Recently, I’ve been conducting interviews with mid-career artists to locate some consistent practices that have worked for career advancement and business development in the arts. Interestingly, negotiation continues to surface as a critical skill and unfortunate pitfall.

“Artists have to learn business, because they are constantly negotiating…you are constantly negotiating with business people…it’s harder for artists, because we need the money… Also, don’t argue….negotiate…don’t blow an opportunity on emotion…” – Visual Artist and Arts Professor, Atlanta

As previously stated, many of the artists we surveyed and interviewed expressed feelings of being inept at (or resistant to) learning business skills like negotiation. However, negotiation is a requirement of living in a socially interdependent world that none of us can escape.
“Negotiation is an interpersonal decision making process necessary whenever we cannot achieve our objectives single-handedly.” - The Mind and Heart of the Negotiator, by Leigh Thompson

The question is not: “Do I want to negotiate?” Or “Do I have to negotiate?”
The question is: “Can you effectively negotiate?”

I, also, have been resistant to (or intimidated by) the concept of negotiation, because I associated the word with the stereotypical car sales man who tries to manipulate you into a crappy finance deal for a lemon disguised as an automobile. You can imagine my surprise when I took a negotiation class last spring and discovered that negotiation is more effective when the parties involved try to:

· find solutions that fairly meet each other’s needs,

· to create value for both parties (1+1=3),

· and to build trust.

“Effective negotiation is not just about money – it is equally about relationships and trust.” – The Mind and Heart of the Negotiator by Leigh Thompson

I was under the assumption that negotiation was about fighting over who gets the bigger slice of the last pie on earth. I never considered that it could be about finding ways to make the pie bigger or make multiple pies. Also, I assumed that all negotiating parties wanted pie. I never considered that one party might not even like pie. That they might prefer to trade their slice of pie for the chocolate cake that makes the other party break out in hives.

In fact, researchers have found that negotiating parties rarely want the exact same thing. Most negotiations involve parties with at least some asymmetrical or complementary needs.

Fictitious example:

An emerging rock band (Young Bucks) with a strong grassroots following and a well-established music venue (Giant Stage) are negotiating the terms of a booking agreement.

A week ago, Young Bucks were approached by a major label (Big Guy Records) about opening up for a major celebrity (Bon No) on an international tour. However, Young Bucks have never played a large audience. Before booking the tour, executives at Big Guy Records want to see how well Young Bucks can perform in a large venue. Other then the Giant Stage concert, the only other opportunity Young Bucks have to play a large venue is at a new venue opening up across town (The Comp). Although The Comp is offering good money, they would have to wait a few months for construction to finish and risk losing the interest of Big Guy Records. Also, Young Bucks are aware of another emerging band (Ambitious) that wants their time slot at the Giant Stage concert.

Meanwhile, Giant Stage is going through some cash flow issues due to poor investment decisions by management. Although they have a reputation for paying bands a little over industry standard; they’re too cash strapped to pay their normal rate. Also, they are concerned about competition from The Comp. Giant Stage needs to protect their reputation as the leading edge presenter of “hot” new talent and there is industry buzz that Young Bucks’ could be the next Jonas Brothers. If they don’t book Young Bucks, they might sign a year-long booking agreement with The Comp.

Entering the negotiations, neither party is aware of the other party’s interests. Giant Stage assumes the negotiations will be about the pay rate. Young Bucks assume they have to fight for their time slot. Young Bucks enters the negotiation with “guns slinging.” They talk up the offer from The Comp, in order to indicate their value so Giant Stage will give them the time slot. Giant Stage interprets this to mean that Young Bucks wants them to beat The Comp’s pay rate, which Giant Stage can’t afford to do.

Unfortunately, no deal is reached.

When negotiating parties do not communicate their needs properly, then false assumptions, information hording, and misplaced suspicion cause them to “leave money on the table.” According to my professor, experts calculate that approximately 20% of negotiations end in a lose-lose situation, where resources are left unclaimed by either party.

“Understanding your counterpart’s interests and shaping the decision so the other side agrees for its own reasons is the key to jointly creating and claiming sustainable value from a negotiation.” - Six Habits of Merely Effective Negotiators, by James K. Sebenius; Harvard Business Review

Good negotiations result in a situation where all parties:

· make trades (not compromises),

· walk away with what they need (not just an even split),

· feel good about the deal,

· and maintain a good relationship for future exchanges.

In the light of this definition of negotiation and the ethical/fair practices it requires, I was able to overcome my resistance to learning about how to become an effective negotiator.

