The Business of Making Beats
What determines price? Factors include the producer’s credentials and the artist or label they are engaging. “It’s all negotiable, especially if the artist or producer is a platinum-selling one.”
The process is multi-layered. “It starts with a producer and his or her music, so we initially own the masters to each beat,” said Hill. “We then negotiate with major record companies or independent labels for royalties and up front costs of the music itself, therefore, retaining some type of residual earnings to the music and credits for number of units sold.”
Simply put, it’s up to the producer to negotiate a deal with the most favorable terms. Some like to set the price of the track and release all rights, while others will ask for money up front along with a percentage of record sales revenue, known as points.
“I can tell you, it’s a tough conversation to have when you are a beginner, ” Hill said of negotiating the right contract. He authored two books to help industry hopefuls navigate the hurdles, The Amazing Music Formula and Record Deal Marketing.
When a producer creates a beat there are two copyrights that come into play: one in the sound recording and one in the underlying musical composition, beat, melody or song. According to Collins, “it is best for a producer not to sign a contract that just gives the beat away as a work for hire for a fixed dollar amount and nothing more. That would be betting against yourself.”
He advises retaining some rights in the sound recording copyright and the song copyright and entering into a standard producer agreement. Although a producer agreement might require that the sound recording copyright be transferred to the artist or label, the underlying song copyright should be retained by the producer.
For songs in which the producer creates the music track and a rapper or singer creates the lyrics, ownership rights are typically evenly split, explained Collins. “A hit single on the radio can generate a lot of money for the producer/writer,” he said. Such an arrangement allows for the producer to benefit from the popularity of the song, enabling him to collect royalties throughout the song’s life as it is sampled, included in compilations, and requested for film contracts, etc.
Producers need not be attached to a record label, or have an agent to make it in the business. What they don’t want to be without, however, is a lawyer to review the contract. “It’s very important for a producer not to sign anything other than an autograph, without having his or her lawyer review it first. Otherwise, he or she risks giving away valuable rights,” said Collins. “There is nothing worse than hearing a big hit on the radio that you produced and watching everyone else get fame and fortune, and you get nothing.”
For sure this career track is not for the faint of heart. “Don’t let the naysayers who don’t like your music stop you from pressing on. In 1999 when I was starting out, my music was horrible,” said Hill. “Practice does not make perfect, it makes for consistency, always remember that. I learned a lot and my dreams are coming true.”
