What artists create is precious and it is important to put your work into the hands of someone you can trust. When collaborating with a producer, you must ensure that your work is valued and that you get due credit and royalties for the sales that the producer will be able to generate based on your music.
A music producer contract or an agreement is what safeguards your interests as an artist or if you are a producer, you should be clear about what you will be offering the artist.
As an artist, once you find the right producer, you will want to enter into a music producer contract before you begin work. This contract will contain legal terms addressing the recordings, song ownership, royalty payments, producer advances, and the like. While its recommended to consult with someone who is experienced in the music industry about the terms, here are a few things you can check yourself before taking the next steps.
1.Ownership of master recordings
As an artist, you have to pay producer fees. But once this is paid in full, you must have complete ownership of the master recordings. It is possible for the producer to co-own the masters or have rights to it but that is rare, and it is usually the artist or label who is the owner based on the industry standards of this kind of relationship. The fee and royalty payments made to the producer are in exchange for this ownership right. This should not be confused with the ownership to the song (music and lyrics) which is addressed below.
2. Co-writing with the producer
You may be the sole creator of your master or the producer may be a co-writer for the composition. Often, co-writing may happen in the recording studio itself. But it is best to agree on the terms beforehand in order to know what the producer expects. If you do not, the copyright law will impose an equal share of copyright ownership based on the number of persons writing, not based on how much was written. If an artist is working with a producer of tracks who has written the music and the artist writes the lyrics, there is a natural 50/50 interest shared in the song. But, if the producer is just helping you to craft your songs better, you may not want them to share in 50% of the song. Therefore, it is possible to include in the agreement that in this scenario, the producer will not own any rights to the words and music the artist wrote. Even if your producer is the co-writer, you should include some administrative rights in the compositions. This way, you can license the compositions embodied in the recordings, together with the recordings, without going to the producer for consent each time.
3. Percentage of record sales
In the music industry, producers, like the artist, are paid a percentage of the income from the sales and exploitation of recordings. This is called a royalty or often referred to as ‘points.’ Producers will earn points on the recordings they produce. So, for example, when producers earn4 points from the masters they produce, it means that they are earning 4% of some portion of the income earned from the sale or exploitation of the recording.
It is advisable to have such clauses in the music producer contract which allow the producer to earn on sales only after the artist recovers all costs on the masters since that is usually how the artist’s royalty is calculated. The reason this is important is because the royalty being paid is coming out of the artist’s royalty, if the artist is in an agreement with a record label. When the royalty is based on the suggested retail price (SRLP) the industry rate is 2-5% (2-5 points) of that price. If the artist’s royalty is based on wholesale or the published price to the dealer (PPD), then that royalty rate would typically double to 4-10%. This can also just be expressed as 20-25% of the royalty rate paid to the artist.
4. Sound Recording Performance Revenues
Because of the reduction of sales of traditional audio products (CDs, downloads) and the increase consumption of streaming, producers will be entitled to a percentage of recording performance royalties These royalties are paid directly to the producer through a letter of direction or have to be paid to them after the income is received by the artist or the artist’s record label. SoundExchange can pay the producer directly on non-interactive performances. But for interactive music services like Spotify or AppleMusic, the artist must pay the producer from the money they receive. Producers will also want to be paid from the flat fee use of the masters such as synchronizations in film and television productions. It is suggested that artists understand the fees mentioned in the clauses of their agreement and clarify any doubts. The royalties paid for all of these fees should be percentage equivalent to the underlying royalty paid to the producer being somewhere between 20-25% of what the artist receives.
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