Music lawyer Donald S. Passman talked with us at Detone8.com about the current state of the major labels, getting their attention and the first thing every band needs to do.
Late last year Donald S. Passman released the seventh addition to his book “All You Need to Know About the Music Business,” and we interviewed Passman about the changes to the book caused by some dramatic shifts in the music industry.
“There has been a huge change from the last edition,” Passman said.
For fans, the most recognizable changes in the music business have been listening to interactive streaming music online with companies like Pandora, and it’s an issue the industry wrestled with right up to the publication of the book. Yet the biggest change to this version of Passman’s book is how the new 360 deals work.
The 360 deal is one of the last ditch efforts by record labels to stay afloat. Simply put, this new contract will not only split the profits from record sales with musicians and labels, but record labels now want a piece of every dollar a band makes. This includes digital sales, merchandise and even performance profits from live shows.
It’s an unprecedented way for record labels to stay afloat, although they have a strong argument in favor of the 360 deal Passman said. It’s not fair that record labels put up most of the money to get a musician off the ground and not share in all of the profit that comes with success.
And the worst part is that this maybe one of the best options for bands right now. As long as record labels are the key holders to major success in the industry, all other business plans are untested. Passman said he has yet to see any completely independent band break into the mainstream.
There is so much competition that even Internet sensations like Justin Bieber have signed with major labels to get mainstream exposure.
“There is what, 7 million bands on Myspace right now, so how do you break through that noise,” Passman asks.
Yet as much as the labels are hoping the 360 deal will save their business model, Passman has yet to see any results. “It’s too early to tell,” he said.
It seems even the experts like Passman are unsure of the future of the industry.
To sign or not to sign is purely academic if you are not even getting noticed by the labels in the first place. So, what is the first thing a band needs to do? Get it in writing.
You don’t need to cough up several hundred dollars it takes to create a business before you make any money, but Passman recommends putting an agreement in writing.
Before the band ever takes in one dollar you need to write down how the band will make decisions, who owns the name and assets of the band and how to kick someone out or bring a new person in. Then everyone signs it.
Passman warns it is harder than ever to get signed. There are less labels, less money and fewer deals made. But the keys to getting signed have stayed the same. You need to build a buzz, a story and learn to manage your fans.
Key Info from music lawyer Donald S. Passman: Before your band makes one dollar put an agreement in writing.
image from flickr.com user NobMouse
Brett Lohmeyer is an editor for detone8.com and an online producer for the Globe-Democrat. Brett has worked in different aspects of the media industry for several years including The Montage, The St. Louis Beacon, The Webster-Kirkwood Times and SLPS Channel 20 in St. Louis, Mo.