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Producers play a critical role in the music industry. A skilled producer can be the deciding factor between a track becoming a viral hit or fading into obscurity. Behind every successful record is a producer agreement that sets the foundation for the collaboration. Here are five practical tips for producers, and their managers, when negotiating producer deals.
1. Record companies are often slow to pay producer advances. You need to be patient and ensure you don't burn a bridge while you wait for your cash (within reason). To speed things up, ensure you execute the producer agreement, issue your invoice to the label, and circulate any applicable tax forms (such as a W8 or W9). Anecdotally, this process can often take several weeks if not months (not days).
2. If you can command it, a fee that is either non-recoupable or 50% recoupable is better for you. That simply means you will receive your royalty sooner (as opposed to a fully recoupable advance). Bargaining power is important here.
3. If you give others your beats for little to no fee/advance, make sure you are protected if the track takes off. For example, try to get a higher royalty/percentage of net receipts. You can also work "upstream" language into the contract. If negotiated properly, that means that, should the track get "upstreamed" to a major label (for example), you could potentially get your full fee/advance at that time (typically payable out of the artist advances).
4. Don't forget your letters of direction (LODs). In your producer agreement, the artist should be executing a SoundExchange LOD, which directs SoundExchange to pay the producer a certain % of the featured artist royalties. In addition, a label LOD will ensure that, when a record label is involved, the label will pay your royalty direct (rather than the artist).
5. If you truly believe in the track, negotiating higher publishing, royalties and SoundExchange is typically much better in the long run than focusing on the fee/advance. Think of these revenue streams as your retirement plan.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.