Clive Rich – Blog

15 07, 2011

Can Virgin’s Deal with Spotify pave the way for more Legitimate Music Services?

By Clive Rich|July 15th, 2011|Blog|Comments Off on Can Virgin’s Deal with Spotify pave the way for more Legitimate Music Services?

Virgin announced a partnership deal with Spotify last week to offer the streaming service at discounted rates, as part of its bundle of tv, broadband and phone services. This deal may well be welcomed by the record industry as a further extension of the opportunity to consume music legitimately, and this is partly true.

However, there is an alternative point of view. Virgin has for 2 years been negotiating with the Majors with a view to launching its own paid for service. Although officially the company is still leaving open the possibility of launching this service, the Spotify deal must surely signify that it will be mothballed. From Virgin’s point of view it’s easier and less risky to license in another service which has already paid advances to the labels, than to pay high advances/minimum guarantees and agree other tough terms with the Majors for its own service.

Why is that a problem? Because if that decision is duplicated by other potential digital stores, then ultimately the only digital stores available will be those with deep enough pockets to consummate deals with the majors. There are not many of those (can Spotify can afford to be part of that group indefinitely?) and the services that are out there are not providing enough traction to make up for the dwindling of physical sales.

What the Industry needs is more legitimate services, not less. Confining the availability of content to a few services who can afford to get licensed reduces choice and is ultimately not good news for the Majors either, since it leaves them continuing to lose money overall and highly dependent on just a few major customers.

15 07, 2011

BSkyB Deal Withdrawal shows importance of Integrity in Negotiation

By Clive Rich|July 15th, 2011|Blog|Comments Off on BSkyB Deal Withdrawal shows importance of Integrity in Negotiation

This saga still has some way to go and illustrates how important it is to retain your integrity when you negotiate. If you lose your reputation as someone who can be trusted you lose all your authority as a negotiator – and authority is one of the major sources of bargaining power.

News International has fallen below even the minimal standards of trust expected of journalists these days, with its hacking of innocent victims’ phones, including Milly Dowler’s. The resulting fall-out among the public, media and politicians, has removed all of Rupert Murdoch’s bargaining power in the negotiation regarding the takeover of Sky.

In these circumstances it is no surprise to see Murdoch engaging in “parting” behaviour, and withdrawing from the negotiation. In the circumstances it is the only sensible option to avoid a comprehensive negotiating defeat – withdraw, re-group and try again when and if enough time has elapsed that trust has been re-earned and the climate has improved. It may take some time.

15 07, 2011

‘Coinage’ could be key to ending NFL Labour Dispute

By Clive Rich|July 15th, 2011|Blog|Comments Off on ‘Coinage’ could be key to ending NFL Labour Dispute

The labour deal between the NFL and it’s players seems to be slowly moving towards a conclusion.

One thing that may have helped is that as well as there being a disagreement about money, there are also plenty of other issues on the table which can supply “coinage”. Coinage is a concession that has low value to one side and high value to the other side because it meets one of their underlying emotional needs (see my video on coinage here).

Look at the list of other issues, including blood testing for human growth hormone, a reduction in off-season workload, deciding which body has the authority to resolve disputes arising out of the new deal, and whether the next deal is a traditional collective bargain or the result of a lawsuit. There is plenty of scope for creating packages here in which monetary demands are offset against other concessions which help meet the other side’s emotional need for reassurance on a particular issue.

I would not be too worried about Judge Arthur Boylan (the mediator credited for a lot of the progress that has been made in discussions over recent weeks ) going on holiday this past week. Some people have commented that this is very bad timing and that he should have cancelled plans to keep working with both sides. However, like any good mediator, he knows that ultimately any settlement must be owned by the parties, not by him. In any event the parties will want to show that they were perfectly capable of solving the dispute without him…

15 07, 2011

Better late than Never – Government Must Collaborate with The Unions

By Clive Rich|July 15th, 2011|Blog|Comments Off on Better late than Never – Government Must Collaborate with The Unions

If you want someone to agree to do something that seems on the face of it to be against their interests then you need to talk to them. You may be able to require them to do what you want temporarily through force or the application of the law, or some other exertion of bargaining power, but the exercise of power does not win over people’s hearts and minds, so they will have no commitment to your desired outcome.

A better way for the process to have worked in relation to public sector cuts might have been for the government to have talked to the relevant Unions before it published its targets for cuts. That way it could have effectively had the Unions own the problem too. It would also have enabled the Government to have listened to Union needs and perhaps found elegant ways of achieving cuts whilst meeting Union concerns.

