Guide to Licensing Beats

LICENSING

When a producer creates a beat, they can put it up for sale in their online store. Artists can buy these beats and use them for their music. But, before they start using the beat, the producer gives them a legal document called a license agreement.

This license agreement gives the artist permission to use the beat in their song and distribute it. Without this agreement, the beat can’t be used legally, even if it was given for free.

The most common type of beat licensing is called non-exclusive licensing, also known as leasing. For a fee, usually between $20 and $300, an artist can buy a license to use the beat and release their song on platforms like Spotify and YouTube.

The license agreement will include the artist’s information, the user-rights they have, and the producer’s information. The producer still owns the copyright to the beat, but the artist can use it as long as they follow the rights outlined in the agreement.

Non-exclusive licenses have limitations, like a set number of streams or views, and an expiration date. The license may also need to be renewed if the number of streams or views is reached before the expiration date.

There are different types of non-exclusive licenses, each with different user-rights, and varying in price. The more expensive licenses come with better audio quality and more rights to use the beat.

If an artist wants even more freedom to use the beat, they can buy an exclusive license. This gives them unlimited rights to use the beat without any limitations on streams, plays, sales, or time. They can use the beat in multiple projects, not just one.

ROYALTIES

Let’s start by talking about two types of royalties: Mechanical Royalties and Performance Royalties.

Mechanical Royalties happen when your music is sold (physical or digital copies) or streamed on platforms like iTunes or Spotify.

Performance Royalties happen when your music is played in public, like on the radio or at a live performance.

Now, who gets to keep these royalties? If you’re an independent artist, you usually get to keep all the mechanical royalties from your music sales and streams. But if you’re signed to a label, the label usually collects these royalties and might choose to give you some of it.

Sometimes, producers might ask for a small percentage (1-10%) of the mechanical royalties in exchange for selling exclusive rights to a beat. This is known as an “advance against mechanical royalties.” The amount the producer gets will be calculated based on the net profit of the song after all costs, including the price of the exclusive rights, have been deducted.

Performance Royalties are collected and paid out by organizations called Performing Rights Organizations (PRO’s), like ASCAP or BMI in the US or PRS in the UK. These royalties are divided into two parts: songwriter royalties (also known as the writer’s share) and publishing royalties.

In short, the music business can be complex, but by understanding these terms, you’ll be on your way to navigating it like a pro!

COPYRIGHT

Have you ever bought a beat online and used it to make a song? When you do that, there are two different types of copyrights involved: the Performing Arts Copyright (PA-Copyright) and the Sound Recording Copyright (SR-Copyright).

PA-Copyright: This is the copyright for the music (the beat) and the lyrics you write. The beat producer always owns the copyright to the music and you own the copyright to the lyrics (unless they’re written by someone else).

SR-Copyright: This is the copyright for the actual song you make with the beat. If you buy an exclusive license, you own the SR-Copyright. But if you buy a non-exclusive license, you don’t own the SR-Copyright.

Derivative Work: When you use someone else’s beat to make a song, it’s called a “Derivative Work”. This is a common thing in the music industry, just like remixes or movies based on books.

Third party samples: Sometimes, producers use samples from other songs in their beats. It’s important to remember that the artist can’t just turn over the responsibility of clearing the sample to the producer. Both the artist and the producer need to make sure they have the rights to use that sample.

Got it? If you have more questions or want to learn more about copyright law, it’s always a good idea to do more research or talk to a lawyer.

FAQ

Q: Can I buy a beat that’s already sold to someone else?

A: No, sorry. If a beat is sold exclusively, that means the producer can’t sell it to anyone else. And if you try to use parts of the beat or recreate it, that’s called “sampling” and it’s not allowed.

Q: Can I make a similar beat to one I already sold?

A: It depends on what you mean by “similar”. If you’re using parts of the sold beat, then no. But if you’re using a similar style or instruments, but different chords and melodies, then yes, you can do that.

Q: What happens if someone buys the beat I already bought a non-exclusive license for?

A: Don’t worry! Your license will still be valid for the agreed upon time period, or until you reach the max number of streams. And if someone else buys the beat exclusively, your license will be protected.

Q: What if my non-exclusive license runs out of streams?

A: If you can’t extend your license, then you’ll have to take your song down. To avoid this, you can consider buying an unlimited license, which is more expensive but has no stream cap.

Q: What should I do if someone used my beat without a license?

A: First, reach out to the artist and let them know they used your beat without permission. Give them the option to buy a license or remove the song. If they don’t comply, you can either let it be or file a DMCA takedown. If the song isn’t popular, it’s probably not worth the time and money to file a takedown.

Q: How do I split publishing and songwriting credits with another producer?

A: It depends on the terms of your collaboration. Usually, if you collaborate on a beat and sell it, you split the publishing, sales, and songwriting credits 50/50. But if an artist uses the beat, they typically get 50% of the publishing and songwriting credits.

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