How The Grateful Dead Inspire the Power Attorney Behind Dave Matthews Band & Pearl Jam
http://www.billboard.com/articles/business/7693420/elliot-groffman-lawyer-music-business-interview
2/17/2017 by Robert Levine
Guerin Blask
Elliot Groffman, photographed Feb. 3 at Carroll Guido & Groffman LLP in New York.
Veteran attorney Elliot Groffman on streaming royalties, revenue models and industry prospects under President Trump.
On the Friday of Grammy week, when Elliot Groffman received the Entertainment Law Initiative Service Award, he used his speech as an opportunity to reflect on just how much the music business has changed. "The economic model that I grew up with in the '80s and '90s has blown sky high," says Groffman, a partner at Carroll, Guido & Groffman LLP who represents the Dave Matthews Band and Pearl Jam, among others. At the same time, Groffman's advice for acts wouldn't have sounded out of place 20 years ago: "If you have any leverage at all in a deal, keep [the term] as short as possible."
Transactional lawyers like Groffman now find themselves representing bands in the brave new world of streaming, with its opaque royalties and unsettled economics. Streaming revenue is spurring the kind of growth in the recorded-music business that hasn't existed for more than a decade. But it remains to be seen how much that growth will benefit artists -- especially those without pop hits. "The question is, Is streaming a sustainable business model where labels and everyone are sharing in an equitable way with the artists?" asks Groffman. "This has always been an issue, from vinyl to CDs."
Groffman, 63, who lives in Manhattan with his wife, Hilary -- the couple has two grown children -- is in a better position than most to navigate this new landscape. For more than two decades, he has represented the Dave Matthews Band, which always had an independent streak. In his speech, Groffman told the story of how he first convinced RCA to let the group release a series of concert recordings -- for which the label didn't see a demand.
"Now everyone does that," he says. Another client is Pearl Jam, a similarly self-contained act that has put out its last few albums under short-term deals. "Generally, when we pack this up, I want to say that we left this business in better shape than we found it," he says. "We need a healthy ecosystem that's balanced and sustainable so creators can create."
The music business seems to be growing again, but there's still a sense that artists aren't getting their fair share of streaming revenue. Is that the fault of the labels, the streaming services or the overall business model?
It's not a matter of good guys and bad guys -- it's not that simple. We're invested heavily in a system that depends on scale, and we need to market effectively to get to scale. Watching the Super Bowl, how many ads were there for Amazon or Google, and how many were there for Spotify? How many people still don't know what Spotify is, much less how to use it? Then there's the issue of royalty formulas. Let's say I listen to jazz or Rosanne Cash -- I don't necessarily listen to the top pop hits at home. But the formulas are skewed to mass and volume. Why isn't my $9.99 only going to the artists I'm listening to? One system may not work for everyone.
Are you confident artists will benefit as the recorded-music business begins to grow again?
We'll find the right balance as the new models scale up. We've seen the growth of the 360 model, but when the business is much larger and costs are less, we'll need to address that. I'm very focused on that.
One of your longest professional relationships has been with Dave Matthews and his manager, Coran Capshaw. What have you learned from them?
Coran felt the change in the air and realized that as the majors consolidated and lost control over their distribution due to technology, artist representation needed to scale up. He's one of the most innovative entrepreneurs in the business. When we did deals to release concert recordings to fans, label executives couldn't wrap their heads around it. Now everyone does that.
You and Coran are both fans of The Grateful Dead. Has that group been an influence too?
In terms of business, Coran and I talk about The Dead a lot. There's a delicate balance: What are you giving to your fans, and what are you asking your fans to pay for? With Dave Matthews, we encouraged people to tape the shows and share them, but when people started making businesses out of selling overpriced bootlegs, that was a perversion of the intent, so we decided to mix, market and sell them.
In your speech at the Entertainment Law Initiative lunch, you spoke about how much Bruce Springsteen inspired you. Any great stories there?
I was sitting at my desk one day when my assistant tells me that Coran Capshaw is on the line -- with [Springsteen manager] Jon Landau and [Pearl Jam manager] Kelly Curtis. And I'm thinking, "OK, this is going to be an interesting phone call." That was how I got involved in the Vote for Change tour in 2004. We met at a photographer's loft, all of us, and I got to turn to Dave Matthews and say, "Dave, please meet the most important music influence of my past. Bruce, please meet the most important musical figure in my life now." I called my wife after to tell her.
With copyright reversion, artists can now file to recover their rights to material created after 1978. How does that change negotiations for acts of that era?
It only takes effect in the U.S., and there are a number of issues that are still being worked out, but it could be very powerful. It's giving artists some leverage for renegotiations and restructurings.
You held a fundraiser for Hillary Clinton last summer. Have you been thinking about politics and where that goes next?
I'm a normal member of the public when it comes to my disappointment there. But as people in the music world, we have an obligation to bring social and political issues to the fore and support our clients who do so. Dave Matthews was deeply involved with the Standing Rock pipeline issue; I'm very involved in the Global Poverty Project. There's a lot to do.
There's also a view that President Donald Trump could be good for copyright, and thus the music industry.
I don't think he's particularly interested in the rights of creators. If people say to him that we have to protect intellectual property, that could help, but will we also get fairness in terms of distribution of digital revenue? That's the level I'm more interested in.
Artists have never had so many options -- or, in some cases, such a hard time making money. Is this the best of times or the worst of times?
The current state of the industry forces everyone to look at a career holistically. If you're throwing the dice and betting everything on a hit single, it may be time to look for another career. But if you look at it as a writer or a performer, looking for ways to connect with fans, it's a good time.
