We are musicians, and therefore broke - obviously we should sign any deal we get! Right? NO!!!
April 14, 2012 6:44 PM   Subscribe

Recording an album, and trying to strike a deal with the sound engineer / producer so we don't go broke. Are we signing in to a good deal or a bad deal?

I'm in the process of recording a full length album with my up-and-coming band that has shown a lot of commercial viability and promise - this particular recording started out as a humble, "live-capture" type of deal, but has snowballed into a much more involved, and therefore much more expensive project.

In the interest of putting out the best possible product while not bankrupting ourselves, our studio engineer has offered us a "points" system, where we would get a 25% discount ($30/hr instead of $40) in return for 15% of the return profits after/if 2000 copies are sold, all put down on a signed contract. Does this seem fairly reasonable, or "standard" for the industry, taking into consideration the fact that he has contributed heavily on the production aspects of the recording (allowing us to use his fancy gear and instruments, offering up lots of insightful and useful tips on "filling out" our sound, et al) and has voiced an interest in being an advocate for us as we try to break in to the big leagues of the industry?

Any people with music industry backgrounds care to chime in? We trust and like this guy, and if our recording does well, we think it would be fair that he get some retroactive compensation; he treated us very well when we recorded our EP with him, and we certainly don't get the sense that he's trying to put one over on us, but we want something that is going to be fair, especially if this "deal" is going to last to perpetuity. Any feedback would be appreciated.
posted by klausman to Media & Arts (9 answers total) 1 user marked this as a favorite
Best answer: $40 an hour is a steal for a quality recording. If the record sounds good and sells well you repay him by recording your next record with him.
posted by gally99 at 7:45 PM on April 14, 2012

Best answer: Just pay $40/hr. Your upside is going to be what, a hundred bucks a most? And your downside is a hell of a lot of money if the record takes off.
posted by empath at 8:37 PM on April 14, 2012

Best answer: On the one hand, it is good that he's offering the discount, if you are broke enough that a discount that small (since your recording cost is so small!) will have a big impact. However, he presumably wouldn't even offer it if he didn't think you had a chance to sell more than 2000 albums (unless he's the kind of guy who takes a hit to support people without talent.) So why don't you accept his faith in you, instead of his discount, pay the $40 an hour and do what gally99 said to pay him back for his support later.
posted by davejay at 8:57 PM on April 14, 2012 [1 favorite]

Best answer: 15% is a lot for an engineer if you are also paying him. If he is also producing the album (which it sounds like he may be doing based on your question), than 15% is still a lot, but not unreasonable.

Honestly, most bands with good commercial prospects still don't ever make it big, and selling 2000 records is a hard hard thing to do. The reality is that your band probably won't do it (and if you do, that is fantastic!). If for some reason you do succeed, though, you are giving the engineer a very high percentage for what amounts to only a limited number of hours of work.

How many hours did your band take to write and craft all of these songs, build up a following, and get these records sold? Did the engineer spend 15% of that time working on your record? If so, should you still be giving him a 15% cut on top of the $30 an hour you are paying?

If you really believe that you are going to be successful, than paying out 15% later on is a mistake. If you don't think you are going to sell the 2000 records, than agreeing to the points will save you a few hundred dollars. Is it worth saving a few hundred dollars to potentially have to pay out thousands of dollars in the future? If you do the math, let's say you are saving $600 by giving up the points. If you sell your album for $10, and you end up selling more than 2000 records, the engineer will make back their money after you get to album 2400. Any more than that and the engineer is raking in "free money". if you really think you can hit 2000, than hitting 2400 isn't that much different. On the other hand, if you pay full price, than you only need to sell 60 extra copies in order to break even.

One last thought is this: If you do release a great record, and a record company wants to sign with you, they are going to buy out the engineer to have full ownership of your music in their catalog. Whatever amount that they pay the engineer for those rights will likely be pulled out of your royalties from album sales, which means it will take a lot longer for you to ever make any money from your record.

