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Beats by KHARMA

The Ultimate Guide:
to Beat Licensing

The Ultimate Guide to Online Beat Licensing

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Online beat licensing is nothing new as music producers have been licensing their beats for many years now. What once started with a few hundred producers on sites like Soundclick and MySpace has now evolved into a massive music-licensing industry led by platforms such as BeatStarsAirbit and Soundee

Music production has never been easier and today’s resources make it possible for almost anyone to launch a website to sell beats from. Still, beat licensing is serious business. 

In this guide, we will explain the concept of beat licensing and particularly focus on the differences between Exclusive and Non-Exclusive Licenses. The information provided in this guide will apply to both artists that are buying beat licenses, and producers selling beat licenses. 

Sit back and relax! ☕️ 

By the end of this guide, you will know everything there is to know about online beat licensing.

Table of Contents

Part 1: Beat Licensing Explained

The concept of beat licensing is not hard to understand. A producer makes a beat and uploads it to their beat store. Any artist can buy these beats directly from the store and use it for their own songs. 

In exchange for their purchase, the producer will provide the artist with a license agreement. A document that grants the artist certain user-rights to create and distribute a song. 

This license agreement is legal proof that the producer has given them permission to use the beat. 

A common misconception is when artists ask producers for free beats. Even when a producer agrees and sends the artist a free beat. The truth is, that free beat is useless as there is no legal proof and permission to use it. This is where the license agreement comes in.  

Before we go any further, we have to let go of the common phrases of “buying beats” and “selling beats”. The product that we’re dealing with here is simply not the beat itself. It is the license agreement. 

Non-Exclusive Beat Licensing 

Non-exclusive licensing, also known as ‘leasing’, is the most common form of beat licensing. For anywhere between $20-300, you can buy a non-exclusive license agreement and release a song on iTunes, Spotify, Apple Music, create a music video for YouTube, and make money from it! 💰

These are also the types of licenses that are directly available from the producer’s beat store. In other words, you don’t have to inquire about them and you can instantly buy a license from the online store. 

In most cases, a license agreement is auto-generated, including the buyer’s name, address, a timestamp (Effective Date), the user-rights, and the information of the producer. 

With a non-exclusive license, the producer grants the artist permission to use the beat to create a song of their own and distribute it online. The producer will still retain copyright ownership (more about this later) and the artist has to adhere to the rights granted in the agreement. 

The limitations of Non-Exclusive Licenses

Most non-exclusive licenses have a limitation on sales, plays, streams, or views. For example, the license might only allow a maximum number of 50,000 streams on Spotify and/or 100,000 views on YouTube. 

A non-exclusive license also has an expiration date in some cases. Meaning that it’s only going to be valid for a set period of time. This could be anywhere between 1-10 years. After the contract period is due, the buyer has to renew the license. In other words, buy a new one. 

The license will also need to be renewed as soon as the buyer reached the maximum amount of streams and/or plays. Even if that’s before the contract’s expiration date (!)

Since these licenses are non-exclusive, a single beat can be licensed to an unlimited number of different artists. This means that several artists could be using the same beat for a different song under similar license terms. 

Whether this is a problem depends entirely on what stage the artist is. A beginner artist would be best off with a non-exclusive license, while a signed artist or an artist that is on the verge of blowing up might be better off with an exclusive license. 

The different types of Non-Exclusive Licenses 

Most producers offer different non-exclusive licensing options. In my case, I offer an MP3+WAV, Premium Trackouts, and Unlimited License. 

Every option comes with its own unique user-rights. These user-rights are often displayed in licensing tables, similar to mine below.

My pricing tables

Obviously, the more expensive the license, the more user-rights you’re getting. These more expensive licenses also come with better quality audio files.

In my case, the second-highest tier, the Premium license, is the most popular. That’s simply because you get the best audio quality, tracked out files of the beat and good user-rights.

Artists who believe these rights still aren’t sufficient for their song, usually go for the highest tier. The Unlimited license. Or even better, an Exclusive license.

Exclusive Beat Licensing

When you own the Exclusive Rights to a beat, there are no limitations on user rights. Meaning that an artist can exploit the song to the fullest.

There is no maximum number of streams, plays, sales or downloads nor is there an expiration date on the contract.

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

In the case of buying the exclusive rights to a beat that was previously (non-exclusively) licensed to other artists, the artist that purchased the exclusive rights is typically the last person to purchase it. After a beat is sold exclusively, the producer is no longer allowed to sell or license the beat to others.

That doesn’t mean the previous non-exclusive licensees will be affected by this. Every exclusive contract should have a section with a “notice of outstanding clients” included.

This section protects these previous licensees from getting a strike by the exclusive buyer.

beat licensing - notice of outstanding clients
These are the main differences between non-exclusive licenses and exclusive licenses. But it goes further than that and there’s often confusion around the topics of rights and royalties.

Going forward in this guide, we will go more in-depth about Royalties, Publishing and Copyright.

Two very different ways of selling Exclusive Rights

For many years, producers had different ways of selling exclusive rights. Luckily, in more recent years, contracts are becoming more streamlined and matching the industry standard.

Still, I want to address two very different ways of selling exclusive rights. 

  1. Selling exclusive rights
  2. Selling exclusive ownership

By selling exclusive rights, the producer remains the original author of the music. And is still able to collect writers share and publishing rights. (again, more about this later)

By selling exclusive ownership, the producer sells the beat including all interest, authorship, copyright etc. These deals are also known as ‘work-for-hire’. Basically, the artist retains actual ownership over the beat and will–from that point on–be considered as the legal author of the beat.

Within the beat licensing industry, selling exclusive ownership is wrong, unethical and–in most cases–not compliant with Copyright Law.   

It’s only right to come to an agreement where both the artist and producer are credited for their work; Legally, financially, and commercially.

Part 2:
All about Royalties, Writers Share and Publishing Rights  

This is the part that most people struggle to understand. 
Mainly, because there are lots of different deal structures in the music industry. No worries! 😉 
By the end of this guide, you’ll know everything you need to know.

Let’s break things down step-by-step and solely in regards to online beat licensing.

Before we jump into this next section, we need to get a better understanding of two types of royalties first.

