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Premier League shows foresight by allowing live feeds

A new rights deal has been struck between the English Premier/Football League and Media Organisations meaning reporters are now free to use Twitter and live blogs throughout matches. This replaces the old outdated system whereby the media were only allowed to upload text and picture updates during certain fixed ‘windows’. This deal reminds me of the same dilemma record companies have faced over the years since digitisation shook up the music business. How is it best to keep control of your rights when the whole thrust of digital distribution makes it harder to keep control?

In relation to music people want to share it, copy it, make mash ups, and download stuff for free. The only thing that can’t be shared in exactly its original form is a live event like a concert. It’s the same with football. There is limited access to the live matches but everything else around the game is up for grabs and people expect to be able to share it – highlights, video clips and live feeds from matches included. It must be very tempting for the Premier League to react as the Music Industry did and try to control all of this usage based on the value its clubs create. But in fact, as the experience of the Music Industry has shown, this is a mistake. Paradoxically, by trying to exert control you alienate consumers and diminish the value of what you are trying to protect. If you relax control then the interest and engagement you stimulate can be turned into value.

So the Premier League has done the right thing by allowing live twitter feeds. Like many fans I follow these as well. They keep […]

By |August 29th, 2011|Blog|Comments Off on Premier League shows foresight by allowing live feeds

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 […]

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

Motorola Patents seen as big Negotiating Currency for Google

The Google bid for Motorola is indeed puzzling in some respects.

Why would Google want to compromise the independence of its Android system in this way? Now it’s in handset competition with the likes of Samsung and who have previously made big commitments to Android. Why would it want to be in the handset business at all given that it is low margin and very tough?

The only answer can lie in the 17,000 patents Motorola possesses. These are big negotiating currency in the competition between major hardware companies. Apple recently had to pay millions of dollars to Nokia and ongoing licence royalties in order to settle outstanding patent disputes. HTC is anticipating a similar outcome having acquired S3 – a company which has just won a similar preliminary ITC judgement against Apple in relation to patent infringement. Ericsson and Sony recently paid an eye watering US$4.5 billion for some 6,000 Nortel patents on the same basis.

Perhaps Google sees Motorola’s patents in purely negotiating terms, as a spoiler for competition and an important insurance policy for itself. After all, having “rules and regulations” on your side is an important piece of bargaining power in any negotiation…

By |August 21st, 2011|Blog|Comments Off on Motorola Patents seen as big Negotiating Currency for Google

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 […]

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

‘Pushing’ back at Rioters Can only be Part of the Solution

In some ways the riots in London last week represent a rather tense negotiation between the Nation and its disaffected youth. Does looking at it like a negotiation give us any fresh perspective on how to address these events?

Certainly if someone is pushing you around, it’s important to push them back. In any negotiation, you have to stand up to tough guys by making their behaviour the issue. So, imposing tough sentences on people who behave badly is as it should be.

However, if you accept this as a “negotiation” then pushing people back cannot be the only tactic required. It’s important also to try to influence the “state” of people on the other side so that they behave the right way not just out of a fear of retaliatory measures but also because they want to. If deterrence is the only response then the negotiation can’t really move forward.

So how do you reach members of disaffected gangs and alter their negotiating state? It has to be done with dialogue of some kind, which interrupts their pattern of behaviour and alters their state of mind.

Recent activity by Strathclyde Police may give us a clue. They have managed to reduce gang violence through adoption of a programme used by Police in the US. It offered kids a way out by saying that if they stopped the gang fights they could have access to help with training, housing, education and community groups – but if they carried on with the gang behaviour they would go to jail. 400 gang members signed up and violent offending among those undertaking the most intensive programme fell by 73%.

This kind of dialogue can make a difference. So can making rioters confront […]

By |August 19th, 2011|Blog|Comments Off on ‘Pushing’ back at Rioters Can only be Part of the Solution

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.

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

‘You win Again’? Maybe not this time for Gibb

The CISAC and its President Robin Gibb last week issued a statement statement berating two recent Court decisions in India regarding copyright laws, believing that these will result in injustices for artists and composers. Whilst this is admirable, I’m not sure what impact they expect these statements to make?

Are they hoping that their authority will carry some weight with the Indian Government? Certainly if you have genuine authority it can make a big difference to your bargaining power in any negotiation. However, the negotiating authority must be genuine otherwise it will have no impact on the other side. Most commercial music in India is of Indian origin.

