Wednesday, March 5, 2008

Licensing Terms

Designer Series, Part 3.

So, now that the licensing genie has been let out, how do we best use this powerful tool to help our businesses? There are two sides to every story, and licensing is a two-edged sword.

From the designer's viewpoint, being able to closely control how a pattern is used seems like a good thing.

But from many customers' point of view, it's not such a grand thing. There are some who don't mind at all being limited to how they can use a pattern, but there are more who won't buy a pattern with strict limitations. The industry-standard for a long time has been that the sewing pattern makers don't want you basing a clothing manufacturing business on their home-sale patterns, but people who sew things at home and sell them haven't been harrassed.

I've traded a few emails with both McCalls and Butterick, and the basics of their official story are that they won't tell me I can sell things I make from their patterns because that "would be an endorsement of the practice", but they specifically did not say that it was illegal to do so, despite their statement "For Home Use Only" on each pattern. Then I was instructed that if I have any other questions I should contact a copyright attorney. So, interpreted into plain language, it's not illegal (because if it was, they'd have told me straight out I couldn't do it), but they're not going to tell me I can do it. I asked another question or two, and they went back to the attorney answer. Which is a weak one. It means "We don't want to tell you the truth of the matter because we don't want you to do what's legal."

So, if a statement "For Home Use Only" (or "For Personal Use Only") at the bottom of a purchased pattern isn't legally binding, where does that leave a designer? Selling licenses--not patterns. You sell a legal right to use your pattern, which includes permission to reproduce the pattern for that purpose, but which does not include the ownership of that reproduction.

When you decide to sell licenses to your patterns, instead of selling patterns, you come upon a couple of bumps in the road.

  • First, crafters aren't accustomed to buying permission to use something (as opposed to buying ownership of the thing itself). When you put as much time and sweat and love into something like a knitted garment, not fully owning it rankles (some knitters more, and some less).
  • Second, crafters are often a frugal bunch. They like to be able to really get their money's worth. Buying a pattern license for $8-$15 so they can knit according to a strict set of regulations will chafe, especially if the licensing terms limit the number of times the pattern may be knit.
  • What's worse, because it is likely an unpopular approach, it's bound to meet with resistance and violation of the license agreement. This introduces conflict and animosity between the pro-licensing and the pro-ownership camps, not to mention lots of coercive innuendos on the topics of ethics and the moral character of opposing sides.
There is definitely a segment of the knitting/crafting community who aren't bothered by such restrictions and higher expenses--but there are just as many (if not more) who do. With the market exploding as it is, new designers popping up all over the place with their offerings (often really great ones), the competition for pattern purchases will grow. Avenues like Ravelry are excellent for finding new knitting options, and free patterns abound.

Since the idea in marketing something in a horizontal market* is to widen your customer base as much as possible (thereby increasing your potential sales), narrowing your market by annoying the customer unduly doesn't seem wise.

*A horizontal market is one which targets a lower-priced commodity to a large segment of the population. A vertical (or niche) market is one which offers highly-priced commodities to a very small segment who really need it (and have the money to spend). Knitting patterns are a horizontal market commodity, while business software (which can retail in the $10,000/license range) is often part of a vertical market.

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