What is the difference between exclusive and lease beats?

First, here is some standard knowledge you’ll hear when researching how to buy beats online:
Licensor/Leasor/Seller = Producer/Beatmaker
Licensee/Leasee/Buyer = Artist/Singer/Rapper
Usage rights = the terms and conditions a licensee follows to legally use a beat
Term = how long a license last

What is Beat Licensing?
Beat licensing, also known as beat leasing, is the exchange of money for the legal rights to use a beat as outlined by the licensor. You may hear or see the phrase “beats for sale”, but the majority of the time, it’s actually a license being sold. This license grants permission to use a beat up to a certain number of sales/streams, or a certain amount of time (legally known as the “term”). Once these limits are reached, the license expires and another license will need to be purchased to continue using the beat. There are two main types of licences: non-exclusive and exclusive.

Non-exclusive Beat Licensing
A “non-exclusive license” means more than one artist could legally license the beat. Once you record your vocals to a beat that was licensed to you, that new song is called a derivative work. Even though you just made a new song, you only own the copyright to the lyrics. The producer still owns the copyright to the beat.

So should you submit your song to distribution services like TuneCore or CDbaby and they ask you who the copyright owners of the song are, you’ll have to tell them that you only have copyright over the lyrics and that you’ve created a ‘New work’ with copyright-protected audio that has been non-exclusively licensed to you by the producer.

Exclusive Beat Licensing
An “exclusive license” means only one artist will be the exclusive licensee of a beat. Once an exclusive license is sold, no other artists will be able to purchase a license to use the beat. However, previous non-exclusive license owners can still use the beat based on the terms of their previous agreement and the producer still retains copyright ownership of the beat.

The term “exclusive rights” can be used to describe an exclusive license, as explained above. However, sometimes producers sell “exclusive rights” and put in their contract that they are transferring complete ownership of the beat to an artist. This is also known as “purchasing a beat outright” or a work-for-hire. Unless a producer is uninformed or new to the music business, work-for-hire’s or transferring complete ownership of a beat should only happen if the monetary offer is so large that it can’t be refused!

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