I suspect that CISAC and the Bee Gees don’t have a huge amount of influence there. Maybe it would be better to find local Indian writers and superstars to complain about these decisions. They are more likely to have genuine “authority” with the Indian Government and consequently more bargaining power in any negotiation to have the decisions over-turned.

By |August 19th, 2011|Blog|Comments Off on ‘You win Again’? Maybe not this time for Gibb

Interest in EMI drives up Valuation

An article on the CMU site speculates that there could be up to 5 parties interested in buying EMI outright.

There’s no question that having many bidders potentially adds bargaining power to Citigroup. When people believe that something they want may be in scarce supply, it often increases its value to them psychologically. Note that the operative word here is “believe”. The belief may have no foundation in reality but if it feels real to the person that holds that belief, then it may tempt them to bid more.

The last time EMI was sold, to Terra Firma, Guy Hands clearly believed there was another buyer waiting in the wings (even though there wasn’t), and that influenced his decision to spend a huge £4.2 billion on securing it. The fact that Hands subsequently had to wrote off half that value shows just how having a group of potential bidders can make a difference in price.

It’s interesting that the potential price being quoted this time is US$3.5 billion – almost exactly the same as the write-down valuation that Terra Firma arrived at. As surprising as this is, the price might go even higher if the number of genuine suitors is correct. Of course, there’s always the possibility that Citigroup might be encouraging the market to believe that there are lots of suitors in the very hope that such upward valuation will occur. Keep your eye on this one…

By |August 19th, 2011|Blog|Comments Off on Interest in EMI drives up Valuation

Dragon’s Den 2011 – Episode 3 – Lessons in the art of Negotiation

As ever, this Dragon’s Den episode provided an array of examples of how to negotiate a deal – and how not to negotiate one.

First-up was the Rascal Dog Litter Box. No points on negotiating skills for Minah from this team who seemed unable to keep quiet at any point in the discussions. Good negotiators know that listening is far more important than talking when negotiating – generally the more you say, the more you give away. Her husband did not fare much better, as he seemed to have no grasp at all on the numbers for his business. Was that £100k turnover he was forecasting for next year? Or £200k? Or £30k? All these numbers were mentioned. Fail to prepare for any negotiation and you prepare to fail – and knowing the numbers for your own business is a pretty basic preparation requirement.

The next interesting example was the Hart family’s fancy dress business. They did well in that their franchise model for expansion attracted interest and an offer from Duncan Bannatyne. He made an offer of £100k for 60% as opposed to their proposal of £100k for 10%. This was a fairly drastic reduction in their valuation. It would have been sensible for the Harts therefore to have taken a break and decided what to do next. Taking a break is always a good idea when you are under pressure in the bargaining phase of a negotiation. Instead the Harts ploughed on even though they clearly had not prepared for this turn of events. The husband uncertainly said that they wanted to keep at least 50% of their own business – a massive shift in their position. The wife undercut him and said they […]

By |August 15th, 2011|Blog|2 Comments

One-Dimensional Negotiating Tactics contribute towards ‘Fudged’ US Debt Deal

As predicted by this blog, a fudged deal got done by Republicans and Democrats in order to avoid the potential disaster of a US debt default. It was inevitable that this kind of arrangement would leave everybody equally unhappy. Not enough has been pledged as a cut from the debt either to satisfy Republicans or financial markets scrutinising the probability of future US debt crisis.

The reaction of the markets since the announcement of the deal tells you everything you need to know about their ongoing concerns. For the democrats, the concern is that too much has been promised by way of cuts, which will affect a whole host of social, health and welfare programmes, hence the wave of criticisms directed at Obama by his own party.

One thing that was noticeable about the negotiations was that they were conducted in a very public manner – with each party declaiming its position repeatedly to the media. This kind of public negotiation makes it hard for parties to step away from their adopted positions for fear of losing face. Negotiations that take place behind closed doors give all sides much more flexibility.

The other problem is that both parties seemed to use exclusively “push” negotiating behaviour focused solely on their own agenda. So there was a lot of “stating of expectations” and “proposing with reasons” as each side sought to justify its own position. Each side used the deadline “pressure” tactic to try and force concessions out of the other. Each side relentlessly “tested and probed” the other side’s negotiating position.

“Push” behaviour has its place in the negotiating repertoire, but it is never enough on its own. Other behaviours need to be mixed in: Some […]

By |August 9th, 2011|Blog|Comments Off on One-Dimensional Negotiating Tactics contribute towards ‘Fudged’ US Debt Deal