SXSW: From Streaming to AI: Legendary Music Lawyer Donald Passman on Music’s Evolution

At this year’s South by Southwest (SXSW) festival, one of the most anticipated discussions in the music sector was the featured session, “All You Need to Know About the Music Business: Right Now.” The panel brought together industry veteran Donald Passman, music lawyer and author of the widely regarded industry bible "All You Need to Know About the Music Business," and David DeCristofaro, an innovation and fan experience expert from The Current Sea. Their conversation explored the ongoing transformation of the music industry, touching on streaming, artist-label relationships, AI, and the future of fan engagement.

The Streaming Era: A Radical Shift

Streaming has fundamentally altered the financial and operational landscape of the music business, according to Passman. “The industry used to be built around selling something tangible — sheet music, vinyl, CDs,” he explained. “Now, it's all about access rather than ownership.”

The shift to streaming introduced a “zero-sum game” where all artists compete for a fixed pot of subscription and ad-generated revenue. Unlike physical sales, where a customer could purchase multiple albums at once, streaming is dictated by listening time. “If I listen to one song, that means I’m not listening to another,” Passman noted. “That changes how revenue is distributed and how artists need to think about marketing themselves.”

Streaming has also opened doors for independent artists. Platforms such as TuneCore allow musicians to distribute their music worldwide with minimal cost. However, the ease of entry has led to an oversaturated market, with over 100,000 new songs uploaded every day. “That means breaking through the noise is harder than ever,” DeCristofaro said. “Labels are now looking at trending artists online rather than developing raw talent from scratch.”

The Changing Role of Record Labels

With technology making music distribution easier, the function of record labels has evolved. In the past, labels provided essential services such as manufacturing, distribution, and radio promotion. Today, their primary value lies in marketing, brand-building, and global reach.

Passman explained that many artists now question whether they even need a label. “If you're an artist with a loyal niche audience, you might be better off staying independent,” he said. “But if you want to be a global superstar, labels still offer infrastructure that is hard to replicate.”

For those who do sign with labels, deals are more favorable than in the past. “New artists are negotiating ownership of their masters and getting 50% of label profits — things that were unheard of in previous decades,” Passman said.

AI and the Music Industry

Artificial intelligence has been a hot-button issue in the creative world, and music is no exception. Passman discussed the legal and ethical challenges of AI-generated music, noting that copyright law does not currently recognize AI-generated works. “If AI creates a song, no one owns the copyright,” he said. “That means anyone can use it without permission.”

There is also concern about AI models training on copyrighted materials. Lawsuits from companies like Getty Images and record labels against AI platforms are testing the boundaries of fair use. “The music industry is fighting to ensure that AI companies either pay for training data or don’t use copyrighted works at all,” Passman explained.

Despite these concerns, AI could serve as a tool rather than a replacement for artists. “It can help with songwriting, production, and even live performance elements,” DeCristofaro suggested. “But at the end of the day, audiences still connect with human artists and their stories.”

The Future of Live Music and Fan Engagement

The session also addressed the evolving landscape of live music, which remains one of the strongest revenue streams for artists. “You can't pirate a live experience,” Passman said. “Touring is still one of the most lucrative aspects of an artist's career.”

However, the economics of live performance are shifting. While superstar tours are thriving, mid-level and emerging artists are facing challenges due to high touring costs. Innovative revenue models, such as fan experiences and VIP packages, are becoming more common. “Artists and venues are experimenting with ways to provide added value, from exclusive meet-and-greets to augmented reality experiences,” DeCristofaro said.

The ticketing landscape is also undergoing scrutiny. The controversy over high ticket prices and resellers remains a major topic. “Artists don’t always control pricing,” Passman noted. “But platforms like StubHub reveal what fans are actually willing to pay.” Some artists, like Taylor Swift, have taken innovative approaches, such as pre-registering fans to prevent scalping.

The Road Ahead

Looking forward, Passman and DeCristofaro anticipate continued evolution in streaming models, rights management, and live event innovation. “Streaming is reaching saturation, so companies are looking at new ways to generate revenue,” Passman said. “That could mean higher subscription prices or more premium fan experiences.”

DeCristofaro believes globalization and data ownership will play a bigger role. “Artists need to own their fan data,” he said. “Right now, that information is mostly controlled by platforms and labels. The artists who take control of that data will have a big advantage in the future.”

In a rapidly changing industry, one thing remains clear: adaptability is key. Passman’s book has long been a guiding light for those navigating the music business, and if the insights shared at SXSW are any indication, staying informed has never been more important.

As the conversation wrapped up, Passman reminded attendees of a fundamental truth: “At its core, the music business is still about great songs and passionate fans. The tools and technologies will change, but that won’t.”

Following the session, Passman stayed to engage with attendees, signing copies of his book and taking photos with fans. The informal interactions underscored his commitment to education and mentorship in an industry that is constantly evolving.