I recently ran a promotion lowering all of my beats to $1. When I announced this on Instagram I had a few artists DM me asking if they could CashApp me the money and I email them the beats. This was not a problem, I explained they would simply have to accept the terms of the licensing agreement prior to me emailing them the beats. One response I got really concerned me. A rapper sent me a message saying he didn't need the licensing agreement because he never reads them. He went on to explain how no one he knows reads these agreements when they purchase a non-exclusive lease for a beat. A general lack of willingness to understand the music industry can cause quite a bit of harm to an indie musician's career. This industry is tough enough to make it in without you stacking the deck against yourself by ignoring contracts. You could end up in a situation where you blow up then have to turn around and deal with a lawsuit all because you didn't abide by the stipulations in a licensing agreement.
What is a Non-Exclusive License?
There are 2 categories of licenses that beats fall into, exclusive and non-exclusive. An exclusive license gives the rights to use the beat to one artist. A non-exclusive license, or "beat lease", means that you’re being given some rights to use the beat, but other artists could be given the same rights to that beat as well. For the sake of this article, I'm going to focus on non-exclusive licenses. For most beat leases, there are some limitations to what you can do with your song. Some of the limitations may include, how many times you can sell the song, how many total streams (audio or video plays) you can get, whether the song is allowed to be played on the radio, whether or not you can make a music video to the song, if you can monetize the song on Youtube or other platforms, if you’re allowed to submit the song to be used on TV, Movies or other types of licensing opportunities, etc.
Violating the terms of a beat lease can lead to legal action being taken by the beatmaker. It's important to know what the guidelines are before you purchase a beat. There are instances where these limitations can be negotiated.
5 Thing You Need to Know Before Leasing a Beat
1) What credits do you have to give?
Make sure you understand how you are suppose to credit the beatmaker. Some beatmakers may want to artist to vocally credit them in the song, some may simply want to leave 1 tag at the beginning of the beat. Either way make sure that you know how to credit the beatmaker and make sure you follow those guidelines.
2) What Can and Can’t Be Done With the Beat?
As I explained earlier, there are limitations to what can be done with leased beats. Make sure you abide by these limtations. In this new world of streaming, there are often limitations to how many times the song can be streamed. Once this limit is reached most beatmakers are open to renegotiating the terms of the lease.
3) How Long Does the Lease Lasts?
It's not super common to have a set amount of time the beat can be leased. If it is I haven’t seen it much, but it is something to look for. I have seen 1 (only 1) licensing contract where the beatmaker's lease was for a term of 5 years.
4) What Are You Getting?
Beatmakers usually have tiers of leases. These tiers indicate which elements of the beat the artist is getting. Make sure you know what you're getting, whether it's just the mp3 file or the stems (each individual instrumental track).
5) What to Do With Publishing?
If you lease a beat, the beatmaker owns the copyright in the musical work embodied in the beat (unless the beat lease agreement says otherwise). Because of this the beatmaker is automatically entitled to mechanical royalties (publishing, or songwriting, royalties). If the lease agreement says nothing you should assume that it’s no less than 50% of the publishing to the track or you should contact the beatmaker and clarify how publishing is to be split.
For the most part, beatmakers and artists alike just want to make a living making music. Not many of us are particularly fond of the business side of the music industry, but it is important that we understand it and conduct business appropriately.