In publishing its targets first the Government was well-intentioned, and no doubt its perceived tough handling of the need for cuts has impressed financial institutions and avoided a Greece-style melt-down. However, dealing with the issue this way round has effectively foreclosed negotiations, and soured the climate because the Unions feel disenfranchised from the process and under-valued. Hence the wave of strikes.

Instead of criticising the Unions, one sensible way to deal with this would be for the Government to signal an attempt to re-set the climate by saying that whilst it remains generally committed to its goals of reducing public expenditure it is open to collaboration with Public sector representatives as to how this is addressed, and welcomes their input. Showing the Unions that they are valued in the process would reduce the temperature […]

15 07, 2011

US Debt Crisis – All sides need to focus on Common Goal

By Clive Rich|July 15th, 2011|Blog|Comments Off on US Debt Crisis – All sides need to focus on Common Goal

It’s all very well politicians posturing in public about the positions they wish to take in the US debt reduction talks. But maybe all sides should be focusing more on what could happen if no deal is struck.

What’s the worst case? If the markets turn against the dollar because of fears that US debt is unsustainable, then the problems for the US would be enormous. Could the scenes in Greece, Ireland and Portugal as those countries grapple with impossible debt bail out deals be repeated in the US? Who would bail out the US – there is no equivalent of the Eurozone Central Bank to do it. If the US was a domestic family or a small business facing a similar debt crisis there would be no messing about – it would be a question of cut costs, increase income, or go to the wall.

It would be better for all sides to focus on this common peril rather than just re-stating their political positions. Such positioning statements may make good headlines for constituents but they prevent each party from progressing the negotiation. This requires stepping into the shoes of the other side and trying to find ways to meet their emotional needs in return for getting what you want from a deal – if you are just broadcasting your own position you are not going to be able to do that.

I wonder what would happen if as part of the negotiation meetings there was agreement to run an exercise, where the Republicans were required to argue the Democrat position, and vice versa. What a great way that would be of learning to truly appreciate the needs of the other side.

20 07, 2011

Corinthians Right to Walk away from Tevez deal

By Clive Rich|July 20th, 2011|Blog|2 Comments

If you set a deadline for doing a deal, and the deadline passes without a deal being done then you have to walk away. If you don’t then you risk losing all your negotiating authority. So, Corinthians have done the right thing by pulling their offer as it became apparent that the deal would not get done in time.

Now, when and if the deal is revived in the January window, Man City know that when Corinthians negotiate they mean what they say.

The danger for Corinthians is that Tevez gets sold in the meantime during the remainder of the European window. Certainly he is going to be one unhappy hombre back at Eastlands. But where else could he go? He has stated publicly that he wants to go back to South America. So, is a move to another European club likely? Even if he changes his mind on that score there can’t be many clubs who could afford the fee and the wages – Inter Milan? It sounds unlikely. Barcelona? They don’t need him. Real Madrid? Possibly, though they already have a surfeit of expensive attacking players.

So, maybe Corinthians have played this about right. If it gets to the January window, Man City will take what Corinthians say more seriously next time.

For Man City, a good short-term “fix” might be to loan Tevez out to someone until January (say Inter) with a view to a potential transfer in the next window. That would keep him away from the club until the next tranfer window – something that is surely desirable for Tevez. It would be desirable for City too, who get an unhappy player and a huge wage bill off their books, and […]

20 07, 2011

Barcelona and Arsenal need to Step into each other’s Shoes

By Clive Rich|July 20th, 2011|Blog|Comments Off on Barcelona and Arsenal need to Step into each other’s Shoes

I’m not sure that all this public positioning around the Fabregas transfer deal by Barcelona and Arsenal really helps to get a deal done. Wenger calls Barcelona disrespectful; Barcelona speak publicly of their desire to bring home a player who is under contract to someone else.

This kind of positioning stops each party seeing the other side’s point of view, which is normally an essential component in negotiating a successful outcome. If the roles were reversed and Arsenal were chasing the signature of an established Barcelona player who was English and yearned to return to England, then Wenger would have no hesitation about pursuing the player in public to try and improve his team. Equally, Barcelona would be just as outraged as Wenger is now about the “disrespectful” public pursuit of one their own key players.

