What's the Deal? Your Beat Lease Agreement!
Music Producers seem to think it's a good idea to sell unlimited leases and today I’m going to give you an entire explanation on why it's not a good idea. Your issue is you want to make the sale. Your failsafe is everybody will have leased the beat anyway and besides, I have the track content ID’d so why does it matter?
Your villain is fast money and you have to fight that urge of fast money versus more money and better positioning. The thing is you need a good placement on either an artist on the rise or a major artist. Because of this many of you are anxious for the gold so you decided not to put up any barriers. This is the question you have to ask yourself when you sell unlimited leases! Mass sales vs a Hot 100 placement?
I can testify!
When I used to lease beasts I quickly saw that policing the outcomes of the streams from the artist would become impossible. However, later on after starting this youtube, I’ve heard the pains of a lot of different perspectives on beat leasing and I know I've got a strategy you're going to love!
Let's break things down, shall we?
Let’s talk about the limitations and why putting limits on the number of streams is a good thing.
When you sell a lease on or offline you should always calculate a fraction of the cost of production and pre-payment on the producer royalty, performance royalty, and mechanical royalty for the limit you set. Now, because you set this limit and price when you made the lease sale you feel good. You feel safe and secure that you got your just due for the limited use. This is a good thing because the exchange is a fair one. By the way, book a call with me if you want to know how to make this calculation.
Now let's talk about the unlimited lease. You cannot run this same formula with the unlimited lease! You also just gave this artist more free reign with the lease than you thought.
Yeah, you limited the radio station plays to 1 station but what if they never do a radio promo run on the song and it goes viral or they only do online promotion? My point is the money you charged up from doesn't justify the unlimited usage.
What about the mechanical royalty did you negotiate that into the contract?
Of course, you didn't. Though many producers are now pushing this through they don't know how to collect and if your performance royalty shares aren't registered correctly by the purchasing party then these are null and void anyway, until the song is registered.
The Producer Royalty
Many of you just chuck this one into the lake because you figure the lease won't really amount to anything anyway so why not let it fall by the wayside. You cannot let this go, however, in an unlimited lease, you are. If the artist gets let's say 3 million streams and you finally want to negotiate they have every right to say we don't owe you any producer royalties for any streams under the lease.
If you think you’re getting a sync placement on this song you can forget about it because sync agencies and music libraries hate leased beats or beat with loops with an unfettered passion!!!
What's my Point?
There are many more points I could go over but my main point is this. Set limits so you can renegotiate after they crossed the thresholds of your agreement if necessary. That way you can get every dime you need to get from the song as you should. Limits give you a default reason to renegotiate for more money 100% of the time.
Don’t just think about the credit of having a hit record. Get all your money because you may never get another hit as big as the one big fish you just bagged.
You've got work to do!
Book a call with me and let's open up your contract and fill in the gaps so you can get even more money with your leases.
In addition to booking a call with me Grab the 60-day Label to build out your DIY record company, or Production Company the right way in 60 days or less.
What the end of the tunnel looks like
If you really learn how to use your lease agreement you’ll get way more in the long run.
You’ll get power and respect from the game of moving like a boss and you’ll know how to not get double-crossed by just sticking to the agreement. If you don't make any changes I guarantee you, you will continue to lose if you don't set limits. You’ll lose maximum renegotiation rights. You’ll probably get a hit with no extra money besides your pro royalty and maybe your mechanical royalty.
Change your mindset
When we started you probably said who does this guy think he is talking about the beat lease community but at this point I know I’ve got your brain turning and thinking. Move from a bedroom producer that wants the sale to a boss producer that gets everything that is deserved.
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Video Copyright © 2022 Casey Graham (www.musicmoneymakeover.com)