The Legal Beat: The Music Producer Agreement

This article discusses some important provisions in a music producer agreement to produce masters for an artist.

Get it in writing: Independent artists or their production companies or labels should enter into written contracts with music producers to confirm the terms of the engagement. And it’s best to have it signed before the producer begins work. However, it does not always work out that way. It once took me several years to get a very well-known producer to sign his producer contract with my client. 

Engagement: The agreement must specify how many masters will be produced.

Term: The Term will typically begin on full execution of the agreement and end when final mixed versions of the Masters are delivered and accepted.

Exclusivity: The producer is often retained on a non-exclusive, first priority basis.

Recording costs: Music producers are paid “record one royalties” meaning they are paid for every album sold. On the other hand, artists only receive royalties after recording costs are recouped.

Advances: Usually, the music producer will receive a non-refundable advance against future royalties. The amount often depends on how successful the producer and artist are. Sometimes the advance is paid in installments such as half on signing and half on delivery and acceptance.

Royalties: Although producer royalties are negotiable and not set by law, the standard is 3% of the price of Top Line Records (other than Audiovisual Records), on which royalties are payable, sold thru normal retail channels in the United States (“USNRC”). Superstar producers may receive 4%. From the producer’s perspective, in this era of streaming with companies such as YouTube, Apple Music, and Google Play, there are some things the producer should do to make sure he or she gets all the income he or she is entitled to. Therefore, a producer should sign up with a performing rights organization (“PRO”) such as ASCAP or BMI to collect performance royalties, Harry Fox Agency to receive a share of mechanical royalties and get the artist to sign a letter of direction to Sound Exchange so the producer is paid a fair share when content is played on a non-interactive digital source, such as Pandora or Sirius XM.

Employee for Hire: Producer agreements must specify that the producer is an “Employee for Hire” and the artist or label owns the masters.

Credit: The producer will give the label or artist the right to use his name and approved likeness in connection with advertising and promotion. And the label will agree to give the producer customary credit.

Whether you are a producer or an artist, it is important to have your producer contracts prepared and negotiated by an experienced music attorney.