All You Need to Know About the Music Business

10th Edition

Donald S. Passman

• Publisher: Simon & Schuster
• Year: 2015
• ISBN:
  9781501104909
• Topic: Mezzi di comunicazione e arti performative
• Subtopic: Musica e business

“The industry bible” ( Los Angeles Times ), now updated, essential for anyone in the music business—musicians, songwriters, lawyers, agents, promoters, publishers, executives, and managers—trying to navigate the rapid transformation of the industry.For more than twenty years, All You Need to Know About the Music Business has been universally regarded as the definitive guide to the music industry. Now in its ninth edition, this latest edition leads novices and experts alike through the crucial, up-to-the-minute information on the industry’s major changes in response to today’s rapid technological advances and uncertain economy.Whether you are—or aspire to be—a performer, writer, or executive, veteran music lawyer Donald Passman’s comprehensive guide is an indispensable tool. He offers timely, authoritative information from how to select and hire a winning team of advisors and structure their commissions and fees; navigate the ins and outs of record deals, songwriting, publishing, and copyrights; maximize concert, touring, and merchandising deals; understand the digital streaming services; and how to take a comprehensive look at the rapidly transforming landscape of the music business as a whole.The music industry is in the eye of the storm, when everyone in the business is scrambling to figure out what’s going to happen to the major labels and what it will mean for the careers of artists and business professionals. No musician, songwriter, entertainment lawyer, agent, promoter, publisher, manager, or record company executive—anyone who makes their living from music—can afford to be without All You Need to Know About the Music Business. As Adam Levine, lead singer and guitarist of Maroon 5, says, “If you want to be in music, you have to read this book.”

1

First Steps

OPEN UP AND SAY “AHHH”

For many years I taught a class on the music business at the University of Southern California Law School’s Advanced Professional Program. The class was for lawyers, accountants, record and film company executives, managers, agents, and bartenders who want to manage groups. Anyway, at the beginning of one of these courses a friend of mine came up to me. She was an executive at a film studio and was taking the class to understand the music industry as it relates to films. She said, “I’m here to open up the top of my head and have you pour in the music business.” I loved that mental picture (because there are many subjects I’d love to absorb that way), and it spurred me to develop a painless way of infusing you with the extensive materials in this book. So if you’ll sit back, relax, and open up your mind, I’ll pour in all you need to know about the music business (and a bit more for good measure).

HOW I GOT STARTED

I really love what I do. I’ve been practicing music law for over thirty years, and I represent recording artists, record companies, film companies, songwriters, producers, music publishers, film music composers, industry executives, managers, agents, business managers, and other assorted mutants that populate the biz.

I got into this gig on purpose, because I’ve always loved creative arts. My first showbiz experience was in grade school, performing magic tricks for assemblies. I also started playing accordion in grade school. (I used to play a mean accordion; everyone applauded when I shook the bellows on “Lady of Spain.” I gave it up because it’s impossible to put the moves on a girl with an accordion on your chest.) In high school, I graduated from accordion to guitar, and in college at the University of Texas, I played lead guitar in a band called Oedipus and the Mothers. While I was with Oedipus, we recorded a demo that I tried to sell to our family friend, Snuff Garrett (more about him later). Snuff, a powerful record producer, very kindly took the time to meet with me. That meeting was a major turning point in my life. Snuff listened to the record, smiled, and said, “Don . . . go to law school.”

So I took Snuff’s advice and went to Harvard Law School. While I was there, I played lead guitar with a band called the Rhythm Method. However, it was quickly becoming clear that my ability to be in the music business and eat regularly lay along the business path. So when I graduated, I began doing tax planning for entertainers. Tax law, like intricate puzzles, was a lot of fun, but when I discovered there was such a thing as music law, the electricity really turned on. In fact, I took the USC class that I later taught, and it got me so excited that I left the tax practice for my current firm. Doing music law was so much fun that it wasn’t even like working (I’m still not over that feeling), and I enjoyed it so much that I felt guilty getting paid (I got over that).

