The difference between music producer points and mechanical royalties is that producers points have absolutely nothing to do with music publishing earnings but mechanical royalties are a part of a music publishing copyright which earns royalty payments as the work is exploited.
NOTE: Music producer points are due when the song in question is sold as physical copies or digital downloads. On the other hand mechanical royalties will be due when the song is sold as a physical copy, streamed online (e.g Spotify, Apple Music & Amazon Music).
For example, if a music producer makes a beat for an artist he has the right to negotiate producer points including splitting the ownership of the music publishing copyright as 50/50 or whatever agreement he can reach with the artist.
However, the artist has the final say whether they want to share their artist royalty percentage for record sales or digital downloads with the music producer.
For instance, if an artist is contractually entitled to earn 25% of the record sales whilst the record label gets the other 75%. The artist can agree to give the music producer 4 points (or 4% as producer points for physical record sales or digital downloads). But only if the artist agrees to do so.
Furthermore, the artist can also decide if they want to own the entire music publishing copyright for that particular song without sharing any music publishing with the music producer. Or the artist can demand that they want the bigger share of the music publishing copyright for that song e.g owning 75% whilst the music producer gets 25% of the music publishing.
Now the interesting part is that the music producer also has to sign into contract agreement whether he is satisfied with the demand of the artist. And if the music producer refuses the proposed arrangement from the artist then the artist will not have legal rights to use the beat for commercial releases meaning the music producer will keep his beat or sell it to someone else.
Standard Producer Points & Music Publishing Agreements Between Rappers and Music Producers.
The standard and common arrangement of producer points and music publishing between rappers and music producers depends on how popular the artist is and also the reputation or production credits of the music producer in question. So let’s look at different scenarios and evaluate how the music split sheets will play out.
Scenario #1: A-List Rapper & A-List Music Producer
- The music producer is mostly like get 4 points or 3 points from the rapper’s sales income royalties.
- The music producer also stands a chance to get 50% of the music publishing for making the beat.
Scenario #2: A-List Rapper & D-List Music Producer
- The A-list rapper will be very reluctant to share his sales income royalties. It’s a take it or leave it scenario for the music producer.
- The A-list rapper will also demand a huge ownership of the music publishing (e.g 75%) Or even tell the music producer that the agreement will be work-for-hire were the rapper gets to keep the entire share of the music publishing copyright.
- Because of the A-list rapper’s demands to have the agreement set up as work-for-hire the music producer will be paid a one-off lump sum payment and that’s a deal done nothing else will come.
- What are Music Producer Points?
- What are Mechanical Royalties?
- Music Business Article – Mechanical Royalties and Digital Downloads Explained