Answers/Glossary/Producer points
Glossary · Contracts
Producer points
Producer points are a producer's percentage share of the sound recording's income, expressed in points where one point equals one percent. Points are separate from any songwriting share of the composition and from the producer's upfront fee.
"Points" is record-business shorthand for percentage of the master. A producer with three points on a recording receives 3% of the defined revenue from that recording. In label deals points are usually calculated on the artist's royalty base and are often payable only after the recording costs have been recouped; in independent deals they are more often a straight share of net receipts.
The reason points exist as their own concept is that a producer's contribution can be split across three separate negotiations, and conflating them is where independent deals fall apart.
- The fee. A one-time payment for doing the work, owed whether the record earns or not.
- The composition share. A percentage of the song, earning performance royalties through ASCAP or BMI and mechanicals through The MLC, potentially forever.
- The points. A percentage of the master, earning from Spotify, Apple Music, downloads and SoundExchange.
These are independent levers. A producer might take a large fee and no points and no composition share. Or no fee, a composition share and points. The Music Modernization Act's Title III, the AMP Act, gave producers a statutory route to receive a share of SoundExchange digital performance royalties directly, through a letter of direction from the artist.
The misunderstanding: assuming points follow the songwriting split automatically. They do not. A 50/50 songwriting split says nothing about the master, and an agreement that mentions only "50%" without saying which copyright it refers to is an argument waiting to happen.
Name which copyright every percentage refers to, in writing. Artist's advice, not a lawyer's.
Related terms
- Songwriter splitA songwriter split is each writer's percentage ownership of a musical composition.
- Sound recording royaltyA sound recording royalty is income earned by the specific recorded master of a song, as opposed to the underlying composition.
- RecoupmentRecoupment is the process by which a label, publisher or distributor recovers money it advanced to an artist out of that artist's…
- Exclusive beat agreementAn exclusive beat agreement is a contract in which a producer stops licensing an instrumental to anyone else and grants it to a…
Definitions on this site describe the United States system. I am an artist who has been through this, not a lawyer.
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