How Producers Make Money
[This article is a bit outdated. It was written over 5 years ago, but there are still some gems in it…]
By, Wendy Day from Rap Coalition 2.06
There are a handful of ways that spring to mind for a gifted producer to make money. First, I must say that not everyone who makes tracks is a producer. There are beat makers and there are producers. A producer makes music that suits a rapper’s talents. A beat maker makes beats. A producer is able to bring out the best in the artist on top of his or her track. A beat maker makes beats. A producer properly showcases a rapper with music that fits the artist’s style and image regardless of the producer’s signature sound. A beat maker makes beats. A producer sits in the studio with the artist to make certain he or she gives his best work to the track. A beat maker sends the beat to the artist or label on ProTools.
OK, having gotten that out of the way, here are some of the ways a producer can make money in the rap music business:
- Sell tracks to labels and artists
- Develop new artists and bring talent to a label
- Production deal (difficult in this economy)
How To Sell Your Production
The way to sell tracks is to network with artists and label A&Rs (at conventions, at clubs, through introductions from friends, etc), and set up meetings to then play your music. This is a “who you know” business, and either you need to have a manager who is connected who will sell your tracks for you, or you need to get yourself connected by networking directly in NY or LA (mostly NY for rap). This is not a one time event. You must keep your name in the mind of the A&R person, because although you may not be right for the project he or she is working today, your sound may be ideal for a project next month, next year, etc. Your track must be in front of the A&R person on the day he or she is looking for that type of track. If you are new to producing, find a way to build a buzz around your name to get attention.
Make a beat CD with your best and hottest music. Assume the A&R person won’t get past the fifth track, so put the best stuff first…. Your beat CD should have 15 to 30 second snippets of as many of your beats that fit on one CD, so the A&R person can skip through them easily and quickly. They should already be copyrighted (http://www.copyright.gov/forms.formpai.pdf). You can copyright a whole beat CD for $30, just keep a copies of the CD so you know which beats are on what CDs if you need to prove your beat got jacked.
Bear in mind that the A&R person listens to tracks all day, every day. The competition is fierce. He or she may not know what they are looking for in terms of music or sound, but they will know it when they hear it. It seems like everyone today is a producer, and as the price of equipment continues to fall, competition will only increase—so you have to stand out. You will hear a lot of A&R people say they are looking for music similar to an established and successful producer, because they have learned that a Lil Jon track or a Neptune track almost guarantees radio play. Not to worry, they are really just looking for a hot track—give it to them. Play your best stuff first.
Your prices need to be fair and competitive with what other producers at your level are charging. Labels are willing to pay based on the budget available. Major labels have bigger budgets than indie labels, and a new artist will have a smaller budget than an established artist. A good place to start for a new producer is somewhere between $3,000 and $10,000 per track.
Once you have a Platinum or Gold hit, it will be far easier for you, obviously. But to find someone to take a chance on you with no track record is a bit harder…much like trying to get a credit card without any credit… your best bet is to get to NY, meet as many people as you can, and hustle your beats! If you are not good at this, find someone who is.
For a producer, being signed exclusively to a label or artist is not necessarily a good way to experience success. Neither is being a smaller producer signed to a larger producer. The “paying dues” process can be long, arduous, and costly in terms of credit and publishing. Decide upfront what you are willing to give up to follow your dream, and learn from those who went before you about what is acceptable and what is not (in other words, supplying production that a famous producer receives all the credit and money for, is NEVER acceptable). Avoid “work for hire” at all cost! Here’s a clue: if the last producer left because he got jerked, chances are you will get jerked too, no matter HOW famous the person is you get to work for. Quit being star struck!!
The way a producer gets paid is half upfront and half on the backend. For example, let’s say an A&R person calls you and says they like one of your beats and want to buy it for one of their artists. You agree on the price of $5,000 and 3 points. You will receive $2,500 upfront BEFORE you go into the studio, and after you sign the contract (at this point, you should already have an entertainment lawyer that you plan to utilize who will negotiate the contract for you). Then, you will receive the other $2,500 after the song is finished (usually as the album is releasing). That $5,000 is considered an advance against the 3 point royalty (3 points is basically 3% of the suggested retail price of a mathematical formula that divides your song against all of the songs that appear on the CD). Never focus on the points, because there’s a very good chance the artist will never recoup and therefore the points will be worthless. If you are doing a beat solely for the backend of points, accept the fact that you may never get a dime— therefore I do not recommend this.
