5 Crucial Questions You Must Answer Before Licensing Content to Stay in Full Control of Your Creations
Are you considering licensing content to someone else? Then, you must answer these questions from a lawyer before you let anyone use your creations.
When you’re licensing content to someone, you want to ensure you remain in full control of how your content will be used and safeguard your creations (and reputation). As a lawyer myself who drafts contracts for entrepreneurs and creators like you, I am asking you the questions I ask every client before they sign a licensing agreement.
You will learn all about what you must know when licensing content before you sign a content licensing agreement for all types of content licenses (no matter which content license agreement template you use).
After learning about the key questions you must answer before licensing content, you will have everything you need in your contract to keep full control of your licensed content and safeguard your creations!
This post is all about the essentials you must know before licensing content to protect your content and remain the master of your masterpieces.
Crucial Questions for Licensing Content
Essential answers you need before signing a content license agreement
Before licensing content, there are 5 essential questions you must answer. These are questions I ask my clients (which may be creators or professional content licensing companies) before I even start drafting their contracts. It is essential to know the answers to these questions before determining the content licensing fees and the type of licensing model to be used, and the answers to those questions must be clearly incorporated into your content licensing agreement.
So, let’s get into the first 5 crucial questions you must answer.
1. What exactly are you giving a license for?
This first question may sound like an obvious one, but it’s really not.
Too often in my career I have seen licenses for content that are described way too broadly when actually what the creator had in mind was just a small piece of that content.
Here are some examples:
A brand sponsors a food creator’s YouTube video for a recipe. The YouTube video is 15 minutes long, but the creator only talks about the sponsorship and the brand’s product for 3 of those 15 minutes. In the brand sponsorship agreement, the food creator grants the brand a license for the entire video, while actually, all the brand needs is a license to the sponsored portion of just 3 minutes. If the creator had just granted a license for those 3 minutes, but the brand later wants to publish the entire recipe video on the website, the food creator could give the brand an additional license for the entire video at a higher price, so the creator is fairly compensated.
A creator is asked to participate in a company’s event, and the company asks the creator to sign a media release form stating that the creator gives the brand a perpetual license to use all footage the company gets of the creator at all events of the company (for one fixed price). But all the creator thought the creator had agreed to and was being paid for was to show up at that one event and have that company only use the footage of that event. Now, the company has the right to exploit any footage the company makes of the creator now and in the future without having to ever compensate the creator for it again.
See how, in each case, the creator is not only foregoing the opportunity to make more money but also giving the brand/company way more of themselves than necessary.
That is why, when licensing content, you should be very specific and make the description as narrow as possible so that you’re only giving what the other party truly needs at fair content licensing fees.
2. For what purpose and where can the licensed content be used?
The second question you must answer before licensing content is: what may the content be used for? And what do you want the content to not be used for?
Let me explain again by way of content licensing examples.
Let’s have a look at my first example, where the brand is sponsoring a food creator’s video, and the creator is licensing video content to the brand to use the (sponsored portion of the) video. Does the brand get to use the video for promotional purposes on its website, its Instagram feed, its TikTok, or all three? But can the brand also use your content for paid ads on Instagram (without you getting paid any extra)?
What if you are a guest speaker on a podcast? The podcaster could want to use (a portion of) the podcast episode with you for publication on all free platforms the podcast is on, like Apple Podcast and Spotify. But what if the podcaster wants to publish a part where you are interviewed or talking about your product exclusively on Patreon, where the audience is way smaller?
What if you are asked to join a live virtual event of an entrepreneur to give valuable information about something you are an expert in, like Facebook marketing, finance, or creating and selling digital products? You’re basically giving a full tutorial on Zoom, and you are being recorded. What can the entrepreneur use that video for? Are you licensing video content just for the entrepreneur to use for promotional purposes on its social media platforms? Or what if the entrepreneur also wants to use that recording of you for a $5,000 course for which you have not been paid and to which you have no access?
See how when you’re licensing content, your content can be (ab)used for other purposes you might not have even thought of and have not been fairly compensated for?
Therefore, it’s extremely important to specify where and for what purpose the content may be used. And for certain collaborations, you may want to be very specific about what the content may not be used for.
In the case of a brand sponsorship deal where I’m advising the creator, I always include that although the brand may use the licensed content for its Instagram Reels, the brand is not allowed to use that content for paid ads on Instagram (unless, of course, the brand is paying royalties for that purpose).
3. For how long may the licensed content be used?
The next question you must answer before licensing content is: how long may the content be used for?
How important this question is depends on the type of collaboration and the terms of the deal. The best way to explain this is, again, by way of specific content licensing examples.
