Artists and Creators – are you "leaving money on the table"? Here's 4 ways you might be.
Even the best of us struggle to navigate the complexities of the creative economy. And this often means having to get ahead of the system in order to optimize our resources, while getting what is due to us. As artists and creators, it’s likely you’ve been told not to “leave money on the table” i.e miss out on money in a deal. Below are some of the most common (and easily fixed) ways I’ve found artists and creators missing on income that is rightfully due to them.
1. Not negotiating for derivative rights or additional revenue streams
When considering a deal involving your original creative work (whether this be music, artwork, a narrative or script etc) or your likeness (your image, your name, your own personal brand), it’s important to get very specific about the context of its usage.
A lot of the time, deals can take on a very “all or nothing” approach when it comes down to the ownership of intellectual property rights. Common examples include:
A film producer offering to buy you out completely when it comes to your script
A brand desiring to use your song, offering an exclusive licensing agreement for unlimited usage in all mediums (now known or hereafter invented)
Influencer marketing deals where you agree to the client’s usage of all content that you make during the term of your contract with them
Book artwork deals where your work will be reproduced for all editions of the book, in all formats (print and digital) and in all territories.
An all encompassing deal like this, especially in exchange for a flat amount or a
one-time-fee is an excellent way to deny yourself lucrative and long-term revenue opportunities.
When negotiating such deals, it’s important to remember that every adaptation or usage derived from your original work (hence, a derivative work) carries its own set of rights and value. Every contextual usage of your image or performance deserves a separate term of payments. Think about negotiating separate base fees and royalties for your work.
2. Not signing up with publishers, collection societies and industry bodies that are supposed to collect income from different kinds of usage and neighbouring rights
Negotiating for royalties and multiple income streams is pointless if you don’t sign up with the right infrastructure that can help you see that money.
As independent creatives, it’s easy to get lost in the mechanics of the creative economy – institutional structures and frameworks that have developed over time with the intention of facilitating the exchange of payments corresponding to the monetization of different intellectual property rights.
To put it quite simply, different entities exist to help monetize and collect from different revenue streams. Music publishers help collect monies due from the monetization of the underlying rights (composition + lyrics), performing rights societies collect on public performance related royalties and so forth. Different industries have different mechanisms in place and it’s vital that you know and sign up with the right bodies, guilds and companies that can help you collect this income due to you. Otherwise you foolishly risk losing hard earned money by simply not being organized enough to collect it.
3. Calculating commissions on gross rather than net
Are you paying attention to the difference between gross and net? This tends to be one of the most commonly ignored ways to lose money. In very simple terms, gross refers to the overall amount earned and net refers to what’s left after deductions are made from the gross sum. Industry standards often dictate the percentage of an agent, manager or PR person’s fee as well as whether it will be calculated based on the gross rather than net. Needless to say, when you’re calculating commissions on gross, you’re most likely going to be left with very little to yourself.
This suggestion of being more strategic with your calculations i.e negotiating to offer a cut from the net rather than gross, can be a bit controversial as it may be considered breaking industry standard (or stereotype) or potentially certain union or association rules. However, the point here is that you have to make an informed decision based on the relationship and scope of work undertaken by the manager, agent or other representative.
Blindly saying yes to commission quotes without thinking about them or negotiating them is just bad business.
4. Not charging significantly higher for exclusivity
Exclusivity has always been a touchy topic but it assumes an even more interesting meaning in the age of new media and social media monetization. In an era of 360 artist deals where essentially, every revenue stream can and will be collected on, you must negotiate solidly for exclusivity in your contracts.
Exclusivity has a delicious aura to it – it denotes desirability and a certain consistency of interest in you. Which is exactly why you should be charging significantly more when it comes to exclusivity clauses. Logically speaking, you are being asked to forego other opportunities of revenue or usage – an opportunity cost if you will. And this is what your clients and brands must be convinced of.
Exclusivity is more important for the client or brand you’re working with, so they better make it worth your while.
The above list is not exhaustive but it does highlight some of the most important and common ways that artists and creators miss out on lucrative revenue sources. Arguably, lacking knowledge of some of these mechanisms is also what allows exploitative practices to flourish in the creative and creator economy.
What else do artists and creators need to look out for in order to optimize their deals? What’s been your experience working around issues like amending commission clauses or negotiating for better royalty rates? If you would like to share your thoughts in the comments below, I would wholeheartedly encourage you to do so knowing that somewhere, someone reading your words is going to benefit a great deal having learnt something valuable from your experience. You can also always hop on over to our AL Glossary or Useful Links page to check out some industry jargon and discover impactful industry resources.