Conflict Resolution and How It Relates To The Music Business

Conflicts are a large part of any successful business. In the music industry, conflicts can make or break many different aspects of how and why a project can be, or is considered a success. Learning to manage these different types of less than favorable situations can greatly improve working relationships within the business as well as pre-negotiate many aspects of up and coming agreements.

Not long ago, the project with which I travel had a major conflict with the booking and management agent for the group. Frustrated over tour routing and percentages, the entire group was ready to walk if the conflict didn’t get resolved in a timely manner. Luckily, the performers and tour management were professional enough to have a very “Civil” meeting with the booking agent and owner of the project and calmly discussed each of the frustrations, in effort to resolve the situations.

Ultimately the group got a great education on what could be done, contractually, and then based on the issues, were included in the decision making processes, also creating a great means to permanent solution(s). The group still retains the same management and booking, however, the routing, percentages paid to the agent, and performer compensation has all been addressed to mutually benefit the entire project.

The booking agent, hindered the situation by trying to exude power and authority, but was then reminded he worked for the project, not the other way around. Internally, the situation was resolved two separate ways. 1) By granting power and also accommodating the project, and 2) by using the collaborative approach and including the entire group in the decision making process.

Similarities and differences in styles both help and hurt the negotiation process. The agent, in an effort to retain 100% of the exaggerated commissions that the group had originally agreed to, tried to display power over the finances of the group, but still not addressing the issue of not having a group to book and promote at all. This didn’t help the situation and also prompting the group to look elsewhere for booking and contract management.

On the internal side, the owner, being understanding and willing to put his own personal goals on hold, was able to manage the conflict very professionally, and still be able to retain the controlling power of the entire group and command over the booking agency.

Some of the greatest tools a group has to offer is its’ intelligence:

The overall positive outcomes of the conflict resolution approach, to the group frustration and management negotiations were handled through a series of A) Compromise, B) Integrative agreements, and C) Structural Improvements within the corporate structure.

Specific examples of these would be 1) The agent not booking shows if the routing doesn’t make sense; and working harder to find shows between cities when the drives are long. 2) Agreeing to add seats in the vehicle to make the performers more comfortable, in conjunction with a trailer to tow the performance gear. And 3) improving the group’s salaries, based on the growth schedule of the project and performance compensations, while lowering the agent’s commissions overall and penalizing him, financially, for bad booking decisions.

The solutions are short-term, with long-term affects; meaning, the group is comfortable for the upcoming bad routing, but, understanding in the fact that overall the entire situation will improve and be better for years to come.

Stories such as this one, can offer a conflict, negotiation and resolution strategy without having to be in the middle of a disagreement. Studying different cases and historical events will also give the researching group or manager the ability to learn and understand how to better approach and (or) resolve serious situations before they become very serious.

Entrepreneurial Management & Its Followers. (A Doc McGhee Profile)

Management within the music industry is constantly changing; however, there is much that can be learned from the profiles of groundbreakers that have truly paved the way for an entrepreneurial-style of management. This particular blog posting will be based around one of those individuals and the quality business he’s built over the past thirty-plus years.

McGhee entertainment is one of the mega-management companies that have helped shape, what the world has come to know as, “Rock History”. Managing groups and artists, such as: Kiss, Motley Crue, Skid Row, Bon Jovi, Guns N’ Roses, and Ted Nugent, Doc McGhee has become one of the most successful managers in the history of the music business.

Organizing one of the most memorable music festivals in history, “The Moscow Music Peace Festival” on August 12-13 1989; the festival drew an audience of 120,000 attendees and was broadcast on television to 51 different countries. The show itself took two years to set up and arrange and employed many of the top artists of the day, still being listed as one of the most memorable concerts of all time. (Celeb. Access, 2009)

To date, McGhee Entertainment still represents some of the most successful bands in the world; one of the most recognizable is the rock band “Kiss”, whom has been touring for well over thirty years and generating hundreds of millions of dollars in revenue throughout the world. Kiss can be recognized as one of the biggest bands of all time, with the likes of “The Rolling Stones”, “The Beatles” and “Led Zeppelin” forever helping to shape the influence of music, history and culture.

