The Main Role of a Music Producer
The music producer is one of the most pivotal elements of how an artist’s music gets created. In the simplest terms, they’re the person who guides their career through the process of creating a music or video, and the extensive duties they have will inevitably be a factor in your negotiations.
Originally, producers were the people who went into the studio with the artist to get their input on the creative process. Over time, the level of assistance that they provided through the recording process expanded to the point that state of the art recording technology was created to help them work more effectively .
Though the duties of a music producer as it relates to the artist’s music may vary slightly, the following are generally agreed to be their key responsibilities:
Since the producer is so essential for an artist’s music creation, it’s crucially important that the project be approached as a collaborative effort. Both parties should have clearly defined roles, based on their own background and input, so that everyone understands at the start of the process where their obligations begin and end with respect to the development of the music.
Whether or not you use the same producer for each album or different people each time is up to you. Either way, however, it’s essential to have a contract to stream-line the interaction and insure that everyone is in agreement as to who is doing what.
Typical Provisions Within a Music Producer’s Contract
There are several key clauses that should be included in every music producer contract. These are by no means exhaustive, but I have found from experience they are some of the most significant terms.
Payment terms including when payment will be due, how payment will be made (check, wire, ACH, etc.) and who will be responsible for paying third parties (e.g., studio time, musicians).
Applicable Law and Where Sphere of Influence – This clause provides guidance on what state or country’s law will govern any dispute under the contract. Likewise this clause can set forth where any dispute will be resolved, whether in a certain city or county.
Intellectual Property Rights – This section should clarify who owns what and set forth any existing rights and whether there are any restrictions with respect to certain works.
Timeframes – This clause ensures the producer knows when various activities are due to be completed. It also memorializes the timeframe in which the producer is expected to return the artist’s property. This set timeframe can help ensure the producer completes their obligations in a timely manner and does not keep the artist waiting.
Royalties and Compensation
The structure of the payment a music producer will receive when producing a record for an artist can differ depending on various factors and types of agreements. Producers are paid in various ways, including, (a) an upfront fee before the recording sessions, (b) through royalties, or (c) a combination of the two.
According to the American Federation of Musicians (AFM), payment is divided into two basic categories: mechanical royalties and producer points. Mechanical royalties are paid for uses of music as recorded on physical media, such as CDs and vinyl records, digital media, including downloads and streaming services, or television, film, and video games. Producer points are compensation paid to the producer based on a point system that takes into account sales of the album or EP. For example, if an album generates a net profit of $2,500,000, and the producer and artist agreed that the producer would receive 3% of the profits, then the producer would receive $75,000. These points are often set at one to five percent of the album’s profitability.
Many contracts will include both royalty agreement and fees for recording. For example, the AFM recommends the following fee and royalty agreement for producers:
- Fixed cash payment receipt of at least $15,000 and giving the producer a set number of points.
- Fees paid for each CD unit manufactured of at least 12.5 cents per unit.
- An overall royalty of not less than 3% of retail dealer price.
Another way a producer may receive compensation is through profits from licensing a song for use in a movie, television show, commercial, or video game. Such compensation is typically split between the producer and the songwriter. This type of work is not covered by most producer contracts and is usually outside the scope of what the producer does during the course of an album’s production.
Until 2016, producers were not entitled to collect any mechanical royalties passed on to songwriters. While songwriters receive 9.1 cents per song from the first 1,200 physical copies sold, producers, up until the 2016 Copyright Royalty Board ruling, were not entitled to that fee. Now, the Court has ruled that producers can receive these mechanical fees.
Intellectual Property and Copyright
The contract with the music artist must clearly specify the ownership of all recordings and song compositions. The ownership of both the master recordings and the creative contributions by the music producer in the recorded music is a significant consideration in the contract negotiations and should be clearly delineated in the contract with the artist.
Ownership of the master recordings is generally governed by Copyright law. The copyright for sound recordings is created when the sound recordings are fixed on a tangible object including digital, electronic, magnetic or any other audiovisual or other storage medium. If the production is employed under a work-for-hire agreement, the producer will own the copyrights to the masters. Commonly, the producer will only have a limited term right to exploit the masters in return for a royalty fee or a license fee for the use of the masters. Any right to exploit the masters after the royalty period will revert to the artist unless the contract clearly specifies that the producer owns all rights.