  1. Mechanical Royalties
  2. Performance Royalties

Mechanical Royalties

Mechanical royalties are generated when music is physically or digitally reproduced or distributed. This applies to hard copy sales, digital sales (e.g. iTunes) and streams (e.g. Spotify).

Performance Royalties

Performance royalties are generated when a song is performed publicly. This applies to when music is played on the radio, performed live or streamed for example.

Who gets the Mechanical Royalties?

In most cases, the artist is allowed to keep 100% of the mechanical royalties in exchange for the price they pay for the license. Regardless of whether the license is non-exclusive or exclusive.

These days, distribution services like TuneCoreCDBaby or DistroKid pay these mechanical royalties directly to the artist. That is if the artist works independently.

When an artist is signed to a label, the label usually collects the mechanical royalties and might choose to pay (a percentage of) it to the artist. 

Advances against Mechanical Royalties in Exclusive Agreements 

I intentionally said that “in most cases” the artist gets to collect 100% of the mechanical rights because this does not always apply. There’s an exception to this, which only applies to exclusive rights. 

Some producers (including myself) ask for a tiny percentage of the Mechanical Royalties in their exclusive agreements. This could be anywhere between 1-10%. 

This is also known as ‘points’ or ‘producer royalties’. 

In this scenario, the price an artist pays for the exclusive rights is considered an “advance against mechanical royalties” that might become due in the future. It will be calculated over the Net Profit of a song. Meaning that all costs to create the song, including the exclusive price may be deducted first before the producer gets his cut. 

Here’s an example to show you how this could potentially play out in a real-life situation.  

Let’s say a producer sells the exclusive rights to a beat for $1,000 USD as an advance against royalties. His mechanical royalty rate is set to 3%.

The artist paid:
$1,000 for exclusive rights
$500 for studio time
$500 for getting the song mixed and mastered

Total expenses = $2,000

After 1 year, the song generated $10,000 in Mechanical Royalties!

The Net Profit: $10,000 – $2,000 expenses = $8,000 💰

The Producer’s Cut: 3% of $8,000 = $240 

As an independent artist, $8,000 is a lot of money to generate on Mechanical Royalties. Still, only $240 has to be paid to the producer. 

Why an Advance against Royalties?

It seems pointless, however, there’s a reason why some producers (including me) prefer selling exclusive rights with an advance against royalties.

A few years back, I could easily sell exclusive rights for anywhere between $2,000 – $10,000. (The Good Ol’ Days! 🤠

These days, it’s considered ‘normal’ to sell exclusive rights for less than $1,000. With all the competition and the beat market becoming more saturated, the prices have dropped and it has become harder to close 4 or 5-figure exclusive deals. 

But what if the song blows up!? 

What if a song starts generating millions of dollars and you sold the exclusive rights to that beat for less than $1,000? 

That doesn’t really sound like a fair deal, does it? 

An advance against royalties can offer the solution. It’s an insurance for the producer just in case the song blows up. It’s also something the artist only has to worry about as soon as the song starts generating serious revenue. And even still, it’s only 3%. 🤷🏻‍♂️

Who collects the Performance Royalties? 

Performance royalties are collected and paid out by Performing Rights Organisations (PRO’s), such as ASCAP or BMI in the US or PRS in the UK. 

(Every country has its own organisation, check which one is yours

These royalties are divided into two parts: 

  1. Songwriter Royalties (A.k.a. Writer’s Share)
  2. Publishing Royalties 

The PRO’s collect both of these royalties and divide them into two groups. 

For every $1 earned on Performance Royalties:

  • $0.50 goes to Songwriter Royalties 
  • $0.50 goes to Publishing Royalties. 

The $0.50 Songwriter Royalties will be paid out to the songwriters directly by the PRO. 

The other $0.50 publishing royalties will be paid out to a publishing company or publishing administrator. (more about this later). 

What are songwriter royalties? 

First, let’s break down the Songwriter Royalties. 

The songwriter royalties, also known as the ‘Writer’s share’ will always be paid out to the credited songwriters. This is the part that can not be sold through an exclusive license, other than a work-for-hire agreement. 

As I said before, this is wrong in the industry of licensing beats online. 

In case you’re getting confused; In copyright law, a producer is considered a ‘songwriter’ too. 🤓

Songwriter royalties apply to anyone that had creative input in a song. Producers, songwriters (lyricists) and sometimes even engineers. 

Generally, non-exclusive beat licenses are sold with 50% publishing and writers share. This is usually not negotiable since the music part is the producers’ contribution to your song and is considered half of the song. The lyrics are considered the other half. 

It doesn’t matter if there happen to be multiple songwriters that contributed to the lyrics. In that case, this 50% should be divided between them. 

Example Non-Exclusive beat licenses: 
50% Producer
25% Writer 1 
25% Writer 2

As part of an exclusive rights deal, a different split between all creators could be negotiated. It all depends on the price and flexibility of the producer. 

While I generally stick to my 50%, some producers sometimes agree to the following example split. 

Example Exclusive Licenses:  
30% Producer 
35% Writer 1
35% Writer 2 

What are Publishing Royalties? 

Unlike Songwriter royalties, Publishing can be assigned to outside entities called publishing companies. Most independent artist and producers will most likely not have a publishing deal, which means they’ll have to collect the publishing royalties themselves. 

Surprisingly, a lot of money is left on the table here. If you’re an independent artist or producer that is only signed up with a PRO and not with a Publishing Administrator, half of what you’ve earned is still waiting for you to collect. 

I’m personally using SongTrust services, which I’d recommend to any independent creator.  

In terms of licensing beats online–regardless of an exclusive or non-exclusive license–the percentage of publishing rights is generally the equivalent of the writers share. 

50% of writers share equals 50% publishing share. 

This is a tricky topic and it goes way further than I can explain here. If you really want to know the ins and outs concerning copyright, I suggest you dive deeper into Copyright Law using our good friend Google or consulting an actual attorney.  

Again, going forward, I’ll explain about copyright solely in regards to licensing beats online. We’re going to dismantle a song to its creators and copyright holders, hopefully making it clear to you who owns what. 

Let’s say you’re an artist and you went to search for beats on YouTube. You found one that you like and you head over to the producer’s website. You buy a license for that beat, write lyrics, create a song and distribute it through CDBabyTuneCore or DistroKid.