Currently, Fractured Atlas is in the process of developing infrastructure and course content for Fractured U., an online business training center for artists and arts manager. When the full fledge program is launched, we hope you take advantage of the opportunity to learn from industry experts and sharpen your business skills. Not to become a hardened sales person, but to avoid some of the pitfalls other artists and arts managers have suffered in the past. We don’t want you to “leave opportunity on the table.”

“As a photographer, I am actually a small business owner as much as I am an artist.” – Anonymous Survey Respondent

In our quest to better understand the professional development needs of artists, we went beyond the survey/interviews and researched various external sources to find out what artists, arts managers, and industry experts were saying about career and business development in the “new economy.”

As we have all witnessed, the world has been “re-created” by the exponential growth of the web and technology. The Internet has fundamentally changed how we conduct business, socialize, and manage our lives. Rapid advancement and exponential increases in global communication have created an entirely new competitive environment for most industries. Older companies are restructuring to remain competitive and newer companies are emerging to meet the unprecedented demands of the “information age” customer. The cost of producing and distributing products and services has decreased so dramatically in some industries that traditional supply chains have shorten or rerouted through new intermediaries. Artists and arts organizations have not escaped these changes.

Traditionally, artists were tasked with developing their craft, then “auditioning” or “presenting” for an intermediary such as a film studio, theater company, record label or gallery. The intermediary would often invest in the continued development of the artist’s work, prepare it for the marketplace, expose it to an audience and sell it for a profit. The same model persists in the not-for-profit arts sector, except that raw talent is cultivated by organizations that received philanthropic funding or government support. Regardless of whether the middle man is for-profit or not-for-profit, they both operated a supply chain in which artists audition for their “big break.” 

However, the advent of new technology is creating a paradigm shift, a change in the power dynamic. ProTools, Garageband, Finalcut Pro, digital cameras, downloadable content, eCommerce, YouTube, MySpace, Napster, and other social networking sites have allowed artists to cheaply produce, market and distribute their work. They do not have to rely on the resources of the “middle man” to reach their audiences or realize financial returns. In fact, in some ways they are better position in the new economy then the big conglomerate or major institution, because they have little overhead. They don’t have to hit the mass market, they can make money marketing to small niche segments of the global village.  

Some examples of what D.I.Y artists are doing:

• Photographers are finding that the Internet and improved data management programs are making it easier to market directly to their customers, increasing opportunities for self-employment and decreasing reliance on stock photo agencies.
• Musicians are selling downloads over the internet, filming their own low budget videos for YouTube, offering free downloads to spur ticket sells for gigs, manufacturing their own merchandise and creating profit sharing programs so fans will solicit sales from friends.
• Actors are producing their own films/plays, using social networks to bring in audiences, and broadcasting work across the globe via the Internet.
• Writers are self-publishing and growing their fan base via blogging/interactive media.
• Visual Artists are selling their prints through e-gallery spaces and getting more active in mix media that can reach virtual audiences.
• Filmmakers are making a name for themselves via YouTube and creating work for premium content websites.

Another major reason why the traditional career model is changing is that traditional firms and organizations are experiencing budget crunches. Traditional firms have been losing money on the decline of legacy products (i.e. DVD’s and CDs) and the decline in philanthropic funding. This has forced them to be more selective about whom they “hire.” They no longer want raw talent they can mold; they want artists to “audition” with proven profitability. They want the artists to come to the “table” with an audience, as measured by MySpace hits,  downloads, user-generated website testimonials, positive reviews from citizen journalist, Google results, and viral-marketing based fame. 

Although there are still opportunities to succeed using the traditional career development model, artists are increasingly competing on the principals of entrepreneurship. For example, one of the artist consultants (and working artist) we interviewed told us the story of why she started consulting. Early in her career she was struggling to launch a painting career in Northern California by submitting her portfolio to galleries and curators. She was very frustrated with her career’s lack of progress when she read a newspaper article that changed her approach. The article told of a corporate woman who gave up her corporate career in pursuit of an artistic career. With the aid of a business consultant, she created a fully researched business plan that targeted the underserved market of northern Californian wineries.  Within a year she sold $100,000 worth of paintings.

This shift from dependant to independent artist, from employee to entrepreneur, has left a number of artists confused about how to approach their career development. The Internet continues to give rise to revenue streams that turn traditional business models upside down and provide numerous options for artists to market their work. However, they are finding an equal number of obstacles in differentiating their work from peers and attracting the attention of a critical mass of people. All these factors leave artists feeling overwhelmed by (and under trained for) the new DIY environment.

Fractured Atlas aims to use its core competence in technology and its ability to create strong networks to connect artists with experts, resources, services, and information that can help them navigate this new terrain.