Producer Artist Agreements: What Are They?
While artist agreements largely define the relationship between a group and their record label, producer artist agreements are used to define the relationship between the recording artist and the producer. These agreements typically outline the rights and responsibilities of both parties in detail. The purpose of a producer agreement is to clearly delineate production requirements and expectations , cover all legal issues associated with such production, and to protect the producer’s contribution to the underlying composition. Getting the details correct at the outset can form the basis for a strong working relationship that avoids disputes later on.
Producer Artist Agreements: What You Need to Know
A producer artist agreement is a document aimed at clearly defining the obligations of the parties. Sometimes they are used with all production companies, while other times they are tailored to individual companies. In any case, they should be of use to the artist and producers alike.
The Basic elements of the written agreement should contain the following:
Payment: The payment provisions (i.e., producer share/royalties) should be clearly defined. Even if the artist or producer is assuming a higher share of the liability, back up the provisions with clear benchmarks so that there will be no dispute as to the amounts due.
Duration: How long will the producer have to complete a project? Independently of the scheduling possibilities of the artist, a producer may have his/her own work commitments, and thus will require a specific period of time to wrap the artistic project.
Services: Particularly the services provided by each party (i.e., studio hours, etc.) must be clearly delineated so that there is no question regarding the deliverables.
Conditions: Likewise, the conditions that each party must perform in order to comply with the agreement should be clearly set out, so that the rights and obligations of the parties are clearly delineated.
Neither party should attempt to pursue rights beyond what it is legally entitled to. The same goes for the obligations the performer under the agreement may have. The performer may not be obligated to any other related rights (i.e., mechanical, performance, etc.) if it is not stated.
In this context, it is important to state what happens in the event the agreement is terminated or expires. A statement of when the agreement terminates can avoid any confusion and additional disputes down the road. A termination clause, which provides for the return of the rights to the performer after a certain period of time has expired, is essential.
The most common timeline for an artist agreement is one year. After one year, the need for the artist’s performance or the producer’s services has normally ended for the given project.
Negotiating Producer Artist Agreements: How to Get Your Way
Negotiating the terms of a producer-artist agreement requires a careful consideration of multiple factors that impact how the music gets produced and who receives the corresponding income. Most of the negotiation will likely be focused on the number of points the producer will receive on the royalty side of the scale, but also consider any advances, how the producer’s expenses and so-called "hard costs" are going to be reimbursed, and how and when the producer will recoup those advances and expenses against its share of the royalties upon release of the song or album. These agreements are often done on a work-for-hire basis, meaning that the producer has no recourse if the album is not commercially successful. Therefore, the agreement often consists of a series of compromises by both parties to ensure that neither party is unduly harmed. For artists, there are three tips that we suggest considering when negotiating with producers: 1. Robbery vs. Reimbursement: While not all producers expect the artist to pay for its expenses and labor (i.e., "hard costs"), those who do should be made to clearly disclose their costs. Under the law, if an artist agrees to pay for hard costs, it is presumed that the artist has agreed to pay those costs. Without (i) an appropriate reference to a specific budget and (ii) an adequate disclosure of the amount of costs along with the nature of the costs, an artist can be taken surprise if its producer spends more than expected. Hired producers may also inequitably inflate their fees if they know that the artist will bear the risk of a profit or loss through hard costs. 2. Demand The Un-Demanded: While a record label may come calling with a multi-album deal, the same cannot be said for a producer hired for a single album. Likewise, while the parties may agree that the artist’s started-but-unfinished project with a producer is the best one since Pet Sounds, the producer may not have the same perspective and may not be willing to work for the artist in the future. Artists should consider asking producers for "first refusal" and "right of negotiation," such that the producer will either (i) be offered its services first, or (ii) be given the chance to negotiate for its services for future projects before the artist offers those services to someone else. 3. No Rights = No Money: An artist can pay 100% of the costs of recording a song and then the label can decide not to distribute the song due to a lack of commercial viability or the dual commercial viability of alternative songs by the artist. The extent of those costs can potentially whittle down the income that the artist would have otherwise received. Thus, while the artist