How does album art licensing work?

Licensing is a great way to make some money while retaining some rights to your artwork. There are many ways to structure a licensing agreement for album art. Which route you decide to go can have a profound impact so contacting an attorney is recommended. Here are some options for licensing artwork:

Copyright in Vietnam

One-time use: allows the artwork to be used one time only. Any further use of the work would require a new agreement.

All rights for limited time: allows the band to use the artwork in any capacity they need, but for a specific period of time detailed in the contract. Once that period has passed, all rights revert back to the artist.

All right for a limited purpose: allows the band to use the artwork only on a specific product (for example - an album cover). This contract should be very descriptive regarding the purpose for the artwork. This contract usually enables artists to sell the artwork to other clients (that aren’t in competition with the band).

All rights for limited time and purpose: allows the band to use the artwork on a specific product but for a limited time. During that time, the band may only use the artwork on the specified product (for example an album cover). Once the agreed upon time has expired, all rights revert back to the artist.

Source: Quora