Front End, Back End, and a Little of Both

Passion vs Money

Musicians, producers, and engineers are often put in an interesting predicament. They work with people who have a vision or passion for their project. These people desire and often demand that the musician, producer, or engineer share their passion for the project. This makes sense, because wouldn’t you want everyone imparting something to your project to make it the very best they can? The predicament or problem comes when a service provider is caught between doing a project for passion or for money. 

Passion OR Money

This is a tough situation that most engineers and producers often find themselves in. Someone brings a project to you to work on, but they have a small budget or no budget at all. They try to sell you on the potential of the project with something like, “this is going to be a huge success” or “you’re gonna make so much money on this one when it hits big”. So they want you to do your work for no money up front but with a percentage of the royalties on the backend. This is a tough spot to be in because honestly everybody thinks their project is “amazing” and is going to be a “huge success”, but the truth is that most won’t be very successful, some will find some moderate success, and then that one in a thousand will be a “huge success”. It’s sad, but it’s true. 

Work for Hire

Most service providers prefer getting paid upfront as a work for hire for the services they provide. Basically if a guitarist comes and plays a guitar part for your song in a recording they need to be paid for two things; their time and skill (the time they spent learning and performing your guitar part and the skill that they have spent years to develop to play the part very well). It’s the same thing for an audio engineer charging an hourly rate that incorporates their time, the facility/equipment, and their long developed skills. A work for hire means that the provider receives payment for what they provide and then don’t expect or deserve any future royalty payments. They retain no ownership for the content because they were sufficiently paid for their contributions on the front end. 

Royalty Only

As mentioned earlier, this is the option that many clients hope for. They are willing to give up a percentage of future royalties to the engineer/producer for working on the project. This is a great deal for the client and a huge risk for the engineer/producer. The risk is that if the project ends up making little to no money then there will be little to no pay. The reward, of course, is that if the project is hugely successful then millions could be made from the engineer/producer’s royalties. I can’t even count how many fancy cars I’ve been promised for my work, “man when this is huge I’m buying you a Mercedes!”

Front and Back

An alternate option is a combination of both being paid upfront and on the backend. The trade-off is that the upfront payment is usually less than normal work-for-hire rates. But the gamble is that you still have ‘skin in the game’ with backend royalties if the project is wildly successful. This is a very common circumstance with big-name music projects. All of the people involved in a huge pop artist’s new project know that the likelihood of success is very high, so they are willing to take less money upfront knowing that they will very likely make ten times more from royalties in the long run. 

Wise Decisions

So which is the best way to go? It depends. The decision all depends on the potential success of the project. Most engineers and producers lean towards getting paid upfront as a work-for-hire on the majority of their projects. If an artist with a good track record comes along and the chances for success are high then many engineers/producers will do a front-and-back deal. And finally, it will usually be a pet project that an engineer/producer takes on, like a young artist with loads of potential, that they’ll do as royalty only. 

Get It In Writing

In all three circumstances make sure to clearly define at the onset of the project how everyone is getting paid. Ideally you should get it in writing with all three situations, but definitely have a contract put together if there are royalties involved BEFORE the project is completed, preferably before it’s started. Generic work-for-hire agreements are handy to have especially with studio musicians, but also for you as an engineer or producer. The work-for-hire agreements/contracts are really simple and straightforward. Royalty agreements can be much more complicated and you may need to get help from a music lawyer or a music contract service. 

Eyes Wide Open

Whichever decision you make, just make sure that you are making it with all of the facts in place. Do your research and homework by reading articles like this, discussing things with your client, and even talking to a music lawyer. Just make sure to go into a circumstance like this with your eyes wide open.