A&M/Octone Records: All Rights or Nothing?
In April 2008, after successfully transitioning Octone Records to Universal Music Group and relaunching the label as A&M/Octone Records, president and chief executive officer James Diener is facing a new challenge. Diener and his executive team have trouble convincing a new, promising act, Paper Tongues, to join A&M/Octone on a so-called all-rights deal, which specified that the label would receive a percentage of all of the artist's revenue streams, including recorded music, concert-ticket sales, merchandising, commercial licensing, sponsorships, and endorsements. Negotiations have stalled. Should A&M/Octone hold on to its "all-rights or no deal" stance? Or was it time to switch to a recorded-music-only deal? Designed for use alongside "Octone Records," HBS No. 507-082, the case allows for an in-depth examination of new-product development and talent management strategies in the context of the music industry. The case provides rich insights into how contracts between labels and artists are structured, and how advances in technology are impacting the music industry and its players.