Distribution Games

When music labels search for trustworthy distributors in various countries, aspects of  negotiation theories swirl around my mind.

Think about this example for a minute. Major music label by the name X happens not to be that satisfied by cooperating with their main distributor - label Y - in Brazil. After years of ups and downs in retail sales by the label Y in distributing X's business & products across many music customers, troubled economic times disrupt the natural flow of sales revenues to label X.

How much valuable time, it will take for label X to search (search costs), find, consider, contact & negotiate their enormous artist catalogue, and eventually trust a new business partner? New titles or scheduled releases will have to be postponed. This major event has occured quite a lot of times with independent labels desperately searching for new distributors. Should label X stick to its weak partner's future recovery plans, hope that the bad climate will vanish & sales will start climbing up again? 

This is exactly the critical point when time & money issues, disregard the weak company's performance, thus establishing a strong card/negotiation standpoint for the weak player's hands to be used on the business table of decision making. 

In plain words, the distributor label Y is in a strong position due to its weak position. Contradictory as it may seem, it's not.


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