Business Musings: Money 1 Licensing In (Rethinking The Writing Business Part Ten)

Business Musings: Money 1 Licensing In (Rethinking The Writing Business Part Ten)

See that piece of art at the top of this post? I licensed that cartoon through Canstock Photo, which I generally use for these posts. There are other stock art licensing sites, and WMG Publishing uses a bunch of them. I’m sure many of you do too.

The license I agreed to for this particular piece of art is pretty standard. I paid a few bucks so that I could use this on my website, as long as I give the artist credit. I use the credit line that Canstock Photo provides.

The cartoon is non-exclusive, which means anyone can download it and use it. If you want to write a post on a completely different topic, and use the same piece of cartoon, you most certainly can.

Back in the early days of my business blog, when it was called the Business Rusch (before the hiatus), I used a single piece of art that Allyson Longueira at WMG designed. Before that, when I was writing The Freelancer’s Survival Guide, I used a piece of art that Pati Nagle designed for me. (Which I’m afraid I no longer have easy access to.) This was 2009, and she was trying to bring me into the modern era. The blog needed art, she said. Back then, it didn’t matter if I used the same piece of art over and over.

Now, it matters. I need something different each time. I’m not handy with design, so I don’t do it myself. I license a piece of art cheaply, and slap it on top of the blog. That way, you all know that I have a new post up this week, and am not recycling an older one.

What I have done here is called Licensing In. I have licensed, through Canstock Photo, this cartoon to enhance this blog.

Most of you writers have licensed in. Generally, your licensing in involves covers, especially if your cover uses an exclusive piece of artwork. The licensing in can be complicated: you might have licensed the artwork for use on your cover, but you might have hired a designer to do the font, the blurb, and the interior. So you now have two licenses on your book for intellectual property that you do not own.

Many of you have done this since the beginning of indie, and you don’t think much about it. You use the same agreement that you had with the same cover artist and/or designer since 2011. The agreement might be verbal. It might be a simple one-line paragraph.

If you are using the work of a friend or a long-time colleague and your agreement (written by the two of you) has existed for more than eight years, I can almost guarantee you that the agreement is inadequate for a revamped writing business with a focus on marketing.

A whole bunch of you just went huh? Because both sides have been happy with this arrangement since the dawn of your indie publishing career. How can this arrangement go wrong?

Well, we haven’t dealt with most of it, because I’m wrapping my arms around the ways to explain licensing to you. It’s such a vast topic that each subtopic that I touch had an impact on a thousand other subtopics.

I started this blog post with the header “Money,” firmly planning to talk about what you can earn and what you should expect. But I know that starting with earnings, particularly in something as vast as licensing, is much too complicated.

So I decided to start with what you actually do. And that’s license-in.

Back in the days of traditional-only publishing, before indie became big (which seems like it was 100,000 years ago, but was really only about ten years ago), we used to advise writers thusly:

Money flows to the writer.

That meant don’t write for free, don’t pay to get something published, don’t pay to enter a contest…

All advice that’s still good for traditional publishing. Where someone else is handling the license. (Essentially, you’re licensing out, but we’ll discuss that in a future money blog.)

However, that aphorism—money flows to the writer—means nothing when you own your own publishing business. Because, before you can even get your book published as an ebook or an audiobook or a print book, you have to spend money.

And some of that money is on art, design, copy edits, and so on and so forth.

Let’s just focus on the art, shall we? I chose an Andrew Genn to accompany this post because I like Genn’s cartoons and I’ve used them a lot. I’ve never met him. I just collect his stuff in my “favorites” file on CanStock Photo, because I find his perspective very useful to the business blogs.

(A lot of his cartoons are designed for a PowerPoint presentation, and indeed, one of the speakers at the Licensing Expo in June used a Genn in his presentation.)

I also want to use the Andrew Genn as a secondary illustration. When I was writing Creating Your Author Brand on this blog, like I’m doing these licensing posts (bit by little tiny bit), I illustrated most of those blog posts with a Genn. Not all. Early on, I used other art. Then I discovered Genn, and thought him as recognizable as a brand for the branding posts.

When I put the book together, I wanted the Genn cartoons to illustrate each chapter. I handed the book in to WMG Publishing, with each cartoon and an instruction: I linked to each license I had used for each cartoon, and made the staff at WMG check the license to ensure that we had the right to use the cartoon in the book.

If we didn’t have the right license, WMG needed to go back and relicense that cartoon for the print and ebook rights. WMG also needed to keep an eye on sales. Because some licenses were good for book sales (or general sales) of up to 150,000. I’m pulling that number out of my butt, but the point is, if we anticipated that the book would sell more than the number listed in the license, we would have to pay for a different license for the cartoon.

We kept the non-exclusive license. We didn’t need exclusivity for a nonfiction book on branding. We still don’t.

