Making Beats is Cool, But Are You Getting Paid? [Breaking Down a Producer Agreement]

Intro:

If you are producing music and you want to understand how you can actually get paid, this one is for you. It’s not just about sending beats and hoping for a hit. It’s about protecting your work and knowing how the money flows once your track is out in the world.

Let’s break down three important parts of a standard producer agreement: the advance (also called the fee), producer points (aka royalties), and publishing.

Producer Advance/Fee

This is your upfront payment that basically is, what you’re paid just for handing over the beat or producing the track. But here’s what’s important to know: in most label deals this advance is recoupable. That means the label pays you for example $1,000 upfront but before you actually see another dime from royalties the label will take the first $1,000 your track earns to “recoup” what they already paid you.

Sometimes, especially when working with independent artists, you can negotiate for part or all of your advance to be non-recoupable or only 50% recoupable. This could help you start earning royalties sooner. Also make sure your deal says the advance will be paid once the agreement is signed because if it’s not listed it could lead to frustrating delays.

Producer Points:

“Points” is just industry slang for percentage points of royalties. In most major label deals producers earn 3-5% of the royalties from the song. That 3-5% usually comes out of the artist’s share, not the label’s. So if an artist has a 20% royalty rate with the label and you have 4 points that means the artist now gets 16% and you get 4%. That’s definitely one thing you need to look at.

If you’re working directly with an independent artist don’t settle for just 3-5%. Since the artist is getting 100% of the royalties you can often negotiate for 15-20%, depending on your role in the track’s creation and your experience level.

Also make sure your contract clearly says you’ll get paid royalties at the same time the artist gets paid and try to request parts of the artist’s label agreement to make sure those terms are fair.

Publishing:

Publishing is about the songwriting side of music like who wrote the lyrics, composed the melody, created the beat. If you made the beat you’re considered a co-writer of the composition which means you’re entitled to a share of the publishing.

Typically publishing is split 50/50 between:

• Writer’s Share (you as the songwriter)

• Publisher’s Share (you or a publishing company that handles the admin)

Don’t give away your publishing unless you’re being compensated for it. In most cases producers keep 50% of the publishing on tracks they create the music for. If you're giving up a portion to the artist or label make sure it’s clearly defined.

Also keep an eye on mechanical royalties which come from physical sales and streaming. Some labels try to include caps that’s why you should always aim for 100% of the statutory rate for your portion of the publishing.

Final Thoughts

As a producer you’re not just making beats you’re building intellectual property. That beat you made in your bedroom could generate income for years to come. So whether you’re working with a major label or an independent artist, understand the business and stand up for your value.

Having a strong producer agreement is one of the smartest moves you can make in your career. Because making music is dope - but getting paid for it? Even better.

Need extra help with reviewing and negotiating producer agreements, collecting your royalties, or anything else music business related? Fill out our contact form and we will get back to you!