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In my industry, I meet A LOT of music composers who are afraid of the music licensing model.

Why? Because of the low prices.

First, let's define music licensing so everyone is on the same page.

Music licensing is a business practice in which a copyright owner (the music producer) grants the right to publicly use his or her copyrighted work (the beat). Types of licensing agreements include:

A flat rate for a defined period of use
Royalties are based on the number of copies of the work sold or the total revenue generated from its distribution.

Let's define what a license is: an agreement between the composer or the library that acts as the composer's publisher and the person or company that wants to use the song. The license consists of three main parts:

The media (will it appear on YouTube, TV, radio?)
The term (for how long?)
And the territory (national/international)

Most likely, you will sell licenses of the first type with the following characteristics:

Internet
eternity
International

In order to accommodate buyers, the market has shifted to this type of license and has been able to dramatically increase its sales volume.

I found this cool article on the website newartistmodel.com that shows six ways to make $3,000 from music licensing.

Buyer Type License Cost Number of Sales
Youtubers $20 150
Videographer $60 50
Indie Film Soundtrack $200 15
Indie Movie Trailer $500 6
Corporate Video 1,000 USD 3
Advertisement $3,000 1

This breakdown will show you how easy it is to make good money from music licensing. Add in the power of the internet and a steady flow of customers thanks to music licensing markets, and you get the secret recipe that lets me and thousands of composers worldwide make a living from beats.

Another great aspect of modern music licensing is that creators retain all of their copyrights. In the past, we were usually offered a higher upfront payment for an exclusive license for which we sold our copyrights to our clients (usually production companies).

For me it's a WIN-WIN-WIN situation.

You can “sell” your beat as many times as you like, your intellectual property remains intact, and many more clients can benefit from working with you at a much lower price.

Another great aspect of music licensing is the royalties paid through your PRO or collecting society. This means that when you sell a license for a TV show, you get money up front (usually around $200) AND royalties after the fact.

This is a second, separate source of income from the same song sale!

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