That song contains two copyrighted elements: 

  1. The Music
  2. The Lyrics 

The producer owns the copyright to the music and you own the copyright to the lyrics. 

Regardless of whether you’ve bought an Exclusive License or Non-Exclusive license. The producer will always own the copyright to the music and the artist will always own the copyright to the lyrics (unless it’s written by someone else other than the artist). 

This is what we call Performing Arts Copyright (PA-Copyright).  

On a side note: Many believe that you have to register the music or the lyrics with the U.S. Copyright office yet, in fact, the instant you write something on paper, make a beat in your DAW or save a demo song to your hard drive, it’s copyrighted! 

Sure, there are benefits to properly registering with the U.S. Copyright office but, failure to do so doesn’t mean you will lose ownership over your creation. 

Back to that song you made. Together with the producer, you’ve created a new song. In legal terms, this is often referred to as the “Master” or “Sound Recording”. 

Now, this is where things can cause confusion because the difference between an Exclusive or Non-Exclusive license plays a huge role here. 

As an artist, buying beats from a producer: 

  • If you have exclusively licensed a beat, you do own the master and sound recording rights. 
  • If you have non-exclusively licensed a beat, you do not own the master and sound recording rights. 

In an exclusive license, the Master rights will be transferred to the client (artist) and it will become their sole property, free from any claims from the Producer. 

The only exception here is the producer’s right to jointly claim the copyright of the so-called ‘underlying musical composition’. This is what we referred to earlier as the PA-Copyright. The producer is and always will be the original creator of the music. 

With a non-exclusive license, the client does not own the master or sound recording rights in the song. They’ve been licensed the right to use the beat and to commercially exploit the song based on the terms and conditions of the non-exclusive agreement. Yet again, they do own the PA Copyright of the lyrics. 

Instead, what they’ve created is called a Derivative Work.   

What’s a Derivative Work?  

In regards to beat licensing, a derivative work is a combination of an original copyrighted work (the beat) in combination with someone else’s original work (the lyrics). 

Derivative works are very common in the music industry and you probably come across them on a daily basis. 

Examples are: 

  • Remixes
  • Translations (A Spanish version of an English song) 
  • Parodies 
  • Movies based on books (Harry Potter)  

Basically, these are all so-called ‘new versions’, created using preexisting copyrighted material. 

In terms of beat licensing, a non-exclusive agreement authorises an artist to create such a ‘new version’, using the producers copyrighted material.

The only person that is able to authorize a derivative work is the owner of the underlying composition itself. In this case, the producer. 

When someone licenses a beat on a non-exclusive basis, they’re specifically given the right to create a Derivative Work. 

Beats that contain third party samples

Pretty straight forward up till now, right? Well, I need you to pay close attention now because this is where things often go wrong… 

A common misconception when producers are selling beats with samples is thinking they can turn the responsibility of ‘clearing the sample’ over to the artists that license the beat. 

I guess somewhere, sometime, someone made a statement about this which is… Entirely FALSE! 

This is make-believe and it couldn’t be more wrong! 🤦🏻‍♂️

Please view the image below for context…

In the image above, there are two different versions that derived from the original sample.
(Version AB and Version ABC) 

Since both these versions are considered a New Work and both contain that original sample–Clearance for Version AB does not account for Version ABC. 

Both the Producer and the Artist are required to clear the first sample! Because in this scenario, there are 3 different copyright owners to a song.

Obviously, everything falls and stands with clearing the original sample. 

This is going to get hard as soon as multiple artists license the same beat and create their songs with it. After a while, there could be a whole lot of Versions ABC deriving from it.  

Exactly why I personally stay away from using samples… 😊

Exclusive or Non-Exclusive, what is best for you? 

By now, we’ve covered all the differences between non-exclusive and exclusive licenses. But, if you’re an artist, you might still wonder which option is the best for you. 

Besides the difference in price–in every way–an exclusive license is the better option. No doubt! 💯 

However, this is not a necessity for everyone. In fact, most artists are better off with a non-exclusive license.

Let’s have an honest view of your current situation… 

  • How many followers and fans do you have? 
  • How many songs have you released to date? 
  • What is the number of plays/stream you get on average? (all platforms combined) 
  • How big is your marketing budget? 
  • Are you getting financial support from a label or publisher? 

Ask yourself; What would be the best option for the artist you are TODAY? 

You see, most artists are simply not ready to buy exclusive rights yet. And there’s no shame in that at all. 

if you’re a young artist working on a mixtape or first album to get your name out there. Why would you spend that much money on exclusive rights if you’re not even sure if the record is going to get big?

The wise(r) investment would be to get one of the higher tier non-exclusive licenses. Preferably, the Unlimited Licenses. 

This allows you to spend less, buy more licenses, release more music and gradually build your fanbase until you’re ready to take that next step. 

A summary of the differences between Exclusive and Non-Exclusive Licenses 

In the image below you’ll find a summary and comparison between Non-Exclusive and Exclusive Beat Licensing. Please note that the Non-Exclusive ‘Sales’ and ‘Streams’ limit does not apply to the “Unlimited” licenses. 

Non-Exclusive vs. Exclusive

Before we go into Part 4…. 

I know the world of buying and selling beats online can be confusing at times as I’ve noticed this firsthand from working with artists and producers daily. 

Heck, I’ve read dozens of books myself to understand things fully! 😅 

Still, I appreciate you for making it this far in the guide and I sincerely hope you’ve learned a thing or two… Feel free to refer back to this whenever you find yourself struggling with anything related to the topic. 

I want to give a special thanks to the producers in the beat-selling course Constant Conversion Strategy Masterclass.

They’ve helped shape this guide to what it is now by providing feedback and letting us know where they’re struggling with the most.

Click this picture if you are a Music Producer looking for a Masterclass on beat-selling.

If you have a second, drop a comment below and share your thoughts. 👇
Good or bad, it’s all appreciated! 🙏

Part 4:
FAQ About Beat Licensing

I want to license a beat that is already sold by the producer. Can I reach out to the exclusive purchaser so they can sell me a license? 

 

 

No, that’s not an option. A common mistake made by artists that are (desperately) trying to license an already sold beat is, thinking they can locate the buyer and buy it from them.