Thirty-five years ago, twenty four year old Doc McGhee set out on a journey, one that would land him a life-style similar to that of the Rock and Roll legends that he has managed over the years. Starting in a band called “Rising four”, the band covered “Yard Birds” songs and then later signed to “Mercury Records” for a short period of four years. (Leblanc, 2009)

Searching for employment in the mid 1970’s McGhee found himself with no major prospects for jobs, but a handful of knowledge about the music business and the need for others to be heard by a number of the contacts he had acquired over his shot stent on Mercury Records. As a 26 year old, Doc had an opportunity to work with Pat Travers and then Moved to Florida, where his management career started to grow, also lucking into an opportunity to work with the late, great, James Brown, where McGhee claims that he didn’t know if he managed Brown, or if Brown managed him.

In 1982 Doc McGhee signed “Motley Crue” and “Bon Jovi”, then in 1989 produced and promoted one of the largest concert promotions in music history, “The Moscow Music Peace Festival”, and by 1996 had signed a deal with one of the great bands of all time “Kiss”. Where McGhee Entertainment was able to help facilitate the biggest tour of that year, being the Kiss Alive World Tour, generating $43.6 Million dollars in revenue over an eleven-month period; further solidifying the abilities and mega-success potential for McGhee, McGhee Entertainment and the artists represented by the company. (Leblanc, 2009)

True to the evolution of the entertainment business, McGhee was able to successfully spawn a Reality Television Show called “Super Group” with the likes of members from bands such as: Skid Row, Ted Nugent, Anthrax, Bonham, etc. and also opening McGhee Entertainment, Nashville for modern country acts, Darius Rucker, Chris Cagle, Drew Davis, and many more.

As of today’s date, McGhee Entertainment has, and is still working with some of the biggest names in the music business; they’ve managed and/or launched the careers of more household names that any other independent management firm and have carved out their own special niche in history.

Management competition in the music industry can be quite fierce, one of the newer companies that have clearly made their presence know is “Wind-up Entertainment” now, a division of “Wind-up Records”. Clearly showing influence from Doc’s Successes and teachings, Wind-up has been able to secure a large amount of Venture Financing and sign acts like “Creed”, “Evanescence” and “Seether”, three of the more successful acts in today’s modern rock.

Another very well established competitor is Bill McGathy and Tony Couch at “McGhathy Promotions” and “McGathy/Indegoot Recordings”, signing artists like “Shinedown”, “Saliva”, “Three Doors Down”, and “Tantric”, McGathy has a huge portion of the Modern Rock market on their current roster.

One thing both companies have in common is their business model, find talent, manage the talent and then either market and promote the talent, or use a record company to exploit the talents of their artists and roster. Ironically similar to what McGhee Entertainment has been speaking about for over 35 years.

One of the luxuries of being a independently owned is that a company doesn’t have to publish their financial reports to the public; however, with artists like Kiss selling Hundreds of millions of dollars in recordings, merchandising and marketing materials, it is obvious that McGhee Entertainment is at the top of the current food chain.

Second in the market place would be Wind-Up, with some of their bigger artists, mainly Creed and Evanescence selling upwards of 30 Million CD worldwide for each of their releases and generating millions of dollars in revenue as well. (Wind-Up Records, 2011)

Third position in the market-place would be McGathy/Indegoot; though Bill McGathy does own a Record Label, his major artists like “Saliva” and “Shinedown” are signed to major labels such as: “Atlantic Records” and “Capitol Records”, relieving some of the financial burden, but also reducing the amount of total revenue as well.

Many companies in the music industry have a sharp strategy, pertaining to the development of new talent; McGhee entertainment’s philosophy is based around an aggressive need to get the artists heard and among the public eye. “Sell by any means necessary” (McGhee, 2011) is the guerilla-marketing tactic used my Doc McGhee and his staff. Finding what makes the artist special and then marketing that aspect of the project with what is currently popular in the market is how MGE innovates and incorporates their new artists into the already existing plateau of their target market and fan-base.

