Guide to Licensing Beats Online

Beat licensing has come a long way since the early days of the internet. I wasn’t in the game back then, but the OG producers were selling their beats on sites like Soundclick and MySpace. What started off as a few hundred producers hustling their tracks online turned into a massive million-dollar beat licensing industry led by platforms such as BeatStars, Airbit, and Soundee.

There has been a revolution going on in the world of music production for over a decade, making it the easiest it has ever been to get into creating music. There are so many resources that exist today making it possible for almost anyone to start releasing their music, making it very important that both artists and producers alike understand the business of beat licensing.

In this guide, I will explain the concept of beat licensing and differences between non-exclusive and exclusive licenses. The information in the guide will be useful for both artists interested in purchasing beat leases online, and producers interested in selling beat leases online.

By the end of this guide you will be familiar with everything there is to know about beat licensing!

Part 1: Beat Licensing Explained

The concept of beat licensing is pretty simple to understand. A producer makes a beat and then uploads it to his beat store and YouTube channel, where artists are more likely to find it. 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.

license agreement

An example of my licensing agreement

There’s a common misconception about “free” beats. You may have seen the [FREE] tag when searching for beats on YouTube and think you’ve stumbled upon a great deal. But in reality, these beats are only free for non-profit reasons a majority of the time.

This typically means an artist is free to download the beat and record a song to it, and some producers even allow artists to release those songs platforms like SoundCloud and YouTube if they’re not monetized. But to release the song on major streaming platforms like Spotify and Apple Music, the artist will have to purchase a license to use the beat commercially.

Every producer has different terms for the free use of their beats, so be sure to check the descriptions of their videos and get in contact with them if you have any questions.

Before we go any further, I’d like to get rid of the common phrases “buying beats” and “selling beats” because we are working with more than just the beat itself. We are dealing with the licenses to these beats.

Non-Exclusive Beat Licensing

The most common way of licensing beats is through non-exclusive licensing, which is also referred to as “leasing.” For anywhere from $20 to $300+, you can purchase a non-exclusive license agreement and distribute your song on platforms such as iTunes, Spotify, and Apple Music, create a music video for YouTube, and earn profits from it!

The Limitation of Non-Exclusive Licenses

The Different Types of Non-Exclusive Licenses

Exclusive Beat Licensing

Two Very Different Ways of Selling Exclusive Rights

Part 2: Everything you need to know about Royalties, Writers Share and Publishing Rights

Who gets the Mechanical Royalties?

Advances against Mechanical Royalties in Exclusive Agreements

Why an Advance against Royalties?

Who collects the Performance Royalties?

What are songwriter royalties?

What are Publishing Royalties?

Part 3: The Copyright Situation…Who owns what?

Performing Arts Copyright (PA-Copyright)

Sound Recording Copyright (SR-Copyright)

What’s a Derivative Work?

Beats that contain third party samples

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

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

Before we go into Part 4….

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?

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

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

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?