Every exclusive contract states that the beat cannot be resold or licensed to a third party in its original form and if it’s not overlayed with lyrics. If they would, that would be a breach of the exclusive agreement.

Someone wants to buy a beat I already sold and asks if I can create a similar one. Can I?

 

 

In this case, we’ll have to define the word ‘similar’. If that means re-using parts of the sold beat or replicating melodies you used in that beat, then NO. You’re basically ‘sampling’ a beat that you’ve already sold. In a way, you’re creating a derivative work which you’re no longer allowed to do.

But if that means using a similar song structure. Or similar instruments, yet different chords and melodies, then YES. It’s possible to do that.

I recently bought a non-exclusive license for a beat. Now someone else bought it exclusively. What happens to my song?

 

 

Nothing!
Your license will be in effect for the length of the agreement or until you’ve reached the maximum number of streams and/or plays. (Check your license agreement)

Your non-exclusive license agreement should include an “Effective Date” (the day you bought the license) and an “Expiration Date” (This could also be a period of time after which your license will expire. E.g. 5 years).

Within the Exclusive contract with the buyer, a so-called “notice of outstanding clients” will protect you from the exclusive buyer to strike you.

My non-exclusive license is reaching its streaming limit but I can’t buy a new license because the beat is already sold exclusively. Do I have to take the song down now?

 

 

If your non-exclusive license is reaching its streaming limits and extending the license is not an option, then yes––legally, you will have to take the song down. How unfortunate that might be.

This is the exact reason why the Unlimited Licenses are such a great option, considering they have no streaming cap. All though it’s more expensive, it does avoid (awkward) situations like these.

Someone released a song with one of my beats but didn’t get a license? What’s the best course of action?

 

 

Unfortunately, this happens a lot if you’re a producer promoting beats online. Luckily, there are different ways to go about this. The first step is to reach out to the artist(s) and notify them about the unauthorized use of the beat.

Then, offer them 2 options.

  1. Either buy a license so they can keep the song online
  2. Or remove the song entirely from all platforms it’s published on

The best-case scenario, they adhere to your request. But what if they don’t?

In that case, you have two options.

  1. Leave it be
  2. File for a DMCA takedown (click the link for more info)

If the song isn’t really gaining numbers and is of very poor quality (which is usually the case when beats are used unauthorized), it might be best to leave it be. It’s not worth your time and money.

The alternative, filing for a DMCA takedown will cost you some money. I would only consider this if the song is gaining serious numbers (1000s of views or stream on any platform).

I created a beat with another producer. How do we split the publishing and songwriters share?

 

 

Collaboration splits are very common these days, yet there’s no quick answer to this question. It all depends on what terms you’re collaborating on.

If you’re collaborating with a producer and you upload that beat to your beat store, the most common split would be 50/50. That goes for sales, publishing and songwriter share.

When the beat is sold or licensed to an artist, they’re usually granted 50% of the publishing and writers share to the song they make. Exact numbers might be different as it depends on the contract terms the producer offers.

But in this case, the split would be as follows.
Producer 1: 25%
Producer 2: 25%
Artist: 50% 

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Price: $50

 

Beginners license that is typically used by beginner artists that do not expect the song to go big.

This license comes with one single industry-quality WAV-file, but not with tracked-out files. (harder to get a better mix).

Radio airplay is not permitted. 

This license does not give the rights to a music video.

 

Allowed on Spotfiy & Apple Music
- but only for up to 50,000 streams combined

 

 

Price: $99 $95

 

Professional license, most popular among artists that are releasing their song on platforms like Spotify, iTunes - or perform with the song in live (paid) performances.

This license comes with high-quality tracked-out files which are essential for mixing songs professionally. 

Allowed 100,000 streams and 10,000 sales - possibility to upgrade if you get above it.

 

We do not recommend this license if you’re looking to create a music video for YouTube. 

 

 

Price: $199 $195

 

Professional license with no limitations on streams, plays or sales.

This license is generally purchased by artists that believe their song has the potential to surpass the streaming caps of other licenses. 

We strongly recommend this license to artists that want to create and monetise a music video for YouTube. 

 

Allows for radio play.

 

This license allows your song to be played on TV/Movies.

Basic License 

Trackouts + Premium License

(Most Popular)

Unlimited License

 


Price: $30

 

Promotional license that is typically used by beginner artists who does not want to profit from their song.

Comes with MP3-file.

Radio airplay is not permitted. 

This license does not give the rights to a music video.


Not allowed on Spotify, iTunes Music, YouTube with monetisation, or any other service with monetisation.

Good for FREE mixtapes and FREE downloads.

Non Profit License

LICENSE EXAMPLE

This is an unlimited-level non-exclusive license agreement (the “UNLIMITED License Agreement”), effective as of – (the “Effective Date”) by and between KHARMA (the “Producer” or “Licensor”); and John Doe, with the artist name JohnDoeMusic, residing at {CUSTOMER_ADDRESS} (“you” or “Licensee”), regarding all the terms for Licensee’s use of, and the rights granted in, the Producer’s master recording and underlying musical composition entitled Track Title (collectively, and including without limitation any and all tracked out stems thereof, the “Beat”).

1. License Fee: Producer’s receipt of a ($) licensee fee (the “UNLIMITED License Fee”) from you is a precondition to this UNLIMITED License Agreement.

2. Delivery of the Beat: Following receipt of the UNLIMITED License Fee and execution of this UNLIMITED License Agreement, Producer will email a link to the Beat in MP3 + WAV + STEMS (TRACK OUTS) for the Beat (as such terms are understood in the music industry), to the email address you provided to Producer.

3. Term: The Term of this UNLIMITED License Agreement shall be in perpetuity (unless terminated earlier pursuant to the terms of this Agreement).

