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La Scena Musicale - Vol. 18, No. 6

The Music Industry Bible, Version 8: Donald Passman’s All You Need to Know About the Music Industry

by Philip Ehrensaft / April 1, 2013

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Donald Passman's All You Need to Know about the Music IndustryWhen a book announcing that it tells you all you need to know about the music industry comes out in an eighth edition, it has passed a Darwinian test. As a young music industry lawyer in Los Angeles, Donald S. Passman observed a shared characteristic of brain surgeons and musicians: “.... 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 ...But in entertainment, as in surgery, you can soar to the top without any business expertise.”

That lack of expertise often leads to a lot of woe. So Passman started teaching a course at the University of Southern California about what makes the music industry tick, aimed at musicians as well as other music professionals. For musicians, the message was: most of you should not manage your own career, but you better get a solid handle on how the music business works in order to monitor whether your manager, booking agent, and lawyer are doing a good job.

In 1991, Passman turned his course notes into a book, All You Need to Know About the Music Business. It took off, as did Passman’s rise to the pinnacle of music law. Part and parcel of his rise is an evolution of music lawyers’ roles beyond the usual legal functions, to an integrative role as dealmakers in an increasingly complex and fragmented music sector. Passman’s deal making has involved the likes of Janet Jackson, Quincy Jones, Tina Turner, and R.E.M.

Passman has a rare talent for transforming technical issues into a clear, entertaining prose. After advising musicians on how to choose and monitor their team of supporting advisors, he proceeds to the intricacies of record deals, songwriting and music publishing, group issues and touring, merchandising, and motion picture music. 

Any Canadian musician doing business in the world’s largest single music market will be well served by Passman’s book. Chapters like those on choosing advisors are equally applicable in Canada. Others require supplemental reading for the specifics of Canadian law and practices, but the reader will know what to look for.

Passman’s clients indicate the focus of All You Need to Know: the popular music, including film music, that generates the lion’s share of music industry revenue, whether it’s the big buck acts in New York, L.A. and Nashville, or aspiring indie bands in outlying regions. 

Classical music gets a scant four-page chapter in Passman’s 480-page book, treated as a mostly poor-cousin special case of the music industry. When Passman discusses musicians’ clout, or lack thereof, in negotiating recording contracts, he refers to a starting artist as a musician who does not have a recording that has sold at least 100,000 copies in the USA.

In contrast, typical classical music sales are “... in the 5,000 to 10,000 range worldwide.... In fact, a “big seller” classical album is 50,000 worldwide.” Passman doesn’t pull punches on why “classical” classic music recording deals are now so rare: “Their economics suck.  Classical records are very expensive to make and have limited sales potential.” Even if you’re a major-name classical artist and can get recording contracts, the terms for the artist’s cut are typically modest compared to pop music.

Readers of La Scena are all too aware of this bleak situation. So why read a book that focuses on the nuts and bolts of popular music businesses? One reason is that these big-dollar genres set the economic parameters for the music sector as whole, including classical music. The special February 16, 2013, issue of the “Wall Street Journal of the pop music industry,” Billboard, is devoted to The Power 100 in the sector. Number one on the list is the chairman of Universal Music Group, Lucian Grange. 

Grange maintains that “The data shows and has proved that the enjoyment, the pleasure, the use, the interest in music has never been higher. That’s why we’re confident.... We’re monetizing things that we’ve not monetized before, and they’re coming elsewhere in the balance sheet.” The classical music sector would do well to monitor whether new strategies created by people like Grange can also bolster the balance sheet for art music.

In particular, classical music has a great deal to learn from popular music’s pioneering use of social media to reshape the music sector. Social networking is front and center in Passman’s music business bible. But the shoe can also be on the other foot – witness the brilliant harnessing of You Tube by the young violinist Lindsey Stirling to launch her international career, as profiled in the March 2, 2013, issue of Billboard.

Passman’s own analysis also suggests that many classical musicians may have superior lifetime net income flows, compared to many pop musicians with much higher gross incomes. Most pop musicians have relatively short careers. Not as short as football players, but most will not emulate the aging Rolling Stones in filling stadiums. An important part of the work of pros like Passman is getting pop musicians to plan ahead and save for the future. 

In contrast, classical musicians can typically continue their career in their 70’s and beyond. Pop musicians in their prime are also paying a larger proportional share of their big gross incomes for commissions to personal managers, booking agents, business managers, lawyers, and big touring expenditures for their band plus tons of electronic equipment and the staff to manage it.

So classical tortoises may outrun pop music hares.

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