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In your scenario, an exclusive agreement will restrict the use of the track to solely one artist or label during the term of the agreement.  The artist or label holding an exclusive right to the track may file a lawsuit against anyone who infringes that right.  You may be able to negotiate a higher fee for the use of the track, since only one artist or label has the exclusive right to use or exploit the track.  Most artists will present an exclusive agreement to the producer to ensure that, in the event the track is considered for their album, they won't run the risk of hearing the track on a mixed tape featuring another artist.  Disadvantage: Exclusive agreements have to be in writing in order to be effective.  It's a disadvantage for the producer to have an exclusive agreement with the artist because he is precluded from granting rights to the track to any other person during the stipulated time period in the agreement. In other words, you should not shop the track to other artists during the term of the agreement, otherwise you might be sued.  Another disadvantage is that you may miss out on a golden opportunity, in the event nothing happens during the term with the artist who has exclusive rights to the track.  The key, in such agreements, is to keep the term period short, control how the track is being used and request a reversion of the rights, if the track is not used.

Conversely, a nonexclusive agreement for music production services means that the producer is free to license the same track to more than one artist or label simultaneously, with no recourse.  In such instances, you are able to charge a license fee to each artist/label for the demo use of the same track. You don't need a written agreement for it to be effective.  But, I would recommend a written agreement just in case you are confronted with an exclusive rights issue and need to prove that the nonexclusive license was granted before the transfer of copyright was executed. Disadvantage: One disadvantage is the artist does not have any rights to the track.  The person who holds the license can't sue if someone else records to the same track.  In addition, the fee for nonexclusive license of the track will most likely be less than the fee paid for exclusive use.  Another issue is overexposure of the track. Consider this scenario: suppose several artists license the track, record to it and then release it in commerce, solely for promotional purposes.  If the track is heavily exploited, the momentum surrounding the track may eventually die down due to over exposure.  Thus, your ability to later grant rights to the track exclusively to a third party artist for use on their album may be slim to none.  However, in the event an artist wants exclusive rights to the track, under such circumstances, you will first have to void all of the nonexclusive agreements you've made, in order to grant exclusive rights going forward.

Before an agreement is presented in regards to the track, it is important to know the intent of both parties. If the intent is one of non-exclusivity, the language in the agreement should expressly convey that you are granting permission to a person to exercise a privilege to do something.  On the other hand, failure to expressly state that an agreement is exclusive does not automatically render the agreement nonexclusive. Certain language such as "sell" transfer" or "assign" are synonymous with "rights" under a contract and should not be used when granting a license. Therefore, in an effort to avoid the issue of ambiguity in an agreement, you should always consult with a lawyer regarding the appropriate language that clearly expresses your intent.

Disclaimer: The content of this article is the express opinion of Bernie Lawrence-Watkins and shall not to be construed as legal advice or in any way create an attorney-client relationship.


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