Let’s license works like George Lucas

We can devise business models in the creative industries by learning how to license works of creativity profitably, following the example of George Lucas – and a self-employed commercial illustrator in a small city in Brazil. In this way a business can be devised to transform the owner from a creative labourer to a true creative entrepreneur.

The other day I advised a photographer to consider following George Lucas. I wasn’t suggesting he became a film director, but simply that he negotiated with his client in a similar way to Lucas when he struck a deal with 20th Century Fox before directing Star Wars.

Lucas turned down a massive director’s fee and instead asked for 40% of the merchandising rights to the Star Wars film and any sequels, plus a modest director’s fee of $175,000. Over 30 years, the income from the merchandise has far exceeded the box office takings and he receives his 40% of this income stream. After six films and thousands of products, he’s now worth around $3.6billion.

Nice one, George.

(Another example is the film director Robert Altman and his son Mike, who wrote the song for the film M*A*S*H.)

The photographer is negotiating a deal to shoot a series of images in connection with a major construction project. He could be a creative labourer and simply take a fee for the work. On the other hand, he could keep ownership of his intellectual property in the images and receive license fees for each use of the images in different circumstances – annual reports, advertising, exhibitions, etc. There is no guarantee that it will bring in more cash than a fee, of course. And it’s unlikely to make him a billionaire. There is a business judgement to be made and there is a risk involved.

In Brazil I advised Guilherme Marconi, a commercial illustrator who licenses (rather than sells) his work to Nike, Coca Cola and other top brands using this business model. For more details about his work and business see my ‘Ideas in Action’ article ‘Don’t sell it; rent it’ featuring Guilherme.

The crucial issue, though, is that it’s a different way of thinking about building a business. It an entrepreneurial approach which is about creating long term income streams that continue to make money while you sleep, through licensing, rather than just taking a fee for your immediate labour.

Become a true creative entrepreneur, not simply a creative laborer!