Several people have told me Atlantic was first to credit a recording director as a "producer" and that it was somewhat inadvertent. The term comes from radio production. They had encountered "producers" at the radio stations where they made many of their early recordings and grabbed that title when they wanted to give Jerry Wexler a label credit.
Independent labels such as Atlantic and Chess went on to buy or lease masters from individuals who became known as "independent producers" who were paid royalties they then shared with the artists. When recording engineers' unions went away in the early '70s our wages plummeted and many began calling themselves "producers" and demanding royalties which added to the confusion about the title.
A real record producer does exactly what a director does in theater or film. Sadly there aren't a whole lot of them today.
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