4. Use of the Beat:

a. Non-Exclusive. The Beat is being licensed to you on a non-exclusive basis, which means for example

without limitation that Producer may continue to exploit the Beat and/or license it to other third parties.

b. Making One New Song. You will have a limited, non-exclusive, nontransferable license to create one (1) new, substantially different (i.e., with substantial unique addition) derivative musical composition (the “New Composition”) and one (1) new derivative master recording (the “New Recording”) incorporating the Beat. For example, you may choose to record your own topline vocals over the Beat, and/or incorporate all or portions/samples of the Beat into the instrumental music of a New Composition and New Recording. You will have the right to modify the arrangement, tempo, duration, and/or pitch of the Beat in preparation of the New Composition and New Recording. You will not have the right to sublicense the New Composition and/or New Recording to third parties (e.g., you may not permit anyone to “sample” your New Recording in a subsequent master recording).

c. For Sale and Streaming. You may exploit and/or permit exploitation of the New Composition and New Recording in non-paid and/or paid uses—e.g., where people don’t have to pay to listen to and/or download it, and where they do. For example, you may release the New Recording for free download, include it on a free mixtape or free compilation of music, or release it on non-monetized digital streaming service (such as SoundCloud); and you may also sell physical copies of it (e.g., on CD), or release it for sale on a digital service platform (such as iTunes or Amazon Music), or release it on a monetized digital streaming service (such as Spotify or Apple Music).

d. Public Performances. You may perform the New Recording (and/or underlying New Composition) publicly (for example, in a live concert performance, at a festival, or in a nightclub), and even if people are paying to see you perform. Any recording of a live performance of the New Composition shall be subject to the same terms of this UNLIMITED License Agreement (i.e., and would qualify as a New Recording hereunder).

e. Radio. You may pitch, submit or permit the pitching or submission of the New Composition and New Recording for performance on terrestrial, satellite, or internet radio (e.g., over-the-air radio, Sirius XM, Pandora, etc.).

f. Music Videos & Synchronizations. You may synchronize (use) the New Composition and New Recording in up to two (2) audiovisual works (“Music Videos”). The duration of the Music Videos can’t exceed the longer of: (i) five (5) minutes; and (ii) the duration of the New Composition as embodied on the New Recording. The Music Videos can’t be used to promote any third-party product or service—it can only be used to promote the New Composition and New Recording. You may exploit the Music Videos on internet video platforms (e.g., YouTube, Vimeo, Instagram, Facebook, and/or Vevo), and you may monetize the Music Videos (on those platforms or otherwise). The description of the Music Videos on such video platforms must include credit to KHARMA as producer. You may license or permit the Music Videos to be broadcast on television networks, or to be otherwise licensed to third parties. For the avoidance of doubt, the New Composition and/or New Recording (and/or Beat) may not be synchronized with or incorporated in any other audiovisual work (i.e., other than the Music Videos as permitted above)—for example without limitation, in any commercial, television show, film, or video game—without Producer or Producer’s publisher approving and issuing a license in connection wtih Producer’s share of the New Composition (and you will cause Producer to be paid a share of your royalties on the New Recording in connection with such synchronization, as set forth in paragraph 7.b)

g. No ContentID Registration. You may not register or permit the registration of the New Composition and/or New Recording with any content identification system or service (for example without limitation, with YouTube’s ContentID, whether directly or through a third party). This is a non-exclusive license agreement, and the Beat may have been or may yet be licensed to third parties for their own use; if any licensed users of the Beat tried to register their derivative songs, the content identification system might improperly flag all other users of the Beat as infringing uses.

h. No Copy / Stream Cap. Your rights to exploit a New Composition and New Recording are not subject to a maximum aggregate number of streams or copies (physical, or digital downloads).

i. No Direct Use of the Beat. For the avoidance of doubt, you are not getting any right to exploit the Beat directly, only to create and exploit a New Composition and New Recording that incorporates the Beat along with sufficient new and unique material to distinguish the New Composition and New Recording from and not directly compete with the Beat.

5. PRO Registration: Producer has written and composed the Beat, which is commonly treated as one-half of the total songwriting on a musical composition (and you agree that Producer retains a 50% ownership of the copyright in the New Composition). You agree to register the New Composition with relevant performance rights organizations (e.g., ASCAP, BMI, etc.) with Producer having 50% of the total writer’s share under KHARMA (STIM #…) and 50% of the total publisher’s share under KHARMA (STIM #…). You agree to contact and get a hold of Producer if any failure occur for performance rights organizations to register Producer as demanded above.

6. SoundExchange Registration: You agree that if/when you register the New Recording with SoundExchange and comparable foreign collectors of master recording public performance royalties, you will direct the same (e.g., by a letter of direction) to pay to Producer twenty-five percent (25%) of any and all public performance royalties collected in connection with the New Recording. You agree to contact and get a hold of Producer if any failure occur for performance rights organizations to register Producer as demanded above.

7. Royalties: In addition to the UNLIMITED License Fee, you agree to pay the following royalties to Producer, either by directing the distributor of your records to do so (i.e., your record label, or the digital distribution company you use, e.g., TuneCore, DistroKid, etc.), or by doing so yourself (e.g., to PayPal ID: whoismarcel@gmail.com, or via Producer banking information that may be provided upon emailed request):

a. Mechanical Royalties. When a copy of a master recording like the New Recording is sold (either on a CD, or when someone buys it on a service like iTunes) or streamed (e.g., on a service like Apple Music or Spotify), copyright law requires that the songwriters get paid a royalty called a mechanical license. You agree to make sure that Producer is paid mechanical royalties for Producer’s 50% songwriting share of the New Composition, at the minimum statutory rate.

b. Producer Royalties. For Producer’s production of the Beat you intend to use in the New Recording, you agree to pay Producer 50% of everything you make from the New Recording (i.e., including without limitation from master use synchronization licenses, but not including in connection with the Music Videos, which shall be subject to paragraph 7.c.)

c. Music Videos Royalties. Notwithstanding anything to the contrary herein, you will pay or cause to be paid to Producer 25% of all monies you make in connection with exploitation of the Music Videos (for example without limitation, from ad revenues in connection with monetization on YouTube, from digital or physical sales of the Music Videos, etc.).

8. Credit: You will have the right to use and permit others to use Producer’s approved name “KHARMA” for purposes of the New Recording and “KHARMA” for purposes of the New Composition, but solely in connection with uses of the New Composition and New Recording permitted hereunder. You will use best efforts to have Producer credited as a “producer” of the New Recording (e.g., “KHARMA”) and co-writer of the New Composition (e.g., “Co-written by KHARMA” [and other co-writers]” in any and all metadata, liner notes, and/or other customary place for such credits in connection with all exploitations of the New Recording and/or New Composition (as applicable), and in a manner no less favorable to Producer than credit accorded to any other producer or songwriter of the master recordings and musical compositions (respectively) bundled with the New Recording and/or New Composition. In the event of any failure to have Producer properly credited, you will use reasonable efforts to cure such failure immediately on a prospective basis.

