Buying Beats Online Is Common, Convenient and Risky

An advantage of being an aspiring artist in 2023, rather than 1983 or even 2003, is having near-instant access to millions of pre-made instrumentals — a club-wrecking drill track or soothing South African amapiano beat is just a few clicks away. For many acts today, the first step in the songwriting process is scouring sites like BeatStars, Soundee or YouTube for the right piece of music. “I just go on YouTube and look up ‘indie-pop-type beat’ or ‘R&B Daniel Caesar-type beat,’ ” Island Records artist Diego Gonzalez told Billboard last year. “I scroll through those until I find one I really like. Then I download it and start humming melodies.”

This approach has led to breakout singles and major-label deals for Muni Long, ThxSoMch, dv4d, Tai Verdes, Wisp and more. The affordability of the online beat economy, where an instrumental might cost as little as $2.99, makes it extremely convenient for young artists. But the casual nature of the business arrangements can come back to haunt them.

Acts typically license the instrumentals they want for cheap rather than buying them outright (which can cost significantly more). What they may not understand, however, is the agreements they accept to access these beats typically grant them limited rights by capping the number of streams a song can earn and allowing other acts to license the same piece of music. If a song built on a leased instrumental becomes a hit, the artist then has to circle back and try to buy out that beat. They have essentially built a highly desirable house on real estate they don’t own.

That’s when negotiations can become fraught and even lead to litigation, according to entertainment attorneys. “When we come on board and a song is starting to go, the first question is always: ‘Do you have paperwork with whoever did this track?’” says Todd Rubenstein, founder of Todd Rubenstein Law. “Licenses don’t give you exclusive rights, so there’s an opportunity for people to come back and leverage you when a record explodes.”

A producer may also be reluctant to assign exclusive rights to an instrumental they’ve already licensed hundreds of times. “If a song is going viral and a record company wants to enter into an agreement, the value of the track is impacted by the fact that you don’t have original materials and the beat exists elsewhere,” explains Leon Morabia, a partner at Mark Music & Media Law.

“These things happen all the time,” says David Fritz, co-founder of law firm Boyarski Fritz. “A baby act is doing well, and then they get a producer saying, ‘You’re over the streaming threshold on this track and we didn’t work out a deal; you have to take the song down’ ” — just at the point where artists and their teams need to slam the pedal to the metal by pouring money into marketing.

Not surprisingly, many producers like these nonexclusive agreements. “The leasing system allows the producer to be at the [negotiating] table if that beat turns into something bigger,” BeatStars president of music and publishing Greg Mateo says.

The music industry is “skewed toward artists and labels having the power,” adds Tiffany Almy, an entertainment attorney. “Producers are part of this, too,” she continues, “and [the licensing economy] gives them a voice, a platform and, potentially, a way to have more opportunities going forward.”

Fritz says the risks involved with beat-licensing deals are one of the reasons he co-founded Creative Intell, a subscription-based educational platform that dissects music contracts, among other business topics, across 18 different courses. Steven Ship, who co-founded the company with Fritz, says they hope to “revolutionize the way dealmaking is conducted in the business.” The first step toward that goal, he adds, is education “so people can understand what they’re signing and how to protect themselves.”

Creative Intell relies on animated modules to take users through beat-licensing agreements paragraph by paragraph, focusing in particular on BeatStars. (Fritz says his company is in negotiations with several music distributors, including Vydia, UnitedMasters and ONErpm, to make Creative Intell available to their clients.) The courses warn artists to look out for streaming limits and clauses that let the beat-makers end a lease at their sole discretion. Creative Intell also offers users an alternative licensing agreement that Fritz and Ship say is more artist-friendly.

The platform advises acts to be especially wary of “beat trolls” — people with mercenary motives who target viral songs built on licensed beats and try to acquire the underlying instrumental. If the trolls succeed in this effort, they own a piece of the artist’s most important track and acquire substantial power to influence — and extract money from — any subsequent label negotiations, Rubenstein says.

If a song explodes “and you don’t have perfect title to all your work, then you’re going to be a target for people, guaranteed,” adds Nicolas Tevez, founder of Tevez Law.

Mateo says he’s aware that the licensing system can create issues and has personally helped some artist lawyers get contentious deals done. BeatStars also has started to provide some major labels, including Atlantic Records and Island Records, with an assortment of instrumentals where terms of use have been agreed upon ahead of time. That way, if an act likes a beat and it turns into a hit, there aren’t any additional complications. “The last thing we want is for a placement to die,” Mateo says.

Despite the potential pitfalls of beat marketplaces, they remain popular with artists and serve as a lifeline for some beat-makers.

Even if producers secure prominent placement on a major-label album — a dream scenario — their future is hardly secure; they might not see any money for more than a year. But in online beat marketplaces, producers can earn a good living through a steady stream of leasing transactions. “A bunch of my clients are crushing it on BeatStars, making $100,000 a year,” says Adam Freedman, an entertainment attorney.

Still, for unsigned artists, learning the ins and outs of the licensing agreements remains paramount. While Ship from Creative Intell and Mateo from BeatStars have conflicting ideas about the best way to draft a beat license, both agree that there needs to be more education about how these deals work.

“Read through the terms and conditions,” says Jason Berger, a partner at Lewis Brisbois. “There’s nothing worse than you not understanding how something is going to play out based on an agreement you’ve already entered.”

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