If they could put themselves in the other side’s shoes, then it would be easier for the clubs to find a price which reflects Arsenal’s need for respect, Barcelona’s need to continue achieving ground-breaking success, and the player’s need to feel that he is back where he belongs.

As it is the public posturing prevents this kind of constructive negotiating, sours the climate, and means the deal takes longer to do. None of this is anybody’s interest – especially Arsenal, who are running out of time to negotiate for replacements before the season starts…

28 07, 2011

One last chance for Myspace to win back their ‘Friends’

By Clive Rich|July 28th, 2011|Blog|Comments Off on One last chance for Myspace to win back their ‘Friends’

It was interesting to read this article (hollywoodreporter.com) about the plans for MySpace, now it has been taken over by Specific Media. They are right that effectively a “re-negotiation” needs to take place between MySpace and its audience (both past and present) in order to gain back their attention.

Like most negotiations, the outcome is largely dependent on the “state” or attitude of mind in which the negotiation is approached by the participants.

Prior to the purchase, MySpace’s state must have been a very anxious one, with the organisation being very conscious of its ever growing losses, and aware that it was running out of time to turn the tide. MySpace users will have been in a state where they felt increasingly negative with the service, were very conscious that other users were deserting the service (thus providing social proof that the service was not worth their attention). Users would also have been pre-disposed to judge modifications to the service harshly – MySpace in fact carried out a major overhaul of the service some months before the sale but this didn’t seem to make any difference.

The sale has created the opportunity for a “pattern interrupt” – a chance to modify the state at MySpace and among users. The early signs are good. Tim Vanderhook, Specific Media’s CEO, sounds positive and confident as he sets out MySpace’s approach. This kind of attitude in any “negotiation” is infectious and strongly favours a positive outcome.

Moreover, MySpace has some interesting things to say about the service going forward – repositioning it as an entertainment platform with the involvement of Justin Timberlake. This is potentially a very clever step as he brings a lot of authority to the new offering […]

28 07, 2011

Collection Societies Conference highlights the Negative impact of a Hostile Climate

By Clive Rich|July 28th, 2011|Blog|Comments Off on Collection Societies Conference highlights the Negative impact of a Hostile Climate

The account of the Music 4.5 Conference here (themusicvoid.com) on Collection Societies reveals just how hostile the climate has become between users, Collection Societies, and their members.

In any negotiation climate-setting is a crucial stage. It determines the atmosphere in which the negotiation takes place, and that atmosphere has a great bearing on the parties’ behaviours and the outcome.

There are normally 4 choices. You can have a warm climate which very open and friendly, a cool climate which is very objective and process driven, a hostile climate which is very confrontational or a wacky climate which is very fun and off the wall. Different climates suit different deals, but as between a Collection Society and its own members one would hope that the climate would be a warm and open one – they are after all on the same side, aren’t they? In fact, depending on the Society, the atmosphere often seems to be mistrustful on both sides, with a climate that veers between cool and hostile. That is why members are sometimes tempted to withdraw rights from Societies and Societies use practices such as NDA’s to ensure that only they have a clear picture of what is going on.

Meanwhile users reap the rewards of this climate schism between Societies and their members, with the result that negotiations mirror the same degree of hostility or coolness. It’s small wonder that so many users in the audience kept quiet when this issue was being discussed at Music 4.5.

An unhelpful climate creates negative thinking on all sides, and means that parties are intent on protecting their own positions rather than (for example) growing the legitimate market to the benefit of all participants in the value chain.

When climate […]

28 07, 2011

Don’t Cut Out the Middle Man

By Clive Rich|July 28th, 2011|Blog|2 Comments

It can be a useful source of bargaining power to use experts on your side in a negotiation. Clearly they are there for their expertise, not to make decisions for you but I would query whether it is always best to take them out of the negotiation at critical points.

Some people, such as Mark Suster in this article (businessinsider.com) express the view that using 3rd parties to negotiate on your behalf should be restricted to a minimum so that you can keep control of your deals. It is true that often we as the decision-maker will have more at stake than the expert does. It is also true that for that same reason we might handle the negotiation differently than they would. However, their detachment can actually be an advantage. Often when our personal interests are at stake we invest the deal-making process with too much emotion. This can cause us to get anxious or aggressive or inhibit us from making decisions. As a result we might end up over playing or under playing our hand.

When we use experts their lack of emotional involvement can be an advantage. It can cause them to view matters more calmly and dispassionately in the heat of the negotiation, enabling us to make better decisions when they refer matters to us for instruction.

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