“Record One” Royalties

It is customary for producers, at some point, to be paid for all records sold, meaning that recording costs are not charged against their royalties (while those costs are always charged against artists’ royalties). These are called record one royalties because they are paid from the first record that the company sells. (All producers have to recoup any advances they have received, but if you think of these advances as a prepayment of royalties, this is the same as getting royalties on all records). The key question is when the record one royalties are paid, and there are three methods:

Superstar Producers
Superstar producers are paid for every record sold without recoupment of anything (except their advances). Read more »

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