Producers play a pivotal role in shaping the sound of an artist’s music, but how do they actually get paid? Whether you’re a new producer or a seasoned artist, understanding the financial side of production can be crucial. Let’s dive into the basics. Producer Royalties Typically, a producer’s royalties come directly from the artist’s royalties. The percentage a producer earns can vary, but here’s a general breakdown:
• 1% PPD: Common for additional or minor production work.
• 3-4% PPD: Standard for full production on an album or single.
• Up to 6% PPD: Reserved for top-tier, superstar producers.
Contracts are not something that music creators will automatically be familiar with. Self-releasing artists (music creators who make and then subsequently retail their own work) have no need to sign any documentation to action this process, and can be caught unaware by the process if they get signed and their career switches lanes. Of course, contracts should a;ways be scrutinised, and signing anything you don’t fully understand or haven’t had checked and explained by a lawyer is never advisable — but that can be easier said than the done for fledgling artists, amid the high cost of legal fees, the emotional sway of feeling your music is believed in, and the pressure applied by money men. Often, artists can find themselves unwittingly exploited.
These royalties are calculated similarly to how the artist’s royalties are calculated under the artist’s record deal. However, the moment a producer starts accruing royalties (or gets paid) can vary from one contract to another.
Licensing and Sync Fees
Producers may also receive a share of master licensing fees when a recording is used in films, TV, or other media. This can be an additional revenue stream for producers beyond their standard royalties.
Producer Fees and Advances
Producers often charge fees ranging from $2,000 to $60,000 per track, depending on their experience and reputation. These fees can be inclusive or exclusive of recording costs, depending on the agreement.
• Advances: These are pre-payments of royalties and are typically recoupable, meaning they must be paid back before the producer starts earning additional royalties.
• Fees: Generally not recoupable unless they include recording costs. Some deals bundle both fees and advances into an “All-in” fund, which may or may not be recoupable depending on the contract terms.
Neighbouring Rights
Producers can also earn neighbouring rights income through collection societies such as PPL (UK) and SoundExchange (US). If a producer provides an audible contribution (e.g., vocals or instrumentation), they may be entitled to a portion of neighbouring rights income as a non-featured performer. However, this varies by country and collection society.
Often, artists need to agree to direct a portion of their neighbouring rights income to the producer. Clarifying these terms early in the agreement is essential for both parties.
How Songpact Can Help
Songpact helps streamline this process by offering tools to create transparent, tailored agreements between artists and producers. You can easily outline terms for royalties, advances, fees, and neighbouring rights—saving time and avoiding misunderstandings. With Songpact, ensuring both parties get what they deserve has never been easier.