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How Music Producers are making Money?

Music producer is responsible for the feel and overall sound of the album or record. They are helping with the creation and delivery of recordings. At the same time, it’s their job that the outcome is the best that it can be when the artist or band is mastering a song or the entire album. This role demands expertise and talent. The producer usually gives direction and performance advice to musicians and ensuring that the sound engineer is right on track.

Their job also includes overseeing every single detail of the album or a new single to be released. Of course, every music producer wants it to become a major hit once released.

With this being said, how producers are paid for the work they do?

Producer Points Definition

There are producers who are being paid on flat fee or sometimes, in advanced on the work they will render. However, most are being paid by points or royalties. Producer points can be referred as album points, producer royalties or producer percentage. Basically, this is the percentage of revenues that was earned because of their hard work.

Point System

1 point is equivalent to 1% and it could be awarded to many different ways.

  • They can be paid on the album like for example, the producer receives 3 points or 3% of royalty from every earnings of the record
  • It can be paid on a particular song of the album. Assuming that the producer receives 2 points on 5 songs on an album with 12 songs, then they’d get 5/12 of 2% of the earned royalties from that album

Deals are structured as well so by that, the points that the producer will receive grows accordingly as the album meets its sales threshold. And it is a common practice among producers to ask for more points at least for those who know the ins and outs of the industry and for business-savvy people. While 3% doesn’t seem that big, it can actually be a big payday for the producer if the album or song turns out to be a blockbuster hit.

So for example, if the producer earns 1 point for the soundtracks played in stores or websites such as D2 stores, they are actually getting a cut from it.