Music Licensing Concepts

Music Licensing Concepts

You should understand a few things about licensing in order to make accurate business decisions regarding your music. How much you earn in the music business is dependent on the way you license out your music, and who you license it to.

Income for your music can be split into two categories: licensing fees, and royalties. Beat Brokerz is your vehicle to get placements and collect licensing fees.

Licensing Fees

In the music business, you make money by licensing your music, and the fee you collect is based on the budget and the needs of the music buyer. The principles are fairly simple: the more the buyer wants to do with the music, the higher the licensing fee should be. This makes sense, because a greater ability for the buyer to exploit your music for profit should also result in a greater upfront compensation (licensing fee) to you (the author).


Licensing fees are only one part of your potential income as a music producer. Royalties are how profit is split between contributing authors of a work after it has been licensed and exploited in the music business. The amount that each author is entitled to is based primarily on what was agreed to when the music was licensed.

There are basically two different types of royalties that you can earn as a music author.

The first type is called "mechanical royalties" in the music business. You earn mechanical royalties when your music is distributed for individual use (singles, albums, mp3 downloads, etc). The maximum amount an author can expect to get from each copy distributed would be what is called the "statutory rate" (9.1 cents at the time this was written), which happens to change from time to time as determined by the government. The person or company distributing the work (such as a record label) is responsible for accounting for how many copies they have distributed and paying out royalties to authors.

How "mechanical royalties" are addressed by your Beat Brokerz licenses.

When you set the "royalty rate" in the mechanicals section of your licensing terms, you are setting a percentage (between 0% and 100%) of the current full statutory rate that you agree the buyer will owe you for mechanical copies distributed. If you license your music at a 100% royalty rate, you'll be entitled to a full 9.1 cents per copy distributed of your music. If you license your music at a 50% royalty rate, you'll only be entitled to 4.55 cents per copy distributed.

The second type of royalties are called "performance royalties". You earn performance royalties when your music is performed for an audience (radio, internet streaming, live shows, jukeboxes, etc). The amount that you collect in each scenario will vary depending on how/where it was performed, and more importantly; if you have somebody to collect the royalties for you. Performance royalties are collected by PRO's (Performance Rights Organizations). Some notable ones are ASCAP, BMI, & SoundExchange. You must register your work with these organizations in order to have any hope of collecting performance royalties for your music, since they are set up to monitor and collect for these types of uses.

How "performance royalties" are addressed by your Beat Brokerz licenses.

Your right to collect performance royalties are always specifically preserved when you license your music through Beat Brokerz, regardless of what "royalty rate" you have agreed to. This is a key benefit of licensing your music through Beat Brokerz.