Beat Licensing Basics: What You Need To Know

You've probably heard about "beat licensing" before. But what does it actually mean?

Although the world of music licensing can be a bit overwhelming, understanding the basics of online beat licensing is essential for any artist looking to monetize their creative content. We’ve created a guide to online beat licensing to help take some of the uncertainty out of this process. We’ll be discussing how copyright works in the music industry, how you can protect your intellectual property and earn money from it, how you can license third-party beats as part of your creative process, as well as a few other topics that may help you make sense of it all.

Don't worry, it's not that complicated—and it'll help you make money from your music!

What’s Beat Licensing?

When an artist “buys” a beat from a beatmaker, the artist does not become the owner of the music. Rather, the beatmaker provides the artist with a license agreement.

The license agreement is a contract between the beatmaker and artist, which grants the artist user rights to use the beat for the creation and distribution of a song.

The license agreement provides artists with legal proof and permission to use a beat in exchange for payment to the producer. That’s all it does. Nothing more, nothing less. It allows you to use the beat for your project under certain terms and conditions which are stated in the license agreement.

So, an artist does not actually buy a beat, the artist buys the license agreement to use that beat. And of course, the use cases and budget differ from artist to artist. This is where the different versions of the license agreement come into play. A beat license can be non-exclusive or exclusive.

📄 Click to see an example License Agreement  

Non-Exclusive Licenses

First off: Most licenses are non-exclusive. That means that multiple artists can license the same beat for different songs under similar terms.

With non-exclusive licensing, which is also known as "leasing," you can buy a license agreement for anywhere between $20 and $300, and use it to release your music on iTunes, Spotify, Apple Music, and other platforms. These types of licenses are usually directly available from producers' online stores. Often, a license agreement will be auto-generated and include your name, address, and information about the producer.

The producer will still retain copyright ownership, but you'll have permission to create your own song using their instrumental, and distribute it online!

The best thing about the non-exclusive license is that it won’t cost you a fortune. That's why this type of license is perfect for the upcoming artist that wants to test the water.

The limitations…

Non-exclusive licenses are based on a limited amount of time, streams, and plays, which means that if you reach these limits, You’ll have to renew your license after that time has passed (even if you haven’t reached the play cap). And you’ll also have to renew your license as soon as you reach that max number of plays or streams allowed by the license.

To be clear: with this license, a single beat can be licensed to an unlimited number of different artists. This means that many artists could be using the same beat for a different song under similar license terms. So if you love a particular beat, there might be a chance that another artist is using it too!

So is this a problem? That depends on a few factors. If you're just starting out and trying to get your name out there, it's fine to opt for a non-exclusive license.

However, if you've already established yourself as an artist, or even if you're just starting to get some hype around your music, it might be time to think about switching to an exclusive license. An exclusive license will allow you to control where and how your music is used more closely.

Non-Exclusive License Variations

Music producers who sell their beats online offer different licenses that artists can purchase. Every license comes with its own unique user rights and price tag. The more expensive a license, the more user rights you’ll get. These rights are usually displayed in a licensing table like the one below.

Ignition Beat Supply Licensing options. Please note: these may be updated periodically.

The Basic and Professional licenses, or MP3 and WAV licenses are relatively similar. They offer a single audio file of the beat. Whereas the WAV version has no data compression, the MP3 version does. This doesn’t mean it sounds bad, not at all. But it does mean mixing the file with a vocal recording and then bouncing that mix to another MP3 file creates another instance of data compression. There will be some degradation in sound quality.

The Premium license is often the license of choice for artists who are serious about their music because of the high-quality tracked-out (the instruments separated) files at a reasonable price and great user rights. This gives the artist the opportunity to have control over the balance between all the separate elements that make up the beat.

For artists that don’t want to worry about capping out the streams and plays, the Unlimited license is the highest tier of non-exclusive licenses. It comes with unlimited profit recouping and unlimited streams. So basically, if you sell or release your song on every platform out there, this license will cover your back without breaking a sweat.

Exclusive Licenses

The last option is an Exclusive license. This one’s special because only one person can own the rights of the beat at a time! With this license, nobody else can use it anymore, because it’s exclusively yours

If you are signed to a label or have had success in selling your songs already, an exclusive license can be beneficial to you because it will allow you to focus on making money from just one song instead of having to split profits between several different labels who have all licensed the same song.

Exclusive licenses aren't always the best option. If you're just starting out in the music industry, they can be risky because they prevent you from working with other publishers. If you're more established and have been signed by a publisher before, exclusive licenses can be worth it because they allow your publisher to focus on promoting your music. You may want to think about these pointers:

Consider how experienced you are as an artist. Do you have a track record of success? Is this your first time signing with a publisher? These questions will help determine if an exclusive license is right for you. For example: if this is your first time signing with a publisher but you've been working as an artist for 10 years and have a track record of success (not just one hit song), then an exclusive license might make sense. However, if this is your third time signing to a different publisher or company within two years, then perhaps it's time to consider other options like non-exclusive licensing agreements

For anyone who owns the exclusivity rights to a beat, there are no restrictions on user rights. Meaning that one can exploit the song to the fullest. There is no limit on the number of streams, plays, sales, or downloads, and there is no expiration date on the contract.

The song may also be used in other projects. Singles, albums, music videos, etc. In comparison to non-exclusive licenses, which are usually limited to use in a single project only.

When an artist purchases exclusive rights to a previously (non-exclusively) licensed beat, the artist is typically the last to do so.

After a beat is sold exclusively, the producer is no longer allowed to sell or license that beat to others. That’s not to say that the other corresponding non-exclusive licensees will be affected by the preceding sale. Every exclusive contract should carry a section that specifically mentions outstanding clients.

Two very different ways of selling Exclusive Rights

Producers in the past used various methods to sell exclusive ownership. Thankfully, in more recent years, this practice has become more uniform. Nonetheless, it’s important to know two different methods of selling exclusive rights.

Selling exclusive rights

Selling exclusive ownership

By selling exclusive rights, the producer still remains the original author of the music. The producer will still be able to collect writers' share and publishing rights.

By selling exclusive ownership, the buyer attains actual ownership over the beat and will (from that point on) be considered the legal author of the beat. These deals are also known as ‘work-for-hire’.

One could question the ethics of selling or buying exclusive ownership, in many cases, it is not compliant with copyright law.

Most producers and artists work very hard and put their heart and their soul into their art. It’s only fair to come to agree on a deal where both the artist and producer are credited for their work; Legally, financially, and commercially.

Conclusion

In conclusion, when you're looking to license a beat, it's important to know what you're looking for and what's available. By understanding the basics of beat licensing, you can find the perfect beat for your project and ensure that you're legally covered. So don't be afraid to explore the world of music licensing - it might just be the perfect way to take your music career to the next level.

Written by Jelle

Composer/producer

@Ignition Beat Supply