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What’s the Deal with Beat Leasing?

Producers are using a new way to sell beats. Learn how it works and why it's getting big.

Reader Question:

I’ve noticed that some beat producers have songs for lease on Instagram. I’m curious about how that works. I create songs and release them, but it never occurred to me about leasing them. If you know something about it, I would love to read it.

Ernesto


As a beat producer, I ‘ve looked into various methods to move ahead in my career with varied success. Although networking and marketing should be the basis of every freelance career strategy, the production game is changing with technological advances, social media, and the accessibility of affordable studio equipment. ‘Beat stores’ grew with these advances, presenting yet another way for artists and producers to create, connect, and market themselves.

Everyone is a self-proclaimed producer these days, but that doesn’t mean that everyone is making enough to pay the bills. Creating and selling beats is a vocation in which few producers receive a comfortable living. Most producers rely on selling exclusive licenses, but unless they work a diamond bed of high-paying clients, revenue checks are sparse.

Check out this article snippet from Complex.com

In 2011, Curtiss King should have been on top of the world. The producer, after working with successful rappers like Ab-Soul, had just placed a beat with two artists on Young Money. On top of that, XXL was writing about him.

To celebrate, he went to a liquor store near his Southern California home and grabbed a copy of the magazine. But when he got to the counter, there was a problem. He was broke.

“I couldn’t afford the magazine,” King tells Complex. “I show up to the register, like, ‘Hey, man, this is my name.’ He’s like, ‘Okay, sure dude.’”

King’s story gets to the heart of the problem with being a producer, even one who appears successful to the outside world: you’re often strapped for cash. Artists take a long time if ever, to decide if they want to use one of the dozens of beats they often receive. From there, it’s a wait to see if you make the album. And from there, it can be up to a year until you actually get paid.

Shawn Setaro


Instead of selling beats outright, producers are taking advantage of an alternative business model called “beat leasing”, which allows them to sell non-exclusive licenses to artists. This strategy is helping producers bridge the gap between checks.

How Does Beat Leasing Work?

beat-lease-contract-agreement

Selling Exclusive Licenses for Beats

If an artist or producer has exclusivity of a beat, it means they retain full ownership without any restrictions on usage rights. With copyright basics in mind, the owner can reproduce, sell, distribute, and create derivatives on their own free will.

If an artist purchases an exclusive license from a ‘beat store’ the beat is removed from sale and the artist gains full rights to exploit it. Prices for exclusive beat licenses can range anywhere from $20 to upwards of $2,000. When producers sell a beat exclusively, they lose the right to resell it to other artists. Doing so would infringe upon the rights of the exclusive owner.

Selling Non-Exclusive Licenses for Beats

This is where things get interesting. Some producers also sell non-exclusive licenses to artists at cheaper rates compared to exclusive licenses. Under a non-exclusive license, there are some variable terms and conditions, and some producers are open to negotiating. Above all, if an artist writes/records lyrics over a non-exclusive beat, then the producer still retains the copyright ownership of the instrumental portion of the song.

Beat stores have organized pricing tiers for non-exclusive licenses. At the lower levels, non-exclusive licenses linger as far below as a few bucks. The lite price tag is alluring, but there are limitations artists need to be aware of. Lower-tiered beat licenses are usually MP3 files with strict distribution caps. Some producers get really specific with usage rights of non-exclusive licenses, sometimes requiring song credit or placing a ceiling on the number of streams allowed. Higher-level tiers have more usage flexibility and include lossless WAV formats and full “track outs” (audio stems).

Pros & Cons

For artists, the most appealing part of non-exclusive ownership is the affordability. Rappers can build a whole album without ripping through a hefty budget because non-exclusive licenses are significantly cheaper than buying the beat outright. It’s a viable option for artists who are trying to cover a lot of ground for relatively cheap. Still, there are some obvious problems with beat leasing.

So what happens if another artist comes along and pulls the exclusivity rug from under you?

Your non-exclusive license becomes void. 

A producer can choose to sell a non-exclusive license to multiple artists while retaining ownership. Artists can continue to use the beat assuming they stay within the bounds of their respective license agreements. The leasing relationship remains intact until another artist knocks at the door to buy the exclusive license, which means producers pull the beat from the store and non-exclusive owners lose all usage rights.

As you can see, there is a lot of room for complications and disputes, especially if an artist is in the middle of a major release and the producer sells the exclusive license for the beat they’re using. It completely tosses a wrench in the process. If you’re an artist considering non-exclusive licenses, please be aware of this possibility and what you’re buying.

Beat leasing presents an awesome opportunity for producers to supplement their earnings with a steady flow of income from non-exclusive license sales. It also comes with some clear advantages and benefits for producers who are looking to build a brand in the process. For example, if several artists are using a beat non-exclusively, the producer is getting heard outside of her own network, thereby exercising a smart promotional tactic in the process.

My General Thoughts on Beat Leasing

hip-hop-rapper-music-performance

One of the biggest questions is, “How much should I charge for a beat?” In the beginning, you can’t expect too much. Non-exclusive licenses are typically cheap, but always remember not to sell yourself short. There isn’t an easy answer to this question, so you’ll have to be realistic and come up with a price tag that reflects your experience. Beat leasing also presents a good trial run to gauge the popularity of your work. If you have a lot of artists banging down your door for non-exclusive licenses, you can leverage the pricing of exclusive licenses accordingly.

If beat leasing appeals to you, start small, be honest with yourself, and don’t wait for overnight success. Beat leasing is a great way to grind, but don’t expect the checks to pile in. It’s possible to make decent side-income from leasing your beats, but it doesn’t come easy. Like everything else in this industry, you have to work for it. Beat leasing simply offers another way for producers to profit on a freelance basis.

Note: I’m not a legal expert. This is just a loose explanation of music copyright and licensing matters involved in beat leasing. If you’re looking for legal advice, contact an experienced entertainment attorney.

2 comments

  1. Thank you so much for this article, Jordan. Now I understand more about the topic. Great job deconstructing the question. It means a lot.

    Have an awesome week.

    Best,

    Ernesto

    Like

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