may bear the burden of paying for the producer’s labor, art, and hard costs, all producer agreements should include an obligation for the producer to assign or license its rights to the artist on a non-exclusive basis to allow the artist to take the project elsewhere, such as a new label that may be interested in the finished product. For producers, there are three tips that we suggest considering when negotiating with artists: 1. Know Your Value: If you are a producer, you likely possess an array of knowledge and experience that another producer lacks. For that reason, you should be able to make a case to any artist of how your specific talents will improve the sound of the artist’s work. In today’s music industry, it is important to sell yourself as a brand. Having a strong sound, a roster of specific popular songs, and (if applicable) a list of other accomplishments will go a long way towards helping an artist see the value of having you as a producer on their next album. 2. Loosen Your Grip: While your instincts may be telling you to hold on to that cassette tape you recorded of yourself pitching an artist’s new work to him or her (in order to later tell your friends that you discovered that artist), you need to remember that most artists have not achieved commercial success. Artists are relatively unknown, and therefore, are less likely to be able to afford to compensate you for your producer services up front. This is why producer agreements often consist of relatively small amounts of money for a producer’s services, along with a range of potential future payments based on the song’s success. While these payments might not be much in the short term, if the song generates enough money, the payments can add up. Therefore, it is important for you to remind yourself that you will have ample control over the song’s long-term financial success – and want for that check to clear. 3. Know Your Rights: Whereas point 1 ("No Rights = No Money") applies to the situation where the artist pays for the producer’s "hard costs," this point refers to a scenario where the artist must pay for the producer’s hard costs, but refuses to pay the labor costs. In such a case, the producer may be tempted to hold on to the recording, including any valuable "masters" (to which an artist otherwise would normally have access) until the artist pays his or her bill. However, the producer does not actually own the masters, and thus will have a hard time attaining title over those masters in any future litigation. By keeping the masters, the producer will also create harmful long-term relationships with both artists and record labels. Thus, even if the artist does not pay for the producer’s labor, all rights in the music should be assigned to the artist so that the artist can take the music elsewhere.
Producer Artist Agreements: What Not to Do
Sometimes, it is very easy to be so focused on the big picture and getting the project off the ground that you forget to look at the details of the producer artist agreement and are surprised later that something seems to be missing or doesn’t seem right. Here we present a few common pitfalls to watch out for:
- Ownership of the Musical Composition. If the producer also wrote the music or lyrics, or both, for songs being recorded and produced during the term of the producer’s services, then the producer and artist should be clear on what that means in terms of ownership of those songs. An artist usually owns the composition when (a) the artist is the author of the music and/or lyrics; (b) the artist has acquired the rights to a song from the author in exchange for an assignment; or (c) the artist has hired a person to write a song for them in exchange for an assignment. More commonly, the artist will own the musical compositions on which they have performed. So, for example, if a producer-artist was going to record all their own songs, this provision may be important to capture. If the producer-artist works with outside songwriters, then they will need to discuss this with the songwriter so that the artist has the appropriate clearances when the producer-artist records the music and lyrics.
- Ownership of the Sound Recording. The producer-artist may not want to assign ownership of the sound recordings to the artist, or may want a portion of ownership in return for providing the production services. In the past, a producer would be paid a stream of royalties based on sales of the album the producer worked on. However, sometimes, the producer-artist may agree to receive a stream of royalties based on sales of all the artist’s albums in the future, resulting in the producer becoming an owner of a portion of the artist’s catalog. Occasionally, artists will invite a producer-artist to be a named member of the "gang" or group of friends who comprise the core members of the artist’s musical entourage. For artists who have long careers and a consistent band of musicians as their backing men (and women), "gang" may be a very attractive proposition, indeed, because of the prestige and money involved. But, it is important to note that the deal being made is not for the producer’s services as producer and is not a producer-artist services deal. In fact, the producer-artist may want to consider whether the "gang" time commitment is so onerous that he or she is in effect tying themselves up for what amounts to the same things a producer does, except without the ability to control the release of the recordings. In such cases, the producer-artist would be well advised to negotiate accordingly.
