Publishing

Published on December 20th, 2011 | by Hugh Hession

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Understanding the business of beat licensing

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Online beat licensing has become quite popular within the last few years. Sites like Soundclick, mybeatshop, Beats Planet and a ton of others are paving a way for emerging music producers to get their beats heard while giving both aspiring and major league music artists the audio tracks necessary to lay down their raps, song lyrics and/or hooks.

Although the licensing of beats is nothing new, the agreements that accompany them can be both intimidating and confusing for you as a music artist. That is why I decided to write on this very subject and give you some insight on the process of what beat licensing is all about.

What is a beat?

A “beat” is really a generic term for what I define as the “skeleton” of a potential song. It typically contains a drum loop pattern, maybe some synth bass and other synth textures. Some beats include hooks – which are usually the equivalent of a chorus. Many online beat sites use female vocalists on these types of tracks. An example of how hooks can be used effectively with beats, can be heard in Eminem’s Love the Way You Lie featuring Rihanna (just gonna stand there and watch me burn…) Bottom line, is that beats provide the structure to create a song in which a music artist can make their own.

Basic agreement terminology

First of all, let’s get down to the basics – the terms you should be familiar with when you enter into these agreements.

You, as an interested party who wants to buy a beat, is known as the licensee or sometimes just simply called the buyer. The entity selling the beat (typically a producer) is the licensor. Easy enough, right?  Let’s move on.

There are typically two types of licenses offered. The first (and most popular) is the non-exclusive. The other (can you guess?), is the exclusive license. Some sites offer other types of “sub-licenses” within the non-exclusive such as premium or standard. All of these have different provisions that are attached to each license and which spell out the terms that are set forth (basically, the stuff that tells you what you can and can’t do with the beat).

Non-Exclusive vs. Exclusive

So now that we’ve covered the types of licenses, what exactly do they contain? Although all agreements are different, there are a lot of similarities. Here they are, broken down by each license.

Non-Exclusive license:

Non-exclusive licenses give you the rights to use the master recording beat (say in .wav or .mp3 format) to create a song with your lyrics, raps, choruses or whatever. Understand that the producer or whoever wrote the song, still retains copyright ownership of the beat. You also need to know that the licensor has the right to license the beat to whomever he wants to until the beat is purchased exclusively.

HOWEVER, understand that when you record your lyrics, choruses etc., you now have created a derivative work of the song. This is usually not entirely clear in the majority of agreements. Basically what this means to you as the artist, is that you own the copyright of the work that you completed on the beat you licensed – but you don’t have any copyright claims to the original music contained on that beat. As a newly created derivative, the song you’ve just developed with the beat you licensed, is a new work.

Some beat websites place limitations on how many derivatives you can use. For instance, if you are given permission for one derivative (such as recording lyrics/vocal track), then you may not be able to record any other derivative material without another license. It’s their prerogative.

Usually, non-exclusive licenses have limits on how many units you can sell as well, such as 2000 copies. If you have higher ambitions, and think you’re going to sell more, you may want to go with an exclusive.

Exclusive license:

If you are serious about a certain beat and want to retain ownership of the sound recording, then it’s probably a good idea to get an exclusive license. This normally gives you complete control over what you do with the master recording. Now, you can add as many derivative recordings as you wish (add a new synth part, create a pre-chorus or whatever you want to do). You also usually get unlimited rights to sell as many copies as you wish.

You need to know that producers differ on how they define exclusive and just because you have exclusive rights to the master doesn’t give you exclusivity to the composition. Often, if you had the opportunity to say, use the song in an audio/visual aspect, then you would have to negotiate a synchronization license with the original writers as well.

Also, licensors sometimes will not let you re-sell or license the master to another entity, such as a record company or another producer. And finally, most will want to get credit for their work.

Master vs. Composition: The confusion sets in!

What I find in a good number of these beat agreements is the lack of separation between the master recording (the sound recording or SR) and the composition (the actual song itself). These are two distinct issues that often create the most ambiguity within beat agreements. The reason, is that both composition and master use rights are blended into one, making it tough to comprehend which is which.

For instance, some producers will refer to the master and the composition as the “song” in their exclusive agreements, when in essence, they are referring to the master. Remember, the song (the composition) and the master (the sound recording) are separate.

So what is outlined in most agreements are a combination of the SR and composition. Such provisions include the writers percentages, synchronization limits based on additional licenses, performing rights registration requirements and of course, indemnification which prevents them from liability.

Negotiating the license

Always remember that everything is negotiable. It’s definitely possible to customize agreements, however you should have full understanding of what you are are asking for. For instance, it is possible to negotiate an exclusive agreement that places limits on some of the rights that the licensor has over the master.

Something else to know. When it comes to licenses, beat sites seem to have a tradition of wanting payment first, then they will send you the agreement. This is an uneasy feeling if you are wanting an exclusive license and the producer is asking for a considerable amount.

Always ask for the agreements first, so you can see what is in them. Often, you can view them on the particular beat website you are on within their FAQ area. Mybeatshop has a decent Terms of Service link that outlines their policies on licensing.

If you want to customize the agreement, do that first, and get a buy-in from the producer or licensor before you proceed. Once they commit (always best to use email for a paper trail), then submit payment. If you’re truly wanting to negotiate terms and you are serious about obtaining exclusivity to a certain beat, you may want to secure the services of an entertainment lawyer to help out.

Much of the time, customized deals are never mentioned, as the agreements these beat sites have are all “standard” (really, there is no such thing as “standard” in the legal world). They send you these agreements automatically after payment is made, without any signatures. When you submit payment and they give you access to the beat for download, that creates what is called “consideration” in a contract between you and the licensor.

The bottom line

Choosing which license to obtain depends on what you are trying to achieve. The licensor or producer is going to keep licensing the beat as a non-exclusive until someone ends up getting an exclusive, in which at that point, it will no longer be available. So, if you want to take “ownership” of the beat by developing your own song around it, then the best thing to do, is go exclusive. After all, there may be a lot of others out there already who have permission to the non-exclusive. It may cheapen your brand as an artist if more people come out with the same beat with another derivative.

Like anything on the internet, there is some crazy and inaccurate information floating around on the subject of beat licensing, but in all fairness, there is some good stuff too. As a music artist, I recommend that you study up on copyright law and general licensing points to command a greater understanding of what it’s all about. Knowledge is power.

Happy beat hunting!

PS: For more reading, check out Royalty Free Music – Licensing and Copyright, by attorney Patrick Curley – legal advisor to premiumbeat.com.

Tags: beats, licensing

About the Author

Hugh Hession owns and operates Emerging Artists Entertainment Marketing & Consulting, LLC - a company devoted to cultivating aspiring music artists, He is also the head of Hession Entertainment Group, LLC (artist management) and the Music Industry Liaison for the artist discovery site, TalentWatch (www.talentwatch.net). He has over 25 years experience in the music business as a performer, composer, producer and artist manager. Hugh holds a BA in Marketing and is a professional member of NARIP and a voting member of The Recording Academy. He often speaks at seminars and workshops on artist development.