Music Contracts and Negotiations - Coursework Example

03 March Music Contracts and Negotiations People negotiate various deals between themselves every day, even if they are not fully aware of it. Throughout the history of humankind the art of negotiation has always been one of the most valuable skills to employ as it helped to resolve problems, settle down burning issues and even stop wars. There is not much of a change from the earliest times to date, except for the knowledge on negotiating habits, tricks and strategies employed in order to accomplish desired goals. Various negotiation theories enriched the knowledge of what key principles of successful negotiating process might look like, what the best negotiation techniques might be and how to achieve satisfactory results for both sides of negotiation when interests of negotiating parties come into contradiction with each other. In this essay I will focus on two key types of negotiation, such as so-called win-lose or zero-sum negotiation (also known as positional or distributive) and win-win or integrative negotiation, as well as the importance of confidence and good communication skills to successful negotiation. I am going to elaborate on pros and cons of the employment of integrative and distributive types of negotiation and dwell on the concept of issues, positions and interests within the context of negotiation in the field of music industry. On top of that, I will invent a scenario of negotiation between a music act and a record label in order to illustrate some aspects of negotiation and communication theories covered in this essay. When entering any negotiation, in order to achieve desirable goals a negotiating party must stick to some rules based on a certain negotiation structure, which is not that complex as one think a successful negotiating paradigm might be. There are four key stages of negotiation, which are preparation for a negotiation, exchanging information between negotiators on different aspects of the future agreement between them, bargaining per say and closing or commitment of an agreement (Shell, 2008, n. p.). Any negotiation may be of at least two types depending upon the intentions of negotiators to fully use their advantage in resources and power in order to influence final decision or upon a particular nature of the deal to be reached between the parties of a negotiation. As a rule, if negotiating parties are not interested in mutual satisfaction for each and every party involved in the negotiation and do not seek out benefit for all parties from the deal they are set to make, then they are most likely to enter distributive negotiation process. Distributive type of negotiation is locked within the framework of strict and straightforward rules and principles the employment of which do not usually generate mutual satisfaction of negotiating parties, even if mutual benefit is relatively easy to achieve. In this case one of the parties of distributive negotiation uses the policy of force to gain maximum benefit as a result of such negotiation. The party that can afford conducting a negotiation from the position of strength ends up imposing its terms by stressing on the differences between negotiators and neglecting the common interest, even if it is on the table (Fisher and Ury, 2011). If the bargaining power of one of the parties dominates the negotiation process and the opposing party of such negotiation is not ready to shift the focus on other aspects of the deal at stake, the party that does not possess sufficient bargaining power will end up yielding more than it can benefit from such negotiation. The thing is skilled negotiators are able to get benefit and achieve desirable goals even under unfavorable circumstance without a bargaining leverage at hand. I will discuss how that might happen a little bit later within the framework of this essay. Certainly, motivation of a negotiating party matters a lot as well. Sometimes the party that can afford conducting negotiation from the posture of strength might end up sacrificing more than it gets from the final deal due to poor motivation and lack of negotiation and communication skills (Fowler, 1995). As a result such a party can easily fail to obtain beneficial agreement despite its bargaining leverage and favorable circumstances. When it comes to distributive negotiation, the opposing parties strive to distribute the joint value at stake by claiming as much value as every party can possibly get. That is why such type of negotiation is often called a win-lose negotiation because as a result one of the parties will get more of the joint value than another. Although such bargaining tactics does not usually imply distribution of the joint value in equal parts, both of the negotiators are rarely satisfied with final deal as every party tries its best to claim and get more of a joint value than it is actually possible to obtain without calling it a robbery. The deal made as a result of a distributive negotiation is always a compromise between the parties, which is usually based on their bargaining power and negotiation skills. This type of negotiating tactics is good when parties have a one-time deal to make and are not interested in long-term business relationships. As each negotiator is likely to be dissatisfied with the outcome of the distributive negotiation, such negotiation tactics is rarely employed by the parties that are not interested in escalation of tensions within the framework of their business relations. Despite any bargaining power that negotiators possess, quite often they do their best to avoid a distributive negotiation tactics considering its confrontational nature and high possibility of failure to achieve any agreement at all due to unwillingness of another party o compromise (Harvard Business Essentials, 2003). Nevertheless, it is not always possible to avoid entering distributive negotiation as it