9. Ownership: The Producer is and shall remain the sole owner and holder of all right, title, and interest in the Beat, including all copyrights to and in the sound recording and the underlying musical compositions written and composed by Producer. Nothing contained herein shall constitute an assignment by Producer to Licensee of any of the foregoing rights. You may not register or attempt to register (or permit the registration or attempted registration) of the Beat with the U.S. Copyright Office. You may own a copyright to the extent of your contributions embodied in the New Song and New Recording (e.g., your topline lyrics, melody, and/or other new instrumental elements), but any registration or claim of copyright as to the New Song and/or New Recording must be as a derivative work disclaiming any ownership to the copyright(s) in the Beat. For the avoidance of doubt, there is no intention of the parties for the New Composition and/or New Recording to constitute a joint work for purposes of copyright law, and Producer does not herein grant to you any rights in or to any other derivative works that may have been or may yet be created by third parties based on the Beat. Producer reserves to itself any and all rights in and to the Beat not expressly granted to you herein. You will, upon request, execute, acknowledge and deliver to Producer such additional documents as Producer may deem necessary to evidence and effectuate Producer’s rights hereunder, and you hereby grant to Producer the right as attorney-in-fact to execute, acknowledge, deliver and record in the U.S. Copyright Office or elsewhere any and all such documents if you fail to execute same within five (5) days after so requested by Producer.

10. Breach by You: 

a. If you fail to cure any breach of this UNLIMITED License Agreement within five (5) business days of Producer providing you with written notice of a breach, Producer will have the right to immediately terminate this UNLIMITED License Agreement, and if Producer notifies you of such termination, you will have no further right to use the Beat in the New Composition, New Recording, and/or Music Videos (and you must immediately cause them to be no longer available to the public).

b. If you use the Beat, New Composition, New Recording, and/or any Music Videos in a manner not expressly permitted in this UNLIMITED License Agreement, you agree to pay Producer any and all amounts previously or thereafter collected, received, or credited to you or any third party in connection with such exploitation of the Beat, New Composition, New Recording, and/or Music Videos (as applicable).

c. You recognize and agree that a breach or threatened breach by you of this UNLIMITED License Agreement could cause irreparable injury to Producer, which may not be adequately compensated by monetary damages. Accordingly, in the event of a breach or threatened breach by you, Producer shall be entitled to a temporary restraining order and preliminary injunction restraining you from violating the provisions of this UNLIMITED License Agreement.

d. Nothing herein shall prohibit Producer from pursuing any other available legal or equitable remedy in connection with breach or threatened breach of this UNLIMITED License Agreement, including but not limited to the recovery of monetary damages from you.

11. Representations, Warranties, and Indemnification: 

a. Producer represents and warrants that Producer has the full right and ability to enter into this UNLIMITED License Agreement and grant those rights granted herein. Producer warrants that the exploitations of the Beat permitted hereunder will not infringe upon or violate any common law or statutory right of any person, firm, or corporation; including, without limitation, contractual rights, copyrights, and right(s) of privacy and publicity and will not constitute libel and/or slander.

b. You represent and warrant that exploitation of the New Composition and/or New Recording hereunder will not infringe upon or violate any common law or statutory right of any person, firm, or corporation; including, without limitation, contractual rights, copyrights, and right(s) of privacy and publicity and will not constitute libel and/or slander. Just to be clear, Producer takes no responsibility whatsoever as to any elements added to the New Composition and/or New Recording by Licensee or any third party, and Licensee indemnifies and holds Producer harmless for any and all such elements.

c. Parties hereto shall indemnify and hold each other harmless from any and all third party claims, liabilities, costs, losses, damages, judgments, costs, and expenses as are actually incurred by the non-defaulting party (including, without limitation, reasonable attorneys’ fees) arising in connection with any breach or claim of breach of this UNLIMITED License Agreement by the defaulting party, their agents, heirs, successors, assigns and employees, which have been reduced to final judgment or settled with the defaulting party’s consent. The non-defaulting party shall give the defaulting party prompt written notice of all claims giving rise to indemnification obligations hereunder, and the defaulting party shall have the right to participate in the defense of such claims with counsel of its choice at its sole expense.

12. Miscellaneous: In no event shall Artist be entitled to seek injunctive or any other equitable relief for any breach or non-compliance with any provision of this UNLIMITED License Agreement. This UNLIMITED License Agreement constitutes the entire understanding of the parties and cannot be changed or waived, in whole or in part, except in writing signed by both parties hereto. This UNLIMITED License Agreement supersedes all prior agreements between the parties, whether oral or written. Should any provision of this UNLIMITED License Agreement be held to be void, invalid or inoperative, such decision shall not affect any other provision hereof, and the remainder of this UNLIMITED License Agreement shall be effective as though such void, invalid or inoperative provision had not been contained herein. No failure by Producer hereto to perform any of its obligations hereunder shall be deemed a material breach of this agreement until you give Producer written notice of its failure to perform, and such failure has not been corrected within thirty (30) days of notice (or, if such breach is not reasonably capable of being cured that quickly, Producer does not commence to cure such breach within said time period, and proceed with reasonable diligence thereafter). This agreement shall be governed by and interpreted in accordance with the laws of Sweden applicable to agreements entered into and wholly performed in said State, without regard to any conflict of laws principles. You hereby agree that the exclusive jurisdiction and venue for any action, suit or proceeding based upon any matter, claim or controversy arising hereunder or relating hereto shall be in the state or federal courts located in Sweden. You don’t have the right to make any money off the Beat, the New Composition, or the New Recording except as specifically allowed in this UNLIMITED License Agreement. You shall be deemed to have signed, affirmed and ratified your acceptance of the terms of this UNLIMITED License Agreement by virtue of your payment of the UNLIMITED License Fee to Producer and your electronic acceptance of the terms and conditions (e.g., at the time of your payment of the UNLIMITED License Fee.

