This guide gives you an in-depth look into licensing terminology and leasing vs. exclusive rights. If you’re an independent artist trying to make their name in the music industry, this article is a must-read. If you’re a total beginner to the world of online beats, we’ve got an extensive catalog of articles and guides where we explain everything to you. With this guide, we’ll explain why you don’t need to buy exclusive rights for your beat.
Within this licensing agreement, you’ll receive several user rights, which provide you with the scope of what you can and can’t do with the beat. A licensing agreement is a legal document, which can be used against you if you breach the conditions of your leasing agreement.
Before you purchase a beat, you want to make sure you read the agreement and fully understand it. Every producer can write their own contract, so you want to look out for custom sections like a break clause.
With beat licensing, you have two primary options to choose from. You can either take out a cheaper non-exclusive license or spend more and get the exclusive rights for the beat.
We have an in-depth guide on the differences between exclusive and non-exclusive licenses, which you can read here. Both options have their pros and cons, but most independent artists will only require the non-exclusive license for the beat.
What is Non-Exclusive Licensing/Leasing?
The only major drawback of leasing a beat is that there is a limitation on streams and sales, requiring you to renew your agreement when you get to this threshold. You can check what this threshold is before purchasing your licensing agreement, so you can determine whether you’re likely to hit that number.
Your non-exclusive license will always come with an expiration date, somewhere in the region of 1 to 10 years after the beat is purchased. If the maximum stream happens before the expiration date, you’ll need to renew your contract.
A non-exclusive license can be sold to multiple artists. Producers can offer tiers within their non-exclusive licenses, with unlimited licenses being a popular option. You can often purchase more user rights by choosing a more expensive non-exclusive license.
What is Exclusive Licensing?
Non-exclusive licensing is usually limited to one project, but exclusive licensing allows you to use the beat for anything you want. Once you’ve purchased the exclusive right, the beat can no longer remain on sale for other artists to buy.
You want to remember that exclusive licensing isn’t everything it’s made out to be. It’s essential to check if the beat was previously sold under non-exclusive beat licensing. When the exclusive rights are purchased, it doesn’t immediately impact holders of the non-exclusive licensing. Other artists can continue to use the beat under their non-exclusive rights until the end of their contract, with they reach the expiry date or their stream threshold.
As part of exclusive licensing, you can also purchase exclusive ownership of the beat. In this scenario, the producer gives you all elements of the beat, including authorship and copyright. Under this agreement, the artist will become the author of the beat and own the copyright over the piece.
Usually, exclusive ownership isn’t compliant with copyright law, so you’re left with basic exclusive rights. In this situation, the producer is still the original author of the beat and will be eligible to collect their writer’s share and publishing rights when your music is distributed.
Why Exclusive License Isn’t Right for Independent Artists
It may seem like a loaded question – but are you likely to get hundreds of thousands of streams on your first song? Unless you struck gold, it probably wouldn’t happen the first time around. If you’re finding your feet in the music industry, you won’t need the exclusive license. It’ll be money down the drain that you could spend elsewhere, whether it’s buying new equipment or paying for social media ads to promote your music.
Instead of thinking your small size restricts you by not being able to buy exclusive rights, you should look at it from the flip side. There are benefits to being in your position and having the option of leasing your beat instead of paying for the exclusive rights.
Consider Your Return on Investment
If you’ve chosen to buy the exclusive rights, you could end up not making a return on your investment and making a net loss. Most exclusive rights cost almost $1000, depending on the producer that you choose.
When you’re starting, you want to be in a position where you can build your portfolio of music to boost your fan base. If you leave your fans waiting months, maybe even years, for new music, they’ll get bored and forget about you. Leasing your beats will make the process more affordable and accessible for you to come out with music regularly.
Other Options Instead of Exclusive Rights
1. Unlimited Licenses’
One of the significant drawbacks of a non-exclusive license is that your agreement needs to be renewed once you’ve reached a certain streaming threshold or your expiry date. In most cases, the streaming threshold may come first. With unlimited licenses, you can make significantly higher profits than with other forms of licensing.
Although unlimited licenses may look similar to exclusive rights, there are a few distinctive differences. This type of licensing agreement is still non-exclusive. The producer will still retain the right to sell the beat through an exclusive rights agreement. You’ll still have an expiry date as part of your unlimited license, which doesn’t occur with exclusive rights.
One subtle difference to consider is that you’ll still have 50/50 publishing rights under the terms of unlimited licenses. When you purchase exclusive rights, you can usually try and negotiate publishing rights.
You’ll want to remember that every producer has their perquisites and will have a custom agreement. This reality is why it’s essential always to read the agreement options before you purchase your beats.
2. Custom Beats
While you’ll have the long-term rights, those with the non-exclusive rights will be able to continue using and selling the beat until they reach the end of their contract. Depending on when you purchase the exclusive rights, it may be another five years before these previous contracts run out.
The term ‘exclusive’ doesn’t always mean exclusive.
If you’ve got your heart set on finding an exclusive beat, why not go for a custom option? This option is more expensive and a better choice for those with an established following and the budget to cover the custom order cost.
You’ll need to find a producer who has a previous portfolio of work that you can check out. It may be someone whose existing beats you’re considering purchasing. While you’ll often have to pay a steeper price for the custom beat, you can tailor your exclusive rights agreement so that you’re the only person who can use the beat for commercial purposes.
When Should I Buy Exclusive Rights?
If you have a larger following on social media – around 100k – then you can expect to reach your streaming threshold earlier on a non-exclusive license than other artists. If you have a publishing deal or are about to sign to a major label, you’ll want to be proactive and get exclusive rights. Another category of people who should buy the exclusive rights is those who have the finances to make a substantial investment into their music marketing to promote their song. If you’re investing several thousand dollars into a music video, along with other advertising, you’ll want to avoid the streaming threshold of a non-exclusive agreement.
As an independent artist, it’s more likely that you’ll be better off with the lease of a beat than buying the exclusive rights. In the early days of your career, you want to maximize the return on your investment. The cost of your exclusive rights could be more than what you make in sales and royalties.
When you become successful, there will be a time when you need to buy exclusive rights. For now, if you’re a new artist, you’ll have no issues with leasing your beat.
Have you got any questions? You can drop me a DM on Instagram at @adelantemusic or email me at email@example.com