Other companies take a similar approach, targeting a multi-market segment, but have a more tactical plan of action scheduled because of the lack of already established talent. McGhee Entertainment can command higher prices and lower percentages for their artists based on guaranteed success; whereas, another company that has less experience will have to charge more and take less, in an effort to build artist confidence and industry connection.

As the company has seen change in the market-place and trend flux in the music industry it made sense for McGhee Entertainment to change along with it, launching reality shows, promoting concert DVDs incorporating new technology and music genres in their marketing mix.

McGhee has the opportunity to continue growing and developing new talent by expanding their operations and hiring new and hungry agents to seek and manage upcoming talent, whereas other companies are still trying to catch up to the success and history, Doc will be setting another bar in the entertainment business.

Connecting emotionally to the audience can be reflected in Doc’s ability to understand what is physically happening in the market and then embrace that, in a way as to get the public involved in promoting and supporting the promotion. Reality TV shows, Performance DVDs and Online, On-Demand interviews for his artists are a way for the company to help reach an emotional connection with both artist and fan.

Being an inspiration to many other companies, McGhee Entertainment is also connected to the music business by way of reputation and ongoing respect. This is one of the largest factors for the company’s 35-year success and relationship to their represented talent.

Several facts can be concluded about McGee Entertainment, the company, though agents are aging, is still in high demand; offering a lifetime of knowledge and inspiration to other companies aspiring to work in the management field and experience that few other companies have the ability to match. McGhee Entertainment, though not acquiring talent very often, spends the same amount of time on the new acts as they do their existing ones, also keeping the company sharp and in the public eye.

The only negative side to any management company participating in the entertainment industry is being able to stay current and modern with the music topping the charts or already established as successful with the current marketable demographic; McGhee is no exception to this rule, the company has the potential to slow, just as many others have in the past, however, at this time, they’re showing no signs of aging or slowing down in the near future. Already planning to open more branches and feature a new genre of emerging talent.

Most Common Legal Issues Facing Artist and Entertainers

This week, I had the opportunity to speak with The Law Offices of Norman Gillis & Associates regarding the most common legal and liability issues surrounding bands, artists and other entities in the entertainment business.

I was not surprised to learn that many of the new performance groups, as well as many of the mid-level professional groups in the music industry, aren’t truly aware of what is needed to set up and maintain a successful project in the business and (or) what all their project could be held liable for in the marketplace. These start up and liability issues typically range from confusion over the ownership of the band name to strict liability lawsuits based on an injury that happened to a fan at one of the groups’ shows.

During my conversation with Chris Skinner (clients include: Brooks & Dunn, Pam Tillis, and OmniSound Studios, to name a few), a consider amount of time was spent talking about the simple, inexpensive process of truly being ready to generate income in the music business and protect the groups’ intellectual property, as well as liabilities during live events.

The top five issues Mr. Skinner and I discussed are:

Setting up shop for business

Most groups aren’t aware that taxes need to be paid on the income generated from their live Shows, merchandise sales and paid public appearances. Often groups don’t understand the value in setting up a corporation, an LLC, or any of the other types of business that one can register. Often groups will become quite successful in a region, and have generated a substantial amount of income as a group before being audited by the IRS personally. More often than not, the group will want to secure some form of credit to finance a recording or to buy a vehicle for travel, having a legitimate business structure can help secure the lines of credit needed for growing the project and will also offer a potential investor the ability to review the financial potential of the group.      

Member Agreements

The majority of local and regional talent performing in a band together has nothing more than a verbal agreement, or even worse, what they consider to be an understanding of what happens to the music written during the groups’ life or the what will happen to the band name if the group should ever break up. This issue is very common, and without a written agreement of which member gets what rights to the intellectual property and which portions of the groups’ income, many individuals that were thought to be great friends have become spiteful enemies.

