Words In Motion
Spellbound - Vol IV Iss IV
© June 2000
From Bernhard S., Nailsworth, SA, Australia -
A question for you, Iva: A few issues ago I noted that you were shopping
your new work around to various producers - an 'out-sourcing' project
you called it. I always thought that producers basically made their money
from the royalties arising from the sales of the products that they work
on, but is that not the case? The above statement leads me now to believe
that maybe they are paid like the every day person on the street pays
someone for their services. Just a question arising out of curiosity!
Iva's answer -
Generally speaking - there's no great industry mystery - producers are
paid a fee. Usually, per track or it might be an overall fee for an album
project. That fee is usually calculated on a per track basis. It is an
advance against a percentage royalty of sales, in the same way that artists
get an advance from a record company against sales.
Let's say, for example,
Paul McCartney gets 20% of the retail price for each CD. But he might
get advanced, say, one hundred thousand dollars. That means that every
CD that's sold, 20% of the price will go back into the record company,
on his behalf, to pay back the $100,000. Once the $100,000 is paid back,
he then starts receiving actual profit. If the record doesn't sell, of
course, he ends up still with $100,000 and it's tough for the record company.
Similarly, a producer might get ten thousand dollars a track. He might
get one percentage point of the retail price. That will have to come out
of the artist's percentage, so if Paul McCartney gets a 20% royalty, he,
in turn, would have to hand on that 1% to the producer. But then he might
have to advance the producer $10,000 a track for 10 tracks. That's one
hundred thousand dollars. At 1% of every CD sold, that advance fee for
the producer will get paid off and once they've accumulated enough sales
that the 1% amounts to, then he will start receiving royalties.
People like David Lord are still receiving royalties from all those various
albums. I think it would be very rare these days that a producer would
just accept a fee. I think it's a combination of, "I need some money
now to pay for the work I'm going to do in case this thing doesn't sell.
But, then if it does sell, I'd like to enjoy some benefit from that."