Written by D-1

Earlier this year, DJ Pain 1 interviewed one of Wiz Khalifa’s go-to producers, E. Dan of ID Labs, who went into details with his experiences of properly getting paid for his contributions to projects. E. Dan explains that “They didn’t treat it like it was an album, which is just their way of not paying me a whole lot.”. This later opens the conversation within the producer community where fellow producers such as Sonny Digital, Rook of the J.U.S.T.I.C.E. League and more detailed similar experiences with major labels.

So to help share insight for fellow producers who may be unfamiliar with the placement process, I decided to to interview an attorney from the New York City area named, Cassandra Spangler. Cassandra is an entertainment attorney who has been practicing law in NYC for more than 8 years, working in the music industry for nearly 20 years, and is a Professor of Music Business.

How do labels to avoid paying producers their appropriate rates?

Artists often sign record deals where they agree to receive a lower royalty for projects that are classified as “mixtapes” or “promotional” than they do for “albums.” Producers then sign agreements with artists where they agree to be paid under the same royalty terms as the artist is paid by the label, which results in the producer receiving a lower royalty rate for those projects as well.

What role does an artist’s royalty rate with their label play into the producer’s being compensated?

The way royalty rate may be affected when a project, that is as a “mixtape”, would be treated as the equivalent to an “EP” in legal/industry terms; which will be subjected to royalty rates and used as promotional purposes.

There are two different types of rates of how artists are being paid: the standard album rate between 10-15%, while the label gets the rest and there’s the most recent model of net profit sharing where the splits are 50/50 or 60/40 between label and artist.

Producers will typically get paid 2-5% royalties (out of the artist’s share) under the traditional model or potentially more under the net profit model.

Does the royalty rate the artist signs with their label affects the producer publishing splits?

No, the artist’s record agreement generally should not affect the producer’s publishing. It is standard for producers in hip-hop to get 50% of the publishing, which is handled separately from the artist’s publishing (although the artist’s publishing might be affected by the artist’s record deal).

How does the royalty rate differ from the artists/producers publishing?

The royalty rate is paid by the owner of the sound recording (the “masters”) to artists and producers who performed on the recording. This is generally paid by a record label and includes a % of the label’s income from physical sales, downloads, and so forth.  The publishing deals with ownership of the musical composition, which is separate from the sound recording. This is usually split between songwriters and producers and administered for them by music publishing companies. Publishing income includes public performance royalties (collected by ASCAP/BMI/SESAC), mechanical royalties, licensing income, etc.

If the producer gets a placement on a project that’s classified as the mixtape, does that leave the producer entitled to little to no royalties on that project?

The producer’s royalties from a mixtape will depend on the terms of the producer’s agreement with the artist for the placement as well as the terms of the artist’s contract with a record label, if any.

How would you suggest producers that combat these practices to be paid appropriately?

I would suggest that producers be sure to always retain their fair share of publishing (usually 50%) so that even if the royalties are limited, they are still making money on the publishing side. I would also suggest that they have an attorney draft and review any written agreements so that they are clear on what they are signing and what their royalty % will be.

Follow Cassandra on Twitter and reach out to her for more feedback or questions you have.

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