Rights owned by the producer under this section may include the following among others; the creative contributions by the producer to the song compositions may include weekly meetings with the artist, co-writing lyrics with the artist, arranging the songs, directing the artist’s performance, hiring and co-ordinating the roles of the musicians, singers and other performers as well as being able to hire and supervise the recording engineers.
Negotiating a Proper Agreement
There are often misconceptions about contract negotiations. Some believe that a good contract serves to benefit one party over another. In fact, a fair contract should protect the rights of both the producer and the artist. Negotiating a fair contract is a long process – there is no rush. Negotiations can take months, even up to a year or more. The best negotiated contracts work for the both parties and are mutually beneficial.
Aspects of a music producer contract that are important for the producer:
The amount of time you would like to work with the artist (2 years, three albums, etc.)
When do you expect payment?
What will the artist provide (song ideas , lyric suggestions, etc.)? Is there anything regarding the song that you are not willing to negotiate upon?
Do you have an agent? If so, what are the terms of their involvement with you?
Where will the music be recorded?
Aspects of a music producer contract that are important for the artist:
The amount of time you would like to work with the producer (2 years, three albums, etc.)
When will you be paid? Is it a flat fee per album, a combination of a flat fee and royalties, or purely by royalties awarded?
Do you have an agent? If so, what are the terms of their involvement with you?
Where will the music be recorded?
Litigation and Other Legal Issues
One feature that often leads to problems is "tracks delivered as delivered to the record company." What does this mean? How does the producer know what was delivered to the record label if the artist delivered?" What was in the mix that was delivered by the artist? Did the artist change the title of the song after delivery? Who pays for correction of any mistake in delivery? Does the producer have to pay if the artist tells the producer that the label has a problem? See "making the label whole?" On the other hand, what if the Producer changed something that the artist did not approve and the label has a problem? Is the producer off the hook because clause says "as delivered?"
Another issue is ownership – what if the song is used for synch or in film and TV where there are additional revenues for the producer? Does the producer get their share after the fact? Does the producer get their share from the label’s share? Again, it depends on who gives permission to exploit. In many instances it is the artist or the label.
Another issue is how to share in the synch and performance royalties. BMI and ASCAP are notoriously inconsistent at sharing revenues for music in film and TV. Often a producer is left out because the list of song descriptions does not match what anyone else has that song. Does the producer get their share only from the label’s share?
The question becomes "the devil is in the details." The question is how many details does a producer want those details spelled out in this contract. If a producer is hired and paid on an hourly basis (which is rare) one may leave the terms vague and be paid well for all the work. Landis has seen land disputes where no one was paid, but all has still rights to use their work and claim they had a joint venture. The point is that if something is fought about, lawyers very expensive lawyers are involved.
The issues are numerous and not for inclusion here, but the best advice is to consult with an attorney and negotiate what should and should not be included. There is no magic formula, but suggestions are possible. There’s a great deal of money at stake in a recording contract and the only way to guard against disaster is to be smart and strike a deal that works.
Why Hiring a Lawyer Is Important
It is critical for both the producer and artist to have an attorney review and negotiate the terms of the music producer contract before it is finalized. Both parties should strongly warn their respective client to seek out legal counsel. It is not a good sign if the other party does not want the attorney involved or the attorney is not cooperating with the process.
The artist needs to understand the agreement terms and how they will affect their career. The producer also needs to ensure that they understand the details properly and get feedback on how to approach the negotiations. A good attorney will use the contract provisions to protect the client’s best interests. The attorney will also work with people with more experience in the industry for insight.
An attorney that reviews the music producer contract for the artist can also seek to negotiate additional compensation or a larger share of revenues being generated from the artist. The contract is crucial and often the results of the agreement last for years , which is why each party needs to understand the term sheet and sign a contract they truly understand. Even a raw deal sheet can be problematic without understanding what the terms probably mean.