But you might need exclusivity for your novels. And we will get to the reason for that in a future blog post. But for a quick explanation, take a look at that decision tree from a few posts back. You might want the same piece of art on the apparel and the posters and decorating your restaurant and…and…and…you will need a license that specifies all of that.

Or you might want to license all rights to the art (if the artist lets you). A few months ago, I spoke to a small publisher who has been licensing art since before I was born, and they pay a huge amount for not only an all-rights license (which they renew when they need to), but for the actual art itself.

I don’t have that kind of money (at the moment) for every project I do. But I can license exclusive art for books or movies or whatever I’m going to do, if I need to, and so can you.

I’m starting with Licensing In because so many of you want to know how much money you can make on licensing. You see online video games or movies and see millions of dollars flowing toward the writer.

And yet, I know traditional writers who’ve made movie or TV deals and who have licensed to games who can’t sell another book to a major publisher. I also know writers whose books on which the movie/TV show/game are based are out of print, with no hope of getting the rights reverted. Many (most) of these writers are broke.

You’ve probably heard of some of these writers, seen the movie based on their property, maybe even bought their books. It isn’t always obvious as to who they are.

Money and licensing is a big complex issue. And making money is even more complex.

So I want you to look at the money you’re spending on a licensing in deal. You have paid money to an artist for something to illustrate your book. You might have paid a few dollars for a nonexclusive tiny license, as I did for the Andrew Genn, or you might have paid thousands for an exclusive to use the art as a book cover.

Did the artist get rich off that license? Heck no. Not from you, and not from me.

A quick Google search for Andrew Genn shows him as the cartoonist behind a site called Cartoon Resource.  Most of the rights to his work are what we would call, in publishing, reprint rights. But he will also accept commissions. So I could hire him to illustrate the licensing book exclusively, if I wanted to.

But more pertinent to this particular post is this:

As of the end of August, 2019, Andrew Genn has 2932 approved images on Canstock Photo. According to his page, he has made 3227 sales of those images. The prices charged on Canstock Photo run between $2.50 for the size I used above to $12 for something more complicated. None of those are exclusive, nor are they the biggest possible license.

But, let’s assume that Genn sold all 3227 images within that range. Let’s just pick $5 as an average. That means he has made about $16,000 on Canstock Photo since he joined in 2011. That doesn’t count the other types of licenses or the exclusive work he might have gotten from the images he has on Canstock Photo. Nor do we know if he made the bulk of that money last year or five years ago.

I do know, from my handy-dandy Google search, that his cartoons also appear for sale on Deposit Photos and Dreamstime. And, I’m sure, on other sites. As well as the site he runs, Cartoon Resource.

He’s not getting rich licensing old cartoons, some of which he probably originally sold to print publications before the internet changed everything. He’s not getting rich…but he’s making money, on intellectual property that would have had very little value twenty years ago.

His cartoons are earning money for him each and every day. All he had to do was upload them to various sites, something he continues to do. (There’s always something new.)

Licensing, for writers and artists, might not make you rich. But it will earn you money. Sometimes in large chunks, and sometimes in small chunks.

But you already know that. If you’re reading this blog, most likely you license out your work to places like Amazon, Kobo, and D2D. You might have audio books (also a license) and print books (yet another license).

If you’re traditionally published, you signed a contract that should be a licensing agreement. I say “should be” because some writers are dumb enough to sign away all of their copyright to the traditional publisher.

I hope you’re not one of those writers.

So…you indies…you understand licensing in. You already do it. We do too. That was the point of my art post a few weeks ago. The art you’ve licensed for your early covers might not be covered for other things in the decision tree that I posted. And you can’t assume, just because you licensed an exclusive for your book cover, that you have the right to use that art in a live-action clip-art piece based on your book.

Or just the artwork itself (no title, no byline, no book cover) on a t-shirt or a mug. Or the female image in that artwork as a standalone poster.

You might not have the rights for that.

You probably don’t.

And if you have a verbal agreement with your artist, you’re in a heck of a mess. You’ll need to solidify that agreement in writing, even if the artist is your kid. (Especially if the artist is your kid.)

I used the licensing in example as a way to get you to understand the scope of licensing and money. I also want you to understand that you already have a hand in licensing. You might not know what you’re doing, but you’re already doing it.

So, as I’ve said before, you need to stop thinking about licensing as money. You need to think about it in terms of what you need for your project.

And, if you think about cover art, you’re already doing that. You’re licensing in the artwork and maybe the cover design. You’re paying what you can afford. You’re thinking about exclusivity. You should also be thinking about the term of the agreement, and the territories where you can use that artwork. (Because if you’re selling your book worldwide, you might not have image rights in, say, Japan.)

Got that?

