LET'S BEGINAny creative endeavor that starts in your brain and ends up established/fixed within/on a tangible medium is copyrighted to you, automatically. This is one of the most frequently misunderstood concepts of modern intellectual property right laws. I often hear beatmakers saying "you gotta copyright your beat, dawg." What they actually mean is that you should consider
registering your work through the Copyright Office (
http://copyright.giv/eco/). Your work is
already, automatically,
prima facie, copyrighted to you and to you alone, assuming it's an
original work, for 70+ years past your death, at which point it becomes "public domain." For example, if you are writing a poem on a notepad, the moment your pen leaves the paper, your poem is copyrighted to you. Congratulations. As the owner of this copyright, you and you alone have the sole, legal ability to exercise the
rights that are entitled to this ownership. These rights include the exclusive ability to sell, to make copies, to make changes (known as
derivative works), to perform, display, to publish, to make recordings, and to digitally transmit. You also have the right to
transfer this ownership.
In the music business, there are two copyrights that you will be concerned with: Sound Recording (SR) copyrights and Performing Arts (PA) copyrights. Sound Recording copyrights, as the name implies, deals with the record business, whereas Performing Arts copyrights deal with the music publishing business (for example the rights attributed to original lyrics, and, as you will see, the rights associated with public and commercial performance of your works). Both copyrights help to protect original songs, works, and lyrics associated with the recording and publishing industries, which make up a large part of the "music business." Music copyrights generate income ("royalities") from various sources, but chief among them are mechanical (CDs, tapes, etc.), performance (live performance, music used for a commercial venture, broadcast radio, etc.) synchronization (for use in combination with audiovisual projects), and print (sheet music, song book publishing). Each of these four sources of revenue all have something to do with the technologies of distribution (EDITOR'S NOTE: original article has Wikipedia links for each). For example,
mechanical royalties, originally derived from player piano rolls, are designed to compensate artists from the profits attained by CD sales. Anything that requires moving parts (or is mechanical in nature) to play back copyrighted music (ringtones, tape recordings, dvd's, digital downloads, etc.) is eligible for mechanical royalties (although so-called "digital royalties" are beginning to take on some of these aspects). The way in which these royalties are paid is through an established royalty rate which is normally divided half and half between the songwriter (creator) and publisher (rights owner) amounting to about 10-20% of the suggested retail price of a CD/album. The compulsory rates change semi-annually but it's generally (these days) somewhere around 8 cents per song of recorded audio for a song of five minutes or less, and up to $1.75 per song exceeding 5 minutes. For CDs/albums sold, record companies will pay the songwriter/recording artist up to 75% of this rate for a maximum of 10 songs. In the United States (foreign mechanical rates and conventions are normally agreed upon somewhat differently), the
Harry Fox Agency is the dominant entity responsible for distributing these mechanical licenses on behalf of copyright owners. Basically, unless you, yourself, are planning on putting out CDs/albums/ringtones for a song/etc., mechanical royalties will be considered
after the fact of selling a beat to a client. Put more simply, these are issues that you won't have to deal with immediately/directly
if you are prescient enough include these provisions into your contract with an artist/group you produce for. This is very important and I'll get back to it a bit later..