Registering Intellectual Property

A songwriter, or group of songwriters for a project, usually has the vision of sitting in a mansion somewhere on a beach surrounded by thousands of dollars of expensive toys, yet doesn’t register or protect their music with a copyright. Typically this means they’ve not registered any of the original material with ASCAP, BMI, Nielsen SoundScan, or the other professional organizations that track airplay and recorded sales. The importance of registering one’s intellectual property is a subject Mr. Skinner and I spent a good portion of time discussing.

Protecting the group

More so than just protecting the band name, a group needs to be aware of how they can be held responsible if someone were to get hurt during an event. Such as the case where a fan was injured during a crowd surfing incident in San Luis Obispo, California where a fan was pushed into a speaker and now has permanent double vision. The group responsible for this accident had no liability insurance for that particular performance and now finds themselves in a thirty-five thousand dollar lawsuit for damages and medical expenses. Mr. Skinner’s advices on this subject, “if presented an insurance liability waiver at a venue, secure the insurance on your own.”

Shopping Unsolicited Material

Many groups want to be successful in the music business. The idea of landing a record deal is at the forefront of many artists’ brain. One of the biggest misconceptions about sending or “shopping” the groups’ material to an established company is that a person can stuff a CD-R or bit of recorded media in a package, walk it into, or mail it to a record company and they’ll listen to the music and fall flat on the floor over its awesomeness. “This is just simply not true,” says Mr. Skinner. Most new bands are ignorant to the protocol of a “press kit” and how beneficial an entertainment attorney can be when it comes to shopping a groups’ press kit to a record company. Simply put, 99% of the time a group’s demo will be thrown in the trash if it is unsolicited by an interested company.

Conclusion

It is absolutely paramount to have an entertainment attorney on standby for a serious project in the music business. Though many individuals are very well adept to look over booking agreements and register their works with performing rights organizations, as the group grows into what could become a substantial part of any market and generates label interest, it is more important than ever in the entertainment industry to have a qualified legal professional acting on the groups’ behalf.

In addition to good legal advice, many professionals in the music industry recommend the book “All You Need To Know About The Music Business” by Donald S. Passman as a great source of knowledge for getting a project ready to seriously pursue any kind of next-level success.

Media Controversy, Entertainment or Information?

The general public has always wanted to be informed about current events. The more scandalous, shocking and unbelievable the news, the more interested the masses become. Crowds would swarm in ancient civilizations to watch brutal public executions, and these days prefer to follow each topic of interest via: The Internet, Network Broadcast, and all forms of Social Media. Ironically, according to Tony Rogers of About.com, “the technology of journalism continues to improve, but young people still ignore the news”. My question, however, is: at what point in the reporting process does the intent of the original informational broadcast become tailored to capturing and retaining people’s interest in an effort to broaden reach and generate advertising dollars, instead of relaying the cold, hard, facts about subjects and how they can affect one’s livelihood.

This week, I’ve followed three very different legal controversies that have become well known in the media. Though the coverage on each separate situation has been informative, I can’t help but see the entertainment value in the discussion panels being put together by the major news networks and how the coverage, though informative, only showing the best of each heated arguments on each side of the controversy.

Article 1:

Digital Rights Management software, and its ability to remotely access people’s personal devices and delete, without permission, files that don’t show the proper security signature, regardless of where and how those files were purchased. According to Adrian Kingsley-Hughes of ZD NET, Amazon reportedly accessed thousands of readers’ Kindle machines and deleted books without the user’s permission.

This, I am truly amazed by; strictly because the music and entertainment industries have been adapting and evolving for years trying to expand their abilities to reach consumers with their products and artist’s intellectual property, but more importantly reduce the cost of production on each unit in order to compensate for the rising low price demand throughout the U.S. Now that digital rights have the ability to sell a user an unlock key for a product, be it: music, media, software, or digital text, the consumers are getting more than they bargain for when they realize that instead of buying and owning a physical copy of a book, they are now only getting limited rights to that digital copy and if other selections weren’t purchased through one particular method, that same limited copyright license that was legitimately paid for now has the ability to delete anything it sees fit.