My first entertainment law experience was representing a gorgeous, six-foot model, referred to me by my dentist. (I promised him I would return the favor, since most of my clients had teeth.) The model was being pursued (I suspect in every way) by a manager who wanted a contract for 50% of her gross earnings for ten years. (You’ll see how absurd this is when you get to Chapter 3.) Even then, I knew this wasn’t right, and so I nervously called up the guy to negotiate. I still remember my voice cracking as I said his proposal was over the industry standard, since most managers took only 15% (which was true). He retorted with “Oh yeah? Who?” Well, he had me. I wasn’t even sure what managers did, much less who they were. So I learned my first lesson in the art of humility.

As I began to really understand how the music business worked, I found that my love of both creative arts and business allowed me to move between the two worlds and help them relate to each other. The marriage of art and commerce has always fascinated me—they can’t exist without each other—yet the concept of creative freedom, and the need to control costs in order to have a business, are eternally locked in a Vulcan death match. Which means the music business will always need lawyers.

Anyway, I now channel my creative energies into innovative business deals, and I satisfy my need to perform by teaching, lecturing, and playing guitar. Just to be sure I don’t get too straight, however, I’ve kept up my weird assortment of hobbies: magic, ham radio, weight lifting, guitar, dog training, five-string banjo, karate, chess, poker, backgammon, and real estate investment. I also write novels, which you are all required to buy.

BRAIN SURGERY

Speaking of marrying creativity and business, I’ve discovered that a rock star and a brain surgeon have something in common. It’s not that either one would be particularly good at the other’s job (and I’m not sure which crossover would produce the more disastrous results), but rather that each one is capable of performing his craft brilliantly, and generating huge sums of money, without the need for any financial skills. In most businesses, before you can start earning big bucks, you have to be pretty well schooled in how the business works. For example, if you open up a shoe store, you have to work up a budget, negotiate a lease, bargain for the price of the shoes, and so forth—all before you smell that first foot. But in entertainment, as in surgery, you can soar to the top without any business expertise.

Making a living from a business you don’t understand is risky. Yet a large number of artists, including major ones, have never learned such basics as how record royalties are computed, what a copyright is, how music publishing works, and a number of other things that directly affect their lives. They don’t know this stuff because (a) their time was better spent making music; (b) they weren’t interested; (c) it sounded too complicated; and/or (d) learning it was too much like being in school. But without knowing these basics, it’s impossible for them to understand the intricacies of their professional lives. And as their success grows, and their lives get more complex, they become even more lost.

While it’s true that some artists refuse to even listen to business talk (I’ve watched them go into sensory shutdown if you so much as mention the topic), others get very interested and study every detail of their business lives. The vast majority, however, are somewhere in the middle. They don’t really enjoy business, but they want to participate intelligently in their career decisions. These artists are smart enough to know one simple thing: No one ever takes as good care of your business as you do.

It was for my moderately-to-seriously interested clients that I developed a way to explain the basics in simple, everyday language. With only a small investment of time, these clients understood the essential concepts, and everyone enjoyed the process (including me). It also made an enormous difference in the artist’s self-confidence about his or her business life, and allowed them to make valuable contributions to the process.

Because the results of these learning sessions were so positive, several clients asked if we could explore the subjects more deeply. Thus the conception of this book. It’s designed to give you a general overview of the music industry. You can read it as casually or intensely as suits your interest level, attention span, and pain tolerance. It’s not written for lawyers or technicians, so it doesn’t include the minutiae you’ll find in a textbook for professionals. Instead, it gives you a broad overview of each segment of the industry, then goes into enough detail for you to understand the major issues you’re likely to confront.

JUNGLE MAPS

When I was in high school, a policeman named Officer Sparks spoke at an assembly. Mr. Sparks hyped us on the life of a crime fighter, seeming sure we all secretly wanted to be cops. In the process, he showed us something I’ll never forget.

Officer Sparks ran a film in which the camera moved down a street. It was a grainy black-and-white movie, only about thirty seconds long, filmed by a camera bobbing along a sidewalk. When it was finished, he asked if we’d seen anything unusual. No one had. Apart from a couple of people bouncing in and out of the doorways, it looked pretty much like pictures taken by a camera walking past a row of boring shops. Mr. Sparks then said that a “trained observer” who watched the film could spot six crimes being committed. He showed the film again and pointed out each of the incidents (there was a quiet exchange of drugs, a pickpocket, etc.). This time, the crimes were obvious. And I felt like a doofus for missing them.