Performance royalties, on the other hand, you
will want to be concerned with from the get-go, especially if an artist you sell a beat to stands a good chance of making it to the radio. More specifically, you will want to be concerned with
small performance rights, which includes radio, television, music playing in retail stores, clubs, and live events. Essentially, if your music is somehow or other performed in public (live performance) or used within the context of a commercial endeavor, you can make royalties from that. These kinds of royalties in the United States are paid out by one of the three major
Performing Rights Organizations (PROs), which are
ASCAP (American Society of Composers, Authors, and Publishers),
BMI (Broadcast Music Inc.), and
SESAC (Society of European Stage Authors & Composers). You will want to affiliate yourself with one (it can only be one), and in my opinion you will want to register as both a
writer and as a
publisher, since you are (presumably) self-managing both responsibilities (
self-publishing) connected with the commercial dissemination of your copyrights. Currently, ASCAP charges around $25/membership registration and does not require a business entity for publishing, while BMI charges nothing to register as a songwriter, but $250 to register as an established business entity for publishing. SESAC I wouldn't even bother with because they're a more inclusive-based entity that operates like a secret club. To sign up all you need to have ready is your social security #, business entity name ("So-and-so Beats") for publishing, taxpayer ID #, and basic personal information like that. At this point you can build a database of your collected works and have them listed as such, free of any further charges. I should reiterate that Performing Rights Organizations do not pay out on behalf of the amount of albums a particular rapper using your beat(s) sells. This is important to understand, because you may be asking yourself why you should even bother with a PRO in the first place, especially if you're not planning on making it past the guarded gates to the citadels of Viacom and Clear Channel. Two reasons, I believe, can answer this question. First of all, think of it as a form of protection. Just as registering your works (which I'm about to get to) through the Copyright Office or similar agency can provide indisputable proof of original creation information and ownership of exclusive rights, so too can registering your works through a PRO. The two compliment each other and usually hold up in court better than either would on its own. To put it another way, it serves the purpose of reiterating your copyright should someone jack one of your beats and try to pass it off as theirs. At the same time, having your works registered through a PRO can result in financial compensation should any of your works be picked up for use in some of the above examples. The other reason why it's a good thing to affiliate yourself with a PRO is that it adds a helpful "aura of professionalism" to your operation. I don't know why, but "the music business" will flat out just take you
that much more seriously. It's a "save face" type of thing. Independent labels, other artists, and potential clients in general who are actually selling records and dealing with the types of entities that are concerned with supporting artists through performance and other forms of licensing will also tend to take you more seriously. It allows you become part of an unofficially unacknowledged "professional network."
REGISTERING YOUR WORKSASCAP and BMI basically do the exact same thing, but there are significant differences between the
contract commitments associated with them. I'm personally choosing to affiliate myself with ASCAP, but that certainly does not mean that ASCAP is
better than BMI. You should definitely check both out and decide for yourself which one seems better to you. As far as registering your works through the Copyright Office goes (which you will want to consider doing
first), it's actually more simple (albeit more expensive) than signing up to be a PRO affiliate. It also guarantees basic protection of your works. Remember, you
already own the copyright for your work. Think of the Copyright Office as a public notary. They are there to
prove this ownership should it need to be challenged at some future point in time. The cost as of August 1st, 2009 for electronically (cheapest way to go) registering a PA or SR basic claim copyright is $35 (
http://www.copyright.gov/register), with the option of being able to file for multiple published works under the same publication #, date, and author. Although you
can file for multiple works at the same time (referred to as a "collection"), having a separate copyright for
every beat you intend to sale is oftentimes recommended as being the safest way to go. Confusion can arise when different beats belonging to the same copyright claim conflict with other factors.
There is, however, a cheaper alternative known as the
poor man's copyright. I should make very clear that,
by itself, a poor man's copyright is essentially useless to prove ownership of a beat. However, when
combined with a PRO registration of the same work, the cumulative effect should be strong enough to hold up in court. To me this seems like a cost-efficient way to go, especially if you are intending to sell a large volume of beats to many different clients. It should go without saying that you are going to want to keep track of where your beats are going and if, in the future, it is possible to claim due royalties from a record company or from your performing rights organization. Basically, the way poor man's copyright works is that you send yourself (through the postal service) a copy of the work(s), specifically multi-tracks/original project file(s), and keep this copy with your records should you need to present it as evidence of a prior date of creation/establishment in a legal dispute. There is also another (free) service that can be utilized to protect your copyrights: (
http://myfreecopyright.com).
In my case, I am choosing to go with a combination of the free copyright service and ASCAP. Basically, the overall idea is that, should you be in the unfortunate and difficult position of having to claim your original creation in the event that someone steals a beat/uses it without your permission and makes a lot of money off of it, or a client reneges on a contract, you are standing on firm ground and are able to prove beyond a shadow of a doubt that you made the beat on such-and-such a date and sold it to so-and-so within the guidelines of a specific legal agreement (contract).
SYNCHRONIZATION INCOMEAny time there is sound accompanying a motion picture or other audiovisual work (dvd, commercial, television show, soundtrack, etc.), royalties are paid to the songwriters/publishers for the synchronization rights to use that audio. The terms for this are based on industry conventions and can include such configurations as a flat-fee, per-instance basis, etc. There are even libraries which you can license your music to, who pay you for submitting tracks that film makers and post-production people pay the services to have access to for use in their projects. Synchronization income is a much slept on form of royalty payments, because having a beat you made used for a commercial or television spot
automatically includes performing rights income as well.
