Producer Points for a Record Deal

How Music Producers Are Paid for Work

Music producer adjusting sound equipment
UpperCut Images/UpperCut Images/Getty Images

music producer is a person in charge of the overall sound and feel of a record or album in order to help create and deliver quality sound recordings. Music producers make sure that when a band or musician is recording a song (master) or an entire album, the end product is the best it can be. The role includes wearing many hats, including giving performance advice and direction to musicians or making sure the sound engineer is on track with the desired end result.

Much like a movie director would for a film, the music producer's role involves overseeing every detail of a song, in hopes of producing a potential hit. But how do producers get paid for all the work that they do on an album or track?

Talking Business: Producer Points Definition

Producer points are also sometimes referred to as points, album points, producer percentage, or producer royalties.

Most producers are paid a flat fee or an advance for their work while some producers get paid in royalties or points. Producer points are the percentage of royalties a producer gets for working on an album. The easiest way to look at points is to consider one point to be equal to one percent. Points can be awarded in a few different ways:

  • Points on the entire album (for instance, the producer gets 3 points on the whole record, meaning he gets 3% of the royalties).
  • Points on particular songs on the album (if the producer gets 2 points on 5 songs on an album that has 12 songs, he gets 5/12 of 2% of the royalties for the album).

    Sometimes points are paid based on the dealer prices for the album, and sometimes they are paid on the retail price.

    Keep in mind that points are not awarded to all producers and that the number of album points actually given can vary greatly, from one point to up to five points or more, depending on the producer.

    Sometimes, deals are structured so that the points a producer receives increases as the album meets certain sales thresholds. Getting any deal regarding points in writing by signing a music producer agreement is important before the recording process begins. 

    Music Producer Agreement

    A music producer or the producer’s agent may choose to sign a deal with an individual artist, band, a production company, or a record company. The agreement may be for just a master or an entire album. Some of the following key terms may be addressed in a producer agreement:

    • Responsibilities
    • All In Record Deal
    • Specific Producer Points
    • Record One Royalties (whether producers are paid on all records sold, without recoupment of recording costs) 
    • Other Royalty Deductions
    • Advances
    • Rights and Ownership of Masters
    • First Right of Refusal Clause

    Music producer contracts and agreements can protect everyone involved in the recording by explicitly detailing duties and compensation. For more information that can help both musicians AND producers figure out a fair deal, read about ​8 issues to address before you sign a music producer contract.