Understanding Exclusive Rights.Jun 022017
Exclusive rights is where a producer grants an artist or company full usage rights and in some cases full ownership to a beat for a certain amount money. This process usually involves a written agreement of terms that both parties are set to follow. Depending on the conditions of the agreement if the artist or company is purchasing usage rights or ownership to a beat the producer will often request in the contract that they receive a percentage of royalties. This is referred to as a royalty retention agreement. The producer who made the beat will want their fair share of publishing in the event the song they helped produced becomes a big success. The price for exclusive rights can range anywhere from $250-$3000 and up depending on the producer. If the beat your buying has a royalty retention clause in the contract. Then you might be able to negotiate a lower price depending on the producer. Exclusive rights with full ownership will be more money because your buying the producer out of their rights to the beat.
Purchasing exclusive rights are expensive because the producer is giving you the rights to use a beat exclusively. Once the beat is sold the producer will no longer hold the right to sell or re-lease the beat to anyone else. If they had already leased the beat to other artist prior to you purchasing it this won't matter because leases have limitations and an expiration. Your rights with the beat will have no limitations and allow you the opportunity to land song placements in TV and film. You'll have the freedom to do whatever you like with the beat except resell the rights. Most producers will state this in their agreements with you. Aside from owning the beat you'll receive track outs also known as stem files to beat session. Stem files are the kick, snare, 808's, stings, piano etc of the beat. This is extremely important to have as it will allow you to have more control over the quality of your recordings. With the stem files you'll be able to bring them to a mix engineer so that your songs can be professionally mixed. No matter the price you're paying for exclusive rights to a beat you should receive the stem files.
Whether your exclusive rights agreement will have a royalty retention clause will depend on the producer and their overall experience. A producer who is just starting out might not charge as much for exclusive rights nor include an agreement along with their stem files. Purchasing exclusive rights without a written agreement is something you'll want to avoid doing. Especially if you plan on making money with the beat you're using in your song. If you want to prove you have full rights to using the beat. This will affect any future song placement opportunity's if you don't have a written agreement that proves you have rights to use the beat. Both producers and artist profit off of royalties from the songs they've created. So a royalty retention clause is nothing to be afraid of or avoid when purchasing exclusive rights.