Any time I learn a new skill, I go through a similar process. At first, things either look deceptively simple, or like a bewildering blur of chaos. But as I learn what to look for, I see a world I never knew was there.

The best way for me to become a “trained observer” is to have a guide to the basics—a framework in which to organize the bits and pieces. So that’s the purpose of this book—to be a map through the jungle, and show you where the crimes are.

DETAILS

There is no way one book (even one filling several volumes) could poke into every nook and cranny of a business as complicated as the music business. So the purpose here is to give you the big picture, not all the details. (Besides, for some of those details, I charge serious money.) Also, even if I tried to lay out all the little pieces, as fast as everything moves in this biz, it would be obsolete within a few months. So the goal is to give you a broad overview (which doesn’t change nearly as quickly). That way you’ll have a bare tree on which to hang the leaves of your own experience. Oddly, it’s easier to pick up details (from trade publications, gossip at cocktail parties, etc.) than it is to learn the structural overview, because few people have the time or patience to sit down and give it to you. In fact, giving you the overall view turned out to be a much bigger job than I thought when I started. But you’re worth it.

SOME RESULTS

Since this is the ninth edition, I now have feedback from experiments using this book on actual human subjects. Of all the responses I got, I thought you’d enjoy hearing about two in particular:

First, I received an irate call from a music lawyer, who was upset because he charged thousands of dollars to give clients the advice I had put in the book.

Second, I received an equally irate call from a manager, who said that most of the artists he’d approached kept pushing my book in his face.

Way to go! Keep shoving.

And if you’ll permit me a momentary lapse of modesty, my favorite compliment was from someone who said this was the first book he’d ever finished in his life.

STAPLE, SPINDLE, AND MUTILATE

When you go through this book, forget everything you learned as a kid about taking good care of books, treating them as sacred works of art, etc. Read this book with a pencil or highlighter in your hand. Circle or star passages you think you’ll need, fold over pages, mark them with Post-its, paper clips, or bong water—whatever helps (unless you’re reading an electronic edition, then you might want to just smudge it here and there). This is an action book—a set of directions on how to jog through the music biz without getting mugged. So treat it like a comfortable old pair of shoes that you don’t mind getting dirty. It doesn’t matter what they look like, as long as they get you where you’re going.

CHOOSE YOUR OWN ADVENTURE

When my sons, David, Josh, and Jordan were little, their favorite books were from a series called Choose Your Own Adventure. They work like this: You start reading the book on page one and, after a few pages, the author gives you a choice. For example, if you want Pinocchio to go down the alley, you turn to page fourteen, but if you want him to go to school, you turn to page nineteen (my boys never picked school). From there, every few pages you have more choices, and there are several different endings to the book. (The boys liked the ending where everyone gets killed, but that’s another story.) These books are not meant to be read straight through; if you tried, you’d find yourself crashing into different plots and stories. Instead, you’re supposed to skip around, following a new path each time.

This concept gave me the idea of how to organize this book. You have a choice of reading for a broad overview or reading in depth, and the book tells you where to skip ahead if you want to do this. However, unlike the Choose Your Own Adventure books, you can read straight through with little or no damage to the central nervous system.

Here’s how it’s organized:

Part I deals with how to put together a team to guide your career, consisting of a personal manager, business manager, agent, and attorney.

Part II looks at record deals, including the concepts of royalties, advances, and other deal points.

Part III talks about songwriting and publishing, including copyrights and the structure of the publishing industry.

Part IV explores things you’ll need to know if you’re a group.

Part V deals with concerts and touring, including agreements for personal appearances, and the role of your various team members in the process.

Part VI, on merchandising, tells you how to profit from plastering your face on posters, T-shirts, and other junk.

Parts VII and VIII explore classical music and motion pictures. They’re the last sections because you need to understand the other concepts before we can tackle them.

Now, to choosing your adventure. You have four mouth-watering ways to go through this book:

1. EXTREMELY FAST TRACK

If you really want a quick trip, then:

(a) Read Part I, on how to pick a team of advisors;

(b) Get people who know what they’re doing;

(c) Let them do it;

(d) Put this book on your shelf to impress your friends; and

(e) Say “Hi” to me backstage at one of your concerts.

2. FAST TRACK

Short of this radical approach, if you want a broad-strokes overview of the busine...