With Needle-Drop (a.k.a Laser-Drop since the introduction of CDs), producers pay a fee each time the music is used. For instance, if you were creating a series of ten TV commercials for one client, each using the same piece of music, you would typically pay the fee ten times, or you might be able to get a production blanket license covering this one series of commercials.
This type of licensing can be an inexpensive way for a producer to have access to a large number of music titles without investing large amounts of money. Since the producer pays on a per-use basis, they only pay for the music they actually use, and typically this fee can be passed on to their clients. Libraries with this type of license structure usually charge more per track than royalty-free-music libraries (more on this below), but the advantage is, more money can be spent on the production of the music cuts. Higher quality music, using real live musicians, means higher quality productions for the producer. A word of caution, just because a library is offered on a per-use basis does not automatically mean the production quality is superior. Give any Laser-Drop library a good listen before signing any contracts.
A buy out library, or royalty free music library, typically charges one fee for a CD or a collection of CDs. This often sounds great on the surface, and many times it is just right for the producer's needs. There are some wonderful buy out music libraries out there, and some that are pretty undesirable. One consideration is how many of the tracks on the CDs will you actually use? How many titles will you pay for you know will never be used? Does it have the right music for the client who is going to walk through the door tomorrow, next week or next month?
At Iamusic.com, we offer a music license which is a hybrid of both royalty-free/buy-out and per-use, the best of both worlds. You get the advantage of Needle-Drop. You never pay for music which is not used, and you already have access to a large number of tracks from a variety of music libraries. You get the advantage of buyout as the music can be licensed for particular useses without reoccuring fees.