Licensing or selling?
Selling is permanent. The buyer owns the share you sell, receives all its future income, and you're paid once.
Licensing is temporary. The buyer gets the right to release and earn from the music for a set number of years, usually three to ten. You get an advance up front, then a royalty on what it earns once the advance has been paid back. When the term ends, the rights come back to you.
How the advance is worked out
The advance depends on what the music is likely to earn during the term, your royalty rate, and the buyer's risk. A longer term or a lower royalty to you usually means a bigger advance. Every valuation shows a likely advance next to the sale value, so you can compare the two.
What to agree
You set your term and royalty when you list. Buyers can propose their own in their offer, and you can counter.
- The term: how many years the buyer holds the rights
- Your royalty after the advance is recouped
- Territory: usually worldwide
- How often you get statements, and what happens to the rights at the end
Questions
Do I have to pay the advance back?
Not out of your pocket. An advance is recouped only from your royalties under the licence. If the music never earns it back, you keep the advance.
Can I license only part of my rights?
Yes. You choose the share of the master and publishing included.
What happens at the end of the term?
The rights revert to you, and the buyer hands back distribution of the recording.
Is there a fee?
Not for you. Buyers pay the platform fee, on top of the advance.