Negotiation Tips & Articles

Century Dinosaurs Lost in the Digital Age

By Clive Rich|August 19th, 2011|Blog|Comments Off on Century Dinosaurs Lost in the Digital Age

In the LA Times last week it was revealed that Metal record label Century Media have withdrawn their content from Spotify’s catalogue claiming that “… in its current form, it does not allow for the artists to derive the profit needed to sustain their respective careers”.

I don’t agree with Century’s comments. The more services like Spotify there are the better. CD sales are in irreversible decline because of the advent of digital.

There are two types of substitutional digital usage – illegal digital usage and legal digital usage. The fewer legal services there are and the more restricted their offering, the more users are driven into the arms of illegal sites.

It is absolutely true that content owners receive only tiny amounts from each stream compared to the amounts they used to receive from CD sales, but that is not the right comparison. The comparison is the amount received from Spotify versus the “nothing” received from illegal services.

If services like Spotify and countless other legitimate digital retailers can be encouraged into the market then Content owners will only benefit, potentially expanding the market well beyond its CD peak. If there were thousand s of digital retailers able to distribute music legitimately, then they would potentially be able to reach millions of users in a way that physical retailers selling CD’s and bound by shelf space and geography could never have hoped to emulate.

The end of the beginning in Libya but Syria Conflict could be drawn out

By Clive Rich|August 21st, 2011|Blog|Comments Off on The end of the beginning in Libya but Syria Conflict could be drawn out

With the world watching on as Syrian President Bashar Al-Assad continues to carry out horrific crimes against his own people, the West has finally responded with coordinated calls for him to stand down. The US have also imposed severe sanctions on Syria, including the freezing of their US assets and banning US citizens from operating or investing in Syria. A UN delegation has also been sent in the last couple of days to assess humanitarian needs in the country. However, these actions still fall some way short of the military intervention seen over the past 5 months in Libya by UN forces and there are also doubts over how long it will take for such sanctions to have an impact on the country and its President.

Is there any other way to ensure a regime change? The military option which the coalition jumped on so quickly for Libya, is not practical. Syria has a strong army and a powerful friend in Iran. It is one of those troublesome countries like Burma, North Korea, Zimbabwe and Iran itself, where it’s very easy for the West to convince itself that it has a justification for intervention, but military and political considerations get in the way.

So, what about negotiating a deal for regime change? Ironically this might have been possible in Libya, but the coalition didn’t really give itself a chance before opting for the military route. Gaddafi may be mad as well as bad, but he was happy enough to do a deal with Tony Blair to renounce terrorism when it suited him. It may be that a dignified exit which met his needs could have been negotiated. This would have […]

La Liga Strike Highlights Top Clubs’ ‘User’ Mentality

By Clive Rich|August 27th, 2011|Blog|Comments Off on La Liga Strike Highlights Top Clubs’ ‘User’ Mentality

I was interested to see that La Liga went on strike last weekend over the creation of a salary fund to protect the wages of Spanish players against non-payment by Spanish League clubs. In spite of the success of Spanish Football, most clubs other than Barcelona and Real Madrid experience severe financial difficulties routinely. As many as 22 of the 42 professional clubs have passed through administration over the last few years and €52million is owed in unpaid wages to players.

The problem is not difficult to spot – Real Madrid and Barcelona take 3 times as much of the TV monies paid to La Liga than any other club. So, they use their bargaining power to max out on revenues from the game, leaving other clubs to fight for the scraps. This is a “users” approach to deal-making, where no attention is paid to the needs of any other parties.

This may seem great for the top 2 clubs, but actually, like most “user” negotiating behaviour, it is short sighted. How great would it be for Barcelona and Real Madrid if the other clubs were so impoverished that they couldn’t offer effective competition? It would not be good at all. The League would be very boring, and actually Real Madrid and Barcelona players would not get sufficiently tested to make them tough enough or sophisticated enough for the Champions League.

You only have to look at what has happened in Scotland to see the force of this. Celtic and Rangers dominate and other clubs rarely get a look in. Which club other than Celtic or Rangers last won the League recently? The result is that actually Celtic and Rangers, along with their poorer cousins, are […]

Eurozone Countries continue to ‘Avoid’ the Issue

By Clive Rich|August 29th, 2011|Blog|Comments Off on Eurozone Countries continue to ‘Avoid’ the Issue

The vacillation over the Euro is a classic case of “avoidance” negotiating behaviour. This kind of negotiating behaviour is not to be recommended, as it creates uncertainty and lack of confidence in whoever you are dealing with.

The Debt crisis within a number of the Eurozone is placing impossible strains on the Euro. The financial markets do not believe the various “austerity” programmes which have been created to accompany individual country bail-outs such as in Greece and Ireland. Nor do they believe that countries like Spain and Italy can avoid a default in the absence of bail-outs which the Eurozone cannot afford.

The only answer to the continued market anxiety is to engage with the problem, but the Eurozone seems to lack the political will to do so. Germany does not wish to underwrite Euro indebtedness with a blank cheque (e.g. by backing a Euro bond). Germany and France would like to utilise the current crisis to impose strict fiscal controls on the Eurozone in future so that member states don’t live beyond their means. But there seems little political will from the other states to accept this kind of political harmonisation. Even the will to engage with ratings agencies like Standard and Poor seems to be lacking – finding ways through dialogue to counter their gloomy predictions, which often spook market anxieties, would surely be a step forward.

Instead France and Germany have put the onus on the European Central Bank to sort out the problem, through interventions involving the buying of European government bonds. Nobody is convinced by this sticking-plaster solution.

When you “avoid” engaging in a necessary negotiation you frustrate the other side, they lose confidence in dealing with you, and they fantasise about all […]

Video streaming could test Amazon’s consumer ‘Authority’

By Clive Rich|August 29th, 2011|Blog|Comments Off on Video streaming could test Amazon’s consumer ‘Authority’

Amazon’s recent drive into the video streaming market may well succeed, but it could also carry some risk for its brand.

In its negotiations for our attention as consumers, Amazon has developed a great sense of “authority”. This is an acknowledged source of bargaining power, as we are all more likely to trust entities which exude authority, and that authority is reinforced by the social conformity which leads more and more of us to trust it. All great brands have this pedigree of authority – from Apple to Harrods. It is wrapped up in a combination of reliability and expertise. This creates a conundrum for such brands though – how to extend such authority into other areas of business where that authority does not yet exist.

Brands are often keen to diversify – but can they carry their authority into new areas? If not then new ventures may fail and this may in turn affect the core brand itself – with harmful effects for the “deal” by which they obtained consumers’ attention in the first place. Virgin is a good example – it has been successful in turning its mixture of refreshing exuberance into an airline brand – less successful when it comes to Cola and cosmetics and trains – and maybe those uneven attempts at diversity have weakened our perceptions of what Virgin stands for, so that we are less likely to sit up and pay attention when Virgin negotiates for our attention as consumers.

For Amazon, video-streaming is an interesting extension of its core brand. It is peerless in the world of e-commerce books, and has extended that brand to book downloads and latterly music downloads. Is video streaming proximate enough to what […]