is often the final stage of other types of a negotiation when the turn of claiming value comes to finalize a deal. Some negotiation theorists believe that it is better to avoid distributive negotiation tactics at all costs as it makes negotiators stress on their differences rather than common interest and recommend employ integrative negotiation tactics instead. Before entering any negotiation each party has to decide what tactics of negotiation to employ (Spangler, 2003, n. p.). Unlike distributive negotiation tactics, integrative negotiation is characterized by its cooperative rather than competitive nature, when both parties are set to achieve mutual gain. Prior to claiming value both of the negotiators team up trying to create additional value for maximum mutual benefit of every party of the negotiation (McRae, 1998). Thus, within the framework of integrative negotiation both of the parties try to do their best to widen the range of options and joint outcomes from the future deal between them. Under such negotiation logic both of the parties focus on their common interest rather than instant gain from the deal between them by expanding the joint value in a way that none of the parties can do on their own. In other words integrative negotiation tactics implies cooperation of the negotiators for their mutual benefit in their attempt to create a so-called win-win situation by enlarging the number of settlement points and outcomes rather than focusing on one goal. Such a negotiation tactics involves transparent communication of interests and priorities of the parties, which I am going to elaborate on in more detail down below. In order to create value both of the parties have to openly exchange information concerning their priorities and interests. For their communication to be effective both of the parties have to demonstrate ability to listen to each other carefully and understand the need of each other. In order to be able to adjust differences a negotiator has to have good communication skills. Usually a set of good communication skills needed for a successful negotiator include the following core features: first of all, it is the ability of a negotiator to listen and analyze; secondly, it is good bargaining skills that imply persuasiveness; thirdly, the ability to read non-verbal signs and body language for better understanding of what a partner/opposing negotiator wants and needs. When it comes to verbal communication tools, it is important to express ones position in a way so that everybody can understand, use questions and approvals rather than conclusions and assumptions in speech in order to avoid forceful wording, which might create an atmosphere of unnecessary tension between the parties and a sense of inequality (Thompson, 2008). Voice volume and pitch cannot be underestimated either. It is often more important as rhetoric of a speakers and might add up to the atmosphere of mutual trust and comfort. A skillful negotiator should know that the meaning of a message relies on non-verbal as much as on verbal means of communication (Evans, 1998). As a rule, eye contact, body posture, manners and ability to control ones emotions are as important as the words people say. The ability to listen carefully is another quality that a successful negotiator cannot do without. The more information a negotiator gets during a negotiating process, the higher his/her ability to put forth constructive ideas will be. Right from the start of an integrative negotiation the parties try to define a common interest that they might share, issues in which the parties can agree and attempt to harmonize their positions. Issues, positions and interests make up the structure of any negotiation, whether it is distributive or integrative. The issues of an agreement are its settlement points and problems that need to be solved within a bargaining session. Incorporating more than one issue in a negotiating process adds value to negotiations. Such tactics is widely used within the context of integrative negotiation and is often neglected within the framework of distributive negotiation. A single issue can be easily split into multiple ones for the negotiators to be able to cooperate in creating additional value to their negotiating process instead of focusing on a single issue and compete in claiming value within a distributive negotiation. Issues of a negotiation might be valued differently by parties of the negotiation. For instance, a music artist and his/her record label can have different points of view towards his/her salary or royalty rate, a tour or album recording budget etc. A position, in turn, is a solution to the problem that an issue contains. A position might often become a stumbling block within a negotiating process as at times for some reasons a negotiator is reluctant to adjust his/her initial position for the sake of common interest and compromise between the parties of the negotiation. However, the deal reached by negotiators may contain different final positions but offer common solution that caters to the needs and interests of all the parties to negotiation. Positions always need justification by negotiators and often are a basis for an argument; but, at the same, they can be solutions to problems that issues of a negotiation might pose. Conversely, interests of the parties do not require justification, but rather an explanation communicated openly and in simple terms so that other negotiator might understand. Interest is a subject of negotiation being reasons that form the basis of positions. It must be noted that it is equally important for a negotiator to understand and assess both his/her interests and the interests of other parties of a negotiation before entering any negotiating process. Interests of negotiators often are way more intricate and compound than they may seem from a superficial analysis and can be a key to ending of a discussion