All You Need to Know About the Music Business

Passman is a music industry lawyer who has represented major artists, and this is the standard reference on how the business works contractually and financially. It has been revised through many editions, which matters because the economics change.

The content is organised around the deals an artist enters. Recording agreements: advances and how they are recouped, royalty rates and the deductions applied to them, term structures based on album commitments rather than years, controlled composition clauses, and what rights the label acquires and for how long. Publishing: the distinction between the composition and the recording, mechanical royalties, performance royalties collected by the performing rights organisations, synchronisation licensing for film and advertising, and how publishing deals divide the income. Live performance: promoter deals, guarantees against percentages, the economics of touring and merchandise. Management: the commission structure and what it applies to. Streaming: how the pro-rata pool is divided, what an artist actually receives per stream and why the number is small, and the differences between distribution through a label and directly.

Passman's most consistent practical point is about recoupment. An artist's advance is a loan against future royalties, and because royalty rates are low after deductions, most artists never recoup and therefore never receive royalties beyond the advance, while the label retains ownership of the recordings.

The book is written for artists and their advisers, and Passman is explicit that he is describing what the deals say rather than what is fair. Editions differ substantially and the streaming material in particular has been rewritten repeatedly. Readers must use a current edition, since the economics described in an older one will be wrong.