When interviewing some of Saint Louis' elite music insiders, it was agreed that "win-win" negotiations were the best tactics to keep all players content. The skill of win-win negotiation is required in the role of a music manager. Win-Win negotiations are not to be confused with compromise or settling for less...It is an agreement where both parties can walk away with what they need and build on a goal together. A music manager must know their musician's worth and have a concise goal with what the artist wants to do with their career. Upon reviewing interviews with a successful entertainment lawyer, a music producer, an owner of an independent record label, and an aspiring musician; a positive attitude where everyone in the agreement gets what they want is the best way to keep long lasting business relationships in the music industry.
What does a Talent/Artist/Music Manager do?:
There are millions of musicians out there trying to be heard, seen, and known by the mainstream media. The competition is steep, but the fact of the matter is, the bulk of the mainstream music industry boils down to two things; money and negotiation skills. Record labels throw millions of dollars at their artists to make the best music videos, have the best tours and have to best public relations so their company can generate even more money in return. Since many music managers do not possess millions, it is hard to be able to just wave a magic wand and have their music artist noticed. This is where the art of great negotiation skills come into play. A talent/ music manager, is in charge of the business side of being in a band. Often, band members are great at the creative side of things, but aren't so great at promoting themselves, booking their own gigs, or negotiating deals. In a very general sense, the task of a manager is take care of the day to day running of the band's career, so the band can focus on the creative side of things. A good talent manger will negotiate their artist's way to the top to be seen by industry insiders. Talent managers work on a commission base making roughly about 15-20% of what ever their musician makes. It is easy for some to try to be greedy and manipulative, but with the music industry being so exclusive, news of shady practices travel fast and can ruin many future chances for the talent manager and their artist. Benjamin Franklin expressed it best when he said, “Trades would not take place unless it were advantageous to the parties concerned. Of course, it is better to strike as good a bargain as one’s bargaining position admits. The worst outcome is when by overriding greed, no bargain is struck, and a trade that could have been advantageous to both parties, does not come off at all.” Also, with there being so many other talents out there, if a manager does not have good negotiating skills, they will be dismissed and their talent will be replaced by someone else who has a better offer. Upon speaking with a record label owner, an aspiring artist, and a music producer, the best negotiation tactic is a win-win negotiation. A win-win negotiation leaves everyone with a since of happiness and security. And it is agreed by some of the industry's heavy hitters, if a manager or musician wants longevity, they must know how to do a win-win negotiation. So how does win-win negotiation work?
Win-Win Negotiations:
The aim of win-win negotiation is to find a solution that is acceptable to both parties, and leaves both parties feeling that they've won, in some way, after the event. The win-win concept of negotiation is not simply based on ethical considerations. Win-win negotiating is simply “good business.” When parties in an agreement are satisfied with the outcome, they will work to make it succeed, not fail (Maddux, Robert B). Author Stephen Covey points out most of us learn to base our self-worth on comparisons and competition. We think about succeeding in terms of someone else failing--that is, if I win, you lose; or if you win, I lose. Life becomes a zero-sum game. There is only so much pie to go around, and if you get a big piece, there is less for me; it's not fair, and I'm going to make sure you don't get anymore. We all play the game, but how much fun is it really?
To ensure a solid foundation with a win-win negotiation one must research and verify a concise goal for what both parties want out of the negotiation. The negotiation itself is a careful exploration of your position and the other person's position, with the goal of finding a mutually acceptable compromise that gives you both as much of what you want as possible. People's positions are rarely as fundamentally opposed as they may initially appear – the other person may have very different goals from the ones you expect! With music business negotiations, think of what services are being traded and what both parties can bring to the table to come to a favorable outcome. When negotiating, the role of power also plays a huge factor in the process. For instance, when trying to book your artist as an opening act for a show, you must realize who has the most power. If the talent being represented is newer and has less of an audience than the main performer, it will be hard to explain the benefit to the opposing side (promoters, tour managers, venues). Asking for a fee in the beginning is almost unfeasible. A win-win negotiation in this case could cause a financial sacrifice on the side of the artist and manager, but if an artist puts on a good show, more fans are made. After a while of doing various openings, the artist will have a solid fan base and can begin doing negotiations with promoters for compensation because the artist is now bringing in consumers. With a new found fan base, the artist now has future investors wanting more. That leaves the artist, the venue, and the artist’s manager (who makes their 15-20% commission) happy. Also, building an artist's resume with quality shows can make for even better negotiations as time goes on. Record label contract agreements can be sticky. There are many horror stories, but a good music manager know exactly what the label is looking for and why their artist would be a benefit for their company (and vice-versa).