SAMPLINGAt this point I am guessing that you are wondering what the deal is with sampling, and how to
get away with it. It's no secret. A lot of well-known producers sample. Sometimes they take more than just merely a 4 bar loop here, a riff there, and it still seems as if they get away with it (e.g.,
http://www.youtube.com/watch?v=M4KX7SkDe4Q).
Technically, it's illegal to copyright someone else's work, meaning that the original rights holder(s) to a song you sample from stands a definite chance of seeking legal motions against you,
if you are found out about. Basically, in order to be technically guilty of copyright infringement, the alleged infringing work must
sound substantially similar to the original work, and the alleged infringing party
must have been able to have had access to the original work. Hilariously, this last requirement is the main reason why record companies, labels, and rap star managers make it a policy of theirs to disregard unsolicited demos. In order to successfully (
though not my any means a guarantee)
get away with it, you either need to be well under the radar, or as the logic goes, learn how to make your sampled works non-obvious. A lot of beatmakers assume that if you go for a record who's artist(s) died years ago, and who's record label has ceased to exist since 1979, there's nothing to worry about. Not true. The
rights holder(s) to that very record (including both sound recording and publishing rights), or the record company itself sometimes, could very well be currently handled by a major corporation (usually through subsidiaries), such as Universal, Sony BMG, EMI, or Warner Music Group. There are people at these corporations who are
actually paid to sift through stacks of hip-hop CD's all day looking for a potential lawsuit that might make some money for the company. It goes without saying that we live in a litigious society, and mega-corporations under the rule of capitalism are seeking to maximize their profits ("protect their interests") in whatever ways possible. And in a sense you can't blame them.
Sampling has become a huge industry unto itself, which is why most high-profile artists today, via their managers, lawyers, publishers, etc., go through the process of
clearing samples, which simply means negotiating with the rights holder(s). If you were to go about clearing a sample, you would need to go through
both channels of music business copyrights: sound recording
and performance arts. Remember, these are two separate forms of copyrighting the same song. Whoever has the sound recording rights of the song you are sampling from might not necessarily be (and most often isn't) the same person/entity who has the performing rights. As far as "being under the radar" goes, it should be comforting to know that,
while it is possible to get sued over a project you're not even selling, the way in which these cases are structured are such that the record companies intend to
make money from them. This means that, in general, the tendency is to pay the most attention to those making the most money. Again, I will not pretend to argue for or against sampling, in whatever form it takes. the point is that if you do decide to sample and are blatantly obvious about it in your
derivative works, you should be well-aware of the risks that go along with it, and adjust your business practices accordingly.
BUSINESS FORMATIONBefore I get into the wonderful world of business contracts, I should take some time out to explain why forming a business "officially" might be a good move for you to consider taking. First of all, you will want to
trademark your name if you plan on making money;
Especially if you plan to reach the kind of success that puts
your name on the back of CDs that are actually sold in stores and available through "officially recognized" sources. Say you want to call yourself "ILL STYLE PRODUCTIONS." Word. You neglect to do a simple
myspace search, let alone an actual TESS database search (
http://www.uspto.gov/index.html) to see if someone else is already using that name, and making money doing it. What will happen if you start making some noise? Chances are, actually, nothing. No joke. But what do you think Babygrande would do if all of a sudden you decided to start a rap group called "Jedi Mind Tricks," and within a couple of years you're up on I-tunes, doing shows, and making money? Chances are, you will receive a nasty (but not unjustified) cease and desist letter demanding you to stop selling and performing under that name. Now, you just wasted two years confusing your fans when all of a sudden you have to change your name and probably spend a good amount of money in the process of doing so. Obviously that's an exaggerated example that probably wouldn't happen in real life but I think you get the basic idea. The reasons for trade-marking your name/business entity are simple. Modern-day trademarks have their origins in cattle branding. You've got 3 or more cattle rustlers occupying the same basic area. How do you know who's are who's? In the music world, trademarks serve the purposes of identifying intellectual property rights, identifying the source they originate from, and distinguishing between entities offering the same service or type of product. I should mention really quickly that when you do go to register a trademark (go here to start burning your retinas:
http://www.uspto.gov/teas/index.html), it will actually be considered a
service mark in your case, since (I'm assuming), your main commodity will be performing a
service, rather than selling physical objects. Now, registering through the
United States Patent and Trademark Office (
http://uspto.gov) is expensive and a downright
bureaucratic nightmare compared with state-level registrations, but it's also an unfortunate necessity, since you are inevitably involved with inter-state commerce. The fee runs about $325 + renewable fees every 10 years. It should take you about 5 days to read all the fine print and to make sure your registration is
impeccable, which it must be, before sending. Again, this headache ultimately serves as a form of
protection. Having to re-arrange your hard-earned SEO configuration would seem like a nightmare scenario, but if you like to send threatening litigious letters to 17 year old kids, you could look at this as a form of demented pleasure.
