Points can be many things, such points you pay on a mortgage or points you pay on a loan or even points in math.
But in the music business,points refer to royalty percentages that are part of a music producer's compensation.
Producers negotiate a percentage of the retail sales of an album as well as a cash advance on those royalties.
Points can be given on the entire album, i.e., 3 points on the whole album
equates to 3% of the royalties. Points also can be given on a particular
song(s) on the album, i.e., 2 points on 5 songs on an album with 12 songs,
equates to 5/12 of 2% of the royalties.
Points can also be based on the dealer price for the album or the retail
price. Depending on what was negotiated, points can increase at certain
sale thresholds. Points are not necessarily given to all producers and
points can vary depending on the popularity of the producer.
To learn more about producer agreements and terms take a look at some of the contracts in our store.