BUSINESS FOR ARTISTS: THE 10 BASICS
Artists create.
To live well and prosper, artists must sell what they create. Selling
art can be as painstaking as creating it. Therefore, many successful
artists enlist the help of professionals to tend to the selling details. Other
artists handle the business details themselves.
Artists need to protect themselves and their art to profit from it. Whether an artist sells a single piece, works with an agent or licenses work for mass production, there are business decisions that need to be made. Here are 10 basic business considerations for artists.
1. REGISTER YOUR WORK
The first step in protecting a piece of art is to register it with the Copyright Office. Registration is not a condition of copyright protection. It is merely a legal formality that makes the work a public record. However, this legal formality is very important if an artist anticipates licensing work or displaying work in any way which puts the piece at risk for infringement – on the web, for instance. Considering the minimal cost of registration, there is little reason not to do it – and lots of reasons to do it. Registration gives artists the leverage they need to stop someone from copying their work.
A work may be registered at any time in the life of the copyright. To register a work, an artist must send to the Copyright Office: (1) a completed Visual Arts application form; (2) a filing fee (currently $30.00); and (3) deposit copies of the work. Although it may take several months to receive a certificate of registration, registrations are effective as of the date the materials are received by the Copyright Office, regardless of the date the registration actually issues. On-line information including copies of forms for registering art and other work can be found at the United States Copyright Office.
2. FIND YOUR NICHE MARKET AND PRICE YOUR ARTWORK ACCORDINGLY
Understanding the marketability of your work is key to selling it. An artist must be able to articulate the market for his work. How much art do you sell? Who do you sell to? Why do they buy it? What prices are you charging for your work? What are comparable artists charging for their work? Is there a particular demographic for purchasers of your work? Where have you sold your work in the past? Where has it sold most successfully? Taking a close look at these issues will allow you to seek out buyers, agents and licensees that are right for your artwork.
3. DOCUMENT YOUR SALES
Artists should use a bill of sale. Although it is easy to use an invoice or receipt for the sale of a piece of art, or no written document at all, these do not allow you to incorporate some very important terms of the sale. A bill of sale allows you to incorporate any unique terms of the sale and will help keep a record of your work. Key terms to include in a bill of sale are: a detailed identification of the work, including the title and size of the piece; other elements that are included in the sale such as the frame or any preliminary sketches; the date of the sale; the sale price; any special instructions or notifications to the buyer; and any other terms of the agreement. For example, if the sale includes an assignment of copyright, the assignment should be included in the bill of sale. Also, if the work is commissioned, the bill of sale should reiterate the terms of the initial commission agreement so you have documentation of the project parameters.
4. DISPLAY YOUR WORK WITHOUT COMPROMISING YOUR RIGHTS.
The best way for you to get exposure for your work is to put it on display. There are many ways to do this, working with galleries, websites, and organizations such as Art Exposure Inc. If you enter into an agreement with a gallery, the gallery will most likely have a form agreement that you must sign. The terms of these agreements vary depending on the relationship between the gallery and the artist. Regardless of the nature of this relationship, any agreement to display work in a gallery should include: terms that address framing of the artwork and placement of the artwork; delivery terms; value and sale price of the works; an express identification of the works to be included; the length of the exhibition; and the fees for exhibiting the work. The agreement will likely also include a limited license for the gallery to reproduce the artist’s work for publicity purposes. Any license that goes beyond reproduction for publicity purposes should be carefully examined and separately negotiated. All gallery agreements should clearly state that the risk of loss in the event of fire, theft or other damage to the artist’s work is on the gallery. The gallery should have insurance that covers the art displayed there.
Artists need to protect themselves and their art to profit from
it. |
Another way to get exposure is to place artwork on a website, whether it is your site or a gallery site. Due to the ease of downloading material on the web, placing images of the work on the web leaves the work vulnerable for copyright infringement. Using preventative measures can help deter infringement. First, you should incorporate a copyright notice in the image file including the “©” symbol and your name. This can be done with minimal impact on the integrity of the image by adding a watermark directly to the image. Second, include a statement expressly stating that all images are your copyrighted work and that all rights are reserved. Third, if the technology is available to you, the best way to avoid unwanted downloads of your images is to put these images on the site in a format that cannot be downloaded.
5. SIGN A FAIR AGENT AGREEMENT
Agents can be a great help in getting exposure for your work. However, entering an agreement with an agent must not be taken lightly. Because agents can often receive up to 50% of your profits, you want to be certain that the agent is the right representative for your work and has your best interests in mind. Research your potential agent before signing any agreements. You will want to know what type of artwork the agent specializes in and how much business they do. Ask for referrals, the agent should be willing to provide you with contact information for actual clients so you can see if the agent is satisfying their needs.
Many artist-agent agreements are exclusive in nature. This means that the agent is the only agent for your work. An exclusive agreement may not suit your needs. For example, some agents only specialize in assistance in selling your artwork. If you are looking for someone to find and negotiate licensing opportunities, you may need a different, or second, agent. Additionally, many agents will require that you sign an agency agreement for three years. This allows them sufficient opportunity to market your work, negotiate licenses on your behalf, and begin bringing in royalties. However, if you are not interested in licensing, and only need an agent to help you sell your artwork, do not sign an agreement for longer than one year. This shorter agreement will allow you to change agents freely if the relationship is not successful.