Setting up a business requires figuring out what kinds of legal protection you want to establish for yourself. Is your house and your car and all your musical gear going to be considered "company property" should you be involved in a lawsuit you don't have the money to pay for? If this was to be the case, do you have adequate insurance coverage? Aside from this bumming scenario being a distinct possibility, you need to ponder in general where you see yourself going in terms of making money and expanding. Obviously, you are technically a "home business" freelancer, and making money as a freelancer doesn't require much more than what you've already got going on or plan to do, which is selling beats at a somewhat small-scale level. The most basic (and actually, probably your current "default state") type of business formation in this case then is referred to as a
sole-proprietorship.
You reap all the benefits, you deal with all the risks. Your personal assets
are your business assets. If this is the case and you're good with it, no legal formalities need apply. If, however, you want to be listed as a business and have your fictitious business name printed on your checks (as well as achieve the "official credibility status"), you need to go through your county clerk, fill out a DBA ("doing business as") form, perhaps pay a nominal fee, and boom. You're now "officially" a "legitimate" business and you need to report profits and losses under Section C of your income tax returns lest the IRS finds you. The next step up from a sole proprietorship is a
limited liability company (LLC), generally deemed the "best" way to go for most small businesses. LLC's effectively put up a wall between your private and business assets, and for this reason, your entire livelihood (real property, personal property, etc.) would not be at stake if you were to defend yourself against legal action. Basically,
forming an LLC requires you to go through your state secretary and fill out the proper forms, most notably an "
articles of organization" form, as well as an "operating agreement," etc. Most of it is a fairly straight-forward homework assignment and will set you back between $100-$800 in filing fees depending on your state (but usually under $500). There are also a number of state-by-state legal services available to help you for a nominal fee as well. Once you have set up a formation you can open a business account at your bank to have checks payable to "NAME PRODUCTIONS, LLC." It
looks professional, even if you're not making money. People will also tend to "take you more seriously" if your fictitious business name is "registered." Fortunately for rap producers, city business licenses, as far as I can tell, are not necessary to obtain. However, you might still want to visit the websites of your local city as well as state level governments to make sure you're set. Once you do start making money, you will be required to declare profits and losses under Section C of your 1040 income tax return (same as with a sole proprietorship, using your social security number instead of an employee identification number since you have no employees). Anyway, once you get this out of the way you're ready to start sellin' some beats, but first it's good to have your contracts ready..
DRAFTING CONTRACTSA solid contractual agreement with a client is perhaps the most important legal and business necessity there is to selling beats. What recording and publishing rights ownership remains for you as the producer, how the beat is to be used for profit, whether production credits on an album released in stores should be included, etc., are all things that contracts specify. Before you sell a beat, it's important to understand
how you're selling a beat. Are you giving up ownership of
all copyrights? Does the purchaser have the right to re-sell the beat or claim it as theirs? If the beat is made into a song and the album sold in stores, would you wax pissed if "SO AND SO PRODUCTIONS" took the credit for the beat you made and stole your thunder? Are you going to be sued if you sell a sampled beat to an artist who then goes onto making it into a hit? Again, as with sound recording rights, publishing rights, trademark rights, and legal rights under an LLC, etc.,
you want to make sure that you are protecting yourself. Even more important than milking potential long-term streams of revenue is to ensure that you are protected legally from outside threats. As I mentioned before, the hip-hop production world in a lot of ways can be a very greedy place, and snakes abound. This isn't about ego masturbation and going on the offensive against someone who took a beat you released for free on a mixtape and used it to record a song to put up on Myspace without your permission; This is about counter-acting very real threats that could lead to massive losses in revenue at the best, and horrendous court fees and debt at the worst.
