Understanding the legalities of music contracts can feel overwhelming. We get it. Fortunately, you don’t have to spend years in law school to understand the nuts and bolts of music contracts and intellectual property rights to create and modify your agreements. BeatStars guides you through this process with easy-to-fill-out templates that fill in the blanks of each agreement.
On BeatStars, by default, you can offer Regular, Exclusive, and Free contracts. You can keep things simple and keep your contracts templated, or customize your contracts to suit your specific needs. To better understand these licenses, though, and to get additional guidance on setting them up, we’ll help clarify the difference between the contracts you may offer and what they mean for you as a creator. Moreover, our templates are just suggestions and not meant to be legal advice. If able, always consult your attorney and make sure the templated contracts are the perfect fit for you and your needs! Now let’s dive into the three main types of contracts that you may encounter.
Regular or Non-Exclusive Contract
The Regular or Non-Exclusive contract is the main workhorse for many Producers on BeatStars. This type of agreement has many benefits which makes it very powerful! Non-Exclusive contracts do not tie down the rights to any particular beat. Producers are allowed to sell that same beat an unlimited amount of times until they sell it exclusively. Non-Exclusive contracts allow you to maintain ownership of the master recordings and “own your masters”.
Furthermore, you will be able to keep ownership of the underlying composition of your beats and have the exclusive right to claim YouTube Content ID for all tracks that use your beat. Best of all, you‘ll own a piece of the composition in each new track that is created with your beat. As the music industry continues to grow and the barriers to entry get lower, the Non-Exclusive contract is a great way to meet each artist in the middle. You maintain ownership while allowing each artist the opportunity to have an affordable contract that gives them the right to commercially monetize their tracks.
The Exclusive contract is a special type of agreement and can be an extremely lucrative source of income for you. In cases where an artist wants to be the last purchaser of a beat, they’ll purchase an Exclusive contract.
They may have a plan to invest a lot in a video or the release and don’t want anyone else to have the right to use the beat after them. Exclusive contracts also allow an artist to own the master and all proceeds derived from the master. Because there is a transfer in ownership in the master of the beat, the price of an Exclusive contract is typically much more expensive than a Non-Exclusive contract. The great thing is that you still maintain ownership of the underlying composition of the beat, you get a piece of the publishing from the new track, and all of your previous customers that purchased Non-Exclusive contracts can still monetize their tracks. Before selling an exclusive, always think about whether the beat that is being sold is one of your top beats, and make sure you price it properly to compensate you for the success the beat has already had.
The Free contract gives you the power to offer a test drive. You can now allow artists to download your beat and use it for strictly non-commercial purposes. They may just want to record a track using your beat and see if they like it enough to potentially put it out as a single or as a part of a project.
With Free contracts, you maintain ownership of the master and composition. In the event that they want to use it commercially, then they must purchase a Non-Exclusive, or an Exclusive contract. This contract gives you the power to control your intellectual property.
Creating a Contract in Studio
In BeatStars Studio, you can seamlessly create, manage, and edit all of your music contracts for your tracks, albums, and sound kits. To create a contract, hover over Contracts on the left hand side of BeatStars Studio, and select Tracks, Albums, or Sound Kits.
When going in to create contract(s) for your track uploads, click Tracks then the blue + Create Contract button.
Once you’re done filling out your contract’s information, you can select which of your uploaded tracks you’d like to supply the contract to. Simply check or uncheck the box next to each track to apply the completed contract.
[Embed Creating Contracts in Studio Tutorial Video]
Essential Contract Vocabulary
As you negotiate and create contracts for your tracks, albums, and sound kits, you may stumble upon some verbiage that you aren’t 100% familiar with. Refer to these definitions to help:
Auditing and Accounting
These provisions allow you to audit or check the purchaser of your contract to make sure they pay you any additional royalties that are owed to you.
A musical work; the art of writing music.
The exclusive rights granted to authors of a copyrightable song, allowing the author to have control over that song and how it is (or is not) exploited for financial gain. A copyright has a “term” or length, depending on when the work itself was created. For works created after January 1, 1978, the term of copyright is the life of the author (or last surviving author) plus 70 years or, if the work is a Work for-Hire, the term is 95 years from first Publication or 120 years from creation, whichever expires first. For works published or registered prior to January 1st, 1978, the term of copyright is 95 years. Copyright owners also have the right to assign their copyrights to their heirs or any other person or business. It is the right and responsibility of those parties to find ways to exploit the song, should the previous publishing contracts or licensing agreements expire.
Credit and Likeness
This section refers to how your Producer name can be used by the Artist.
% of Licensor's Net Receipts
This is the percentage of monies owed to you based on the sales of the Purchaser.
Licensor or Contractor
You are the owner or Licensor/Contractor of the Track.
Licensee or Contractee
The person or entity who purchases your Track.
The original master recording, which also refers to a finished recording of the song.
The payments owed to a songwriter or publisher for use of a song in digital and physical media. These payments are referred to as “mechanicals.”
Publishing RIghts describe your rights as it relates to the Composition and ownership of the Publishing in the New Track.
Termination describes the rights that you have as a Producer to end the Agreement.
To keep your knowledge up-to-date and flowing, be sure to check out the following:
- Our official ‘How to Create a Contract in BeatStars Studio’ tutorial video
- The Most Important Agreements You Should Understand
- Protect Your Art by Properly Using Loops
- Understanding Content ID
- Protecting Your Art by Having an LLC or Corporation
- Protecting Your Art Through Copyright Registration
- Protecting My Intellectual Property
- Understanding Taxes
- The Key Difference Between Exclusive and Non-Exclusive Licenses