Beat Licensing Explained
Beat Licensing Explained
The concept of beat licensing is not hard to understand. A producer makes a beat and uploads it to their beat store. Any artist can buy these beats directly from the store and use it for their own songs.
In exchange for their purchase, the producer will provide the artist with a license agreement. A document that grants the artist certain user-rights to create and distribute a song.
A common misconception is when artists ask producers for free beats. Even when a producer agrees and sends the artist a free beat. The truth is, that free beat is useless as there is no legal proof and permission to use it. This is where the license agreement comes in.
Before we go any further, we have to let go of the common phrases of “buying beats” and “selling beats”. The product that we’re dealing with here is simply not the beat itself. It is the license agreement.
Non-Exclusive Beat Licensing
Non-exclusive licensing, also known as ‘leasing’, is the most common form of beat licensing. For anywhere between $20-300, you can buy a non-exclusive license agreement and release a song on iTunes, Spotify, Apple Music, create a music video for YouTube, and make money from it! These are also the types of licenses that are directly available from the producer’s beat store. In other words, you don’t have to inquire for them and you can instantly buy a license from the online store.
In most cases, a license agreement is auto-generated, including the buyer’s name, address, a timestamp (Effective Date), the user-rights and the information of the producer. With a non-exclusive license, the producer grants the artist permission to use the beat to create a song of their own and distribute it online. The producer will still retain copyright ownership (more about this later) and the artist has to adhere to the rights granted in the agreement.
The limitations of Non-Exclusive Licenses
Most non-exclusive licenses have a limitation on sales, plays, streams or views. For example, the license might only allow a maximum number of 50,000 streams on Spotify and/or 100,000 views on YouTube. A non-exclusive license also has an expiration date. Meaning that it’s only going to be valid for a set period of time. This could be anywhere between 1-10 years. After the contract period is due, the buyer has to renew the license. In other words, buy a new one. The license will also need to be renewed as soon as the buyer reached the maximum amount of streams and/or plays. Even if that’s before the contract’s expiration date (!) Since these licenses are non-exclusive, a single beat can be licensed to an unlimited number of different artists. This means that several artists could be using the same beat for a different song under similar license terms. Whether this is a problem depends entirely on what stage the artist is. A beginner artist would be best off with a non-exclusive license, while a signed artist or an artist that is on the verge of blowing up might be better off with an exclusive license.
The different types of Non-Exclusive Licenses
Most producers offer different non-exclusive licensing options. In my case, I offer an MP3, WAV, Premium, and Unlimited License. Every option comes with its own unique user-rights. These user-rights are often displayed in licensing tables, like you commonly see.Obviously, the more expensive the license, the more user-rights you’re getting. These more expensive licenses also come with better quality audio files. In my case, the second-highest tier, the Premium license, is the most popular. That’s simply because you get the best audio quality, tracked out files of the beat and good user-rights. Artists who believe these rights still aren’t sufficient for their song, usually go for the highest tier. The Unlimited license. Or even better, an Exclusive license.
Exclusive Beat Licensing
When you own the Exclusive Rights to a beat, there are no limitations on user rights. Meaning that an artist can exploit the song to the fullest. There is no maximum number of streams, plays, sales or downloads nor is there an expiration date on the contract. The song may also be used in numerous different projects. Singles, albums, music videos etc. In comparison to non-exclusive licenses, which are usually limited for use in a single project only. In the case of buying the exclusive rights to a beat that was previously (non-exclusively) licensed to other artists, the artist that purchased the exclusive rights is typically the last person to purchase it. After a beat is sold exclusively, the producer is no longer allowed to sell or license the beat to others. That doesn’t mean the previous non-exclusive licensees will be affected by this. Every exclusive contract should have a section with a “notice of outstanding clients” included. This section protects these previous licensees from getting a strike by the exclusive buyer.
Two very different ways of selling Exclusive Rights
For many years, producers had different ways of selling exclusive rights. Luckily, in more recent years, contracts are becoming more streamlined and matching the industry standard.
Still, I want to address two very different ways of selling exclusive rights.
- Selling exclusive rights
- Selling exclusive ownership
By selling exclusive rights, the producer remains the original author of the music. And is still able to collect writers share and publishing rights. (again, more about this later)
By selling exclusive ownership, the producer sells the beat including all interest, authorship, copyright etc. These deals are also known as ‘work-for-hire’. Basically, the artist retains actual ownership over the beat and will–from that point on–be considered as the legal author of the beat.
Within the beat licensing industry, selling exclusive ownership is wrong, unethical and–in most cases–not compliant with Copyright Law.
It’s only right to come to an agreement where both the artist and producer are credited for their work; Legally, financially and commercially.
