Thursday, July 25, 2013

Getting You Paid, Part 2: Contracts & Licensing

-By Lauren Panepinto


So last post I started talking about what goes wrong with invoicing and accounting and all that, all the teeny little things that can add up to payments being delayed, missing, lost in transit, etc, when you are working with legit companies with proper accounting departments. Pretty much the moral of the story was: Generally people are not out to screw you over, things just get screwed up. And neither artists nor art directors are terribly good accountants generally, so we're mostly self-taught, and we all make mistakes.

Well, let me tell you, artists and art directors are not trained to be lawyers either, yet contracts and legal terms, legalese, and fine print are very much a part of our business. For generations most artwork was commissioned with a gentleman's agreement (and a martini if you're watching Mad Men), but more and more companies are insisting on proper paperwork to get you paid. Also, issues of licensing and rights are changing rapidly with internet games, apps, and ebooks. And most artists are very happy to get work, so they generally sign a contract without looking it over too carefully (especially if it is coming from a legit company), and then find themselves complaining later about terms they unwittingly agreed to. Every company is different, and there's a great deal of variance on things like territories, languages, kill fees, reproduction rights, etc. So I'm going to go thru some common terms and also some issues you should really be thinking about when you take on a job from a new company. Obviously, I'm going to be talking from a books centric view, but most of this is translatable.

1—JOB DESCRIPTION
Make sure a contract clearly states what the project is, how much you're being paid for it, and when it is due. Generally a fill-in-the-blanks section. The more detail the better here.

2—REPRESENTATIONS
You are agreeing that this is your original work, and no part of it is under contract to anyone else. You are "representing" yourself as an artist available to hire (not under exclusive contract to anyone else) who does original work. Pretty much, this means if you're found to have copied or stolen something later, the company is not responsible, you are.

Warning: If you use stock imagery, or any found imagery, in your work, you are responsible for making sure it is clear for use, and that you pass along the information to clear the art & pay the copyright holder along to the art director. Fonts too. There's even tricky laws about using photos for reference too closely. Let us all remember the Shepard Fairey/Obama photo fiasco.

3—USAGE
Is the client paying you for one usage or all usages? For example, At Orbit we license for book use only. which means you retain the right to sell the same image for sneaker ads, album covers, to publish in a magazine, sell prints on your website, etc. If someone is buying all your rights to use the art for anything they want (called "Exclusive" Rights), and more importantly, keeping you from reselling the art for different usages, then they should be paying you more. Don't forget merchandising rights too...just because I am buying rights for use on a book cover doesn't mean I get to sell t-shirts with your art on it, even if its the whole book cover on the t-shirt.

Warning: "Work for Hire" means "Exclusive Rights" to the max. It means that you do not have the right to use the artwork you create for any purpose, even self-promotional. Although most companies will allow an artist to show work-for-hire work in their portfolios, unless it says so in the contract, you do not automatically have the legal right to. Most work done for well-known licenses (Disney, Star Wars, Tomb Raider, etc.) will be work-for-hire, because they can't allow you to sell that work for any other purpose. Or show it to anyone without their say-so. License work is also usually protected by a Non-Disclosure Agreement "NDA", which means you can't show the work to anyone until the license makes it public.


4—PROMOTIONAL USE
Most contracts will state that they also have use of the art to promote the product. Your art can be taken off the cover and used as a background in a newspaper ad, or on the author's website. We can also make merchandise to give away promotionally. I have to explain this to authors a lot - you can absolutely have things printed with your cover art on it - shirts, posters, coffee mugs, whatever - but you can only give those items away to promote your book, not sell them for profit.


5—TERRITORY/LANGUAGE
Art used to be licensed by physical territory - for example, before ebooks I always bought rights for just North America. However, with the internet and ebooks, where a product physically ships is less and less relevant, we are now licensing by language. So I am buying rights to not only use the art on a book cover, but only book covers in English, wherever they physically are. This is pretty standard now in books, apps, advertising - it's called licensing "World English". If a company wants all rights everywhere in every language, they call it "World" Rights. Or this may fall under the umbrella of "Exclusive Rights" - again, read the contract carefully.

This means that when a foreign publisher or company buys the rights to the book or product content, they need to relicense the art. If you've ever heard the term "sub rights" and not known what they do, this is it. We give the foreign publishers your contact information, and they are supposed to approach you to pay you to reuse it. Generally this is 50% of the original fee or less, but it depends on the country/language. It's kind of a bluffing game, because you don't want to quote a price so high that the publisher wants to scrap your art and make their own cheap ripoff.

Warning: Some countries are more well known for being shady (I'm looking at YOU, Poland) and will just take the files from the publisher and never contact the artist. Sometimes they're even worse and they'll swap art from one book to another. Sometimes they'll literally buy the english edition, scan the cover, and photoshop off the text. Unfortunately it's not the original company's job to police that. Trust me, they're stealing the content too, not just the art. I remember hearing about a foreign card game that just scanned and stole a bunch of Magic card art and reused it on their own card game. Good luck hunting them down, and even more luck getting them to pay you or change the cover.

6—REVISION RIGHTS
This is pretty much a clause saying the pesky Art Director can do whatever they want to your art after you hand it in - crop it wildly, change the colors, any revisions they want, and they do not need you to do it for them, and they do not need your permission. This is one that does tend to piss the crap out of artists, but look at it this way...no Art Director wants to make more work for themselves monkeying with your art. If they're making revisions it's to please someone who has the power to kill your artwork, and they're trying to salvage it. Most of the time they'd be much happier (and I speak from experience) to leave it as you handed it in, but if recropping, or changing the color of something, will get the art approved, they will do as much as they can to keep from killing it.

7— KILL FEES
Many companies have kill fees (often 50% of the initial hiring fee) that you are given when you get partially thru the assignment and then it gets killed. Or even if the artwork is done, but for some reason doesn't get used. However, a lot of companies can't afford kill fees on top of the cost of restarting the art, and it needs to say so in the contract somewhere.

Warning: Make sure there is mention of a kill fee or what happens in the event a cover is killed. This might be one of the most frequent problems that pops up between artists and ADs. You can't demand a kill fee if it's not in the contract.

8—FUTURE RIGHTS
This is kind of a miscellaneous heading, and it's kind of "What-If" terms. kind of "If this happens, then we have the right to do this, so long as we pay you." Sometimes a company will say in the contract they have the option to use the art for different usages as long as they send you more money. This comes up in books a lot, because I will license for hardcover use, but in the contract it says I have the right to put the art on a second format (like paperback or audio) without needing to get your permission again, so long as I pay you X% of the original fee, or a flat money amount.

Artists rarely think this way, but remember, you're not necessarily being paid to create the art, you're being paid to license it's usage. Think of it that way and you'll automatically be a more savvy businessman.

So I'm sure I'm leaving some finer points out in my generalizing, so feel free to ask questions in the comments!

See Part 1

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