Producer points: off the top, or off your share

37 · 2026-09-04 · 14 min read · Español

Off the top means the producer’s percentage comes out of the recording’s receipts before the people on the artist side divide what is left. Off the artist’s share means it comes out of one named person’s share, after that division. If one person holds the whole artist side, those two produce the same number and the distinction costs nothing. If more than one person does — a band, a co-owned master, a featured guest — they are two different amounts of money, and “three points” does not say which one was agreed.

• Off the top: the producer’s percentage is taken from the recording’s receipts before the artist side is divided. Off the artist’s share: it is taken from one named person’s share, after.
• With one person on the artist side the two are the same arithmetic and the same amount. With two or more, the difference to the person who agreed the points is that percentage multiplied by everybody else’s share.
• Neither is a default. No statute, society or distributor publishes one, so the agreement is the only thing that answers it.
• SoundExchange states that it “does not pay Creative Participants ‘off the top,’ i.e., prior to allocating royalties to the Featured Artist(s).” A letter of direction moves the signing artist’s own allocation and nobody else’s.
• A distributor’s split does the opposite. DistroKid’s Splits assign each person a percentage of a song’s earnings, and raising one collaborator’s percentage reduces every other collaborator’s.

What does it mean for producer points to come off the top?

Off the top means the producer’s percentage is taken from the recording’s receipts before the artist side is divided among the people entitled to it.

Off the artist’s share means the opposite order: the receipts are divided first, and the producer’s percentage is then taken out of one named person’s share.

Two orderings, one percentage. Note what neither of them touches: what the percentage is calculated on. A point is one percent of a recording’s royalty, and which number that royalty is — a wholesale price, net receipts after deductions, an all-in rate — is a separate question with its own page and its own arguments.

Settle that one first. This page assumes it is settled and asks the question that comes immediately after it, which is whose money the percentage is subtracted from.

The base is the harder question. This one is the one nobody asks.

When are the two the same number?

When one person holds the whole artist side, off the top and off that person’s share are the same arithmetic and the same amount.

There is no division for the deduction to sit in front of or behind. Three points of the receipts and three points of your share are three points of the same pile, because the pile and your share are the same object.

So the first thing to establish is not the wording. It is the list of people. Who owns the recording is the question that produces that list, and paying for the session does not settle it in the direction most people assume. Session players are usually not on the list — they are paid a fee and, where a one-page assignment has been signed, they hold no share of the recording at all.

If that list has one name on it, you can stop here with a clear conscience. The wording still belongs in the agreement, because lists of people are not permanent, but nothing turns on it today.

When do they stop being the same number?

Off the top and off one person’s share diverge as soon as two or more people share the artist side. Off the top, everyone on that side pays a proportion of the producer’s points; off one person’s share, that person pays all of them.

Worked through, with the inputs stated: two members holding an equal half each, a producer on three points, one thousand dollars of receipts. These are example figures chosen to make the arithmetic legible, not typical ones.

The producer is paid thirty dollars either way. The member who agreed the points is fifteen dollars better off under the first reading and the other member is fifteen dollars worse off. Nobody has been cheated and no number is wrong. The same sentence simply paid two different people.

The rule underneath it holds at any size: the difference to the person who agreed the points is the percentage multiplied by everybody else’s share of the artist side. Two equal members and three points on a thousand dollars is three percent of the other five hundred, which is fifteen. Three equal members is three percent of the other two thirds, which is twenty.

Which is the part that stings. Off the top, everybody on the artist side pays their proportion of a number they may never have been told, agreed in a conversation they were not in. Your bass player has been paying a producer they never hired.

And it surfaces late, because a smaller number on a statement usually has a boring explanation. Agreed deductions are the commonest of them, and one that somebody did not agree to looks exactly like one that they did.

Does “all-in” answer it?

In a label deal, yes: an all-in rate is a single artist-plus-producer percentage out of which the producer is paid first.

That mechanism, and the worked example behind it, belong to the piece on what a point is worth, and nothing here disturbs them. What matters on this page is the half of the sentence that does not travel.

