What is a Production Deal?

by Robert Marshall

A production deal is an agreement between a producer and an artist to produce a record. Simple, right? Just like the search for a record label, the decision is much easier once the artist understands what types of deals are available, and which one works for the artist’s vision.

No two production deals are exactly alike, but there are three categories to which most of today’s deals are trending: the Mini-Record Deal, the Joint Venture, and the Work-for-Hire Deal.

The Mini-Record Deal

This production deal bears striking similarities to signing on with a record label, as you might have guessed. Artists sign to the production company, serve the term of a contract, and, as in a label deal, sacrifice a percentage of their income for the services of the producer: 85% of record sales, and 50% of the artist’s publishing (if the artist is the songwriter). In exchange, the producer pays for the entire cost of production.

Next, the producer then pitches the finished product to major or independent record labels in order to have the album distributed. There are three possible scenarios here:

1. Master Buyout- In this deal, the record label buys the completed masters and pays the same prices to the artist as if they had signed to the label (~$25,000/song), along with the standard royalties of 12-14% of the suggested retail list price for the songs. In some cases, the label will sign the producer’s production company. The artists receives a “Side Chain Letter,” stating that the artist will perform exclusively for the label the producer signed to.
2. Master Licensing Deal- This deal is the same as the master buyout, with the exception that the produced albums are NOT sold to a record label. Instead, it is licensed, with the option of being purchased at a later time. (Check out my earlier blog on music licensing @ http://www.peggystill.com/Articles/What-is-Music-Licensing-and-How-does-it-Work-for-You-as-the-Songwriter.)
3. Pressing and Distribution (P&D) Deal- The last of the Mini-Record Deal options. In this case, the producer is in the process of changing his production company into a record label. However, the producer still must find an independent or major label to distribute his company’s masters to.

The Joint Venture

The Joint Venture deal is the most collaborative deal between the producer and artist, and is the best choice for artist beginning their careers. They share responsibilities and finances for the production of the album, and remain mutually responsible until the partnership is dissolved. This usually happens when a label wants to sign the artist but not the producer. The artist pays the producer a nominal amount for his work, about $300-$500 per song, and the producer receives 5%. The artist also benefits from the producers expertise and industry contacts when it comes time to distribute the record. A typical budget for the Joint Venture deal is $5,000-$40,000.

The Work-for-Hire Deal

In the case of the Work-for-Hire Deal, artists essentially hire a producer at a flat rate per song (usually between $2,000-$3,000). Once the tracks are produced, the producer’s job is done, and has no claim to the master recordings.

The best choice for the artist seeking a production deal depends on the artist’s goals and financial resources. For example, a start-up artist may want to hire a producer to help create a demo, but given the cost per song, it may be better for him to pursue a Joint Venture deal to produce an EP. Again, it is up to the artist to determine which deal is best for him or her, and to fully understand the contracts presented by each of these deals before signing.

Works Cited:

. N.p., 08 Jun 2007. Web. 21 Jan. 2012. <http://theproducersden.com/site/2007/06/08/the-artist-producer-production-deals/>.