Quincy Jones said it best,” explains Nile Rodgers: “A producer of a record is like the director of a film.” From his first production credits on tracks by Luther Vandross, Sister Sledge and Diana Ross to his more recent work with Beyoncé, Daft Punk and Coldplay, Rodgers is one of the rare producers who bridges the gap between the classic understanding of a record producer and today’s digital music-maker.

In the 20th century, Rodgers and his contemporaries recorded songs to lumbering rolls of tape, bringing the visions of artists and songwriters to life with their ornamentation, arrangement and technical skill. While that is still true for some producers, the trade has changed dramatically. Around the turn of the millennium, increasingly powerful DIY recording tools and the piracy-inflicted bust of the music business drove recording from fancy studios and into musicians’ homes — shifts that democratized who could be viewed as a producer and blurred the lines between the processes of songwriting and recording. How producers are compensated has also evolved, with greater distinctions for payment by genre, widely varying upfront fees and greater possibilities to earn publishing income than ever.

Producer Fees

The most reliable form of income for producers: a sum owed for their work before the song comes out. Fees tend to start around $15,000 to do a track for a major-label-affiliated pop or R&B/hip-hop artist; a superstar-level producer might charge up to $75,000 (or higher), but $30,000 to $40,000 is considered a good range for one who is well-established and working with a major-label act.

When producers work across an entire album of songs, it’s common to reduce per-track rates. “It might be $30,000 for the first three songs, $20,000 for the second two and $10,000 for the last song,” says Lucas Keller, founder of producer management firm Milk & Honey.

These fees are paid half upfront and half upon the delivery of a record that the label deems “commercially satisfactory.” While that first half is a producer’s to keep, the second is an advance against master royalties earned from the song. In today’s streaming economy, however, many tracks don’t recoup their fees.

Independent artists and/or those with little-to-no recording budget sometimes get more creative in paying producers what they are owed. Instead of a fee, “a lot of producers are getting 50% of the master monies, either in perpetuity or until the artist makes the producer’s fee back,” says Audrey Benoualid, partner at Myman Greenspan. Producers can also receive a fee under the aforementioned $15,000 for their work.

Points

The percentage of master royalties producers receive for their work. Earning from two to five percentage points of a record is common today, starting at two points for a newcomer and four to five for a well-established, in-demand producer. This amount is subtracted from the act’s percentage share of the recording; labels aren’t expected to cede any of their share to compensate a producer.

In rare cases, a superstar talent may command six to eight points: Rodgers and his manager, Hipgnosis founder and CEO Merck Mercuriadis, confirm that, on average, Rodgers earns six points, but every song is a unique negotiation. As Keller explains, things can get more complicated when two producers are involved: “Let’s say two sizable producers want four points each. We likely won’t get to take eight all together, so what about we try to split six points down the middle?”

Publishing

Because modern musicians often write and record as they go, the line between songwriter and producer is blurrier than ever. Many creatives that are now primarily classified as producers are also part of the songwriting process — and these multihyphenates earn publishing in addition to fees and points.

“Back in the day, when people talked about what a songwriter did, it was the guy who wrote melody, lyrics and chords. Today, if you come up with the beat, like many producers do, you can also be credited as a songwriter,” Mercuriadis says.

This is especially true in hip-hop. Michael Sukin, a top music attorney who has worked in the business since the 1970s, credits the genre’s emergence as a big part of redefining what a producer does. Timmy Haehl, senior director of publishing at Big Machine’s Los Angeles office, says, “In hip-hop, publishing is sometimes split down the middle: 50% for the top line, 50% for the track.” (In pop and other genres, there isn’t a standard amount of publishing a producer-songwriter can expect; that share of the composition is negotiated on a case-by-case basis.)

Extra Earnings

Some producers can pocket extra income through neighboring rights — performance royalties earned on the master side of income in many countries outside the United States. This, however, “has to be for a qualified record or qualified person,” Benoualid says. “You can’t be a U.S. citizen, unless you record in London and the studio is credited on the album — then you qualify for neighboring rights there.”

Producers in the United States qualify to earn a similar (but more limited) royalty from their masters playing on digital radio stations like SiriusXM, Pandora and other noninteractive digital transmissions. This is paid by SoundExchange, but producers aren’t entitled to this income unless the artists they worked with tell SoundExchange to pay the producers part of their royalty directly.

Nowadays, veteran hit-makers like Dr. Luke and Max Martin may also sign protégés to production deals or joint ventures with publishers to earn additional income, allowing them to, as Keller puts it, “amass a huge catalog with real enterprise value.” The younger producers, in exchange for part of their monies, in turn get introductions to, Haehl says, “people in [the veteran hit-makers’] network [and] special opportunities with artists.”

This story originally appeared in the Oct. 7, 2023, issue of Billboard.