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December 10, 2012

Attorney Don Passman on the Future of Digital Music


Don Passman
Photo by Lester Cohen

Major change is afoot in the music industry, and few are more qualified to comment on it than Don Passman. The noted attorney has spent more than 20 years representing some of the biggest names in music. He's shared his wisdom in All You Need to Know About the Music Business, a thorough music biz primer aimed at music creators. A couple days after the release of the eighth edition of All You Need to Know..., Passman told us a few things that music creators need to know about the future of music.

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Unlike a lot of music industry textbooks, All You Need to Know... is geared towards music creators. What would you say is unique about their needs?

Creative people generally don't like business, so I've made All You Need to Know About the Music Business easy to read by using layman's language.

More and more music creators are going the independent route these days. Why is it still important for a songwriter, composer or producer to understand the music business if they never intend to sign a label or publishing deal?

Even if you go independent, you still have to deal with concepts like copyrights, master rights, publishing rights, performing rights and a host of other concepts. In fact, it can be more complicated when you're doing it yourself.

How significant are the various streams of digital income available to music creators?

[They are] growing in significance, but CDs are still 45% of the business.

Do you see that changing in the future?

Without a doubt, everything will be digital in the future. It's not yet clear what the primary model will be, but we're starting to see trends. I personally think streaming on demand services, like Rhapsody or Spotify, will be a big part of the future.


What steps can songwriters or composers take to make sure they're prepared for a future where subscription services become a main source of music for consumers, and a main source of compensation for creators?

As an artist, the game hasn't changed as radically as you might think-it's still about building an audience. However, the growth of social media makes it far easier to connect with your fans, and there's a new section in the 8th edition of All You Need to Know About the Music Business that talks about how to maximize your fan base. Essentially, it's about building a presence, and staying in contact.

All You Need to Know About the Music Business

Do you think public performance income will stay a vital source of income for songwriters and composers in the next few years?

Yes, but it's going to decline until the advertising revenue in digital catches up. Advertising dollars are migrating online in a big way, which means traditional media is earning less, and they're squeezing down the public performance license fees. Digital isn't yet making up the difference.

Increasingly, major decisions about the future of the music industry are playing out in the courts and in Congress. Do you see music creators themselves having a meaningful impact in how they are compensated in the future?

If the historical pattern holds, when a new model is figured out, the stars will renegotiate deals and make them more favorable for artists. That's the way it worked when CDs came out-in the beginning, the artists were paid less, then grew their revenue share as the business grew.


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The eighth edition of All You Need to Know About the Music Business was released on December 4th, 2012. Find it on Amazon here.

About Don Passman
One of America's top entertainment attorneys, Don Passman practices law with the Los-Angeles-based firm of Gang, Tyre, Ramer, and Brown, Inc. Having specialized in the music business intensively for over twenty years, his clients include major entertainers, publishers, record companies, managers, producers and other participants in the music industry. Responsible for the record-breaking "mega" deals for both Janet Jackson and R.E.M., he has also worked with a number of major artists.

A graduate of the University of Texas and Harvard Law School, Passman is listed in The Best Lawyers of America. He is the author of the nonfiction bestseller All You Need to Know About the Music Business, which has sold more than 150,000 hardcover copies in print. Passman has lectured extensively on the subject of the music industry, including teaching a course at the University of Southern California Law School's Advanced Professional Program, and lecturing for the UCLA Entertainment Law Symposium, Harvard Law School, the American Bar Association, the Practicing Law Institute, the USC Entertainment Law Institute, and the Los Angeles Copyright Society.

Find out more about Don Passman at www.donpassman.com.