- Exclusivity of Producer. Exclusivity can be a very important element to a producer-artist agreement and should be drafted carefully. Be sure to include language that covers any exclusivity with respect to albums the producer-artist may be producing for other members of the "gang." Some agreements refer to either party being exclusive, when it would be better for both parties to be exclusive. Sometimes, a record company or publishing company will have secured the rights to receive a portion of the artist’s royalties. While it may not seem like a problem to state that the exclusivity ends upon the expiration or termination of the record or publishing agreement(s), it may not occur to parties making an agreement today that majors will become less and less important and that artists will become far more commercially valuable, sometimes even before the expiration of their record agreements. It is all too easy to forget that the provision requires a little thought concerning how the arrangement will actually work over the course of time, rather than simply agreeing to the terms that are presented on a take-it-or-leave it basis.
Producer Artist Agreements in Practice: The Legal Aspects
Failure to adhere to a producer artist agreement can result in lengthy disputes and litigation. Such disputes may arise in a number of different contexts: if a producer is retained to produce an album but the artist does not agree to extend the terms of any previous agreements to produce additional albums; if the producer fails to deliver the master recordings for the album; if the producer has failed to receive payment for his or her services, and so on. In all these contexts, the result can be protracted litigation, particularly if the producer cannot deliver the masters he or she has produced.
If a producer does not have a top shelf lawyer who can negotiate favorable terms for the producer artist agreement, it is likely that the producer will lose shares of the writers share of copyright that is difficult, if not impossible, to litigate after the fact . Arguments against these deductions to the producers artist share are frequently based on the claim that the producer was conceived as doing more services beyond a producer’s normal scope of duties, and that the producer negotiated to go beyond the normal producer’s duties so that the parties must together share certain costs for making the master recordings. This has become a key argument in litigation where the producer has been restricted to performing his or her customary role (as opposed to being asked to serve in some executive capacity), and has worked to produce the masters accordingly. It is the contention of this author that if the producers are asked to perform any tasks outside the scope of producing a master recording, all of this should be carefully delineated in paragraph 2 of the producer artist agreement. At times, lawyers will argue that this is overkill, but it is best for the producer to have a specific list of what a producer will do under the producer artist agreement.
Producer Artist Agreements: Illustrative Example
PRODUCER ARTIST AGREEMENT
This Production Agreement ("Agreement") is made and entered as of ____________ ("Effective Date") by and between ____________________ ("Producer") and ____________________ ("Artist")
RECITALS
WHEREAS, Producer is the owner and licensee exclusive for the territories of _______________________________________________ of the musical compositions and master recordings embodying the songs hereinafter referred to; and
WHEREAS, Producer is desirous of producing an album comprising of compositions written by Artist; and
WHEREAS, Artist is desirous of recording an album of said compositions to be produced and distributed by Producer;
NOW THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties hereto agree as follows:
- TERM. The term of this Agreement shall commence on the effective date, and, unless earlier terminated, shall end on the release by Producer for sale to the public of an album containing the Master Recordings.
- SUBSIDIARY RIGHTS. Producer agrees to furnish and pay for the cost of all Union and private labor, musicians’ scales and union fees, studio expenses, tape stock, mixdown and duplication expenses. The costs of all other expenditures for record production and advancement in various stages shall be borne by Artist from his/her prior royalties in the Recoupment Account of the Royalty Account. All such expenditures shall be deemed Subsidiary Rights and shall be recoupable (as hereinafter provided) from the Royalty Account. An itemized accounting of all Subsidiary Rights shall be provided to Artist upon request and on a quarterly basis.
- SUBSIDIARY LOAN/ADVANCE. The cost of all Subsidiary Rights which are unrecouped as provided above shall constitute an unrecouped loan/advance to Artist of his/her Royalty Account. Artist hereby irrevocably authorizes Producer to recoup the amount of said loan/advance from all income, as it is earned through the sale of the Recordings hereunder, as hereinafter provided.
- RECORDINGS. Producer hereby is deemed to own all rights in and to each of the master versions of the following:
Title: ______________________________________
Artist: ______________________________
5. ROYALTIES. Producer shall pay to Artist royalties as follows:
a. All Advances and Recoupable Expenses are recoupable with interest; provided, however, that all Advances must be paid in accordance with the balance agreed to in the Royalty Account.
b. Royalties are accrued upon the following transactions; Producer advances the payment of royalties as follows:
c. Producer is entitled to recoup from all contract charges paid to Artist in the Royalty Account.
d. Recordings in excess of sixty-five (65) minutes have recorded royalties accrued, at one hundred percent (100%) of Artist royalties less any applicable contract charges, for each Master Recording in excess of sixty-five (65) minutes.