When you’re licensing digital content that’s made for social media, you know the shelf life of that content is not going to be very long. It will probably not be used for more than 2 years, as social media is constantly evolving, and so are trends. The content you post now will probably seem outdated 2 years from now. So when licensing content to a brand to post on their own social media, you don’t really need to worry about the term.
When you’re licensing content, like a photo or video, for a company to use for advertising, and you receive monthly royalties for it, you want the content to be licensed for as long as possible. So, you don’t necessarily want to put a time limit on it. But, if you know the content will be used for longer than a year, you might want to include price adjustments in your content licensing agreement (which we’ll get into in the next question).
When you’re licensing content that is evergreen, like a blog post or a tutorial, and you’re not being paid royalties but a fixed fee for the project or content, I recommend setting a time limit. You set a license term that reflects the compensation you receive. If you’re at the end of the license term and the person or company using that content wants to keep using your content, you can re-grant a license at a fee. Now, you’ve made more money off of the same piece of content!
See how even the term of the license can create new opportunities?
4. How will you be compensated for the license?
The next important question to answer before licensing content is: How will you be compensated for your content?
There are basically two options:
You license your content for a fixed fee (for a specified period).
You license your intellectual property for royalties, which are recurring payments, either on a weekly, monthly, quarterly or even annual basis.
It depends on the situation and the type of collaboration which payment type makes sense:
In the case of a brand sponsorship or a paid podcast or YouTube appearance, the license fee is often included in a fixed fee.
In the case of a UGC (user-generated content) deal or other content used for advertising, royalties are more common.
Suppose you’re receiving royalties for content which you know will be used for longer than a year. In that case, I recommend including a price index according to which the amount of the royalties increases by a small percentage every year. This is very common in all types of long-term contracts, as we want to be compensated for inflation.
As you see, the license term and the payment method influence each other.
5. Who else may use the same thing you’re licensing out?
The last crucial question you must ask yourself before licensing content is: who else may use the same content?
Will you want to use the content too on your own platforms for your own purposes without any restrictions?
Is it content that you can license out to multiple different brands, companies, or customers?
These are important questions to determine which of the following 3 types of content licenses you want to grant:
Exclusive license
Sole license
Non-exclusive license
Want to learn more about each of these types of content licenses? For a full explanation, read my blog post on the 3 Key Types of Content Licensing Every Creator Must Master for Successful Deals (+ Practical Examples).
Another part of the question is whether the individual or company you’re licensing content to will also have the right to have others use that same license. They may want to have their subsidiaries, family, or friends use that same content, too. In that case, the content is sublicensable. If you do not want them to sublicense their own lice, you’ll need to explicitly state in your content license agreement that the license is not sublicensable.
Or maybe that company or individual you have been licensing content to is finished using that content and wants to give their license to someone else. In that case, they are transferring the license to someone else (while you’re not compensated for it). Want to prevent that from happening, too? Then, you must make your license non-transferable.
These are all restrictions you must think about to stay in full control of your content when licensing content.
The 3 types of content licenses you must know
I’ve already touched upon the 3 different types of content licenses to consider when licensing content.
However, it’s absolutely crucial to fully comprehend what each of them means before you choose one.
Therefore, I highly recommend reading my blog post on the 3 Key Types of Content Licensing Every Creator Must Master for Successful Deals.
It gives an in-depth explanation of each licensing model so you know exactly what type of content licensing agreement works best for your intellectual property.
Content licensing examples for creators
As a creator, there are many different situations in which you are licensing content (without you maybe realising it). Here are some content licensing examples:
When contracting with a brand to create sponsored content for the brand, you’ll be licensing your sponsored content to the brand so the brand can show on its own platforms, too.
When you are creating user-generated content for a brand, you’ll also be licensing content to the brand.
When you are a guest on someone’s podcast or YouTube channel, you’re also licensing content to that podcaster or creator.
Want to learn about the most common content licensing examples that may apply to you? Want to know what types of content licenses to use in those situations? Read this blog post on the 7 Essential Types of Licensing Agreements Creators Must Know to Maximise Income and Protect Creativity.
This post was all about the crucial answers to questions you must have before licensing content to protect and keep full control of your content.
Need a license agreement template to start licensing content to third parties? Get your content licensing agreement template on this page of my contract shop!
Are you a (UGC) creator creating and licensing content for brands to use on their platforms? Get your content creator agreement template on this page of my contract shop!
Are you sponsored by a brand to post sponsored content on your platforms? Get your brand sponsorship agreement template on this page of my contract shop!
