Producer Payments, Money, and Advances part 2 10% down? Example: You may approach a producer that has credibility on some records, and offer to pay them 10% of the normal advance fee. If they normally charge $5,000, then you pay a non-refundable $500 up front (10%). You then pay the recording costs to the producer's studio or wherever you decide to record and mix. Then, you get a written agreement with the producer to pay the balance of $4,500 as part of the producer's advance when you (the artist or company) get your deal in place along with whatever points the producer wants. And the producer will keep the masters for collateral. Please note: This is only an example, and every producer and situation will be different. What are Producer Points? Producer points means the producer's royalty percentage. In other words, 3 points would mean a 3 percent royalty payment. The producer is usually paid a percentage of record sales based on either suggested retail list price, or wholesale price... depending on what is in the agreement. What is a Royalty Payment? A Royalty is money that is to be paid to an artist, producer, songwriter, or publisher from the sale or performance of their music, normally to be paid after deductions of expenses and advances. What is a Producer Advance Fee? An Advance is just what it sounds like; advance money or "up-front" money. Basically an advance is money paid "in advance" of royalties paid that hopefully you (or the producer in this case) would earn in the future. The majority of advances are non-refundable, and whatever is advanced to you or paid up front - is recovered by balancing the "future-earned royalties" against the original money that had already been paid in the "advance".