Developing New Artists
If your goal is to get an artist that you have discovered signed to a label (most likely because you don’t know the negative realities of that if you have not read all the stuff at rapcoalition.org), here’s what labels are looking for, as talent has not mattered much since the mid-90s. Labels are in business to make money, and they will pick up ONLY what reduces their financial risk since the music business is so speculative (this explains why a gifted talent like Ras Kass sells 50,000 CDs while Master P, with no real lyrical skill, can sell 50 million CDs). What the labels sign is based upon what the public buys, like all good businesses. This is why it is called the music BUSINESS instead of the music art forum, or the music friendship, or the music opportunity…
There are two huge fallacies in this biz: one is that a banging demo will get you a good deal (in the 12 years I’ve been in this industry, I have yet to see one artist get a real deal from a demo), and the second one is that a good connection can get you a deal. A good connection (like a powerful attorney, or a friend at a label, or a deal broker, etc) can only match what a label is looking for with the artist. So, if you put yourself in a position to supply what a major label is looking for, perhaps a match can be made. Until then, there is not much anyone can do for you personally. The bad news is that labels do not always know what they are looking for, and often can’t put it into words. This is where SoundScan helps.
In order to get offered a deal that is respectable, you will need to sell units regionally. The only ways I see folks getting deals these days is either to come up under a platinum recording act, like Nelly, Eminem, 50 Cent, Jay Z, DMX, etc…or put out a record regionally and sell 30,000+ units yourselves. Then the majors will come around and take you seriously! If you decide to take this route, www.rapcointelpro.com probably has some helpful info for you. This is the only way I’ve seen folks getting good deals for many years now, actually. I’ll explain why in a minute….
I hear the same frustration from artists everyday regarding finding a deal. It is next to impossible these days to get a deal without either coming through a platinum recording artist who has a deal (again, 50 Cent, Eminem, Nelly, etc); OR putting out your own record and selling units regionally on your own (again, like in excess of 30,000). The labels are looking to reduce their risk, and since there are already so many artists selling units around the country, they have an already established pool from which to choose new artists to sign. For example, if there is a group in Houston who are selling 75,000 CDs, an artist in Jackson, MS that has 500+ BDS radio spins and 24,000 CDs sold, and a bunch of artists in Atlanta with radio spins and sales in excess of 30,000 CDs each, why would any label sign a rapper with a great demo, when they could sign a rapper that has some radio spins, proven marketability, a fan base, and sales already underway? Sad, but true!
It has been this way for awhile (since the late 90s) and I don’t see any signs of it changing in the near future. Artists used to get discovered and signed by label A&R folks, but now it seems they get attention through moving units (which, by the way, gives the artist better leverage and better deals). To keep creative control or to get a label deal for more than one artist, you will need to put out multiple albums successfully, with each one out selling the one before. THEN the labels will allow you to retain control once you’ve proven that your success is not a fluke.
I have not seen many production deals lately. However, this is a deal that a very successful producer with a proven track record of platinum hits does exclusively with one label for a set price. Under that deal, the producer gets an overhead budget and brings to the label an agreed amount of artists and is paid additionally as each artist is delivered. This is a production driven industry, and a smart label was able to control the market on producers, until it got too expensive to do this. Also, platinum producers have become more savvy, and learned that making upwards of $100,000 to produce one track for a superstar is far more profitable than doing a deal with a major label even for ten times that amount and being tied to that one label for 5 to 7 years (far longer than the length of most rap producers’ popularity).
So there you have it!! Brush up on your skills, be the best producer you can be, and make unique and different music. Set a trend, don’t follow it!!! If you hire folks to do what you are weakest at (on the business side) you will win in this game. And maybe you’ll even get to spend the bulk of your time doing what you love most: producing!!