Understanding Music Rights

What Are Music Rights?

When someone creates an original piece of music, they own the rights to that work. These rights are a form of intellectual property — they control who can use, distribute, and profit from the music.

Music rights can be divided into percentage stakes and transferred between parties. This is exactly what HearIt facilitates: sellers offer a defined percentage of their rights, and buyers acquire that ownership stake through our auction platform.

What You're Buying

When you win an auction for a percentage of a musical work, you receive:

• An ownership stake — the specific percentage listed in the auction (e.g., 25% of the work)
• Streaming royalties — your proportional share of revenue from streaming platforms
• Sync licensing fees — your proportional share when the music is licensed for use in film, TV, commercials, or video games
• Mechanical royalties — your proportional share from physical or digital reproduction and distribution
• Other revenue — any other income generated by the work, proportional to your stake

Your ownership is documented in a formal Assignment Agreement generated during the escrow process, which both parties sign.

What You're NOT Buying

Owning a percentage of a musical work does not give you unilateral control. Specifically:

• You cannot re-release, remix, or create derivative works without the agreement of all rights holders
• You cannot sublicense the work on your own — all rights holders must consent
• You own the percentage specified, not the entire work (unless you acquire 100%)

Think of it like owning shares in a company — you benefit from the profits proportionally, but major decisions require agreement among stakeholders.

How Royalties Work

Music generates revenue through several channels:

Streaming Royalties

When the music is played on platforms like Spotify, Apple Music, or YouTube, royalties are generated. As a rights holder, you receive your proportional share of these payments.

Sync Licensing

When the music is placed in a film, TV show, commercial, or video game, a sync license fee is paid. Your ownership percentage determines your share of that fee.

Mechanical Royalties

These are generated when the music is reproduced — whether as physical copies (CDs, vinyl) or digital downloads. Your share is proportional to your ownership stake.

The specific arrangement for distributing royalties is between the rights holders. HearIt facilitates the transfer of ownership but is not involved in ongoing royalty administration.

The Assignment Agreement

When an auction is settled successfully and the buyer's payment is verified, HearIt generates a formal Music Rights Assignment Agreement as a downloadable PDF. This document includes:

• The names of both buyer and seller
• The specific work being transferred
• The exact percentage of rights being assigned
• The purchase price and escrow reference
• Seller warranties confirming ownership and originality
• Signature lines for both parties

Both buyer and seller can download this document from their escrow page at any time after payment is verified. We recommend both parties print, sign, and retain copies for their records.

HearIt's Role

HearIt is a marketplace that connects music rights sellers with buyers. We provide:

• A secure auction platform with transparent bidding
• An escrow process to protect both parties during the transaction
• A formal assignment agreement documenting the transfer

HearIt charges a 10% platform fee on successful sales, deducted from the winning bid before the seller payout. Once the escrow process is complete, HearIt is not a party to the ongoing rights relationship between buyer and seller.