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Beats by KHARMA

Why you should lease beats...
Instead of buying the exclusive

Why you should Lease beats instead of buying Exclusive Rights

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Why you should Lease beats instead of buying Exclusive Rights​

You’re new to buying beats online and you read all these things about people who lease beats.
Some people might have convinced you that it’s an absolute must to buy exclusive rights. 
Perhaps you have already purchased beats from producers online and you feel it’s time to go for something exclusive now.
Or, maybe you just don’t like the whole terminology behind beat licensing? No problem. 

I’m going to explain to you…

  • When you should definitely not buy exclusive rights
  • Why, in most cases, it can be far more beneficial to lease beats instead of buying exclusivity.
  • Two alternatives to exclusive rights that might be better options for you!
  • Which artists should buy exclusive rights 

In this article, I’m going to assume that you’re an independent artist and that you’re familiar with the terminology of (online) beat licensing. 

If you’re not familiar with online beat licensing, I recommend you check out our:

Otherwise, let’s get started!

When you should definitely NOT go for an Exclusive license

Being an online producer myself, I’m fortunate to meet a lot of aspiring artists. While everyone is unique in their own ways, there are a lot of similarities and common mistakes a lot of these artists make. Especially when it comes to deciding whether to buy exclusive rights or lease beats. 

If you can identify yourself in one of the following statements, you’re better off leasing beats instead of buying exclusivity:

  • You have a social follower/fan base under 10,000 people. (all channels combined. FB, IG, Twitter)
  • You have less than 1,000 plays on YouTube and Soundcloud.
  • As for right now, you haven’t released a single, promotional album or EP yet.
  • You do not fully understand the basics of non-exclusive and exclusive beat licensing

For some, this might be confronting but, realistically speaking…

How BIG of an artist are you? 

If you did a show locally, would more than 100 people show up?

If you released a mixtape online for free, would more than 500 people listen to it?

Have you been featured on at least three music blogs run by people who weren’t friends with you personally before you put out music?

Do you have a manager, agent, or lawyer who’s doing some legwork to help your career or have people approached you about managing you?

Trust me, I’m not trying to discourage you in any way. I’m merely trying to help you reflect on your current situation and let you understand that buying exclusive rights might not always be the best option. 

And there is no shame in that, at all!
In fact, there are many benefits to leasing beats as opposed to buying them exclusively. 😃

Why it can be far more beneficial to lease beats instead of buying exclusivity

Let me sketch out a possible scenario here. 

Let’s say, you just purchased a non-exclusive lease for $30 which permits you to sell up to 5,000 copies of your song. 

Obviously, you recorded a killer track! 🔥💪🏽 

You drop it on iTunes and you promote it to all your followers on your social channels and tell all the people on your mailing list that it’s up for sale. 

People like the song and they go to your website looking to buy it.

Let’s say, you promote it to around 10,000 people and 300 people are interested in buying it. For simplicity, you’re going to sell it for $1 per download.

300 x $1 = $300 – $30 investment

Your profit = $270 🍾🥳

Now, let’s say–instead of a non-exclusive lease–you purchased an Exclusive License for $800 USD.

300 x $1 = $300 – $800 investment

No Profit! = -$500 “OUCHH!” ☹️

This is just a simple example and sure, there are other ways to generate income from your music these days (streams, live shows music videos etc.) 📈

Then again, I haven’t even calculated additional costs, such as studio time, audio engineers and promotion costs. 📉

When you’re in such an early stage of your career as a music artist, you’ll have to understand that all extra’s are beneficial. Spend the extra money to purchase more beats and release more music.
Invest what you earn! That way you’ll earn more next time around. 💰

In my opinion (and you’re welcoming to disagree), the first priority for upcoming independent artists should be to grow a fan base and release as much music as possible on a regular basis. 

Ask yourself; “Would the small group of fans you’ve gained so far care less about you leasing beats instead of getting them exclusively?” 

Heck, they don’t even know what the hell you’re talking about! 😅

Two alternatives to exclusive rights that might be better options for you!

1. Unlimited Licenses 

Even if you have the budget to purchase exclusive rights, I’d strongly recommend looking into Unlimited Licenses. Most producers offer it as the most expensive non-exclusive licensing option.

The biggest advantage of an Unlimited License is that for a relatively low price, you are allowed to sell, stream and play your song without a streaming cap.
In other words, you’re not limited to (for example) 5,000 sold copies or 100,000 streams on Spotify.
And you don’t risk breaching the contract if the song would blow up, you get to skip having to forever watch if the song goes over it’s streaming limit.

The profits could be substantially higher compared to other licenses that are limited to a certain number of sales, streams and plays. 

More streams, more 💸

In many ways, this license looks a lot like an exclusive license but of course, there are some significant differences. 

  1. It’s still non-exclusive. Producers are allowed to sell it to others too so you won’t be the only one with such a license.  
  2. Publishing rights are usually set in the agreement to the standard 50/50 split. Whereas, opposed to exclusive rights, the publishing rights are usually negotiable. I wouldn’t consider this a direct problem but it’s still a difference. 
  3. There’s still an expiration date for some producers (I personally do NOT have an expiration date since I try and salute artists who invest in themselves) which means the license will be valid for several years after which a new license has to be purchased. 

Just a little disclaimer here… Every (online) producer has his own terms and methods of licensing beats so make sure to check the agreement before you purchase it. 🤓

2. Custom Beats

When I ask my clients why they don’t want to lease beats, the answer is almost always the same;

“They want something exclusive for themselves and don’t want another artist to use it!” 

Did you know that almost all online beats you are interested in buying exclusively were already leased to other artists before you?

How ‘Exclusive’ is it then?

This is a common misconception of the term ‘exclusive rights’ within the beat licensing industry. 

If having something created exclusively for you is what you’re after, you should go for a custom beat!
If you’re digging the style of the producer, ask for a custom beat! Something exclusively produced for you. 

Keep in mind that this will be expensive. 

Some may see the cheap prices for a lease, and believes that a producer work for cheap – however, that’s not the case. Producers are expensive, but the possibility to lease beats have made it possible for independent artists to get quality-beats to record over.
Since leases let producers earn their usual rates, just that the payments are divided into several artists, instead of one major artist who got a billion-dollar record label behind them. 

Which artists should buy exclusive rights?

Most of you reading this right now would probably be better off with a non-exclusive license. To round this off…

We only recommend the following artists to purchase exclusive rights: 

  • If you are on the verge of blowing up
  • If you already have a large following (over 100k, all social platforms combined) 
  • When you’re signed to (major) labels  
  • If you have a publishing deal 
  • When you’re preparing to make a substantial investment in marketing plans
  • If you are investing over $5k in music video production  

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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

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