Fair Compensation When Recording

Editor's Note: This article is one in a series detailing information from Emily White's book How To Build A Sustainable Music Career And Collect All Revenue Streams

Before you start recording your next project, get the finances figured out. Trust us — you'll appreciate having everything in order so you can focus entirely on making the best recording possible instead of worrying how much it will cost, if you need to pay everybody the same, or any hidden expenses that are going to stop you from getting exactly what you want. 

But if you won't take our word for it, take Emily White's. As a manager, White has overseen all kinds of recording budgets and represented people on all sides of the equation. 

But what exactly are the different costs and kinds of compensation you should consider? Well, if you're a one-person-band recording at home, you may only have to worry about making sure all of your copyrights are registered and decide how you'd like to pay yourself from the money your music makes. But what if you have other collaborators? Session musicians? A producer? What if you're trying to record covers?

Here are just a few of the things you should consider, according to White:

• Master Recording and Publishing Rights
• Traditional Master Ownership
• Extra "Points"/Percentages for When You Truly Can't Afford Their Cash Rates
• Points and Percentages for Producers and Mixing Engineers Who Also Get Fixed Rates
• Having People Sign a "Work For Hire"
• Songwriting Splits for Legitimate Songwriting Credit
• Sync Placements And Master Rights
• Flat Fees for Remixes and New Arrangements
• Cover Song Compensation
• Agreements Between Who Owns What in the Group/Band

As you can tell, there's a lot to take in. But don't get overwhelmed! Not all of this will apply to you, and once you've dealt with it a few times, you'll start to speak the language like it's second nature. If you want more in-depth info on each point, we recommend checking out her book. But let's look at one of the most-discussed topics in the list: points and percentages for collaborators. 

Points and Percentages When Recording

It's pretty common in music for different collaborators on a project to earn a percentages of the money that recording makes. (Not everything it makes — publishing is a different subject, but for simplicity's sake, just think the money you get paid from your distributor for when your music is streamed or downloaded). 

Keep in mind that "points" and "percentages" are strictly related to revenue and not ownership. This is an important distinction to make, as some things require you to get approval of all owners of a recorded work. That means if engineers, producers, and others actually owned the recording, you'd have to track them down for certain uses. But if they have "points," it means you retain the rights to make all those decisions without them as the owner of the master — they're just entitled to make money from it.

In many cases, especially if you're just starting out, you'll be dealing with collaborators who are cool with a flat fee and not taking a percentage or "points" on the backend. That's because it can be cleaner and guaranteed money for them. If they're a producer or engineer who makes a living maintaining a steady line of work, it might be more worthwhile for them to get paid a per-track rate than take less and try to continually track down money months after the project comes out.

And if they are getting points on the backend, they probably have somebody helping them administer this. 

"For a point of reference, I manage producers who are in some of the biggest bands in the world," White says. "These are established 'names' with extensive reels and recording resumes, who will work within budgets. But despite their stature, generally speaking, they’re comfortable with a rate of $1,000 per track plus their standard producer points, which we’ll discuss. I’m throwing this out there because unless your producer is at that level, be mindful of being overcharged. Again, this is negotiable, but it crushes my soul when I see new producers charging an arm and a leg to artists when they don’t have the reel/resume/CV to back it up."

What about percentages of master recordings?

"A local/new producer generally receives 1 to 2 percent on the master recording," White says. "Someone with a few titles under their belt should receive 3 percent. A producer who has worked with national acts should receive 4 percent. And your Mark Ronsons/St. Vincents/Dr. Dres/Rick Rubins of the world are entitled to 5 percent. Please reread that last sentence. If you are not working with a producer that everyone in music has heard of, and the producer is receiving their full cash rate up front, I do not feel they should be receiving more than five points."

So, from a practical perspective, think about what makes the most sense for you as an artist or producer. Yes, you could potentially own a very small percentage of a project that blows up. Or, you could try to keep things clean and simple. It's up to you.

But you need to have it all squared away before the red light turns on. Make sure that you have agreements put in place — there are plenty of affordable resources and templates around this kind of thing. "Work For Hire" notices are incredibly common and make sure that you protect the actual ownership of the recordings. 

Read more from Emily White here.