Don Passman Updates The 'Music Biz'

Don Passman
Lester Cohen

Don Passman

When it comes to the music business, Don Passman has seen it all -- and written the book on it. Due to 40 years of accomplishments, clout and clients -- which currently include Taylor Swift, Paul Simon, Adele and Stevie Wonder -- Passman has landed on Billboard’s Power 100 list the past two years. But in most circles the attorney is best known for his seminal tome All You Need to Know About the Music Business, a detailed handbook made palatable and engaging through anecdotes and humor, which will be rereleased for its 10th edition on Nov. 2. (The first edition was published in 1991.) 

He calls writing his “serious hobby,” which he does on weeknights and weekends. The Texas-born partner at Gang Tyre Ramer Brown & Passman knows how to play to his audience -- and he’s also known for writing three fiction novels. “They’re very different mindsets and skills,” Passman tells Billboard. “In a novel, you’re trying to make people feel something. In the music book, you’re trying to make people not feel bored.”

It’s been four years since the last update to your Music Business book. It’s usually two or three years between updates. Why now?
Because the industry has changed so radically, it was a moving target to get this thing current. I needed the extra time to get it as up-to-date as I could. When I thought I had it, the Music Modernization Act came along. I decided to write a section on the copyright infringement cases. In the meantime, streaming began to take more shape in terms of marketing and how the industry has adjusted for it. I had to do the best I could for the moment. And because of how things had changed, I had to completely restructure the book. For example, in the last edition, the CD royalty calculation was first, but now it’s almost irrelevant. All the metrics were based on sales, which are also irrelevant.

How do you explain the Marvin Gaye estate’s copyright infringement lawsuit against the writers of “Blurred Lines”?
The concept is easy to understand; the specific facts apply to it. Obviously there’s a range in difference of opinion. If you’re Marvin Gaye’s estate you think they stole it and that’s that. Others think it’s somewhat of a mood feel, which isn’t copyrightable. And maybe more things that weren’t original and had been around. The jury decided otherwise.

People have worried that’s a slippery slope and might impede creativity. 
You know, I don’t think it impedes creativity because creative people are driven to create no matter what. It has very little to do with business with the serious creatives. I think that it may encourage lawsuits and it may encourage more people going after, but almost every major artist has had litigating claiming people stole their work. It’s just comes with the territory. Some of them are nutjobs, some of them are legit.

Have you noticed any increase in infringement lawsuits over the years?
In general, we’re getting more copyright litigation but I wouldn’t call it a massive avalanche. And in the age of the Internet, when everything is accessible, people will believe that someone actually stole their song whether they did or didn’t.

Is it easier or harder for an artist to make bad decisions in terms of contract terms? Is it any more difficult to navigate that then it used to be?
It’s probably not any more difficult than it used to be. It’s just different issues that it used to be. The complexity of it, in some ways, it’s gotten simpler. Royalties used to be a very complicated formula and now they’re straightforward. Now you get a percentage of what the record company gets. It’s pretty clear. That’s a change to the positive. The rights restrictions have gotten tighter. Today, for example, the exclusivity in your record deal would cover you as an actor in a film even if you’re not singing. It would cover you going on TV on a talk show. So you have to be careful, particularly if you’re someone who is an actor, that your record deal doesn’t get in the way of your other career. 

You mean if they go on a talk show, the appearance fee?
Yeah, I think the record company could make the claim to it. The other thing people get caught in is streaming festivals, if their exclusivity of the record deal won’t allow that. If they go make a contract and the festival allows them to stream it then they’re in breach of their contract. You have to worry about things that didn’t exist before. 

It sounds like the 360 deal has gone to a 400-degree deal.
The 360 is alive and well. As a practical matter, nobody bothers you about a TV appearance. In fact, they want it as promotion. The big festivals have made deals with the festivals so they can get that done. But I’m just giving you examples of things that exist today that didn’t exist in the past.

What about advances given to artists and songwriters. How do you advise clients? 
If you are a major artist and don’t need the money, I like to go for a bigger back end and take less in the way of advance, and cover some risk in exchange to do well with success. If you’re starting out and need money, you’re going to give up more to get the money to survive to get yourself to a position to have a career. And there’s a diff in temperment. Some people like the guaranteed money up front and they’re willing to take less on the back end. Some people are willing to bet on themselves and think they’ll make more money in the long run by taking a bigger back end. 

In the book you said the increase in independent labels has been good for the industry. As I read it, you meant the quality of the music. How is it for labels as companies? 
I think the small labels are doing quite well. Unlike the days when physical product was king, small labels had a very hard time because you needed capital, you needed to manufacture to ship, you needed clout to get into record stores. You don’t need any of that any more (8:30) So now if you’re doing good marketing and promo and positioning your artist well, you can make quite a bit of money.

You mentioned label joint ventures in the book. Are those more common than a few years ago?
Yes, very much so. One might argue they’re becoming the norm in the rap world -- at least for highly sought after artist.

What does an artist need to watch out for when doing a deal like that?
You just want to watch out for the expenses and you want to watch out for what charges they’re taking for distribution, overhead, for services like marketing and promotion. They’re shared off the top. But on the other hand, the more of them there are, the less an artist is going to get. 

Streaming seems to be nothing but controversy, and nobody seems to be happy about their streaming royalties. But for a successful artist, is streaming a net positive? 
Oh yeah. I mean streaming it’s not making money an artist was making 15 years ago, but it’s substantial money, particularly if you’re pop and hip hop, that’s where most of the money is going in streaming. But it can be really substantial. An artist can make tens of millions of dollars from streaming. 

You give a little bit of time to foreign performances. Is it getting any easier to get your hands on neighboring rights royalties? 
It’s not hard to set up a system to collect them. But to get anything meaningful is hard if you’re an America. You have to record in a country that’s a party to the Rome Convention, like Canada, or if you sign to a UK label, that will help in some territories. But basically because the US isn’t party to those treaties, the countries don’t reciprocate. Some countries do, but it’s harder if you’re in American. 

Your book still gives significant space to touring. Have there been any significant changes? 
Not since the last edition of the book. There have obviously been radical changes since the first edition of the book. There were no national promoters in the beginning, and that has seriously changed the industry. But I haven’t seen anything in the way of a major change since the last edition. 

Do you sense artists need to be out on the road more often?
It depends on the music. If you’re country, you’ve always had to be on the road 300 days a year. The others, it’s interesting in that it’s disconnected from the album to some degree, because albums are becoming less relevant even though they’re still the norm for a lot of artists. So the touring to supplement it is less significant around an album. It’s definitely helped in terms of streaming numbers, I’m told, but I don’t have first-hand knowledge of it.

Download sales have consistently gone down 20% a year since peaking. CD sales were flat last year, maybe just a break from the downward trends.
It’s certainly an interesting phenomenon. My personal theory on it, based solely out of my head, is the people who were downloading were tech savvy enough to go and switch to streaming, whereas the people buying CDs don’t want to hear either one of those, so they keep buying them.