Exclusive vs. Non-Exclusive Licensing: What’s the Difference?

Should you choose exclusive or non-exclusive artwork licensing for your product? And what's the real difference?

If you've never licensed artwork before, you may be wondering what licensing is and where to find answers. These questions are so important in making the best decision for your brand, but sometimes it can be difficult to find the answers. Exclusivity impacts the way you can use the artwork, who else can use the artwork, artwork cost, and your brand's protection. As a business owner, you need to know the answers to all these factors in order to make the right choice for your brand.

In this article, we'll break down exclusive vs non-exclusive licensing so you understand all the nuances plus we'll go through when it makes sense to consider purchasing the full copyright instead. So let's get into it!

What is Artwork Licensing?

Let's first define what artwork licensing is. Licensing is essentially renting the right to use artwork under agreed upon terms. These terms include industry, product categories, duration, and geography. Licensing contracts should define all of these things so that both parties are clear as to how the artwork can be used and the protections for both licensee and licensor as well as the cost of the artwork license.

If either party is unsure about the terms of the license, things can get sticky, so understanding exactly what you're licensing and the terms of that license are crucial. Not all licenses are created equal. One big difference in the usage of artwork comes down to exclusive vs. non-exclusive licenses. So let's get into what each term means and the pros and cons of each.

Non-Exclusive Licensing Explained

Non-exclusive licensing means that multiple brands can use the same artwork. If you want a non-exclusive license, it means that anyone else can also choose to license that same artwork. So you may see the same print across multiple industries or even repeated in your brand category.

One of the biggest reasons brands choose non-exclusive licenses is that it's affordable (prices range from $200-$1000 depending on other factors mentioned above). Non-exclusive licenses are also often flexible, and good for testing products. Seasonal or short-term products are another time when non-exclusive licensing may be a good choice.

Non-exclusive licensing comes with some drawbacks as well. Those include the fact that it's not unique to you and your competitors may also license that same artwork.

For example, you're a stationery company and license a piece of artwork with a non-exclusive license. Then a packaging company also non-exclusively licenses the same artwork for their product. Both companies are able to use the artwork based on the terms of the contract they signed with the artist.

Exclusive Licensing Explained

Exclusive licensing means that only your brand can use the artwork in a category or industry for a set amount of time (and other factors) specified in the contract. Those details will be unique to your contract, but it provides your brand with more unique artwork.

The pros of exclusive licensing include brand differentiation (you're the only one within the specified industry that can use the artwork for the time period), competitive protection, and peace of mind. If you're trying to stand out with products that are only available through you, exclusive licensing helps give you that differentiation.

This protection and uniqueness come at a cost though, which makes sense as the artwork is not available for the artist to use as freely. This higher cost (anywhere from $500-$2000+) often limits you to one product category or industry, but is the most common licensing type among established brands trying to stand out from their competitors.

For example, many of my licenses for wallpaper are exclusive only to wallpaper. They may still be licensed on stationery, bolt fabric, etc., but one company has exclusive rights on wallpaper for the duration of our contract. The brand knows they will have something unique and that aligns with their vision without worrying whether the next wallpaper company will license the same artwork. However, once the contract ends, other wallpaper companies will be allowed to license it.

License vs. Buying Artwork Copyright

Before we go any further, there's another option here, and it's a buyout. Licensing is a temporary usage of the rights, but a buyout is where you gain full ownership of the copyright. There are no time limits, no renewals, and no royalties or fees after the sale of the artwork.

This means you can use it in any product category and on as many products as you'd like. It also means you have complete control of the artwork, no risk of overlap in any industry, and can use it for as long as you like. It's a beautiful way to ensure your brand stays unique.

This freedom comes with the highest upfront costs, often $800+ depending on how sought after the artist is and the complexity of the work. Typical buyout prices can also vary depending on industry with fashion being on the lower end and home being on the higher end.

Many businesses wonder whether to license or buy artwork copyright. The right answer depends on your budget, brand goals, and how permanent you need your art usage to be.

Exclusive vs Non-exclusive licensing: How to Choose the Right Option for your brand

So what is the right option for your brand? Only you will know, but we do see some trends as to who seeks each type of license or buyout.

Non-exclusive licenses often make the most sense for startups, brands testing a product concept (and they're not ready to go all in yet), and those with limited budgets. They also make sense for seasonal or short-term products where you won't be producing it for long.

Exclusive licenses are a mid-tier option for brands who want to differentiate themselves from their competitors, and protect their product lines, but have shorter-term products or consumables where their customers will probably want something different and new as the sales cycles go on. They have bigger budgets to work with and can pay for that protection.

Copyright Buyouts typically go to luxury brands or brands with long term product lines that become iconic. They may also be sought after by those who really value uniqueness and brand recognition and want to use that artwork across multiple product lines.

	Pros	Cons	Good For
Non-exclusive License	Affordable, flexible, and great for short-term products	Competitors can also license the same artwork	Startups, testing product concepts, and limited budgets
Exclusive License	Brand differentiation, competitive protection, peace of mind	Mid-to-higher cost, license will still expire	Established brands, protecting brand image, and competitive industries
Copyright Buyout	Complete uniqueness, brand customization, own the copyright, complete freedom to use as desired	Higher cost	Luxury brands, long term product lines, brands who value uniqueness and want complete control

So in making your decision, you'll want to keep in mind four major points:

• Budget

• Timeline

• Risk Tolerance

• Market Positioning

You'll want to weigh these factors and determine which are most important to you and your brand. Then use this chart to determine which category of licensing or buyout that best fits your goals for the artwork. There are no right or wrong options--it completely depends on how you plan to use the artwork and what level of control you want in your decisions.

Now if you're ready to find artwork to license, I'd love to have you consider my artwork. I offer all three options—non-exclusive licenses, exclusive licenses, and copyright purchase—so you can choose the path that fits your product and brand best. Let's create something beautiful together!