Granting someone permission to use your work under defined terms — where, how long, and for what purpose — without transferring ownership of it.
Licensing is renting instead of selling. You keep ownership of the work and grant the client permission to use it within limits: which channels, which markets, for how long. A photographer might license an image for a client’s website for one year, while keeping the right to sell the same shot elsewhere.
For sellers, licensing is how you get paid more than once for the same work. Rather than selling a logo or illustration outright for a flat fee, you can license defined uses and charge again when the client wants broader rights — national ad campaign, resale, exclusivity. It turns one asset into recurring revenue.
For buyers, a license is often cheaper than full ownership, which is great if your use is narrow. But read the limits: if the license covers “web only” and you later want it on billboards and packaging, you’ll owe more. Buy the rights you’ll actually need.
The distinction that trips people up: a license grants use, while an assignment transfers ownership. Know which one your contract does. Related to this, the exact permissions in a license are its usage rights — spell them out precisely.