record producer

Different types of record producer deals

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While the role of a record producer is typically understood by most artists, the business aspects are more confusing. What follows is a brief rundown of when a producer may first get involved in your career and how the deals are structured.

While the proliferation of home recording tools has enabled many talented artists/producers to record quality masters right out of their own bedrooms, there are still just as many talented songwriters/performers like you who need help from an experienced record producer.

An experienced record producer not only understands the technical and creative aspects of bringing a recording to life, they also understand – should you ever advance your career to signing with a record company – how to manage budgets, deal with union forms, and get guest permissions to use other artists. In short, they are expert project managers and know how to deliver a commercially viable record on time, on budget, and at the desired level of quality.

While the role of a record producer is typically understood by most artists, the business aspects are more confusing. What follows is a brief rundown of when a producer may first get involved in your career and how the deals are structured.

When and how a producer may first get involved

A record producer’s involvement in your career may begin at a number of different junctures and be handled in a number of different ways. The most common scenarios include:

  1. A barter system arrangement
  2. An on-spec agreement
  3. A DIY deal
  4. A production deal
  5. A record label deal

Barter system arrangement

When artists are just starting out and have little or no money to pay for a recording studio and record producer, their first involvement with a producer might exist under a barter system arrangement with a local producer.

A barter system deal is a straight-forward arrangement where the goods or services of the artist are “exchanged” (i.e., used as currency) for the goods and services of the producer. Just be sure that the terms of the arrangement are clear and there are no misunderstandings about additional ownership of songs, recordings, and/or hourly fees owed.

On-spec agreement

Another scenario for artists at the beginning of their careers is the on-spec deal.

The on-spec deal is a situation in which the artist makes contact with a local producer/studio owner (perhaps one who is a friend, fan, or close relative of the band) and arranges to record at no cost under the terms of an informal agreement. Such an agreement may state that if the band gets a recording agreement, they will pay the producer a predetermined flat fee for services rendered and consider him or her as a candidate to record the final product for the label. If the artist never gets signed to a recording agreement, it never owes the producer any money.

Another agreement could state that the artist gives up ownership in the master recordings or shares in certain songs for a specific term. This way, when the artist makes money down the line, the record producer also gets paid. Warning: be sure to understand the terms of any agreement before signing and to speak with an attorney or consultant if unsure about anything.

Do-it-yourself / work for hire approach

Moving on, when a young artist is resourceful enough (or lucky enough) to have the funds necessary to pay a producer at their full going rate, their involvement with a producer might exist under a do-it-yourself/work made for hire approach.
In this scenario, the artist makes contact with the producer/studio owner via referrals from other local indie artists, recommendation from an industry source, or via a directory on printed/online resource. After discussing recording philosophies, listening to recorded tracks, and examining the facilities, the artist hires the producer for a flat fee to record tracks perhaps even to mix and master the recording.

Just be clear that the producer is hired by you via a contract that explicitly states that he or she is to perform a job for a fee, and that he or she does not retain any rights in the sound recording nor own any shares in your compositions. Consult an attorney if needed.

Production company deal

Moving on in our discussion about when a producer’s involvement may begin, let’s take a look at production deals. These are situations that exist when talented young artists can show they have the potential to be a worthy business investment (i.e., they have excellent songwriting or performing skills, exceptional looks, and a unique sound).

In a typical production company deal, the production company discovers, grooms, and records the artist, and then enters into a recording agreement with a label on the artist’s behalf. The production company receives a royalty rate for sales from the label, which it typically splits with the artist 50/50. The production company also typically receives a recording advance, and if anything is left over after it covers its recording expenses, it will usually be split 50/50 as well.

The record label deal

Finally, when artists can prove that they are self sufficient (i.e., they can record and distribute their own albums, build a strong fan base, and make sales), they might be offered a record label deal to help their career to continue moving forward.

In a typical label deal, the artist is obligated by contract to hire an experienced record producer to help guide him or her through the recording process and to deliver a product that has the commercial sales potential to meet the company’s expectations. The artist receives an advance, typically known as the “recording fund,” from which all recording costs (including the producer) must be paid. Additionally, the artist receives an artist royalty rate (typically structured as an “all-in” royalty) from which the producer gets a percentage share. Producers typically also earn a prorated portion of master fees from the licensing of the recording and in some cases may share in the copyright of the songs.

Since the record label deal is still held as a coveted accomplishment for young artists who dream of world-wide success, and since the business issues can be far more involved than at any other level discussed, I expand upon the record label deal scenario in more detail in my book, Business Basics For Musicians: The Complete Handbook From Start To Success. I hope you’ll check it out.

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music musiness basicsThe contents of this post are © 2015 by Bobby Borg All rights reserved. Not to be posted, printed, or used in any other way without proper attribution to Bobby Borg and Disc Makers.

Bobby Borg Is the author of The New Book Business Basics For Musicians: The Complete Handbook From Start To Success (Hal Leonard) available at Limited time special offer – get the book, CD, and DVD for only $21.99 (a $70 Value)!

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7 thoughts on “Different types of record producer deals

  1. I think the biggest thing to grasp , is that with all of these types of deals the details of the agreement are clearly defined and agreed to at the beginning of a project. Im currently in a situation that is the direct result of the opposite. 4 years into recording the studio owner attempted to unilaterally change the understood terms of our arrangement. I refused to sign this contract and am now being sued. Be careful who you work with and be certain to obtain the agreement in full detail in writing before beginning work with anyone.

  2. I’ve been offered a Production Company Deal from an established company in Nashville. They want to ‘develop’ me as the artist. I have issue with the deal because they are asking me to pay for the recording – which includes the producer, studio musicians, radio release, Internet promotion. ($6,500 for a single, $30k for 10 song cd) They also have the 50/50 split of any ‘NET’ income. In other words, NET means after they recoup all of their expenses. These expenses are not all laid out in detail in this agreement. I did the math…. The #1 single on the charts today barely gets any TRUE sales or downloads. Much different than 25yrs ago. (Platinum selling record doesn’t mean it sold a million!!!!) If I did a single for $6500, it would take at least 15-20k downloads to get my $6500 back. This is without knowing any phantom expenses I might owe the production company. Basically, it’s clear to me that the Production Company just wants to make $$$ off of me up front and they don’t really give a s*^t about my music or me as an artist. I’ve been fortunate enough to have songs published and placed in numerous TV shows and Films. I did this by recording my music in my own studio without the assistance of one of the big companies. The companies are using the “We Want to Develop You as an Artist” sales pitch to get you, the artist, to spend $$$ creating another recording or demo. This is how the major studios keep their doors open. Artists are better off building a decent recording studio, learning how to perform music on several instruments, developing their songwriting, and then ultimately spending their $$$ on self promotion. At least then if you succeed (or not). You only have yourself to blame. To me, there is no blame. I have to much fun exploring my passion of writing and recording music.

    1. Nick, stay well clear of this kind of deal. These type of companies probably formed as groups of singers/songwriters who have had some success and know the business side. They may have been signed to a label or still are. Then they run out of ideas and burn themselves out. Other people are coming up with good ideas so why not get a free ride? You come along with a bunch of completed songs that are fine, but NO, a few things need changing–change a word take a third! They all want a slice of your pie. My advice is where ever possible meet people FACE TO FACE. It’s easy to make mistakes–when you’re desperate– I did ! These days songwriters in Nashville have to finance their own demos, the publishers won’t pay for them now things have got that tight and people look for anyway to make money out of you–yonder comes a sucker. Find people that really believe in YOU.

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