Article 2:

Unless the reader has been living under a rock, or in a cabin in the woods over the past several weeks, they’ve seen panel after panel of experts debating on the positives and negatives of the ObamaCare campaign and court ruling. The synapsis of this controversial issue is based around the want and need to extend healthcare insurance to the uninsured and lay the groundwork for systemic reforms. Many people are strongly for this, and many people are equally against it.

I can absolutely see why this is such a controversial subject, people that have insurance and have been working hard all of their lives to be able to afford great coverage for themselves and their loved ones don’t think that it’s fair to give equal coverage to those whom can’t afford the same coverage, or those who’ve never had a job with health benefits. The republican argument to this situation is based around additional taxes and the feeling of having to pay additional money to the government, unwillingly, in order to provide coverage for people uninsured, over and above what they are already paying for their own policies. One of the more entertaining interviews I’ve seen regarding ObamaCare was called “Obama lies, freedom dies” with Sarah Palin.

I can also absolutely see the benefits of health insurance for those whom aren’t in, nor have ever been, in a situation to where they could afford good health coverage. There are many positive outcomes that can happen from having this type of court decision, thought there will still be a small percentage that aren’t insured the numbers will drop drastically. Many of the people that were previously denied coverage by insurance companies will now have the opportunity for good healthcare, and even aspects of Medicare that were virtually abolished under Republican budgeting will see many signs of new life. Perhaps one of the better articles I read about this court decision was from The Bangor Daily News, showing their consumers the positives and potential future outcomes from the court’s decision.

Article 3

The Arizona Immigration Law controversy was another one of the frontrunners from my research over the past week. This particular story has been ongoing for quite some time, however, the most recent decision to uphold one of the four contested provisions of the Arizona Law that, some would say, permits law enforcement officers to racially profile people that could be in the state illegally. Many other states are also trying to model some of their immigration laws after the Arizona ruling, with only five states following currently.

One of the many issues that people are having with the entire immigration law battle is giving law enforcement the power to racially profile someone. There are many Hispanic people throughout the country legally and this type of law will open the doors to what some people perceive as harassment. Many reporters, such as Alicia Caldwell, of the Associated Press, believe that levying penalties on business owners that employ illegals will help to retain a large portion of the job market within the U.S.

One of the better coverage videos I’ve seen on this legislation was from Huffpost. It gives better detail to several of the laws that were considered but not passed, and gives better detail to the entire outlook of the situation. One of the most interesting facts I’ve seen regarding this story, according to Michael Martinez and Mariano Castillo, of CNN, was the amount of additional phone calls per yea, totaling 50,000, that the Tuscan Police Department will now have to make.

Conclusion:

Each of the articles I’ve read and researched this week all have valid messages and are reporting the facts revolving around each case. Though every source I’ve seen for these reports are basically broadcasting the same information, just like the rest of the masses in this “on demand” generation, I found myself drawn more to the discussion panels, industry debates, and high-profile political opinions.  At one point, I forgot I was actually watching a discussion that directly affects my personal taxes and ability to be seen by a medical professional. Even though I was well informed about all three of the controversies I felt as if I were just watching an episode of some reality television show that I hadn’t seen before, and during my research on the other articles, I found myself looking for something more entertaining to watch and/or read about the other two articles to include in this blog.

I feel that appealing to the masses, while delivering a powerful message is important, but what I personally would like to see is a better grasp of current events and how those same masses that are being broadcast to can make a substantial difference. There is more to news, law, and television media than just watching it happen and hearing about the results of what others are fighting for constitutionally.

Commercial, or Sellout... That is the question.

One of my favorite subjects in the music and entertainment business is the battle between being commercially successful, and the perception of selling out.

Recently, I had the opportunity to overhear a conversation between two people in a coffee shop talking about some of their favorite artists, “from back in the day”, and how they’ve “sold out, in the music industry”. Obviously, these two young gentlemen weren’t professional musicians, and more than likely not even playing local gigs, but based on their non-stop chatter about how awesome their eyeliner-driven emo-project is, I could tell they had a strong desire to grow within the industry.

