Music producers' earnings vary considerably, but generally depend on their clients and track record. Independent-level producers may work for flat fees or form partnerships with artists for a set amount per song. If the independent producer has a name, he may sign and develop the talent himself, then license the results to major labels. As of 2010, most producers earn from $32,770 to $69,700, while a small handful of superstars reap $92,700 or more for their efforts.
Music producers are classed as sound engineering technicians by the U.S. Bureau of Labor Statistics. As of May 2008, median annual wages for producers were $47,490, according to the bureau. Earnings for the middle 50 percent ranged from $32,770 to $69,700, while the lowest 10 percent earned less than $23,790. The highest 10 percent earned more than $92,700. Median hourly wages were $22.29, with total employment peaking at 20,000 people, says the bureau.
Joint venture deals are common arrangements in the independent music world, where album budgets and fees are far lower than those of major labels. The artist funds the recording and pays the producer $300 to $500 per song, according to a summary posted on The Producer's Den website. The producer may also receive a 5 percent royalty, based on album sales. Recording budgets can range from $5,000 to $40,000.
Master Buyout and Licensing Agreements
Independent producers with track records may sign, develop and record the artist and then try selling the results to a major label. In the master buyout scenario, as of 2010, a major label buys the completed master for about $25,000 per song, according to The Producer's Den. The producer and artist also earn a 12 to 14 percent royalty off each record sold. In a licensing agreement, the label simply agrees to distribute the track for a set time period. Thus, the fees drop to $5,000 to $25,000 per song.
Superstar producers' pay is based on a combination of advances and royalties for their work, which are spelled out contractually. However, while advances are nonrecoupable, the producer does not begin to earn anything until the label recoups the record's production and promotion costs, according to Donald Passman, an entertainment lawyer writing for Taxi.com. For example, if an album costs $120,000 to make — yet recoups only $90,000 of its costs -- the producer could still get his advance, but no royalty.
In other cases, the producer may be asked to work for flat fees of $2,000 to $3,000 per track, on the condition that he gives up any future credit or compensation. These deals are known as work-for-hire arrangements, which professionals strive to avoid, according to the Producer's Den. The fees may often be restricted to a specific number of completed tracks. A 3 to 5 percent royalty may be offered, but not materialize — due to claims of unrecouped costs.