An all-in rate is all-in of the label’s rate — the number the label was going to pay anyway, which does not move when a producer is added to it. Take the phrase to a self-release and there is no label rate for anything to be all-in of. It arrives carrying an answer from a structure you do not have, and it hands that answer over as though it were a fact about producers.

So the sentence everybody repeats — the producer comes out of the artist’s share — is a true description of somebody else’s contract. It is not a term in yours until one of you writes one.

Does SoundExchange pay a producer off the top?

No. SoundExchange states that it does not pay creative participants off the top, and a letter of direction moves only the signing artist’s own allocation.

This is not an inference from how the programme works. It is on SoundExchange’s own page, in the piece’s own words:

SoundExchange does not pay Creative Participants “off the top,” i.e., prior to allocating royalties to the Featured Artist(s).

The mechanism follows from what the document is. A letter of direction is described there as an instrument by which a featured artist directs SoundExchange to pay a portion of the featured artist’s sound recording performance royalties to a participant in the creative process. The thing being directed is already somebody’s, and there is no earlier pool to reach into. Who may sign one, who may be paid through one and who may not is set out on the points page and is not restated here.

The consequence is sharper than it looks. On a recording with two featured artists, a percentage stated in one letter “would only apply to Artist A’s allocation of the royalties and not to Artist B’s allocation” — and a producer who wants both must, in SoundExchange’s words, “secure an LOD from each Featured Artist on that sound recording.”

Read that as a producer for a second. Three points of the record, agreed with one of two featured artists, collects on one of two allocations — not because anybody reneged, but because the channel has no off-the-top setting and never did. The number of signatures your producer needs is the number of featured artists, and who counts as one has a real answer rather than a courteous one.

SoundExchange collects for the United States. Nothing in this section describes what a Canadian collector does, and the two systems do not mirror each other.

Does a distributor’s split take the points off the top?

Yes, by construction. A distributor’s split assigns each person a percentage of a song’s earnings, taken before anyone’s individual share exists.

DistroKid’s Splits are the clearest published example, and the help page gives the shape away without meaning to. The feature “can split earnings from any song or album” and pays collaborators, producers, bandmates and managers directly. A release with no split shows “100% of earnings set for you, the account owner.” And then the sentence that decides the question: adjusting one collaborator’s percentage “will automatically reduce the percentage for all other collaborators so the total will always equal 100%.”

That is off the top, implemented. A producer added at three points is three points nobody else has any more, spread across every other name on the split. There is no field for out of mine, and nowhere to put one.

You can settle it in the agreement. You cannot type it into the form.

A recoupment is the same principle at its limit: a collaborator can be set “to receive all earnings for the release until a specific recoupment amount is met,” and until then “no earnings will be distributed to other collaborators in a Split.” A hundred points off the top, for a while.

One more line from the same help page, and it is the one nobody plans for:

For privacy, collaborators can only see what percentage they get. They can’t see who your other collaborators are, or what percentage other folks are getting.

It is a defensible rule — a session player has no business seeing a manager’s cut. It also means the one place the arithmetic finally exists in full is a place none of the people paying for it can audit. If the number typed in disagrees with the number signed, the payouts follow the number typed in, and the person best placed to notice is looking at a screen showing them exactly one figure.

Which one should you agree to?

Agree off the top when the producer made the record everyone is selling, and off one named share when one person commissioned the work alone.

Put the cost where the work earned the money. That is our recommendation rather than a rule anybody publishes, and the reasoning is short enough to check. A producer who shaped the record made every share on it more valuable, so every share can carry a proportion of the cost — and off the top is the reading that survives a line-up change without anybody renegotiating. A producer one member brought in for their own song benefits one share, so it should come out of one share.

What is not available is a default. Nothing openable states one: not a statute, not a society, not a distributor, not a standard form. Both readings are ordinary, and the two systems most likely to move the money have already chosen opposite answers without being asked.

So both answers are defensible and neither is automatic. Silence is not a third answer — it is half-assed, and somebody else’s software will make it for you.

What the clause has to say

The agreement should state seven things about who pays, in the same paragraph as the number.

