WHY SOME PRODUCERS CAN CHARGE $100,000 PER BEAT

Yesterday I had a conversation with one my friends (he's an up and coming rap artist) about why some producers charge $100,000 (and up) for one beat.

His argument was:  A beat can be hot no matter who produced it. So why are labels paying crazy money to a famous producer when they can get Joe Blow to make a similar beat?

I gave him my explanation...

1). YOUR NAME

When I was interning @ Silent Sound Studios, Assistant Engineer Kory Aaron told me that the most   important thing in the music busy is YOUR NAME.
      -No matter where you go your name follows you.


2). CREDITS

Sometimes the only thing that separates one producer from the other is their CREDITS
     -If you wikipedia any producer and scroll up to the top of their CREDITS you will see a list of 
          projects that were not huge hits. There may only be a few credits for the 1st couple of years. But  
          scroll down until you find that big hit. The list will become longer and the producer will have 
          more placements per year.

3). HIT RECORD

Its not just about getting placements on any Joe Blow's album. You need that HIT RECORD.
     -Even if you get a placement on an album that did okay, you don't want the track that no one likes.

     -I personally avoid making beats that will be the "I Miss My Dog" or "Life Is Hard" of the album.
     -I want the song that gets played in the clubs, on the radio, commercials, etc.

     -The key is to make a song that can be the lead single or a HIT RECORD.

4). GAMBLE

Releasing music is always a big GAMBLE.
     -No one can tell if a record will blow up or not
     -Record labels figure that since Famous Producer has had some hit records then it would be a 
         smarter move to go with him.
     -Its all about that hit record and Famous Producer has made some; therefore its a better GAMBLE

5). ITS A PRODUCER ADVANCE

The $500,000 is a PRODUCER ADVANCE meaning...
     -The producer will not receive a royalty check until the PRODUCER ADVANCE is recouped.
     -Famous Producer says to the Record Label: "Since I'm making you a hit record that will make 
         you a ton of $ I want $500,000 up front".
     -Most of the time the album didn't make enough money to recoup the PRODUCER ADVANCE so
         Famous Producer may not see a royalty check for that album.



6). MARKET

Its all based on the needs and likes from the consumer and the MARKET.
    -Why does a Cadillac Escalade cost more than a Dodge Durango?
    -Why does a Louis Vuitton t-shirt cost more than a Wal-Mart t-shirt?
    -Answer = MARKET
    -Every producers' dream is to sell that one beat for $100,000, but what's wrong with selling ten        
        beats for $10,000 per track?
    -There is nothing wrong with being the owner of Wal-Mart or Dodge.