Always reach an agreement beforehand.
Contracts are legal documents and as such need to be drafted in the most non-ambiguous language possible. They need to be absolutely clear, straight-forward, to the point, and most importantly,
not open to interpretation. As I mentioned before, I was originally against the idea of
leasing beats. I have since come full circle, and, upon learning the business a little bit more (which is something you should always be doing), realized the benefits for both producers
and emcees in the whole leasing schematic. Put simply, for the producer it can be the difference between making some money and barely making any. If you're lucky, it's the difference between making money here and there, spread out, and only making a few hundred (or a few thousand, depending on your level) every few months. You see how on practically every single producer's hustle there's the line "HOT $20 BEATS! KAYNYE WOULD RIP EM! ONLY $20 WE COMIN HARD ROUN HERE RUFF RUFF HOLLA CHA BOI $20 BUCKS BANGIN SLAPS GRAB SHAWTY! BEATS!!! BEATS!!! BEATS!!! RATED NUMBA 1 MYSPACE 14 MILLION HITZ WASZ GUDD?? KEEP DOIN THANGZ BIG DOUGH $20 AIGHT MCS HOLLA! NUFF APPRECHIATION NEW LAYOUT COMMENT BACK $20 BANGAZ AIGHT!! N SUM REAL TALK DONT LET DA HATAZ HOLD ME BACK SON I BE DOIN THANGZ. BANGIN AZZ BEATZ IZ U ON YO GRINE? WHATS GOIN ON WITCHU??? TAKE THE TIME AND VOTE FOR ME THIS YA BOI NEW MIXTAPE COMIN U NEED HITZ?!?!?!?!" Well, more than likely they are charging $20 to
lease the beat. And what does that mean? By leasing a beat, you still technically "own" the beat. The purchaser is sort of "renting it." You still hold the rights of ownership, meaning you are free to
resell the beat to further clients until someone buys
exclusive rights to it. Simple enough. And there are many variations to the terms in which the beat can be used (whether for profit or not, etc.), and many variations off this basic deal in general. The main catch is that once someone buys exclusive rights to a beat, you must stop selling it (leasing rights to previous clients notwithstanding). Originally, leasing was intended for rappers who wanted to make demo albums or non-profit promotional works, because it provides cheap beats for a project that may lack adequate funding for massive distribution. Currently, the major change you will find in most leasing deals allows the purchaser (artist) the right to make
one commercial (profitable) recording (called the "master recording") with the beat (either broadcast, released on a CD or digitally, or performed live, etc.), and to sell a limited amount of copies of the master recording until a new lease license must be purchased. Business-wise, this gives the artist incentive, if the beat turns out to be a major project, to purchase exclusive rights (which I will get to). It also allows artists on a budget to pick hot beats for a project that isn't planned to sell more than a certain number of copies. Some producers have time limits on leased beats, which I don't personally find all that satisfying for the customer, so I choose not to include a time provision in my contract terms. So at this point, you have multiple clients leasing the same beat. Some of them may be using the beat for a demo/mixtape, some of them simply to freestyle over and throw up on Myspace, and some of them are making some money by selling the master recording (99 cent digital download, for example). Either way, with leasing you're able to reach a wide audience and you stand a far better chance of landing a client who will turn your beat into a hit song.
Leasing beats from a marketing perspective allows you to get your beats heard by as many people as possible, which is a good thing. For example, if you make a dope beat, like one of the 5 best you've ever made, what's the point in selling it outright to an artist who then goes on to do
nothing with it? One of the great things about this business is that simply selling a beat automatically guarantees publicity and promotion for your work based on who hears the master recording, so as a producer you're naturally going to want to work with artists who are capable of reaching a large number of music fans. From the client's perspective, knowing exactly what they're getting by having you produce a track for them and by being up-front about your terms of arrangement will solidify their decision to either choose leasing a beat they want to use or to buy the exclusive rights if they're planning to use the beat for a major project. Again, a contract needs to be specific and precise as it relates to the producer-artist relationship. In writing up terms and conditions for your contract,
try to imagine how a snake might circumvent it, but at the same time make it fair for an honest client to feel comfortable and satisfied with. This is the hallmark of good business: Don't get screwed, and don't screw the customer. You want your client to feel that they made a good decision to go with
your professionalism and quality of work versus someone else's.
