5 Things to Consider Before you Sell or Lease a Beat online
As an entertainment attorney, I receive questions all the time about buying and selling “beats” (musical/instrumentation side of songs). Here are some basics and some of my FAQ’s (frequently asked questions):
Buying/Selling a Beat outright
Traditionally, a producer would create a musical track (or beat) for a specific artist or put together a “catalog” of beats and an artist would pick the beat that they wanted from those in the catalog. The producer and artist would enter into a “producer agreement” and the artist would record their lyrics and vocals on top of the producer’s “beat”, creating one master recording that combines the work of both the producer and the artist. In a traditional situation where the artist buys the beat upfront from the producer, the artist/writer and producer generally (not always) split the writer’s credits (and musical work/composition copyright) and the publishing 50/50. Generally, the fee paid to the producer for exclusive use of the beat is considered an advance against future earnings. Sometimes, a producer will sell all rights to a song to an artist or record label and in these situations, the artist or the label will own 100% of the copyrights (I strongly suggest consulting with an experienced entertainment attorney before assigning your rights to anyone).
Leasing a beat
Purchasing a “leased beat” generally provides the artist purchasing that beat with a limited license to use the beat and reproduce the beat in conjunction with that use. Where buying exclusive rights to a beat means that only the artist/label that purchased the exclusive right can use that track ‘forever’, leasing the beat limits the time that an artist can use a beat as well as what purposes (such as for a mixtape vs. an album vs. a video vs. a limited pressing CD, etc.). Generally, publishing and ownership of the copyright for the track remains with the producer but this is one of many very important points that should be included in the beat leasing contract.
A Few things for artists to consider before leasing a beat
Its important to understand that a beat lease does NOT give the artist exclusive rights to that track. Some lease agreements will allow the artist the exclusive use of the beat for a limited amount of time while others will state that other artists may use the track at the same time you are using the track. At the end of the lease, some agreements give you the automatic option to renew the lease (for more money) or to make the lease exclusive (again for more money). Leasing a beat is generally more affordable than buying exclusive rights to a track but owning a track gives the artist more options for the short and long term use of that track.
A Few things for producers to consider before offering beats for lease
For producers, leasing a beat might provide you with an immediate income stream, especially if the beat is leased to multiple artists at the same time. Leasing beats might also help you increase your visibility to other artists and help build your brand. However, there are many artists that will not lease a beat or purchase beats from producers that lease beats. Established artists tend to understand the value of originality and most want any track they appear on to be associated with them and them only. More importantly, artists that understand publishing might place ownership and control over their own publishing catalogs over any immediate short-term savings associate with leasing a beat. Weigh these thoughts out when determining if leasing beats will be a part of your business plan.
Contractual considerations with beat leasing
Beat leasers should consider, among other things, the time frame of the license; indemnity if the beat contains a sample (and clearance information); whether or not the license provides an option to purchase outright at the end of the time frame and if so, is the price named in advance (important if you have a track that starts to generate substantial interest/streams/views as the producer will probably ask for considerably more to buy the track if it hasn’t already been negotiated); if other artists will be able to use the track at the same time; publishing splits; how many “uses” or copies come with the license; the jurisdiction in which the contract is based (i.e. New York, California, Georgia, etc., or European countries, African countries, etc.).
It is always a good idea for artists to consult with an experienced entertainment attorney before signing any agreement, and for producers to do the same before using a template agreement that you find online thinking it might protect your rights to a track. Remember, continue to educate yourself on the business of music, the more you learn, the more you earn!
Jason Bost, Esq., MBA, is an author (his book can be found here), adjunct professor of law, and partner/attorney with a focus on entertainment law at the Law Firm of Patel, Soltis, Cardenas and Bost. He spent more than twenty years in the entertainment industry as an artist manager, A&R, entertainment executive for independent labels and now as an attorney. He can be reached by email at email@example.com or by phone at (973) 200-1111.