I wanted to dedicate an entire section of my site to this topic because I constantly get questions and see confusion about it. It’s definitely one of those grey areas in the game and it always has been. A lot of producers and artists think they have an understanding of how the whole Exclusive Rights thing works, but unfortunately, given that many have never been in a situation to where they’ve signed sync agreements or copyright acquisition contracts, a lot of the supposed know-how gets tossed around and misconstrued. This leads to the blind leading the blind on a misinformation crusade.
So let’s get some things really clear about how Exclusive Rights work, and when you read this, go about the assumption that this is how all producers operate. I say this because even if they tell you different and try to be that too-good-to-be-true person that you’ve been dreaming of, 9/10 times they’ve never actually had a real contractual situation before. They will switch up quick if the record blows up like Bodak Yellow or Panda did I promise. But let’s break this down in a few ways so you can get a full understanding:
1. Exclusive Rights is a removal fee, not an ownership fee:
The number one biggest misconception about Exclusive Rights is that when you purchase it you own all the copyrights to it. And I can’t blame you for thinking that. There are hundreds of producer websites, well-known ones also that say you own all the rights on their price charts. It’s very easy to read something like that and think you own the whole pie. But the fact is, those rights are no different than the rights you would get in an Unlimited Trackout purchase. It is very, very rare, but, there may be a tiny handful of producers out there that have their paperwork to a point where they already have a copyright acquisition agreement drafted up for you to sign/execute upon purchase. But even if that were the case, that would still mean that they would have a clause stating their 50% writer/publishing contribution to the record. One thing to be completely certain of is that there will never be a situation where a Producer isn’t entitled to their splits and credit because they were paid a $500-1000 Exclusive fee. As long as they made that beat, their writers/publishing interests are always acknowledged on the final song. If the record blows up without said acknowledgement, then, the producer can just put in a legal claim which they’d be well within their right to do.
2. Purchasing Exclusive Rights has greater financial risk than necessary if you’re still building clout:
If you are an Artist that’s just starting out and you want to purchase an Exclusive, you are taking a really big risk. To you it may feel like you got the upper hand because you paid more and the beat is no longer online getting leased out. But what you might be unaware of is how many times that same beat got leased out before you had a chance to cop it Exclusively. For all you know 30 other Artists could have the same beat, and they would be well within their right to release and earn from their records until they reach their respective sales caps. Additionally, one of those 30 people could end up having a really successful record and that would be it. You’d feel like a sucker spending $500-1000 on something that somebody else spent $150 on and profited.
So then what exactly is Exclusive Rights?
The REAL definition of Exclusive Rights is exactly what an Unlimited lease is except it comes with a surcharge to have the beat removed from the marketplace and Youtube for a period of time. That period of time varies from producer to producer but the norm is usually 1 year unless the recording is commercially placed before then (i.e. Radio Broadcast, Commercial Advertisement, Television Broadcast, Video Games, Soundtracks).
Exclusive Rights purchases for beats in the main catalog are in place for Artists that have a strong audience behind them and a tried-and-true business plan for the record. You have to be so sure of where you want to go with this record that the idea of even one more person buying a lease can’t happen. You don’t want anybody else in the world to hear this beat anymore until your song comes out. And you’re willing to risk paying that extra amount so that you can be the last person the beat was sold to.
So then when is the right time to own copyrights on a beat?
Simply put, the right time to start talking about acquiring copyrights for an instrumental is either when the song starts to get hot, or, if the label or management company you’re signed to is interested in acquiring the copyrights (again usually because the song is starting to get hot). Those situations are the only times it make sense to begin determining who will be controlling the masters and how the splits will get handled.
This is why I always recommend to Artists that ask about Exclusives to just cop an Unlimited license from the main catalog. In my personal opinion, the Unlimited license is the safest and cheapest way to have unlimited usage rights and all the editable stem files on an instrumental. That way you can put more of that money you would’ve spent towards your video shoot or pushing the record when it’s ready. In most situations, buying Exclusively is just putting the cart before the horse and wasting money. If you want to own a beat that other people don’t have and that’s made just for you, then a custom beat is the way to go.