Exclusive rights transfer full ownership of the beat (as well as the multi-tracks),
pending contractual provisions (e.g. you keep a percentage of publishing rights and have a stake in mechanical royalties, etc.), and as such are more expensive than leasing deals (in which normally you give them a single track). In other words, the extreme "exclusive track" example is one in which you transfer full ownership (no strings attached) to the client, which is known as the "work for hire" arrangement. The producer cannot resell or reuse the beat, and the artist is free to distribute as many profitable copies of the master recording as s/he wishes. Normally, or at least in my case, the standard artist-producer contract doesn't apply
as much to leased beats as it does to the exclusive deals. The reasons for this become obvious when you go about drafting your contract and figuring out what kinds of royalties you want to retain. A good way to begin doing this is to break down the basics in a "terms of service," which should be displayed in print wherever you sale your beats so potential clients can get an idea of what the terms are right off the bat. Basically, this gives the potential client an overall view of how the purchasing process happens, what format you're sending them the beat in, and what you ask for in your contracts. Here is a sample that I drafted and am planning to use:
General Terms of Service (TOS)When interested in a beat, let me know if you want to purchase leasing or exclusive rights. I accept money through Paypal and upon payment will send you a digital contract for you to sign (via
http://www.snapcontract.com). Once that is received I will give you a download URL for the beat (or send a data DVD through a delivery service for exclusive rights option) and a signed copy of the contract for your records. You will also receive a Paypal receipt for the transaction, as well as pertinent beat information such as track BPM, sample information, etc. I ask for production credit in any commercial and/or non-profit recording(s) of the beat (master recording), and
potential sample clearance issues are the sole responsibility of the purchaser. Malakai Beats reserves the right to display, stream, or broadcast purchased beats for self-promotion (non-profit) use. By doing business with Malakai Beats you accept these general terms, terms for leasing and exclusive rights, and leasing/exclusive rights contract terms. All terms subject to negotiation.
LeasingGuarantees a CD-quality redbook format PCM (*.wav) file (44.1 kHz, 16 bit dithered) w/ ~ -3db of headroom for vocal track(s), as well as a low-fidelity MP3 file. The untagged beat will be available digitally upon payment and contract signature. Leasing rights allow the use of the beat for
ONE commercial recording, which can then be distributed for up to 3,000 copies. Selling
more than 3,000 copies will require a new lease or the purchase of exclusive rights. Purchaser may also use the beat for any non-profit or promotional use, including broadcast, streaming, and live performance, with full rights to record, alter, or mix the beat in any shape, way, or form. The beat (notwithstanding a master recording accompanied by vocal performance) may not be resold to a third party, and full credit ("Malakai Beats") must be given when displayed, streamed, broadcast, or released, in print, or through vocal acknowledgment ("shout-out"). In the event that exclusive rights are purchased by another entity, your rights will stand, and, predating the exclusive sale, you may continue to purchase a lease renewal should you sell more than 3,000 copies of a commercial recording of the beat (master recording).
ExclusiveGuarantees a data DVD containing a CD-quality redbook format PCM (*.wav) file (44.1 kHz, 16 bit dithered) w/ ~ -3db of headroom for vocal track(s), as well as a low-fidelity MP3 file, and a folder containing the separated multi-tracks in high quality (48 kHz, 32 bit). The untagged beat and multi-track files will be shipped upon payment and contract signature. Exclusive rights allow the use of the beat for any and all commercial or non-profit distribution. The original seller may no longer lease or sell the beat, except for prior leasing rights holders. Full credit ("Malakai Beats") must be given when displayed, streamed, broadcast, or released, in print, or through a vocal acknowledgement ("shout-out").
