If you are a songwriter and/or performing artist, you know the integral role a producer can play in elevating your music. A good producer has an ear. They also have a vision about your sound. The tweaks and nuances of a producer might not be noticeable to the ear of a common listener, but can make the difference between a good song and a hit recording. Accordingly, many producers insist on having a contract with the artist. Here are just a few provisions that any artist (or producer) should be aware of when negotiating the contract:

  1. Recording Budget vs. Producer Advance: A producer agreement generally provides for a recording budget – an amount of money that the artist (or record label) will pay to the producer for the producer’s services, as well as other staff (mixer, engineers, studio owner), studio and equipment rental, side musicians, and supply purchases (tape, hard drive, etc…). The recording budget also includes some type of payment for the producer. Because the producer generally also receives a royalty on record sales, it is important to make sure that the producer payment is considered an advance for purposes of royalty payments. As a general rule, you should insist on fifty percent (50%) of the recording budget to be treated as a producer advance (and therefore recoupable from producer royalties).
  2. Ownership in Musical Compositions:  Assuming the sound recordings are owned by a record label, a contentious issue could arise as to the ownership of the musical compositions (and the sound recordings, if the artist is going to own them outright). Many producers will try to claim a share of your songwriting ownership based on their contribution to the outcome of the song (they suggested a new guitar rift, change of some lyrics). You want to try to avoid sharing ownership in the musical compositions (generally referred to as “publishing”), unless of course the producer is truly contributing something original. In the event you do share ownership, it is crucial that the producer agrees to provisions contained in your recording agreement… specifically, the “controlled composition clause”
  3. A discussion of mechanical royalties and the implications of a controlled composition clause is beyond the scope of this article (but possibly the topic of a future article). What you should make sure of in your producer agreement is that the producer agrees to reduced mechanical royalties – based on the same calculation that you are paid mechanical royalties under the recording agreement. It is also important to note the date from which the mechanical royalty will be paid (from commencement of recording, delivery of master, North American release). Depending on the date of release, the mechanical royalty (as set forth by the U.S. Copyright Office) could increase; causing you to pay a larger royalty to the producer  than the record label is paying you = ARTIST LOSES MONEY.

  4. Producer Royalty: A producer royalty can range from 1% – 5% – the upper level reserved for proven hit makers. This percentage is not from your earnings, but instead from the calculation of your royalty under your recording agreement (or without a recording agreement, a comparable percentage to your “net” revenues). For example, if your royalty is 16% of SRLP (standard retail list price), you only earn 12% while your producer earns the remaining 4%; also known as 25% of your earnings attributed to the master recordings produced by producer. If the producer is not also mixing each track, you should generally ask for a 1% reduction in the producer royalty. This is just the type of the iceberg… many producers ask for calculations that do not match your recording pay-outs, granting them payments on sales that you would otherwise not get paid on under the recording agreement = ARTIST LOSES MONEY.

A producer is an important member of the artist’s team. A solid producer agreement that doesn’t lead to unintended consequences for the artist (or producer) is equally important. Legal counsel from an attorney that focuses on music law can go a long way to ensure that you are protected – whether you be an artist or producer.

5 comments to Music Producer Agreements – Key Provisions

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