This article originally appeared in the Feb. 25 issue of Billboard.
2/17/2017 by Robert Levine
Guerin Blask
Elliot Groffman, photographed Feb. 3 at Carroll Guido & Groffman LLP in New York.
Veteran attorney Elliot Groffman on streaming royalties, revenue models and industry prospects under President Trump.
On the Friday of Grammy week, when Elliot Groffman received the Entertainment Law Initiative Service Award, he used his speech as an opportunity to reflect on just how much the music business has changed. "The economic model that I grew up with in the '80s and '90s has blown sky high," says Groffman, a partner at Carroll, Guido & Groffman LLP who represents the Dave Matthews Band and Pearl Jam, among others. At the same time, Groffman's advice for acts wouldn't have sounded out of place 20 years ago: "If you have any leverage at all in a deal, keep [the term] as short as possible."
Transactional lawyers like Groffman now find themselves representing bands in the brave new world of streaming, with its opaque royalties and unsettled economics. Streaming revenue is spurring the kind of growth in the recorded-music business that hasn't existed for more than a decade. But it remains to be seen how much that growth will benefit artists -- especially those without pop hits. "The question is, Is streaming a sustainable business model where labels and everyone are sharing in an equitable way with the artists?" asks Groffman. "This has always been an issue, from vinyl to CDs."
Groffman, 63, who lives in Manhattan with his wife, Hilary -- the couple has two grown children -- is in a better position than most to navigate this new landscape. For more than two decades, he has represented the Dave Matthews Band, which always had an independent streak. In his speech, Groffman told the story of how he first convinced RCA to let the group release a series of concert recordings -- for which the label didn't see a demand.
"Now everyone does that," he says. Another client is Pearl Jam, a similarly self-contained act that has put out its last few albums under short-term deals. "Generally, when we pack this up, I want to say that we left this business in better shape than we found it," he says. "We need a healthy ecosystem that's balanced and sustainable so creators can create."
The music business seems to be growing again, but there's still a sense that artists aren't getting their fair share of streaming revenue. Is that the fault of the labels, the streaming services or the overall business model?
It's not a matter of good guys and bad guys -- it's not that simple. We're invested heavily in a system that depends on scale, and we need to market effectively to get to scale. Watching the Super Bowl, how many ads were there for Amazon or Google, and how many were there for Spotify? How many people still don't know what Spotify is, much less how to use it? Then there's the issue of royalty formulas. Let's say I listen to jazz or Rosanne Cash -- I don't necessarily listen to the top pop hits at home. But the formulas are skewed to mass and volume. Why isn't my $9.99 only going to the artists I'm listening to? One system may not work for everyone.
Are you confident artists will benefit as the recorded-music business begins to grow again?
We'll find the right balance as the new models scale up. We've seen the growth of the 360 model, but when the business is much larger and costs are less, we'll need to address that. I'm very focused on that.
One of your longest professional relationships has been with Dave Matthews and his manager, Coran Capshaw. What have you learned from them?
Coran felt the change in the air and realized that as the majors consolidated and lost control over their distribution due to technology, artist representation needed to scale up. He's one of the most innovative entrepreneurs in the business. When we did deals to release concert recordings to fans, label executives couldn't wrap their heads around it. Now everyone does that.
You and Coran are both fans of The Grateful Dead. Has that group been an influence too?
In terms of business, Coran and I talk about The Dead a lot. There's a delicate balance: What are you giving to your fans, and what are you asking your fans to pay for? With Dave Matthews, we encouraged people to tape the shows and share them, but when people started making businesses out of selling overpriced bootlegs, that was a perversion of the intent, so we decided to mix, market and sell them.
In your speech at the Entertainment Law Initiative lunch, you spoke about how much Bruce Springsteen inspired you. Any great stories there?
I was sitting at my desk one day when my assistant tells me that Coran Capshaw is on the line -- with [Springsteen manager] Jon Landau and [Pearl Jam manager] Kelly Curtis. And I'm thinking, "OK, this is going to be an interesting phone call." That was how I got involved in the Vote for Change tour in 2004. We met at a photographer's loft, all of us, and I got to turn to Dave Matthews and say, "Dave, please meet the most important music influence of my past. Bruce, please meet the most important musical figure in my life now." I called my wife after to tell her.
With copyright reversion, artists can now file to recover their rights to material created after 1978. How does that change negotiations for acts of that era?
It only takes effect in the U.S., and there are a number of issues that are still being worked out, but it could be very powerful. It's giving artists some leverage for renegotiations and restructurings.
You held a fundraiser for Hillary Clinton last summer. Have you been thinking about politics and where that goes next?
I'm a normal member of the public when it comes to my disappointment there. But as people in the music world, we have an obligation to bring social and political issues to the fore and support our clients who do so. Dave Matthews was deeply involved with the Standing Rock pipeline issue; I'm very involved in the Global Poverty Project. There's a lot to do.
There's also a view that President Donald Trump could be good for copyright, and thus the music industry.
I don't think he's particularly interested in the rights of creators. If people say to him that we have to protect intellectual property, that could help, but will we also get fairness in terms of distribution of digital revenue? That's the level I'm more interested in.
Artists have never had so many options -- or, in some cases, such a hard time making money. Is this the best of times or the worst of times?
The current state of the industry forces everyone to look at a career holistically. If you're throwing the dice and betting everything on a hit single, it may be time to look for another career. But if you look at it as a writer or a performer, looking for ways to connect with fans, it's a good time.
This article originally appeared in the Feb. 25 issue of Billboard.
0