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“I have a production company, so I love selling beats. We have a full production company,
so when I wake up every day, I am hoping to sell a beat for someone’s album. Right now we are selling beats; placing
productions on both major and independent projects.”
-- Big Oomp Southern
Style DJs Oomp Camp Records
Type 3 Scenario: The Outright Sale
When a producer sells a beat "outright," the producer
receives a purchase price consisting of the producer fee, the value of the masters, the current value of the producer's back-end
producer royalties (including possible advances on that amount), and an additional amount for his publishing rights in the
underlying composition - i.e., the producer sells his rights in the masters and the underlying composition. While this purchase
price formula may look impressive, in actuality, beats are often sold "outright" for as little as $500. As you may
have noticed, the difference between an "outright sale" and a "quasi-sale," as we have described them,
concerns the sale of the producer's publishing rights.
When deciding on whether to lease or sell a beat, consider the foregoing
scenarios and choose one that you feel will work best for you. But, you must remember the time-value of money. Even if everyone
in the world agrees that your beat will be worth $1,000,000 next year, no one will pay you that entire amount today. In reality,
it will be impossible to definitively predict what a beat will be worth in a year. Therefore, you must essentially estimate
how much money the beat could make you in the long run.
If you are being offered an up-front amount that you believe
is much less than the beat's long-term value, then leasing the beat or quasi-selling it may make sense. However, if you are
being offered an up-front amount that is close to, equal to or larger than the beat's long-term value, then selling it outright
may make sense. But let's keep it real; you may produce a beat that you feel "sucks," but, someone that you know,
who couldn't get a deal with anyone - actually loves it. In this case, it may be better to just take your money and
run, rather than getting old and gray waiting for him to sign a record deal. |
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