This is a basic-level non-exclusive license agreement (the “Non Profit Agreement”), effective as of (the “Effective Date”) by and between the “Producer” or “Licensor”); and John Doe residing at {CUSTOMER_ADDRESS} (“you” or “Licensee”), regarding all the terms for Licensee’s use of, and the rights granted in, the Producer’s master recording and underlying musical composition entitled Track Title (collectively, the “Beat”). 

1. License Fee: Producer’s receipt of a – licensee fee (the “Non Profit Fee”) from you is a precondition to this Non Profit Agreement. 

2. Delivery of the Beat: Following receipt of the Non Profit Fee and execution of this Non Profit Agreement, Producer will email a link to the Beat in MP3 for the Beat (as such terms are understood in the music industry), to the email address you provided to Producer.  

3. Term: The Term of this Non Profit Agreement shall be ten (10) years and this license shall expire on the ten (10) year anniversary of the Effective Date.

4. Use of the Beat:

a. Non-Exclusive. The Beat is being licensed to you on a non-exclusive basis, which means for example without limitation that Producer may continue to exploit the Beat and/or license it to other third parties. 

b. Making One New Song. You will have a limited, non-exclusive, nontransferable license to create one (1) new, substantially different (i.e., with substantial unique addition) derivative musical composition (the “New Composition”) and one (1) new derivative master recording (the “New Recording”) incorporating the Beat. For example, you may choose to record your own topline vocals over the Beat, and/or incorporate all or portions/samples of the Beat into the instrumental music of a New Composition and New Recording. You will have the right to modify the arrangement, tempo, duration, and/or pitch of the Beat in preparation of the New Composition and New Recording. You will not have the right to sublicense the New Composition and/or New Recording to third parties (e.g., you may not permit anyone to “sample” your New Recording in a subsequent master recording). 

c. Promotional / Free Use Only. You may only exploit and/or permit exploitation of the New Composition and New Recording in non-paid uses—e.g., where people don’t have to pay to listen to and/or download it. For example, you may release the New Recording for free download, include it on a free mixtape or free compilation of music, or release it on non-monetized digital streaming service (such as SoundCloud, but not, for example, via Spotify or Apple Music). 

d. No Public Performances. Notwithstanding anything to the contrary herein, you not may perform the New Recording (and/or underlying New Composition) publicly (for example, in a live concert performance, at a festival, or in a nightclub), and even if people are paying to see you perform.

e. No Radio. You may not pitch, submit or permit the pitching or submission of the New Composition and New Recording for performance on terrestrial, satellite, or internet radio (e.g., over-the-air radio, Sirius XM, Pandora, etc.)—any such use would require your purchase of an UNLIMITED License in connection with the Beat. 

f. 0 Video. You may synchronize (use) the New Composition and New Recording in zero (0) audiovisual work (“Video”). The duration of the Video can’t exceed the longer of: (i) five (5) minutes; and (ii) the duration of the New Composition as embodied on the New Recording. The Video can’t be used to promote any third- party product or service—it can only be used to promote the New Composition and New Recording. You may exploit the Video only on free-access internet video platforms (e.g., YouTube, Vimeo, Instagram, Facebook, and/or Vevo), and you may not monetize the Video (on those platforms or otherwise). The description of the Video on such video platforms must include credit to KHARMA as producer. You may not license or permit the Video to be broadcast on television networks, or to be otherwise licensed to third parties. For the avoidance of doubt, the New Composition and/or New Recording (and/or Beat) may not be synchronized with or incorporated in any other audiovisual work—for example without limitation, in any commercial, television show, film, or video game. 

g. No ContentID Registration. You may not register or permit the registration of the New Composition and/or New Recording with any content identification system or service (for example without limitation, with YouTube’s ContentID, whether directly or through a third party). This is a non-exclusive license agreement, and the Beat may have been or may yet be licensed to third parties for their own use; if any licensed users of the Beat tried to register their derivative songs, the content identification system might improperly flag all other users of the Beat as infringing uses. 

h. 0 Distribution Copy/10,000 Stream Cap. Your rights to exploit a New Composition and New Recording are subject to a maximum aggregate number of ten thousand (10,000) streams and zero (0) distribution copies (physical, or digital downloads), across all services and platforms (for illustrative example, if the Video had half (50%) of 10,000 plays on YouTube and the New Recording had half (50%) of 10,000 + one (1) streams on SoundCloud, that would be a breach of this paragraph). If you are approaching the foregoing cap on your rights to use the Beat, New Composition, and New Recording, you must either remove the New Composition and New Recording from all platforms, or you must purchase a new higher-level license of the Beat from Producer (e.g., an UNLIMITED License), before exceeding the foregoing cap. 

i. No Direct Use of the Beat. For the avoidance of doubt, you are not getting any right to exploit the Beat directly, only to create and exploit a New Composition and New Recording that incorporates the Beat along with sufficient new and unique material to distinguish the New Composition and New Recording from and not directly compete with the Beat. 

5. Credit: You will have the right to use and permit others to use Producer’s approved name “KHARMA” for purposes of the New Recording and “KHARMA” for purposes of the New Composition, but solely in connection with uses of the New Composition and New Recording permitted hereunder. You will use best efforts to have Producer credited as a “producer” of the New Recording (e.g., “Produced by KHARMA”) and co-writer of the New Composition (e.g., “Co-written by KHARMA [and other co-writers]” in any and all metadata, liner notes, and/or other customary place for such credits in connection with all exploitations of the New Recording and/or New Composition (as applicable), and in a manner no less favorable to Producer than credit accorded to any other producer or songwriter of the master recordings and musical compositions (respectively) bundled with the New Recording and/or New Composition. In the event of any failure to have Producer properly credited, you will use reasonable efforts to cure such failure immediately on a prospective basis.

6. Royalties: In addition to the Non Profit Fee, you agree to pay the following royalties to Producer, either by directing the distributor of your records to do so (i.e., your record label, or the digital distribution company you use, e.g., DistroKid), or by doing so yourself (e.g., to PayPal ID: whoismarcel@gmail.com, or via Producer banking information that may be provided upon emailed request): 

a. Mechanical Royalties. When a copy of a master recording like the New Recording is sold (either on a CD, or when someone buys it on a service like iTunes) or streamed (e.g., on a service like Apple Music or Spotify), copyright law requires that the songwriters get paid a royalty called a mechanical license. You agree to make sure that Producer is paid mechanical royalties for Producer’s 50% songwriting share of the New Composition, at the minimum statutory rate. 

b. Producer Royalties. For Producer’s production of the Beat you intend to use in the New Recording, you agree to pay Producer 50% of everything you make from the New Recording. 

