The main concern for creators has always been retaining control over the rights for works they have created while maximizing the profit potential for use of those works. This prompts many to seek a publisher who typically shares in the rights and controls the work that cuts into the creator's bottom line.
With the advent of the Internet, creators now distribute their works independently without the use of a middle man. To protect themselves, creators have adopted two popular clauses they include in licensing their work: "rights managed" and "royalty free."
Rights managed means the owner of a creative work, i.e., a photograph, has given a user permission in the form of a license to be used in a specific way. This may include a certain length of time, a particular project or a designated locale. It speaks specifically to the publishing rights and not the payment for those rights.
Example: The owner of a photograph tells the user he can use the photograph as a thumbnail for his website for a 2-year period.
Typically, a royalty fee is paid every time a creative work is used. An example of this occurs when a song is played on the radio. Royalty free means the owner of a creative work is compensated once by the user and never has to pay them again, no matter how many times the creative work is used. It focuses on payment for the rights and is also known as a one-time buyout.
Example: A music producer licenses a 30-second musical composition for $50, which the user is free to use in her PowerPoint presentations, podcasts and DVD sales without ever having to pay again.
Neither rights managed or royalty free means that ownership of the copyright is given away or transferred. The owner still retains all copyrights for creative work and can distribute the work as he sees fit. In addition, there usually are stipulations that the work cannot be used in a specific context (television commercials, magazines) even though it may have been labeled "royalty free." This is where the line between rights managed and royalty free often is blurred and a potential user would do well to read the fine print.
The advantages of understanding and using rights managed and royalty free clauses in agreements have empowered creators by giving them total control of their work without giving up ownership. This gives the financial leverage needed to get the most out of each work created.