Beat Economics 101
In music production, the value of creativity can be hard to quantify. Every project is unique, and the energy that goes into creating a track varies. Whether I’m producing a track from scratch or adding musical elements to elevate someone else’s work, it requires thought, time, and creativity.
Recently, I had an experience that made me really reflect on the value of my craft. I was working on a project that involved mapping out an existing song (that someone else produced) and crafting an 808 bass line—essentially contributing a substantial musical element. Up to that point, I had already added 808s and subs to two other songs for the same artist, elevating them significantly.
But something changed before this last song – we had discussed compensation, and in my own haste, I verbally agreed to something I shouldn’t have. So, as I sat in my studio, ready to start, it hit me that the rate I agreed to was far below the value of my work and I was not motivated at all. I knew I had about 2.5 hours worth of work ahead of me and I wasn’t feeling it. It wasn’t really about the money either—it was knowing my contribution was devalued.
In hindsight, I should have set clearer boundaries and negotiated for a producer fee that reflected the value of my work. It was a great deal for them, but it really was a sucker deal for me – and that was on me. I also broke my own rule: never start an engagement without paper in place. Ironically, I was able to back out of the verbal agreement because there was no paper, but I still took the L. This, along with other experiences—like selling on Beatstars—is forcing me to be more upfront about my approach and mindset to pricing.
My Thought Process
Below are key factors that guide my decisions so you’ll know how I think if you make an offer on a beat or reach out for custom services.
The Potential for Numbers
Before taking on a project, I evaluate the track’s potential to do numbers. At a high level, there are royalties (mechanical, streaming), work-for-hire, and a producer fee. Here is some info on each one.
Mechanical Royalties
As an indie artist, if you’re selling 10,000 physical units (would be very impressive) and offering 10 points (which some think is a lot) at the statutory minimum rate of $0.091 per unit, that’s $91. So even if you’re fronting the money to print 10K CDs (which I hope you aren’t doing) and advancing me my share, 10 points doesn’t add up to much. In my opinion, points on physical sales have become largely symbolic unless you’re doing big numbers on physical media.
Streaming Royalties
Now, let’s talk about streaming. Say your song gets 100,000 streams on Spotify, which is far beyond what most do. At roughly $0.004 per stream, 100,000 streams would generate $400 in total royalties. If I’m offered 10 points, that’s 10% of $400, which is $40.
So, between physical sales and streaming, 10 points might get me $131 at best, but realistically, it’ll be much less. That’s why points have largely become symbolic. If you are trying to offer only points and you are independent, at least make a goodwill gesture and agree to the standard 50% if I’m doing all the production and no less than 25 for contributions like adding elements. It just sounds better and helps me sleep at night.
Producer Fee ✅
This is my preferred method. A producer fee (not a work-for-hire) is an upfront payment for my work on a track, separate from any backend royalties or points. Why do I prefer this? Because without numbers (units or streams), points are symbolic. However, paying a producer fee for an exclusive license shows commitment on your part and the willingness to make an investment in your music.
If an independent artist with limited resources is willing to invest $450+ for an exclusive beat, it tells me they’re serious about their craft. Even if the song doesn’t do big numbers, it shows respect for themselves and for me. I value that, and will likely work something out with such an artist.
Work-for-Hire ❌
As an artist or label, please don’t ask me to do a work-for-hire engagement. That was the first lesson I learned 20 years ago. No producer should consider work-for-hire unless there’s decent money on the table and you are OK with relinquishing rights. The one time I did do a work-for-hire, it wasn’t even for an album but a stage play, and I was paid well.
Ministry, or Nah Not Really?
I consider whether the artist charges for shows or does this mainly for ministry. If you’re charging for shows and have a price tag on your album, that shows your commitment to generating income (regardless if you are talking about God), and I expect you to pay. That’s just fair. If it’s truly ministry-oriented (e.g. you are doing free concerts at church and make nothing from streams or sales), I go into full Kingdom-building mode because the economics are entirely different. I’m thinking about storing riches in Heaven at that point.
Signed to a Label?
Understanding whether an artist is independent or signed helps me gauge their resources and the level of exposure the project might have. Signed artists typically have more reach, which often justifies a different pricing structure compared to indie artists. I’ve spent thousands on equipment and sounds and countless hours honing my craft – not to mention my musical mind. That’s what you’re paying for. Offering $25 for an exclusive track or 10 points on something unlikely to do big numbers just tells me you aren’t a serious artist.
I Will Work With You 💯
If you are still here reading, know that I will work with you. Let’s say you want three beats. You reach out and we agree on [offer amount] for three beats. I will 100% work with you on payment. The expectation isn’t for you to pay everything upfront either. We will work out a deposit and a plan for the remainder. Working with someone’s budget has never been an issue with me, especially when they are like-minded individuals.