A demo reels is essentially a visual resume that highlights the best of your work in sample form.
There are no hard and fast rules for Demo reel construction, but below are some good guidelines:
1. Bars, tone, countdown, black
2. Fade in to your basic info; Name, contact phone#, email. Fade Out
3. Fade up music, Fade in titles for Demo, begin demo, 2 - 3 min. Fade out
4. Repeat step 2, fade in to your basic info; Name, contact phone#, email. Fade Out
5. (optional) Longer clips of your work, whole films, etc.
Usually only the first few minutes of a demo reel is viewed. Often employment decisions are based on HOW your demo was put together as opposed to WHAT it contains!
It is standard practise to use non-copyright cleared music as your demo is not being distributed or used specifically for profit or assembled audiences.