February 12th Philippe Dauman, Viacmon’s president and CEO, issued the following statment:
As we go forward, we are continuing to focus more on software than hardware, looking to reduce the cost structure associated with Rock Band, being selective in the music titles that we choose for Rock Band based on their cost. The music industry will assist with this category to make sure that it can continue on a profitable basis in the future and then finally we think we have the best games in the category, we’ll continue to rollout exciting products.
An obvious signal to the Music Industry as he begins the negotiation by creating his position through the media. It is even more effective when followed by a letter/email/phone call to each company with his offer. Effective positioning helps to shift the frame of reference before the negotiation technically begins. Philippe is preparing the industry to receive his demands. To truly shift their expectations you need to deliver an offer, effectively dropping an anchor.
The Music Industry would be wise to attempt to shift the focus back onto their position with a preemptive strike. Instead of allowing Viacom to open the discussions with some ridiculous offer like 50%, they need to provide an anchor of their own to begin the discussions around their position. By opening first the initial expectation is set. This is definitely shaping up into a classic Hard Bargaining negotiation. I’ll keep my eye on any developments. What do you think?