The conversation then proceeded to some of the television commercials these two aspiring music professionals have seen on YouTube, featuring: Darius Rucker (formerly of the band “Hootie and The Blowfish” and now managed by the world renowned Doc McGhee (Kiss, Motley Crue, Bon Jovi, Skid Row, Ted Nugent, etc.)), Dr. Dre (mega music mogul and owner of “Beats Headphone Technology”), Johnny Rotten (formerly of the legendary punk band “The Sex Pistols”), Chris Brown (new pop artist), and then Shakira (international pop sensation). Normally, I would have seen my way out of their conversation at this point, but having just saw John Bon Jovi on an AARP commercial, Hulk Hogan & Troy Akeman on a Rent-A-Center commercial, and a multitude of other very wealthy people featured in new corporate ad campaigns, I decided to forego my homework for a few minutes and explore the subject further, on my own. As an artist, I’ve been in the position to get work with my music, or to not get work with my music, many times; the alternative(s) being: 1) digging a ditch, 2) pumping gas, 3) mowing lawns, and 4) anything else that would probably make my life miserable.

During my ad campaign exploration, I was able to find all of the videos these two were discussing and have included hyperlinks for the reader’s enjoyment: Darius Rucker Commercial, Dr. Dre Commercial, Johnny Rotten Commercial, Chris Brown Commercial, and Shakira Commercial.

Professional Synopsis:

I’ve had the opportunity to meet Darius Rucker on several occasions and I have to say, he’s a funny, silly guy that I’m sure laughed all the way to the bank on after that Burger King commercial. (Barry Manilow made more money with his commercial Jingles than he did on all of his other recorded music). Not only does Darius now get royalties, forever, based on the writing of that song, but also got paid a hefty sum of money, just to get him to poke fun at himself the way he did in the spot. I rather enjoyed that one, as did I on the Johnny Rotten commercial about butter. He’s basically saying, “I eat this butter because I like it… and nothing else!” What could be more anti-anything than getting paid to do an ad spot relating to a product that you’d be utilizing either way? Not to mention, his image was portrayed perfectly in the commercial and widely accepted by the most diehard Sex Pistol fanatics.

I’m a big fan of Dr. Dre’s spot. Not only did he have the opportunity to be super sly and increase his own personal image in that video, but also plugged his own brand of bass boosting headphones that now have their own commercial app for improving the sound of listening to music via smartphone.

Pop-stars, by definition are all ready sold out, they’re usually not promoting their own art, or personal writing craft and are most of the time super puppets for a major label, so true to form Shakira and Chris brown are doing what they do best; representing an image for profit (though Chris did sing a song directly related to Juicy fruit gum and that can be considered borderline).

Professionally, in each situation, they’ve sold out the value of what creating timeless works of art are in exchange for profit; but, by increase brand awareness, financial yield, and the sustainability of their careers, I think they’ve all made the best decisions for themselves professionally.

An artist’s image plays a big part in what the public will perceive as “selling out” as well, for instance: if Metallica did a commercial for the WWE, or the MMA Championships, this wouldn’t be selling out at all, but if they did one for The Pink Tutu maker in San Diego, CA then I’m sure their image would be tarnished and be construed as well outside the scope of what Metallica’s brand actually means (this issue would typically be a management flaw).

If I were managing any of these artists during the pitch stage of their ventures, I would’ve spent a great deal of time looking at both positive and negative aspects of the opportunity(s) and would have designed a damage control strategy if there were any negative backlash from the public. Most of the time, bad press is still good press, so I would’ve looked at the integrity of the entire situation before I suggested or advised my artist(s) either way.

The Conversation Conclusion:

The conclusion of this conversation between the two gents next to me, involved: flavored Ice Frappe chinos, a discussion of wanting to be on the radio with their hard-core emotional love songs, to have videos on MTV, and a reality television show to follow them around and feature their band and struggle to make it. Ironically, they had fallen more victim to the “Feedback Marketing Loop” than anyone I had seen in quite a while, and everything they wanted to accomplish professionally was either: branded for profit by someone else, designed to promote and/or sell ad space to corporate sponsors, or simply a generic, cookie-cutter formula designed to generate enough interest in a musical product to start and sustain a career.

