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    The Yowl-Pop case

    It's not easy to be an artist. They see the world in their own ways; some want to be famous, others rich, and yet others want to enrich the lives of their fans. Ms. Sonata is a young artist who belongs to the last group. She is not yet widely recognized, but she is a spiritual singer and composer of a new genre of music called yowl-pop. According to her admirers, her songs help listeners better understand their inner selves.

    In order to spread her positive feelings, Ms. Sonata reluctantly decided to sign a contract with a major entertainment agency. She is known for hating business deals, therefore she asked Fado, whom she knows and trusts, to represent her in the contract negotiation. Fado is an independent agent who although young, has the reputation of being able to establish good relationships with often eccentric artists as well as with entertainment companies.

    One of the major entertainment companies is WorldMusic, respectable and well known around the world. WorldMusic prides itself as the best promoter of promising young artists. However, there are also other well-known and respectable entertainment companies, including EntertainMusic and UniversMusic.

    Mosico is one of WorldMusic's employees. Although quite young, Mosico had already been involved in several recent contract negotiations. In a recent magazine article featuring one of the artists signed by Mosico, the journalist favorably wrote that Mosico is a contract manager dedicated to promoting new talent.

    Fado contacted Mosico and informed him that Ms. Sonata may be interested in signing a contract with WorldMusic. It is common practice that the first contract is signed for three years and there are only four issues for negotiation. These issues are listed in the table below with the possible options for each issue.

    Standard issues and their values for the first contract negotiation

    Issues to negotiate

    Issue options

    Number of new songs 11; 12; 13; 14; or 15 songs
    Royalties for CDs (in percent) 1.5; 2; 2.5 or 3 %
    Contract signing bonus (in dollars) $125,000; $150,000 or $200,000
    Number of promotional concerts (per year, for 1,000 or more people each) 5; 6; 7 or 8 concerts