within a negotiation and finalizing the deal between the parties (Baskerville, 2005). Let us proceed to a specific negotiation situation between the music band, which is titled Arctic Donkeys, and an independent record label Dramamine that tried to sign them. I am going to invent a non-contractual scenario to illustrate some of the negotiation and communication theories put forth above. Arctic Donkeys was a new English indie rock band of young and talented musicians, which became famous within the British indie rock scene for both colorful lyrics of their songs, experimental use of bass guitar mixed with brooding electronic background and reluctance to sign to any record label that approached the band every single gig they played. The band turned down both worldwide major record labels famous nationwide and a great number of independent labels from across the world. The main reason for this, according to the front man of the bands words, was the unwillingness of the band members to become an integral part commercial music industry. The band existed within the paradigm of low-budget tours across Great Britain, did not demonstrate any signs of eagerness to record their first EP and uploaded their music track by track digitally via various online stores. Their songs uploaded on youtube had millions of views. The bands got extremely popular in the UK within the past few months without being signed to any record label whatsoever. The collective psychological portrait of the band was characterized by British music critics as sweet and tender hooligans. Every independent record label, apart from some famous major labels, in Europe dreamed of signing this breakthrough of the year at indie rock music scene. But it was obviously a hard goal to achieve as Arctic Donkeys proved to think little of their own commercial success and renounce of any authority in music industry. A skillful negotiator was needed to talk them into signing a contract with a record label. A Dramamine record label representative was one of the most skillful negotiators in show business. He came to the Arctic Donkeys Friday gig in London to talk to the band in person and persuade them to sign a contract deal with Dramamine label. From all communication tools, such as telephone, email or passing of quite a beneficial contract to the band via the third party, the Dramamine agent decided to focus on a face-to-face communication for he possessed strong communication skills, both verbal and non-verbal (Hendon, D. and Hendon, R. 1994). When he approached the bandleader and started to talk to him, the Dramamine agent was extremely careful to his body language as he realized that Arctic Donkeys could reject his offer without even listening much to it if they do not like him and do not feel like trusting him. He avoided both excessive smiling and speaking too seriously in order not to inspire feeling of dishonesty in young musicians. He didnt cross arms and used open gestures instead to make guys want to trust him (DeVito, 2011, p. 22). He never turned his body or eyes away from them so that not to look close-minded and insecure. He smiled from time to time and maintained eye contact nodding every time they responded to his direct speech. These simple tricks made Arctic Donkeys feel comfortable with the agent and so he could put forth the issues of the deal, which were a high royalty rate and tour budget, a well-equipped studio and new musical instruments as a present from the record label. He prepared well for this meeting and tried to multiply the issues and use an integrative negotiation tactics so that the band did not perceive him as an opposing party but rather teammate. He did not conceal any information on the label and details of the contract he offered and communicated positions and interests of his label openly. He realized that the interest of the band in eventually signing a record label deal was not money but a desire to get maximum creative freedom with restrictions and an opportunity for self actualization with 24/7 access to the studio. They were not interesting in well-being; the only thing they wanted was to have a good studio to record their album. And he offered that in the first place. He skillfully created values to negotiation and made the band claim them (Boyce, 1993, p. 83). The bands alternative for making the deal didnt surpass the Dramamines offer, which finally resulted in their signing the contract. All in all, a successful negotiation can be of both distributive and integrative types and depend on the ability of a negotiator to identify issues, adjust positions articulate interests combining with intelligent use of bargaining power and communication skills. References Baskerville, D. (2005) Music business handbook & career guide. 8th ed. Thousand Oaks, CA: Sage Publications. Boyce, T. (1993) Successful contract negotiation. London: Thorogood. DeVito, J. A. (2011) Human communication: the basic course. 12th ed. Boston: Allyn & Bacon. Evans, E. (1998) Mastering negotiations. London: Thorogood. Fisher, R. & Ury, W. (2011) Getting to yes: negotiating agreement without giving in. 3rd ed. London: Random House Business Books. Fowler, A. (1995) Negotiating, persuading and influencing. Institute of Personnel & Management. Harvard Business Essentials. (2003) Negotiation. Boston, MA: Harvard Business School. Hendon, D. & Hendon, R. (1994) How to negotiate worldwide. Aldershot: Gower Publishing Company Ltd. McRae, B. (1998) Copyright. In negotiating and influencing skills: the art of creating and claiming value. Thousand Oaks, CA: Sage Publications. Thompson, L. (2008) The truth about negotiations. Upper Saddle River, NJ: Pearson Prentice Hall. Shell, R. (2006) Bargaining for advantage. 2nd ed. London: Penguin. Spangler, B. (2003) Creating and claiming value [Online]. Available from: http://www.beyondintractability.org/essay/creating_value/ (Accessed: 4 March 2015) Read More