Next time, we’ll deal with how to think about money as you’re licensing out, meaning someone else wants to use your IP on their project.

If you want homework, here it is:

Make a list of all the things you have licensed in for your writing business. You should have this anyway. A list of what you’ve licensed, and whether or not the license is exclusive. What territories it covers, and how long the license lasts.

And think about how much you paid (or didn’t pay) for those licenses.

Realize that you’re already in the licensing business—whether you knew it or not.

 

***

 

Dean and I were surprised in June when the Licensing Expo changed the way we approach our business. I had a hunch that would happen, but not to this extent. We’re doing a lot of learning, and getting overwhelmed, just like you are. But we’re excited too.

We have Deidre J. Manna-Bratten of the Global Licensing Group speaking at our Business Master Class in October. She’ll be doing quite a few sessions and answering questions—probably some of them from us! There are still five slots open in the class, but I don’t know how long they’ll last.

Dean’s also doing a learn-along as WMG Publishing makes its transition to a more licensing based focus. Licensing Transition: A Year-Long Journey From IP To License is something you can sign onto, and interact with him and others taking the course. I’m also doing some extra blogs on Patreon, and will continue to do so as the year progresses. Many are focused on licensing.

But I’ll be finishing this series here, so no worries if you don’t want to go to Patreon. The series will be free on this site, and will remain here. I suspect I’ll make a book out of it as well.

So…here’s the standard plug:

If you feel like supporting the blog on an on-going basis, then please head to my Patreon page.

If you liked this post, and want to show your one-time appreciation, the place to do that is PayPal. If you go that route, please include your email address in the notes section, so I can say thank you.

Which I am going to say right now. Thank you!

Click paypal.me/kristinekathrynrusch to go to PayPal.

“Business Musings: Money 1 (Rethinking The Writing Business Part Ten),” copyright © 2019 by Kristine Kathryn Rusch. Image at the top of the blog copyright © Can Stock Photo / andrewgenn.

 

 

5 responses to “Business Musings: Money 1 Licensing In (Rethinking The Writing Business Part Ten)”

  1. Curious says:

    When you mentioned the small publisher that licenses all the rights to a price of art and/or the art itself, am I correct in thinking this is work for hire? Work for hire is a case where the copyright for the item produced goes to the purchaser rather than remaining with the person who created it, right? Just like ghostwriters give up the copyright to their work in exchange for a fee, an artist working for hire would be giving you the copyright to their art (and giving up the chance for future royalties or further licensing deals) in exchange for a one-time fee. Of course if the artist is any good, this would surely be very expensive – but could be very beneficial down the road for the author. You mentioned in a post a while back that we authors may need to think differently about art, so I’m wondering if this is what you meant. I’m sure you’ll address this in full later – just wondering if I’m on the right track. Thanks!!!

    • Um, no. No, this is not work-for-hire. The small company buys the painting and all related rights There are several different kind of rights with images that do not exist with print works. Also, work-for-hire has its own problems and really shouldn’t be used in publishing at all. Giving up your copyright can be done a million different ways. It doesn’t just have to be work-for-hire. Essentially traditionally published writers who sign some current contracts with the Big 5 are giving up their copyright–and yet not doing work for hire.

      The Copyright Handbook answers these and many other questions.

  2. Rick Grant says:

    I must be a very old dog indeed because it has taken me all of these blog posts to finally begin to understand the importance of what you are talking about.

    There was an almost audible click in my brain when I read today’s installment and the concept of “licensing in” popped up. At that point it all started to come together and instead of me reading along vicariously with the overriding thought in my brain that this was, “All good for some, but it hardly pertains to me,” things fell into place.

    I then went to Canstock Photo and realized that I have a metric tonne load of high quality photos I have taken related to my business and fiction writing that might as well be turned out of the barn and let loose into the stock photo world to earn their keep. That’s a licensing opportunity almost entirely unrelated to my writing and it would never have occurred to me to explore it without your post.

    I am now going to go back and re-read the previous posts in the light of the little bit of understanding I gained today. Thank you very much.

  3. Mark Schultz says:

    You are right, Kathryn, this is getting deep and I love it! Thanks. I will share this widely.

  4. Liana Mir says:

    Being generally unrich in funds, I have collected over the years a broad folder of free for commercial use stock photos, which I use to create any artwork I need. In some cases, they require credit and I save each of these with the credit name in the filename, so I know when I choose it to credit the photographer on my copyrights page or the equivalent. I have always been very careful NOT to save any stock photos that come with any commercial restrictions because I know at my current stage of health, etc. I’m not closely monitoring anything enough to ensure not going over x number of impressions or sales.

    But I always knew if I started using more complicated licenses, my publishing life (such as it is) would require a ton more maintenance because owning and licensing are way different things and really, really matter with photography.

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