Beat Contracts

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Beat Contracts

A Brief Introduction About the Beat Contracts

Beat contracts, also known as beat leasing, is the exchange of money for the legal rights to utilize a beat as outlined by the Licensor. This license grants permission to utilize a beat up to a certain number of sales/streams, or a certain amount of time (known as the “term”).

This is well elaborated in an exclusive beat contract, which states that once these limits are attained, the license expires and another license shall require to be purchased to continue using the beat. There are two main categories of licenses: non-exclusive and exclusive.

Who Takes the Beat Contracts?

A beat lease or beat contract is a contract made between producer and artist/label that allows the artist to utilize an instrumental beat to record a unique song or ‘Master Recording’ for use in demos, mixtapes, promotional usage, etc.

Purpose of the Beat Contracts

The main purpose of a beat contract is to allow the producer to maintain full ownership and continue to sell the instrument until an exclusive license is bought for it, after which it can no longer be sold again.

Any artists who had leased the beat before the exclusive was bought shall not be affected until their beat lease contract reaches its termination deadline.

Contents of the Beat Contracts

The inclusions in a beat licensing are

  • In a Beat Contract, the parties must agree in writing on what the original creator is entitled to in exchange for the rights. This could contain the instrumental producer getting a traditional music publishing interest in a completed track;
  • The percentage that the original creator would be entitled to.
  • Royalty rate the seller is permitted to, which is typically a stated percentage of the income generated from the track. This rate could be based on a ‘per copy’ rate or could just be a flat fee buy-out that doesn’t include any additional royalties for the recordings sold.
  • Indemnification that specifies that the Licensee agrees to hold Licensor harmless against any and all claims, losses, and expenses, attorneys’ fees, in case of breach of any of Licensee’s representations, warranties or agreements hereunder.
  • Broadcast Rights that requires the parties to agree in writing that the Licensor will grant to the Licensee an exclusive license to broadcast or air the Master Recording on unlimited radio stations or through unlimited station channels.
  • Miscellaneous, which ideally includes
    • The Licensor should confirm not to sell, loan, rent, lease, assign, remix, rearrange, or remove any melodies, or transfer rights to another user.
    • The Licensee must include credits to Licensor on all physical media including CDs, CD covers, Cassette tapes, Cards, Mixtapes, Websites, etc.
    • Written consent in case the instrumental is to be used for Radio Broadcast, and Commercial Advertisement.

You get the exclusive rights beat contract well-drafted, you must outline whether the purchasing party is allowed to issue third-party licenses for the finished recording or not. The parties must also agree on which avenues of exploitation are permissible, for instance, the right to synchronize with visual images in any media such as in a motion picture, in television, or in a video game.

How to Draft the Beat Contracts?

A beat contract must be drafted keeping in few points in mind which includes;

  • You must write the general terms of the contract. Indicate between whom the agreement is made, i.e producer, and the name of the artist, label or studio who wants to use your beat.
  • State the specific names of the beats you are leasing to the other party.
  • Also specify the length of time and specific purposes the beats could be used for, if appropriate. If you wish to grant the other party total control, specify that the other party has exclusive rights to the beats. If the other party is only allowed to use your beats for a certain amount of time, point out the exact date and time the other party’s rights to your music expire.
  • Describe the financial terms of the agreement in as much detail as possible. If you are leasing the music for a set sum, specify that amount, indicate who is to pay, and indicate when the payment is due and towards whom the check must be written. If you are going to be paid a percentage of revenue generated through the music that uses your beats, indicate the exact percentage and additional details of the revenue share model.
  • All the parties must sign the contract, print their name, and date the agreement.

When you have the Exclusive Rights to a beat, there are no limitations on user rights. This means that an artist could exploit the song to the fullest.

Neither there is no maximum number of streams, plays, sales or downloads, nor is there an expiration date on the beat contract. The song could also be used in many different projects. In contrast with non-exclusive licenses, which are usually limited for use in a single project.

For buying the exclusive rights to a beat that was before (non-exclusively) licensed towards other artists, the artist that has purchased the exclusive rights is usually the last individual to purchase it. After a beat is sold exclusively, the producer is not permitted to sell or license the beat to others. That does not mean the previous non-exclusive licensees would be affected by this. Every exclusive contract must have a section with a “notice of outstanding clients” included.

Benefits & Drawbacks of the Beat Contracts

Benefits include

  • With the beat contract, you are still able to receive all royalties and publishing owed to you as an artist that is made from sales of your master recording through streaming services, digital retailers, etc.
  • Producer’s leasing beats towards artists usually have many pricing levels to choose from.

Drawbacks include

  • Beat leases are available to be sold through producers for as long as they select or until an exclusive is purchased for it, giving more opportunity for other artists to grab the same beat.
  • A non-exclusive one, though, is subjected to the terms and limits within your contract.

What Happens in Case of Violation?

In a beat contract, if the artist fails towards obtaining the proper clearance prior to commencing to sell their music(1), it could possibly impact the amounts that the artist could make as well as potentially exposing him/her to significant liability.

Like a traditional producer agreement or beat sale agreement, a Beat Contract permits an artist to incorporate a producer’s instrumental beat into a new recording. In a Beat contract, the producer maintains full ownership of the copyright in the beat, although he/she gives the artist either an exclusive or non-exclusive license to use the beat, usually for a set period of time (years) and/or a set number of exploitations (sales and streams).