Record Contract Win-Win Negotiations:
Record label agreements can get very tricky because every contract is different depending on the artist and what they have to offer. Bradd Young, an Urban R&B artist, writer, and producer formerly signed with Sony states that “…record contracts are not what they used to be. Music is not as lucrative as it used to be, and record contracts are not being handed out like they used to be. It is a manager’s job to come up with an agreement suitable for benefiting the musician as well as the record label…” Record labels are now looking for music artists that can generate the most money and have their own fan bases already. A manager music negotiate that their artist not only is marketable and talented, but can benefit the company bringing fans. In more recent years, major record companies have evolved to fit the new digital music market. Since there are so many outlets for independent musicians to have their own fan bases and sell their products, record labels have kept their head above water with what is called a "360 Deal". The artists that are the most popular such as Justin Bieber, Lady Gaga, Katy Perry, Rihanna, and Beyonce all have a 360 Deal. A 360 Deal basically states that the record company not only get a percentage of the recordings, but also the publishing (song writing), merchandise, and other endorsements (commercials, movies, television appearances). Again, the talent manager only makes 15-20% of what their artist makes. A manager must prove to the record label that their artist is what their label needs. It would be wise for a talent manager to make sure their musician has good people skills and is open to doing other endorsements to make some extra money since they will be getting a percentage taken out of their publishing and future money made off of albums and promotion. The true meaning of a win-win negotiated settlement is where the agreement reached cannot be improved further by any discussions. So your outcome cannot be improved for your benefit, and similarly, the agreement for the other party cannot be improved further for their benefit either. By definition, there is no value left on the table and all creative options have been thoroughly explored and exploited (Steve Roberts). A "360 Deal" may not be the right fit for your artist depending on their market. If a talent manager works with an Independent record label, their role is not a little bit more important. Though the manager's commission rate stays consistent, the manager must now work as a booking agent and financial adviser. Independent record labels do not have near as much money as major labels do, but they also have less people to work with and split money with which could work in the artist and manager's favor financially. With independent labels, music managers have a much more hands on approach. Music/ Talent managers need to determine whether their goals can be connected to the business goals of the other party. The more they know about their aims, the more they are be able to put together settlement packages that better address the business goals and priorities of both parties. When a manager know what's important to the other party, they can build a beneficial and productive agreement. Many negotiators falsely believe that compromise is a positive approach to gain a win-win negotiation deal. This is plainly incorrect. If you look at the definition of the word 'compromise', it means 'A settlement of a dispute in which two or more parties agree to accept something less than they originally wanted.' If one or both parties agree to lower their aspirations, this is hardly a win-win outcome, is it? Daniel Friedman, an entertainment lawyer for multi-platinum selling artists even stated "If you read the contract, and there is something you do not like, or want to add, speak up. The other party may have a whole different point of view than you, and you must speak up and make sure your ideas are clearly communicated."
Someone going into a win-win negotiation must also prepare for alternative trades or ideas because their best idea may be shot down. A talent manager also must be flexible with their ideas of how to come about getting what they want and still having the other party get what they want. A good negotiator often spring from presenting multiple offers rather than a single, lone offer or proposal. The reason is that a single offer or proposal often has an anchoring effect. Multiple offers tend to stimulate communication. Multiple offers will often prompt or nudge our counterpart into providing vital information about their objectives and the true nature of their business ambitions. Negotiating will be more energetic and productive because several options will likely enhance the possibility of finding even more creative solutions than would otherwise have been possible (Steve Roberts).
