Music producers, also known as record producers, are in charge of overseeing the production and recording of a band or artist's music. The producer helps to shape the tracks that eventually become a finished album. The amount of money that a producer makes is based on a number of factors, including where the producer works and who he works for. Most music producers are paid per project rather than receiving a yearly salary. This allows the producer to be able to take on as many projects as possible to increase his income.
One option open to producers is to receive a flat fee for services rendered. This can be an hourly rate, with the average music producer making $32.08 per hour, according to O*Net. A music producer also may choose to take a flat fee that encompasses all of his work on the project. This fee is determined largely by the producer, according to the amount of work being done and the budget of the artist. This fee could range anywhere from nothing at the beginning of a producer's career to several thousand or more per track as he hones his skills.
When a music producer works on an album, one of his payment methods can be album points. Points are percentage points on sales of the album. In this instance the producer is taking a gamble on his income because if the album doesn't sell well then the producer won't make a lot of money. If the album is a huge success the producer may make a much larger amount of money than he would have made otherwise. To earn money from points, the producer earns a percentage of the profit from the album sales equal to the amount of points he has. A producer with five points earns five percent of the album sales. Rather than choose to just receive album points the producer may take points along with a reduced fee.
There are some instances where a music producer receives a salary. For a producer to receive a salary he generally has to work in-house for a recording studio or record label. Producers earn an average salary of $45,970 as of 2010, according to the Bureau of Labor Statistics. The benefits of receiving a salary include the guarantee of steady employment and not having to worry about finances being tied to the album's success or failure. The downside is that if a music producer works on an album that has high sales figures, he won't receive any additional payment for his work on the record.
Education & Reputation
One of the considerations when determining a music producer's rate or how he is paid is his education. A producer who has professional training or a college degree may be able to demand more money than one who has no formal technical training. Having a higher degree in music production, such as a master's degree, may be helpful to help the producer gain a higher income. A music producer who has no formal education but has had notable success as a producer is able to command a larger fee based on his work experience and reputation. Music production is one career where the producer's talent and reputation are as important as technical training.