6. AUDIT CLAUSE. Each party shall submit to an annual audit. Neither party shall be responsible for the cost incurred in connection with any audit. Each party shall be responsible for its own internal accounting and bookkeeping systems.
This is a very basic and therefore very limited sample producer artist agreement for only one artist, one album and one territory. Each agreement must be customized and tailored for each individual artist and album project. As you can see, there is no "standard" producer artist agreement. And as I have repeatedly suggested, never use just a boilerplate agreement—use it as a guide only—and have it tailored and fully drafted by a competent entertainment attorney.
Producer Artist Agreements and Technology: How New Tools Change the Landscape
Technology has always played a part in how not only music is created and consumed, but also how those agreements are made and how the rights of parties are enforced. From the advent of the player piano, to 8-Track cassettes, to vinyl, to eight-tracks and cassette tapes, to vinyl, to CDs, to MP3s – music has always been available on a variety of different and constantly changing formats. Similarly, the music industry and the means of its consumption has had to adapt to and adopt every single technological innovation since before the invention of the rubber record master in the 1890s. With the exponential growth of the internet, numerous technological innovations have completely transformed common practices within the music industry. The main power shift has been from the former music industry gatekeepers to independent label managers and artists. By way of example, at one time, in order to gain access to radio play over the airwaves, an artist needed multiple music label representatives to possibly get one of them to curry favor with a radio DJ or GM. Nowadays, with the ubiquity of the internet, an artist can upload a song directly to and through virtually all if not all platforms for distribution and consumption. Musicians and consumers can both market directly to the public through social media. In short, the internet has removed the barriers to entry for all forms of content creation, which has made the former music industry gatekeepers virtually obsolete and easily circumvented. But technological innovation is stretching beyond just retaking control away from the former music industry gatekeepers. Innovations such as digital contracts, blockchain and smart contracts are poised to dramatically alter the dynamics of producer artist agreements and recording contracts. For example, there are now apps and platforms that allow not only automated or digital versions of recording agreements to exist on the blockchain, but even smart contracts. Smart contracts are designed to automatically transfer value from one party to another once predetermined conditions are met, thus eliminating the need for extensive monitoring, accounting and recoupment processes. Combined with the prevalence of digital contracts, it is now easier than ever for an artist, producer, recording engineer, or anyone else in the creative field to create, execute and be paid via a digital contract on the blockchain and in the real world.
Answers to Your Producer Artist Agreement Questions
Q: What is the legal distinction between a producer and an artist?
A: The key distinctions are based on the different roles the parties will play in the making and distribution of recorded music. A producer, for example, is generally responsible for guiding and shaping the artistic vision of the work (e.g. musical style, arrangements, tempos), supervising the recording itself, and assisting in or directly overseeing the mixing and mastering of the finished product (i.e. the actual song). An artist, conversely, is generally responsible for the writing and performing the music. For example, an artist’s typical duties could involve songwriting, auditioning and selecting appropriate session musicians, rehearsing the music with the band, and recording the music at the studio.
Q: In addition to issuing the "work for hire" language and provisions, what else should producer and recording artist expect in an artist/producer agreement?
A: An average producer/artists agreement will address other matters , such as:
Q: Do producer/artist agreements always have to be in writing?
A: Not always. Parties may reach informal agreements, or may enter into a producer/artist agreement that is oral, or implied. Such a producer/artist agreement may still give rise to claims for breach of contract or infringement, depending on the circumstances. However, it is advisable for parties to reduce these types of agreements to writing for evidentiary and drafting purposes.
Q: What are some of the more common pitfalls producers and artists face when entering into such agreements?
A: Some of the most common pitfalls include:
Q: What can parties do to avoid pitfalls?
A: The best course of action is to have a written agreement and to make sure that it is as clear and comprehensive as possible. Moreover, parties should seek out qualified legal counsel to draft and/or review the artist/producer agreement.