My question to them, as they noticed and asked about my “Business of Artist Management” book, was “are you commercial, or sellouts?”

The Beatles Finally Agree To Deal With Apple

The Beatles and Apple have been negotiating and settling disputessince the late 1970’s, first with trademark dispute of the name Apple Corps, owned by the Beatles, then over what was known as Apple’s Music Synthesizer, and now over licensing and digitally distributing the recorded catalogue of the group’s music. Ironically, after a total of thirty two years of bickering back and forth, both parties are ready to play nice and do business so many generations of new Beatles fans, as well as the old, will have a more accessible channel through which to purchase their favorite selections.

The primary parties in this negotiation are Apple, Inc. and the entire Beatles group. The secondary party in the group that has stake in the negotiations is the record company EMI whom owns a considerable portion, alongside of Michael Jackson’s estate, of the Beatles master recording rights. Though all three sides had a very large monetary incentive that would encourage them to make the deal, one of the strongest inhibitors to the agreement was based around the ability to satisfy each separate member of the Beatles interest(s) in the agreement before anything could move forward in the total process, which took roughly seven years. Obviously, a super group, such as the Beatles, doesn’t really have to worry so much about the financial end of what their return will be in this type of negotiated deal, their main focus will be on what is know as Marketing Reach, and how this type of business merger will benefit the longevity of their entire catalog of music. The main questions that will likely be asked on the management end of the band’s side are: “Will this venture be profitable and reach new fans?” “Will this agreement help facilitate new business and future sales of the Beatles music?” and lastly, “Is releasing this music through iTunes a valid effort to modernize with the distribution process as the methods of selling recorded music evolves and changes?” From the iTunes side, they already own 90% of the digital distribution market and don’t particularly need the Beatles to help their quarterly reports. Their interest in this would be to protect their already existing market share and look toward future growth if they have the monopoly on digitally distributing the Beatles music. EMI, on the other hand, was almost in bankruptcy and needed this deal to happen more than anyone; their stake in the agreement could potentially save the entire record label.

During this long negotiation process many different angles were used to understand each reason this deal had to happen for everyone involved. One of the most present elements was the Beatles management’s ability to “separate the people from the problem” and “focus on the mutual benefit”. Even though it was apparent that each side had the ability to utilize the best alternative to the entire negotiation and continue on with their daily process, it was made very clear each party involved was for making a solid, long-term agreement.

The Beatles separated the people from the problem by hiring Jeff Jones to run their company’s interests and Mr. Jones was new enough to their business to have not developed any animosity toward Apple and want to look at the best options for protecting and preserving the group’s interest in their own music; he felt digital distribution was something that had to happen in order for this to long-term solution to be successful. Focusing on the mutual benefit aspects of the deal gave each party the ability to come to the table with something to gain and an even better incentive to make fair offers to speed the process along. In this mind-set and avoiding the pitfalls of Distributive Thinking, they were able to expand the entire pie to include a fair profit portion for all three entities involved. The benefits of this, other than financial, include: publicity and promotional power, two of the most important words for any business’s brand.

Though there were many different positive and negative factors represented by each side, one major aspect of the negotiation went very well. Apple was able to offer the Beatles their absolute highest payout for their purchases while not offending the other super groups already being distributed through iTunes, including: Garth Brooks, AC/DC, and Kid Rock. This was very important to Apple because they didn’t want to put themselves in the position to offer the Beatles more, just to make the agreement and have other groups assume they could hold out and get the same amount.  One could assume that this was an aspect of the deal that adversely didn’t go well for the Beatles because of the length of time they felt they needed to hold out, but the hold out in itself is more than likely the largest aspect of the agreement that had a negative affect on the process. Having to appease the estates and family members of a multi-billion dollar group was something that didn’t have to take as long as it did and therefore could have put the entire contract in jeopardy.

