About The Book
ALL YOU NEED TO KNOW ABOUT THE MUSIC BUSINESS
By Donald S. Passman
10th Edition
Now in its tenth edition and its biggest revise ever, Donald Passman’s classic guide returns with the most changes in the book’s and music’s history, due to how streaming has turned the industry upside down. This is a must read to navigate those changes and thrive in the rapidly changing music industry.
Nobody knows the music business like Don Passman. The first edition of ALL YOU NEED TO KNOW ABOUT THE MUSIC BUSINESS was released in 1991, quickly being dubbed the “industry bible” by the Los Angeles Times. Over the next 28 years and many editions, Donald Passman’s roadmap on how to succeed in music has only become sharper and more insightful. Now, in its tenth and most comprehensive update yet, Passman guides readers once more through the constantly shifting landscape of the music industry—through all the digital and streaming jungles and mystifying legalese and royalties—to teach music-loving hopefuls everything they could possibly need to know to not only survive, but to strike it big.
But this book isn’t only for those just starting out. Whether you’re a novice taking your first look into the music world or you’ve been in the business for a while but are mystified by the massive upheaval around you, you will find that the newest update to Passman’s guide offers the same gold-standard of timely, trustworthy guidance from a universally respected veteran of the industry. He teaches new talent how to choose a winning team of advisors; how to structure their commissions and fees; and how to navigate the ins and outs of record deals. Higher-ups can find authoritative advice on maximizing profits through concerts, touring, and merchandising deals. But most importantly, while this tenth revamp of Passman’s indispensable guidebook retains the sage lessons from past editions, it also indicates how professionals can navigate the biggest shift the industry has faced since the phonograph: teaching us all how to play the game even after the streaming revolution completely changed the rules.
The music industry has gone through a period of unprecedented upheaval in the last twenty years. The advent of streaming threw the musical ecosystem completely on its head. Suddenly, musicians don’t earn money through the number of units they sell, but rather by how many times their audiences listen to their songs. Now that this major transformation has occurred, changing everything we thought we knew about how the industry operates, the only question left to ask yourself is: how do I make streaming work for me? The tenth edition of ALL YOU NEED TO KNOW ABOUT THE MUSIC BUSINESS definitively answers this question—and so many more.
Book Excerpt
1
First Steps
STATE OF THE UNION
This tenth edition is the most extensive rewrite of my book since the first edition.
That’s because the music industry has changed more radically in the last few years than at any other time in its history.
Let me explain:
Since the 1890s, music has been monetized by selling something: wax cylinders, piano rolls, shellac records, vinyl records, cassettes, CDs, and cheesy merchandise (well, I guess we’re still doing that). But the business is no longer based primarily on sales. Spotify, Apple Music, Amazon Music, YouTube, and similar services have revolutionized how people consume music, so that streaming is now the dominant revenue source for recorded music. And this change is WAY more drastic than you might think.
Consider this:
- In the past, when record sales were the mainstay of the recorded music business, you could go to a record store and buy two or three records at a time. Today, you can only stream one song at a time. That may not seem like a big deal, but . . .
- In the days of sales, an artist was paid the same money for each record sold, regardless of whether a buyer listened to it a thousand times or never took it out of the shrink wrap and used it as a doorstop. But today, the more listens you have, the more money you make. However . . .
- In the old days, if my records sold big numbers, it didn’t make any difference to the number of sales you had. Your fans would buy your albums, and my fans would buy mine. In fact, if you had a big seller, it would bring a lot of people into record stores, and that increased the chances of selling my records. But in the streaming world, that’s no longer true. For reasons we’ll discuss later, the more listens you get, the less money I make. A truly radical change.
The good news is that, after fifteen years of music revenue falling like buckets of rocks, we had our first earnings increase in 2016. And every year after that, we’ve had double-digit growth. All because of streaming.
We still have a ways to go—at the time of this writing, the recorded music business is less than 60 percent of what it was at its peak in 1999. But I predict it’s going to be bigger than it’s ever been in history. Why?
In 1999, the historical peak of the music biz, an average CD buyer spent about $40 to $50 per year on CDs; let’s call it $45. Today, with subscriptions priced at $10 per month, the average per-subscriber fee is about $7 (because of student and family discounts). So let’s use $7 per month, which means a music fan spends about $84 per year. That’s almost double the $45 of CD purchases we got from each fan in the good ol’ days. On top of that, the number of subscribers is growing all over the world.
But wait . . . there’s more! In the heyday of the music biz, the average CD buyer stopped going to record stores (or even listening to much music) in their early twenties. Today, people of all ages subscribe to streaming services (oldsters listen to Lawrence Welk, and youngsters want stuff like “Baby Shark,” a song that can mercilessly eat your brain). Which means streaming is not only generating more money per user (the $84 vs. $45 in the above example), but it’s also bringing in a wider range of consumers than ever before. How can the industry not be bigger than ever?
Another radical shift in the last few years is how the concept of an “album” is being challenged. What does an “album” mean in the streaming age, when you can listen to just the tracks you like? Why should artists even bother to make albums when they can release individual songs as soon as they’re ready? And if albums go away, what does that mean for recording contracts that have always been based on the delivery and release of albums? For example, if your contract requires you to deliver three albums, but nobody wants albums anymore, how do you ever finish the deal?
And that’s just a taste of what’s new in this edition. There’s also an update of all the current industry figures, a new section on the recent copyright infringement cases, an overview of the Music Modernization Act, and much, much more. All waiting for you just inside the tent.
So step right up, folks, and lemme show you how the music business is shifting around like a Rubik’s cube.
Donald S. Passman’s remarkably easy-to-read primer, “All You Need To Know About The Music Business,” continues being an essential asset for those in the music industry.
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