Contractual Royalties/Co-publishing Arrangement/Producer PointsIn the
Artist-Producer Contract, I ask to retain
35% songwriter publishing rights (including synchronization) of the master recording and
2% producer points (mechanical royalties)/master recording/unit, based on suggested retail price of commercial release for a master recording that sells
more than 3,000 copies. I also ask for a
3% record label/company artist advance (of
greater than $60,000) for master recordings that are commercially released.[/b]
As you can see, the main ingredient is summarizing the
artist-producer contract, as well as the basic leasing/exclusive provisions. The actual way in which you accept money, send the product, and have the contracts signed is best left to what you personally find the easiest for yourself to manage. I should mention that exclusive packages normally (or at least
should) include: an MP3, a redbook format, a folder with the multi-tracks in high quality, a notepad file with sample information (if applicable) as well as the bpm, etc. These multi-tracks should include all post-processing and should be ready to load up into Pro Tools or other mixing DAW. Leasing packages should include the basic CD-quality .wav file (remember about headroom) and an MP3. I've seen lots of producers who do their clients no good by only giving them an MP3 file for leasing rights or in general just being sloppy lazy with it. At this point a good thing to mention is the difference between a work for hire and the retainment of publishing rights. A
work for hire deal simply guarantees a flat fee, with no potential future royalties attached, which is why I have decided to opt for a
co-publishing deal.
By and large, most of the producers selling beats on Rocbattle and Soundclick are unknowingly transferring their publishing rights and royalty points to the purchaser of a beat, which may include such revenue streams as synchronization income, possible mechanical royalties, and due money from performing rights organizations. In ideal situations the split of publishing rights is 50/50, which actually seems fair when you consider that beat and lyrics is just about half and half of a rap song, but when you factor in that the artist (or the artists' company, manager, etc.) is spending a lot money on all those other aspects of being an artist or group that I mentioned at the very beginning of this article, it's easier to see why producers (usually) simply can't demand as much. The business-end of rap music being the numbers game that it is, it goes without saying that a lot of bargaining is based on "status" and "priority placement." You would need to be in a high position to be able to negotiate a higher percentage of publishing rights, mechanical royalties ("producer points"), record label advance, etc., which is why you need to see what others at your level are generally asking for. The market has a strange way of stabilizing itself, and standard bargaining rights (what you can realistically ask for) usually become evident.
Assuming that you're keeping it in mind to make sure to copyright register and register via your publishing company
before selling your beats, the rest of the process is straight-forward. As I've outlined in my own terms of service, it's a good idea to ask for
production credits on releases, and to make sure the purchaser of the beat cannot simply resell the beat, etc. When you have your online shop ready, it's a good idea to
protect your beats. A basic vocal tag should do it. Not a whole lot of thought needs to be put into it either. Just a basic, "You're listenin' to a **** Beat." for the ultra paranoid, I recommend looking into audio watermarking (
http://www.musictrace.de/technologies/w ... ing.en.htm). By and large, it's no secret that
anything online is up for grabs. If you haven't figured it out yet, you're still able to download a streaming track even if that option in the web browser is disabled. And even though NO-BITING is a universally acknowledged rule of hip-hop culture, not everyone feels that way. The actual contract you send to your clients doesn't need to be written by a lawyer, although I would definitely recommend forking down the $50-$100 at some point to at least have one look over your operation to make sure you're doing things the right way. Plenty of contracts can be found online, so I won't pretend to copy/paste the one true contract that you should use. You are free to copy and paste from different contracts and edit the fields to suit your personal needs. If you've ever watched Judge Judy before, you know that a contract can be something as simple as two signatures on a napkin with a brief description of what's being agreed upon. However, you will want to dress your contract up formally with plenty of legal jargon and terms like "
in consideration of the mutual covenants set forth herein," and "
in good faith with respect thereto in pursuant to this agreement," etc. Most important, as I mentioned, is the fact that your contract is specific and precise with what you're asking for in the transaction.
IN CONCLUSIONDon't listen to the doom-sayers. Almost every single forum thread I visited in researching for this guide was full of negative comments about "living in your mom's basement," and "you'll never get anywhere only the big dawgs sell beats," and "hip-hop is dead homie producers were only making money from 2000-2005." Don't listen to any of that. Be yourself and do your own thing. And don't get discouraged if at first the ride is rocky. I've been producing long enough to see both the down sides and the upsides in putting these skills towards a possible career path. Be open, communicative with your clients and other producers, and don't ever think you've learned all there is to know. As much time and thought as I've put into writing this guide, I'm sure there will probably be some revisions needed. A few years from now a lot of this guide may even be obsolete. Whatever the case may be, I hope this guide serves you well on your path. Thanks for reading and good luck!