- Delivery- Producer will deliver to the label 12 recordings.
A good negotiation would be to split the album in half. In other words, the label can make this deal for only 6 songs and re-negotiate a deal for the next six songs. Assuming this is the first time the label is working with the producer, making a deal of 6 songs will give the label a chance to reconsider working with the producer if things do not go well. If the change is implemented, the label would have the ability to consider how well they worked with the producer and if the label still believes the producer is creating the right sound for them. The label would also negotiate to ensure that no pre-recorded works are used or to consider them otherwise work-for-hire.
- Royalty- Producer will receive a royalty of 5% of the suggested retail list price of any record embodying the Masters, escalating to 5.5% on sales in excess of 500,000 units, and escalating to 6% on sales in excess of 1,000,000 units (“the “Royalty”)
Royalties need to be clarified. The 5% needs to be clarified as to where it is coming from. A counteroffer that aligns with the artists’ goals would be royalty of a consistent 5% of the artist’s 15% royalties in their all-in deal with the record label. This is due to the collaboration and creative involvement of the producer. However, this does not include the previously noted increase of a percentage dependent on the number of units sold.
Confirming how the 5% is taken makes sure the artist confirms their own percentage of royalties as they are also getting a specific percentage of royalties in their own deal with the record label. A con with this agreement is that it could mean the artist is giving away a royalty percentage even if few units are sold. However, this agreement aims to continue a working relationship and ensure the producer gets a royalty from their creative input, particularly if a song does extremely well.
This would mean that out of the 15% approximately, 75% would go to the producer to clarify the monetary breakdown, and 14.25% would go to the artist. A pro for the producer in this agreement is that as the producer is also being paid a fee for production and recording, they are receiving the money no matter if the songs are successful or not. Due to the concept of taking 5% to 15%(meaning the producer would be getting less than if they were getting 5% and the artist was making 10% of the total 15%), the below clause would be important to negotiate to help ensure this percentage of royalties breakdown is agreed upon by both parties. During negotiations, a range of percentages that the label would be comfortable with would be 5%-8% of the 15% of the artist’s royalty income in their all-in deal with the label.
- Advance: Producer will be given 50% advance of the Fee upon commencement of the recording sessions, 25% upon producer’s delivery of a rough mix of the Masters to Artist, and 25% upon delivery of the completed technically satisfactory Masters.
The advance amount upon commencement is a bit too high. The advance amount would be lowered to a 25-30% advance fee. This will motivate the producer to put in the appropriate work instead of receiving half the money at the start.
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