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Begin harnessing the power and potential of licensing your work, comprehending licensing agreements, and understanding contract terminology, along with what learning what kind of arrangements are ideal and what offers you should avoid. I talk about pitfalls to watch out for and why you should be using your own agreements.
- 01:16 A general overview of licensing
- 04:10 Designers that don’t have a good grasp on licensing often sell their work at a flat rate and simply transfer all the rights—often missing out on potential value.
- 04:42 If you take away one thing from all of this: Your ownership of rights to a work is like your soul.
- 05:28 Beware of the “buyout”.
- 05:52 Get out of the mindset of “TIME x RATE = COST” because it has no accounting for VALUE.
- 07:40 It’s not about the product itself, it’s about the appeal of the design.
- 08:06 Licensing is how you realize this value.
- 08:16 Positives: Recurring revenue, passive income, potentially very lucrative if you have multiple, numerous, diversified sources.
- 08:44 Don’t be fooled by promises of “exposure”. In no circumstances should this be solicited in place of actual compensation. Exposure should never take the place of payment. Professionals get paid for their work.
- 10:10 You need to seriously evaluate your business goals and how licensing affects those goals.
- 12:00 Let’s not mince words: when you license, you are selling out. It’s the very definition of selling out. You are cashing in on the appeal of your work. Don’t get me wrong, it’s a very legitimate way to monetize your work, but make sure you realize exactly what it is that you’re doing.
- 12:19 Make sure you are exercising quality control when it comes to where you allow your work to be licensed. Don’t dilute your brand.
- 14:09 You also have to consider the appeal of your work. If you are a front-runner within a given industry, then your royalty rates should reflect that—it should be inflated because of your appeal.
- 15:01 It does often come down to negotiation. Negotiate your rate, but you need to be able to back it up and stand by it. Don’t cheapen your work.
- 15:30 Sean’s Licensing Agreement Breakdown:
- Flat rate for any design work
- Percentage-based royalty on the profits
- Non-refundable advance on royalties
- 16:46 You should base your quoted percentage on the Gross Sales, not the Net.
- 18:40 How to avoid unmitigated risk
- 21:41 What kind of questions you should be asking the licensee?
- What is the number of items to be produced?
- What is the intended retail price?
- What is the expected profit per item?
- 22:30 The granularity of region-specific licenses and exclusive vs. non-exclusive rights.