1. Which side the points come off: the recording’s receipts before division, or one person’s share after it.
2. If it is one person’s share, whose — by name, not “the artist.”
3. Who is on the artist side today, listed, with their shares.
4. What happens when somebody joins or leaves that list.
5. That a second producer’s points do not change the first producer’s number, and which side the second one comes off.
6. Which system will implement it: you accounting directly, a distributor’s split, or a letter of direction — and that the same sentence has to survive all three.
7. A line requiring the entered percentages to match the agreement, checked by somebody, once, after the first payout.

None of that replaces the seven lines on the points page, which cover the base, the deduction list and recoupment. These are the seven underneath them, and they are about the people rather than the money. The song side has its own version of the same problem — numbers that will not divide cleanly among writers — and the two get settled on different pieces of paper, on purpose.

Seven lines. They take twenty minutes, and they are the difference between a producer agreement and a number two people remember differently.

FAQ

Does this change what the producer is owed in total?

No. The producer receives the same percentage of the same base either way, and their cheque is identical. What changes is whose money it came out of. That is why this is an argument between the people on the artist side rather than an argument with the producer, and it is also why it is so easy to leave unsettled: the person across the table has no reason to raise it.

Does a featured artist pay part of the producer’s points?

Only if the points come off the top, and only if they agreed to. Off the top, every share of the recording’s receipts is reduced, including a featured artist’s. Off one named person’s share, a featured artist pays nothing. A guest who signed nothing has agreed to neither, and the recording’s receipts are not the only money involved — a featured artist’s statutory performance royalties are allocated separately and are reached only by a letter they sign themselves.

What if somebody joins the artist side after the agreement is signed?

Off the top re-prices itself and nobody has to do anything; off a named share does not move at all. A clause written as a percentage of the recording’s receipts keeps working when a member joins, because it never named who pays. A clause written out of one person’s share keeps charging that person, which may or may not still be what everyone intended. Whichever you choose, say what happens when the line-up changes.

We already entered the split at our distributor. Have we answered the question?

Yes — one way, whatever the agreement says. A distributor’s split assigns each person a percentage of the song’s earnings, so a producer’s percentage entered there is taken off the top and everyone else on the split is paying a proportion of it. If the agreement said it came out of one person’s share, the two now disagree, and the payouts follow the split rather than the paper.

Sources

• SoundExchange, Letters of Direction — that SoundExchange does not pay Creative Participants “off the top,” i.e., prior to allocating royalties to the Featured Artist(s); that a Featured Artist LOD directs payment of a portion of the Featured Artist’s own sound recording performance royalties to a participant in the creative process; that a stated percentage applies only to the signing artist’s allocation and not to a co-artist’s; and that a Creative Participant seeking both must secure an LOD from each Featured Artist on the recording. United States only.
• DistroKid Help Center, Using Splits To Pay Your Collaborators Automatically — that the feature splits earnings from a song or album and pays collaborators, producers, bandmates and managers directly; that a release with no split shows 100% of earnings set for the account owner; that adjusting one collaborator’s percentage automatically reduces the percentage for all other collaborators so the total always equals 100%; and that collaborators can see only their own percentage.
• DistroKid Help Center, Setting a Recoupment in Splits — that a recoupment sets a collaborator to receive all earnings for a release until a specific amount is met, and that no earnings are distributed to other collaborators in the split until it is.

All three pages were read on the date at the top of this piece. DistroKid’s help centre refuses automated readers, so both of its pages were read in a browser; the terms it describes are its own and other distributors implement splits differently. The arithmetic above is arithmetic on stated example figures, not a survey of what anybody typically agrees, and the letter-of-direction mechanism is United States law and practice. None of this is legal advice, and a producer agreement is worth twenty minutes of somebody who does this for a living before it is signed.

Keeping the register

The failure this page describes is two people holding different numbers and no shared place to compare them. CatalogTracker keeps master splits on the track they belong to, enforced to a hundred, and sends the split to every party for confirmation — the sheet reaches Confirmed only when all of them have confirmed it, which is the opposite arrangement to a distributor’s split. It records what was agreed; it does not decide which side the points come off. In development for iPhone.