NEGOTIATIONS IN THE MUSIC INDUSTRY

What does negotiating have to do with the music industry? Well, I’m happy you asked.  There are all types of negotiations that take place in the music industry. Pertaining to someone who has a music career as an artist or a musician, one of the major things you have to negotiate are your contracts. You have to become wise about how you negotiate your contracts and there are various types of contracts to negotiate. You may have one or all of these: a manager contract, a producer contract, a record contract, and a performance contract. These are only a few contracts that you may have to consider within your career. Within each contract there are terms that have to be agreed upon. The process that takes place to decide on those terms is called negotiating. You have to negotiate the length of time of each contract as well as what you are willing to give up in exchange for what you will receive. You have to negotiate how much money you will receive for your efforts and when those monies will be recoupable. You even have to negotiate what your responsibilities will be in each agreement and how those responsibilities are expected to be carried out. One of the main things to consider when negotiating is the fact that nothing that happens to you in this business just happens.  You are very rarely just freely given what you want. A lot of what you receive is hugely a part of what you accept, what you vie for, and what you negotiate. You are never obligated to accept every offer that is presented to you. You have the right to refuse any offer or negotiate for better terms. It is very important to be knowledgeable about the music business and surround yourself with the right team of individuals that are knowledgeable as well. This is definitely what I sensed when speaking with Mike Holloway, the CEO of Walking On Water Productions located in Detroit, Michigan. He is very knowledgeable about the music industry and negotiating is a part of his routine on a consistent basis. In our conversation, I asked him a few questions about the technics he uses when negotiating and here’s what he had to say.

There were three main questions that I asked Mr. Holloway. The first question was how he was able to deal with positional bargaining tactics when negotiating with his clients. Mr. Holloway uses objective criteria to deal with a positional bargaining issue that might occur over the rates for his company’s services. He stated that as an Audio Production Specialist, his company offers rates that are set based on experienced claims of the industry. His company uses historical data and trends for audio engineering services.  This data is used to support their rates. Mr. Holloway went on to say, “This strengthens our position in the bargaining process as we are able to validate our rates being considerably less than the rates in the industry.” The next question I asked Mr. Holloway was if he could give me an example of how he worked toward a mutual benefit in a negotiation. Mr. Holloway had this to say, “ In the audio production industry, being able to build long-term relationships is vital. Therefore, we work towards mutual benefits with all clients to develop these relationships.” One of the examples he gave had to do with an organization that produces multiple plays, concerts, and other various services. This particular client approached Mr. Holloway’s company to help provide them with audio production services. His company was able to develop a long-term strategy for the organization. This strategy allowed his company to not just provide services for one particular program, but they were able to negotiate a deal that allowed them to partner with this organization and provide audio services for all of their performance needs at all of their venues. The mutual benefit in this scenario worked as the client was able to obtain a reduced rate for audio services based on the long-term relationship and Mr. Holloway’s company profited by gaining a long-term client with residual dividends. The last question I proposed to Mr. Holloway was would he ever use dirty tricks when negotiating with any of his clients. Mr. Holloway said, “We would never use dirty tactics in negotiating with a client. All data we provide is current and accurate. We would not speak adversely or provide any negative facts about any competitor in the industry. Integrity has to be a priority in conducting our business.” This is truly a principle that Mr. Holloway thoroughly stands by. He believes in treating people right and treating people fair. He is more concerned with the relationships he establishes with his clients and the longevity of that relationship over trying to make a quick buck.

This was a great interview. It gave some direct insight on how negotiation goes down in the music industry with some clear examples. I believe Mr. Holloway has the right idea about integrity and building long-term relationships. Success in the music industry has a lot to do with relationships and good relationships that are hard to come by should not be destroyed over the use of poor negotiation tactics. I hope that you were able to gain as much from this interview as I was about negotiating in the music industry.

   

-The Mike Sears