement, the employee will be entitled to holidays, sick pay, paternity or maternity leave, maybe a pension, and all the other things needed to do the job, like being supplied with software, hardware and furniture. As long as a person isn’t on a zero-hour contract, they’ll get a regular wage and job security, which perhaps makes giving up their copyright by working-for-hire a fair compromise.
Apart from the specific reasons above, I do not know any professional illustrators who will take a ‘work for hire’ commission. I certainly do not work this way.
But we really want to own the rights to the illustration
As mentioned, by law, the copyright of an illustration rests with the illustrator. In commissioning an illustration you would be granted rights to use that illustration for the agreed purpose/s via an illustration licence, and assuming the licence you have covers all your required usage, really there is no need for you to own the copyright.
Illustrators are strongly advised not to sign over copyright to their work, as it is not in their best interests to do so. I’ve covered it above, but to clarify again, it is because it relinquishes any control over where and how their illustration work may be used, and it removes any right they have to reproduce the work or use it in any way in the future.
If an illustrator does decide to sell the copyright for an illustration this should be put into writing. The fee for copyright assignment would justifiably be much higher to reflect the fact that it gives the owner the exclusive right to reproduce the image (or sell on to allow others to reproduce it) in any way throughout the world.
The illustration business
A freelance illustrator may only be one person, but they are a business and they should conduct themselves in a professional and businesslike way. It’s common sense for a business to exploit its assets for monetary gain, and every freelance illustrator should have the option to do likewise? It would be very tough indeed for an illustrator to have a full career without retaining the rights to their own art.
An illustrator has usually chosen this particular career because they are passionate about being an illustrator. It’s obviously not ‘all about the money’, so just to mention that an illustrator’s fees may sometimes be negotiable. We appreciate that you may have a limited budget - so it’s useful to be upfront about this so that it can be taken into account when an illustrator quotes for the work. There may be some flexibility in what can be done in terms of licensing to keep fees lower, or a fee reduction may be possible in certain circumstances. Either way the more open and honest you can be upfront, and the more you can communicate your thoughts, plans and ideas the more likely it will be that you can commission the illustrator you want to create awesome work at a price that is fair for all.