7. Ownership: Producer has written and composed the Beat, which is commonly treated as one-half of the total songwriting on a musical composition (and you agree that Producer retains a 50% ownership of the copyright in the New Composition). The Producer is and shall remain the sole owner and holder of all right, title, and interest in the Beat, including all copyrights to and in the sound recording and the underlying musical compositions written and composed by Producer. Nothing contained herein shall constitute an assignment by Producer to Licensee of any of the foregoing rights. You may not register or attempt to register (or permit the registration or attempted registration) of the Beat with the U.S. Copyright Office. You may own a copyright to the extent of your contributions embodied in the New Song and New Recording (e.g., your topline lyrics, melody, and/or other new instrumental elements), but any registration or claim of copyright as to the New Song and/or New Recording must be as a derivative work disclaiming any ownership to the copyright(s) in the Beat.  For the avoidance of doubt, there is no intention of the parties for the New Composition and/or New Recording to constitute a joint work for purposes of copyright law, and Producer does not herein grant to you any rights in or to any other derivative works that may have been or may yet be created by third parties based on the Beat. Producer reserves to itself any and all rights in and to the Beat not expressly granted to you herein. You will, upon request, execute, acknowledge and deliver to Producer such additional documents as Producer may deem necessary to evidence and effectuate Producer’s rights hereunder, and you hereby grant to Producer the right as attorney-in-fact to execute, acknowledge, deliver and record in the U.S. Copyright Office or elsewhere any and all such documents if you fail to execute same within five (5) days after so requested by Producer. 

8. Breach by You: 

a. If you fail to cure any breach of this Non Profit Agreement within five (5) business days of Producer providing you with written notice of a breach, Producer will have the right to immediately terminate this Non Profit Agreement, and if Producer notifies you of such termination, you will have no further right to use the Beat in the New Composition, New Recording, and/or Video (and you must immediately cause them to be no longer available to the public). 

b. If you use the Beat, New Composition, New Recording, and/or any Video in a manner not expressly permitted in this Non Profit Agreement, you agree to pay Producer any and all amounts previously or thereafter collected, received, or credited to you or any third party in connection with such exploitation of the Beat, New Composition, New Recording, and/or Video (as applicable). 

c. You recognize and agree that a breach or threatened breach by you of this Non Profit Agreement could cause irreparable injury to Producer, which may not be adequately compensated by monetary damages. Accordingly, in the event of a breach or threatened breach by you, Producer shall be entitled to a temporary restraining order and preliminary injunction restraining you from violating the provisions of this Non Profit Agreement. 

d. Nothing herein shall prohibit Producer from pursuing any other available legal or equitable remedy in connection with breach or threatened breach of this Non Profit Agreement, including but not limited to the recovery of monetary damages from you. 

9. Representations, Warranties, and Indemnification: 

a. Producer represents and warrants that Producer has the full right and ability to enter into this Non Profit Agreement and grant those rights granted herein. Producer warrants that the exploitations of the Beat permitted hereunder will not infringe upon or violate any common law or statutory right of any person, firm, or corporation; including, without limitation, contractual rights, copyrights, and right(s) of privacy and publicity and will not constitute libel and/or slander. 

b. You represent and warrant that exploitation of the New Composition and/or New Recording hereunder will not infringe upon or violate any common law or statutory right of any person, firm, or corporation; including, without limitation, contractual rights, copyrights, and right(s) of privacy and publicity and will not constitute libel and/or slander. Just to be clear, Producer takes no responsibility whatsoever as to any elements added to the New Composition and/or New Recording by Licensee or any third party, and Licensee indemnifies and holds Producer harmless for any and all such elements. 

c. Parties hereto shall indemnify and hold each other harmless from any and all third party claims, liabilities, costs, losses, damages, judgments, costs, and expenses as are actually incurred by the non-defaulting party (including, without limitation, reasonable attorneys’ fees) arising in connection with any breach or claim of breach of this Non Profit Agreement by the defaulting party, their agents, heirs, successors, assigns and employees, which have been reduced to final judgment or settled with the defaulting party’s consent. The non- defaulting party shall give the defaulting party prompt written notice of all claims giving rise to indemnification obligations hereunder, and the defaulting party shall have the right to participate in the defense of such claims with counsel of its choice at its sole expense. 

10. Miscellaneous: In no event shall Artist be entitled to seek injunctive or any other equitable relief for any breach or non-compliance with any provision of this Non Profit Agreement. This Non Profit Agreement constitutes the entire understanding of the parties and cannot be changed or waived, in whole or in part, except in writing signed by both parties hereto. This Non Profit Agreement supersedes all prior agreements between the parties, whether oral or written. Should any provision of this Non Profit Agreement be held to be void, invalid or inoperative, such decision shall not affect any other provision hereof, and the remainder of this Non Profit Agreement shall be effective as though such void, invalid or inoperative provision had not been contained herein. No failure by Producer hereto to perform any of its obligations hereunder shall be deemed a material breach of this agreement until you give Producer written notice of its failure to perform, and such failure has not been corrected within thirty (30) days of notice (or, if such breach is not reasonably capable of being cured that quickly, Producer does not commence to cure such breach within said time period, and proceed with reasonable diligence thereafter). This agreement shall be governed by and interpreted in accordance with the laws of Sweden applicable to agreements entered into and wholly performed in said State, without regard to any conflict of laws principles. You hereby agree that the exclusive jurisdiction and venue for any action, suit or proceeding based upon any matter, claim or controversy arising hereunder or relating hereto shall be in the state or federal courts located in Sweden. You don’t have the right to make any money off the Beat, the New Composition, or the New Recording except as specifically allowed in this Non Profit Agreement. You shall be deemed to have signed, affirmed and ratified your acceptance of the terms of this Non Profit Agreement by virtue of your payment of the Non Profit Fee to Producer and your electronic acceptance of the terms and conditions (e.g., at the time of your payment of the Non Profit Fe