Music or record producers are often paid advances by Artists after lending out their services. These funds are recoupable advances that goes against record points on the master recording. The Producer’s advance is based on the recording project of the Producer’s service’s for producing an album or a song
50% of the advance is paid to the producer, prior to the recording sessions and the other remaining half once the entire song is fully produced thats gone through the final Mix stage. The producer would need to recouple its advance just like the artist before they are paid any back end royalties on the master recording which is a percentage of the artists royalty points. The producer is also entitled to a share of the Artist’s SoundExchange Royalties, Streaming and Master Use License fees stated in a standard Producer Agreement.
Most producers negotiate around 2% to 3% based on the PPD (Published Price to Dealer). Superstar A-List record producers can demand as much as 5% or 6% based on their track record of making hits. Record producers are in charge of supervision and directing the entire recording project that typically works alongside the engineer behind the mixing board in the control room.
The producer works closely with the vocalist, Musician’s and the Engineer in the studio, merging ideas, that provide technical direction and musical insight. Basically a Producer is like a director in a movie that is responsible for bringing everything together as the finished product.
Some record producers play a role in the songwriting and arranging process, some are technical on the engineering side while some are completely hands off. The modern Music Producer is likely to possess all this these days depending on their skill level and genre. Sean Diddy Combs and Rick Rubin are examples of hands off Record Producer’s that are essentially creative directors as they aren’t necessary the person that would program beats or arrange the music. They manage and control recording sessions and coach the Artist , making sure that they are getting the right energy and performance. Jimmy Douglas and Syvila Massy are technical producers that wear both the record producer and Engineering hat.
Let me chip in this unpopular way to make money off your production(s). To make money out of your music producing skills, the quick way is to ghost produce the tracks for people.
Now, ghost production is basically producing music for someone without being given the credits, i.e. the person for whom you produced the track gets all the credits. The bonus part is that you get an amount worth much more than the value of the track, since the people who will see that track won’t ever get to know that you were the person behind it, hence to compensate, the client pays almost double (or more) in order to get his/her track ghost produced.
There are many sites those give opportunity to young artists to make money (in order to invest in their own projects) through ghost production.
Hope this helps.