Some other provisions that should be included in any artist-agent agreement are: the reservation of an artist’s right to reject any proposed sale or licensing agreement; an assertion that any works loaned to the agent will be promptly returned upon termination of the agreement; an explanation of who will bear the expense of promotional and advertising materials, shipping, and other expenses; the agent’s percentage for all of the various possible transactions such as licenses, sales, and agreements negotiated without the aid of the agent; and a bilateral termination provision (both you an the agent have the right to terminate the agreement).
6. LIMIT YOUR ART LICENSES
An agent is paid, in part, for who they know. It is your agent’s job to find manufacturers interested in licensing your work. It is possible, however, to negotiate licenses without an agent. Although it will take a lot of work, you may be able to make your own contacts with manufacturers.
Once you have found someone who wants to license your artwork for reproduction, whether it is in the form of greeting cards, coffee mugs, prints, or t-shirts, it is easy to become enamored with the idea of making money on your work and neglect the details of the license arrangement. However, as an initial matter, be sure that this agreement is a license and not an assignment (or sale) of your rights. Any agreement that gives the licensee the exclusive right to reproduce your work and create derivative works on any product in any geographic location for an extended period of time takes the control of this artwork out of your hands.
A more favorable license will limit this license to
a particular geographic location and include only a license to reproduce
the artwork
on certain
types of products.
Like an agent-artist agreement, any license must also place an obligation
on the licensee to use its best efforts to exploit your work. If the
licensee is not able to exploit your work and take these products to
market within
a
period
of time, the license must terminate.
A license should also be limited in duration. This will allow you an
opportunity to renegotiate a successful license for higher royalty rates
or to seek
a new license if the existing license arrangement is not as successful
as you
would
like.
Other necessary provisions for licenses include: an
indemnification from the licensee for harms caused by the products that
bear your artwork;
a list of
the specific works being licensed; an assurance by the licensee that
copyright notice
will be on every product sold and in all advertising, including your
name; clear terms as to royalties for the sale of the products and how
and when
these royalties
will be paid; and provisions for termination of the agreement if the
licensee does not fulfill its obligations.
Most license agreements are fairly complex. You may want to seek the
advice of an attorney when negotiating the terms of these agreements,
even if
you already
have a licensing agent.
7. KEEP GOOD RECORDS/BOOKKEEPING
In agreements you
have with agents, galleries, or licensees, you must be able to monitor
your income. All agreements should require the contracting
party
to provide you with regular accountings. This documentation will let
you
see how
much has been sold, how much money others have made from your artwork,
and how much money you have made.
If you enter into any long term agreement (6 months or more) your agreement should include a provision that allows you to inspect the books and records relating to the agreement during regular business hours upon reasonable notice. You should also require that these books and records be kept according to standard accounting principals.
Always remember that this is a business and there are tax implications for any transaction. Keeping accurate records of all sales, licenses, and income is crucial for tax reporting purposes.
8. MONITOR YOUR RIGHTS
If you become successful, you may have licensed various rights in your works to various licensees. It is possible that you could have obligated yourself to licenses that conflict with one another. For example, if you have granted an exclusive license to reproduce a certain work, and you also have that original piece of art on display in a gallery, you may be violating the terms of your exclusive license by allowing the gallery to reproduce the original work for publicity purposes. This is a very basic example, but conflicts can arise. By keeping a detailed record of your artwork and all licenses granted, you should be able to avoid this problem.
9. POLICE INFRINGEMENT
In order to protect your rights, you must police any unauthorized use of your work. If you find that someone has reproduced your work without authorization, or that one of your licensees has used your work outside the scope of the license arrangement, that individual or licensee has infringed your copyright in violation of federal law.
The first step is to send the infringer a letter informing them of your rights and demanding that they stop the offensive activity. This letter, known as a cease and desist letter, should be drafted with care. The next step is to sue for infringement. Remember that suit cannot be filed until you have registered your copyright in the work. You may want to seek the advice of legal counsel as soon as you find that your rights have been infringed.
10. ESTATE PLANNING
Because copyright endures for 70 years after the artist’s death, it is an asset with inheritance value and should be treated like one. When an artist dies, his copyright rights pass to his estate. Copyright is a property right and therefore will be subject to the disposition of the estate just like other tangible property. If you have chosen to divide your property evenly between each of your children, for example, the rights in each work will be valued (just as a chair or a car would be valued) and these rights will be sold or divided among your beneficiaries. If you would rather have these rights owned by one individual, or controlled by a trust for the benefit of the beneficiaries, you must expressly arrange this. When crafting a will or trust, be sure to consider these rights as well as ownership of any physical pieces of art.
Let an attorney from Goldman & Minton, P.C. help you take the next step. Artists create. Lawyers protect. Contact us.
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