After much hard work, negotiating, and deal making, there was a mutually beneficial agreement reached that could foster a long-termmutually beneficial relationship, a relationship that is considered by many to be one of the most solid in the record industry. Though the Beatles will receive a reported $1.29 per song, when most digital albums are only $12.99, the Digital Beatles box set is a great barging to their fan-base at a mere $149.00. This is an absolutely amazing price for the most die-hard Beatles fan that legally wants to obtain a high quality digital copy of the group’s music. Now, with the ability for millions of existing fans, as well as new younger generations of fans, the Beatles have the ability to once again grow and root themselves into what can be considered as an even bigger part of rock and roll infamy, even in the new digital revolution.

Negotiating & Deal Making Insight (Interview with CEO of Plastic Musik)

I recently had the opportunity to interview Jeremy Price, the founder and CEO of Plastic Musik, LLC.  Mr. Price is not only a well-respected businessperson but a highly skilled artist as well. Jeremy has been a touring musician since 1997, cast member of the global success STOMP & STOM OUT LOUD since 1999, and project creator/ rehearsal director of the internationally recognized percussion group Plastic Musik.

During our interview, I wanted to get Jeremy’s opinion on three different aspects of negotiating and deal making, including: leverage and power, mutual benefit, and best alternative to negotiation. Ironically, Plastic Musik was in the middle of a re-negotiation to their booking and management agreement so the information was basically given to me in real time.

In reference to leverage and power, I asked how gaining a certain level of clout affected the ability to negotiate on Plastic Musik’s behalf. Jeremy’s reply explained that having clout was a great position in which to be but not what is giving him the ability to get terms more favorable to his vision. Utilizing his position and standing in the world of percussion gave the agent the ability to spend less time on booking and also justified a lower percentage for less work involved on the agency’s behalf.

My questions toward mutual benefit were along the lines of “other than financially, how can both Plastic Musik and the Booking Company mutually benefit each other by a renegotiation of their agreement?” His answer was “I had planned on spending a larger amount during the first two years of the project because of the work involved for the agent, but now because people are calling to fit us in their schedules I have to justify paying back some of the overhead that accumulated during the initial routing of the tours. The agent has benefited because other projects looking to get on the road and start a career will see the company’s ability to sustain shows based on our touring history, and I will benefit because I have built a solid relationship with quality individuals and retain a larger portion of what I earn for the group.”

Jeremy and I spent quite a bit of time discussing BATNA as a last resort or worse case scenario to the potential of the negotiations, or future negotiations not going well. He explained how always cultivating new relationships with the buyers of his group’s talent and getting opinions on which agencies they’ve had the best experiences working with gave him the ability to speak with other companies that were interested in what the group had to offer without being disrespectful to his existing agency. Weeding out the many companies that wanted to be part of the group’s success was a goal for Plastic Musik when the idea of “what happens if our current agent doesn’t agree to fair terms’’ becomes a reality. Because of this, Jeremy was able to streamline his alternate interest into three sections. 1) Book and manage the project himself, 2) Negotiate terms with a company that he feels the group would be a great fit, or 3) Stop touring with Plastic Musik until he gets the terms he wants. Each was a legitimate alternative, but after factoring in the other performers of Plastic Musik, not touring wasn’t an option.

His solution to the complex, multi-month, negotiation process was to A) be more flexible in his terms to the existing agent, respecting the work already completed and recognizing the mutual importance of benefiting together and B) only talking to two other very strong companies that could help the project grow in ways the current agent wasn’t able keeping himself in a position to sustain with greater profit, or move forward and grow to a new level earning more profit in the long-term.

In summary, Jeremy was in the position as a business person to decide on reclaiming a portion of his company that he had to give up for two years, or work harder to find a common ground with other agencies that could help him grow into new markets. Each aspect of this process took into account emotions, livelihoods, and realistic visions for the future. Though in a great position to sign with any company in the market, Jeremy was more concerned with building a long-term, fair, relationship with deserving people. His final thought on the interview was “people buy people, not products… I’d rather pay an agent more and get more than have a company give me what I want and produce less.”