In essence, this deal is only a good one if you don't think you are going to be successful, and if that is the case, you shouldn't be paying so much for your engineer in the first place.
posted by markblasco at 10:37 PM on April 14, 2012 [1 favorite]

Best answer: If he has the connections and influence that you think his advocacy could make a night and day difference, then that 15% would give him an inventive to leverage his influence to your mutual benefit. If him having some skin in whether you succeed is unlikely to significantly affect whether you succeed, then... I won't presume to know which way is best.
posted by -harlequin- at 2:47 AM on April 15, 2012

Best answer: The fear is "what if I sell a million records and he’s getting 15%?"

First, that’s what’s known as a quality problem, one we’d all like to have. This is like worrying about all the taxes you’re going to have to pay if you win the lottery.

Secondly, if that did happen you can’t assume you would have sold the million without his work. If his contribution is the difference between selling 500,000 and 1,000,000 then it was a good investment. Is he really contributing something special? The gear and recording skill are what you’re paying for, that’s not doing you a favor. Musical ideas and production help are another thing though, most people will not be offering a lot of that for $40 an hour.

Thirdly, you’re probably not going to realize that huge profit, especially these days, and he knows it. He’s doing work for free that he knows he will probably never make a dime on, on the off chance that something big happens. Everyone knows this is a terrible idea, but everyone does it at some point because we’re suckers and love the music, and possibly have a gambling problem.

No one here can know how much he’s actually contributing to the project, that’s your call. If you make the deal you’re making him part of your project, you have to decide if that’s a good or bad thing.

If you’re not comfortable with the deal, pay the full rate, it’s pretty cheap already and you won’t have to worry about making it complicated. I don’t know how anyone could be offering production help that cheap on top of the engineering. If you want him to be a part of the project, and/or want to save money, then make the deal and don’t bitch about how he tried to rip you off when you sell the million.
posted by bongo_x at 4:00 AM on April 15, 2012

Best answer: Thirdly, you’re probably not going to realize that huge profit, especially these days, and he knows it. He’s doing work for free that he knows he will probably never make a dime on, on the off chance that something big happens. Everyone knows this is a terrible idea, but everyone does it at some point because we’re suckers and love the music, and possibly have a gambling problem. - bongo x

Quoted for truth.

Yeah, the scenario seems kind of odd to me - not that I think that he's playing some nefarious "I own a piece of you FOREVER mwuahahahahaha" long con, but that he actually might like you & your tunes enough to take a long-shot gamble, or just wants to cut you a break but can't justify it to himself without presenting it as a "business" deal.

I mean, I've NEVER offered that kind of deal myself. I have BEEN offered similar deals from bands, and turned them down without regret, precisely because it's such a sort of "pie in the sky" kind of idea. I can't pay this month's electric bill with hypothetical future profits that have such a slim chance of ever becoming reality.

So while I think your engineer probably has good intentions, I'd say "pass," largely because you already have a nice, straightforward, getting-more-than-your-money's-worth business relationship, and adding the level of complexity of "points" seems likely to have a high potential of damaging that relationship.

I mean, what's "profit" on your CD? What's your "cost per disc"? How do you determine that? Who determines that? What about free copies you give away for promo - does that count towards the 2000? What about downloads - what if you're getting a different rate for downloads than physical CD's? What about individual songs as downloads? How does he know how many discs you've sold to audience members after live shows?

One common way to get a price break in the studio is "block time" or "lock-out" - if you're willing to guarantee a fairly significant chunk of continuous time (24 hours, 3 days, a week, etc.) in the studio, your price-per-hour will drop. Something to look into, if you're not doing that already.
posted by soundguy99 at 6:38 AM on April 15, 2012

Is it 15% of all profits after 2000 copies? Or will you owe him retroactive profits on the first 2000 copies too?

How is "Profit" defined?
posted by gjc at 7:49 AM on April 15, 2012

Response by poster: Thanks, all. The advice on this one seems pretty consistent. Best answers all around!
posted by klausman at 10:32 AM on April 16, 2012

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