Royalty Rate

One of the ways that you can customize the licensing terms for your music is by specifying a "Royalty Rate".

When selling a license through Beat Brokerz, the royalty rate can be set anywhere between 0 and 100%. As outlined in the Beat Brokerz licensing agreement, the royalty rate is the percentage of royalties you'll be entitled to collect after any "free copies" you've allowed in the license have been exhausted.

  • 100% = Pay me the maximum amount allowed by law
  • 50% = I'll settle for half of what the law allows
  • 0% = Sell as much of my music as you want, and never pay me a dime

Breakdown

When you sell a license with a Royalty Rate under 100%, that means that if the song were to generate mechanical royalties, such as if it were to be sold for more copies than your allowed "free copies", then the royalties due to you would be less than the full amount allowed by law.

So, a Royalty Rate of 50% would mean that a record company selling a ton of copies of music that uses your beat, would only have to pay you 50% of the standard royalties that would be due to you, (since the license you issued them only obligates them to pay 50% of your due royalties).

Similarly, if you issue a license with a "Royalty Rate: Free" (0%) term, that's even worse, since that means that no royalties would ever need to be paid to you for any amount of copies sold.

How To Use It

Typically, you want to leave this rate at 100% ALWAYS. You can increase the amount of "free copies" that your customer can sell to make the license more attractive, but leave your earning potential intact in case the music becomes a hit, or ends up selling a ton of copies.

If you're making a deal with a bonified record label or an established artist, sometimes, the only way to get them to include your music on an album would be to offer them a reduced royalty rate. Which is why we have the royalty rate as a negotiation point. But in that case, you know that you will be receiving a significant amount of royalties already on the backend, and who will be paying them.

Bottom line, leave your royalty rate at 100% whenever possible unless you know what you're getting yourself into.