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Selling and Leasing Beats

by | Aug 11, 2021 | Blogs By Trevor J. Cartales, Entertainment Law, Intellectual Property Law

studio microphone pop shield mic in an empty recording studio

Congratulations, you’ve been sampling, EQing, and mixing in your favorite digital audio workstation and now an up-and-coming artist is interested in collaborating or using your work on their latest album! But what is the best way for you to let them use your beat while protecting yourself? 

  • Should you sell your beat or lease it? 

  • Should it be exclusive or nonexclusive? 

  • Should you retain copyrights to the musical work (composition or publishing rights), copyrights to the sound recording (master rights), and/or writers’ credits? 

Here are some considerations for aspiring beat producers entering the marketplace:

Selling Your Beat

Some beat producers simply sell their beats. Selling beats comes in many shapes and sizes, but often the way it works is that the parties enter into an agreement whereby the artist would record vocals over the beat, splitting their writer’s credits and copyrights 50/50, or perhaps in a ratio more favorable to one party or the other. 

The parties may also negotiate to adjust the ratio completely in favor of the artist, selling all rights exclusively, permanently. In those situations, it is typical for a flat fee to be paid to the beat producer, and the beat producer will surrender all copyrights and writers’ credit to the artist. The beat producer will not be able to sell that beat to future clients. If the record becomes a number-one hit, expect the artist to take all the credit, as well as the revenue.

What is an “advance” when selling your beat?

In many transactions, an “advance” is paid to the beat producer against future earnings. Advances can be a double-edged sword, as the purchaser expects the beat producer to “earn out” the advance. If the advance is too high and the song flops, it may not necessarily result in a breach of contract, but the artist may not want to work with the same beat producer in the future. Setting the advance fee is a delicate part of this negotiation.

What are writing credit provisions?

Certain purchase and sale agreements can also provide that the beat producer is to be credited in metadata, regardless of who is entitled to revenues from the copyrights. Beat producers trying to get their brand out should consider provisions requiring writing credit.

Leasing Your Beat

These days, leases are becoming more common. Generally speaking, a leased beat provides a limited license for an artist to use and reproduce the beat within carefully defined parameters. 

How is leasing different from buying exclusive rights to a beat?

Contrary to buying exclusive rights to a beat, leasing the beat allows the beat producer to insert various limitations, such as the amount of time that an artist can use a beat, the authorized and prohibited uses of the beat, perhaps limited to demos, albums, YouTube videos, television, number of streams, etc. In most situations, the beat producer retains ownership of the copyrights. Like all contracts, restrictions and limitations are negotiated among the parties.

What happens when the lease “term” ends?

Most leases do not give the artist exclusive rights to that track, and some only do for a limited amount of time. At the end of the lease “term,” certain leases provide for an artist’s right to renew the lease for an additional term for specified rates, or may include an option to purchase the beat outright. Artists may prefer to lease a beat rather than buy exclusive rights because lease terms may be less expensive. However, leased beats give more control to the beat producer. If the leases are non-exclusive, an artist may not be interested in leasing a beat that might be used by other artists. Each transaction requires a careful analysis of the parties’ wishes and desires. Generally speaking, the more control the beat producer has, the less the beat producer will be paid for the lease, and vice versa.

Copyright Issues

Once a beat producer creates a beat, a copyright exists. No registration is required for a right to sue for copyright infringement. However, a savvy beat producer may want to register copyrights anyway in order to gain certain statutory damages and automatic attorney fees. See 17 U.S.C. § 412. 

Beat producers should be careful about how they promote their beats when soliciting buyers.

But whether the copyright is registered or not, beat producers should be careful about how they promote their beats when soliciting buyers. If a beat producer decides to pepper the internet with .mp3 files to attract artists, it may be more difficult to prove the original source of the musical work in the event of a copyright dispute. This is why so many beat producers only offer short audio clips, or clips adulterated with an audio “watermark” to make clear who the original author is, which watermark can be removed in the event of a sale or lease. Protecting copyrights is important because if there’s no copyright to the beat, there’s really nothing to sell or lease to an interested artist.

Using unlicensed samples in their beats can result in copyright lawsuits.

Additionally, beat producers should be careful about how they select and integrate samples into their beats to avoid infringing on the rights of others. Certainly many artists crave originality and may not be interested in beats that simply replicate existing songs. But more importantly, beats using unlicensed samples can result in copyright lawsuits. While a lease or exclusive sale may contain indemnity provisions in the event of a lawsuit regarding a sample, beat producers should always be extra careful to make sure they have rights to samples used in the beat, and artists should demand the beat producer make warranties about copyrights.

Understanding the contract can help you avoid future agreement violations.

Oftentimes, inexperienced artists and beat producers are so excited to execute a transaction that they fail to read or understand what they are signing, or perhaps they sign nothing at all. Both artists and beat producers should be wary of using leased beats in a way that violates the agreement, and parties should pay careful attention to what rights they have (or have surrendered). 

Final Thoughts

Negotiating each element of the transaction in advance is always the best way to avoid any unnecessary surprises (or litigation). If you have questions or concerns about buying, leasing, or selling beats, call Navigate Law Group.

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Disclaimer

Every legal issue is very unique. Accordingly, the information in this blog is intended as general education material and not as legal advice. If you think you may have a legal issue, you should consult an attorney.