Negotiation's Four possible outcomes:
Going into a negotiation, it is pivotal to have a win-win mind frame. However, there are certain times when those negotiations do not always work. Lose-Lose negotiations are the obvious opposite of a win-win. This unfavorable negotiation outcome usually stems from egos that are unwilling to compromise certain aspects of their proposals to reach an agreement. An example of a lose-lose with music management is requesting the record label to put millions of dollars into your new artist's promotion. That is almost asking for conflict considering as a new artist, they must pay their dues and prove themselves to the label and the rest of the world. Rapper T.I. lost his first record contract because after his first album failed because of lack of promotion, his management requested a bigger budget or they would not work with the label any longer. Since management did not realize the difference of power between their artist and the label they 'worked for', T.I. was dropped. In turn, the record label lost an artist who could have been a huge asset to the label. There is the win-lose scenario many unmanaged musicians face. Since some musicians do not have the negotiation power of a music manager, they end up signing contracts that leave them with nothing to show for their artistic work. For example, an musician can submit their work to anyone, just like a talent manager can. They can be presented a contract that tells them all of the positive things they will be able to do for the musicians career, but some artist's do not know that they are signing over their rights to the record company. There are numerous stories where artists end up poor and hungry because their record label owns their work, and the money their work has earned through radio, movie, and commercial outlets. Music managers usually avoid the win-lose, but if one lacks the right listening and communication skills, they too can fall into a win-lose negotiation. Then of course, there is the last option of no outcome. That is pretty much when a negotiation is put on the table, but both parties walk away from it because their needs were clearly communicated, but did not match for each other. No outcome could also be an example of a stalemate where both parties would not budge from their opposing side for grounds of a mutual agreement. According to Robert Maddux's 'Successful Negotiation : Effective "Win-Win" Strategies and Tactics', there are 8 ways to lose out on a negotiation: Inadequate preparation, ignoring the give/get principle, use of intimidating behavior, impatience, loss of temper, talking too much and listening too little, arguing instead of influencing, and ignoring conflict. The author says during the negotiation process, avoid these mistakes.
Conclusion:
Being a successful win-win negotiator is crucial in the field of Music management. Since management does not make any money unless their artist does, they must keep in mind the clear goal of what they artist needs and what oppositions they face. A music manager must do valuable research on business ethics and figure out what is feasible for their musician. With the power of win-win negotiations, there is no way to walk away from any deal empty handed and one win-win negotiation leads to another.
References:
Covey, S. (n.d.). Franklincovey. Retrieved from https://www.stephencovey.com/7habits/7habits-habit4.php
Models of negotiation. (n.d.). Retrieved from http://www.managementstudyguide.com/models-of-negotiation.htm
Nierenberg, A. (1999, January 1). Creating win/win negotiations. Retrieved from http://www.inc.com/articles/1999/01/14527.html
6 win-win negotiation tips for managers. (2010, June 2). Retrieved from http://blog.dalecarnegie.com/leadership/6-win-win-negotiation-tips-for-managers/
Donaldson, M. C. (2011). Win-win negotiating. Retrieved from http://www.dummies.com/how-to/content/winwin-negotiating.html
Kramer, H. (2001). Game, set, match : Winning the negotiations game . New York: American Lawyer Media.
Dietmyer, B. (2004). Strategic negotiation : A breakthrough four-step process for effective business. Chicago: Dearborn Trade, A Kaplan Professional Company
Maddux, R. (1995). Successful negotiation : Effective "win-win" strategies and tactics. Boston: Course Technology Crisp
Camp, J. (2002). Start with no.. and other negotiating tools : What the real negotiators don't want you to know. Westminster: CrownPublishing Group
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