Co-Opetition - Adam M. Brandenburger [127]
4. Links through Tactics
Two games are linked anytime someone perceives them to be linked. The two games become one larger game when someone believes that what will happen in one of them is contingent on what happens in the other. By creating or destroying these perceptions of linkage, tactics change the boundaries of the game.
Threats and promises are the classic examples of creating a perceptual linkage. They are designed to persuade other people to do something—or not do something—based on how you say you’ll respond. They do something in one game because of what they perceive you’ll do somewhere else. Setting a precedent is another tactic designed to link games. You take an action in a game today to convince people of what you’ll do next time you’re in a similar game.
You can institute a link unilaterally. All you have to do is convince other players that you perceive two games as linked and that you’re going to treat them as linked. To deal with the consequences, other players will have to treat the games as linked, too.
Creating linkage is a familiar idea: one person tries to bring in another issue, and the other person resists. The concept of linkage is often explicit in trade negotiations. What issues can be discussed together? Rice and beef imports, most-favored-nation status, human rights, military aid, copyright protection, fishing rights. The links can be very tight or very loose: an explicit threat or promise to act in a certain way, or a vague hint of a general policy.
The key ingredient for linkage is contingency: another player must believe that what you will do in one game depends on what happens in another. Or you believe that he believes this. Or he believes you believe that he believes this. The game is all about perceptions.
Cable Retransmission Dissent In the Tactics chapter, we took a first look at the negotiations between the broadcasters and the cable TV companies over cable retransmission consent. Most broadcasters—CBS, in particular—lost out. Here, we’ll take a look at the game in southern Texas, where things turned out a little different.
Unlike broadcasters elsewhere, the Corpus Christi stations didn’t allow themselves to be painted as the bad guys. They took the lead in shaping public opinion. Mike McKinnon, owner and founder of KIII, the local ABC affiliate in Corpus Christi, used his station to broadcast the following challenge: “If cable will reduce your basic rate by 60 cents per subscriber, we’ll give them permission to carry our total programming lineup at no charge from us. Free means free.”18 TCI, the local cable operator, was charging subscribers $10.23 a month for basic cable—60 cents a channel. Yet it wasn’t willing to pay the broadcasters anything for their signals. If KIII wasn’t going to get paid, neither should TCI.
Many things are done a little differently down in Texas. In most of the country, television stations are regularly bought and sold, but all three network affiliates in Corpus Christi were owned by their original founders. The CBS affiliate KZTV had been founded in 1956 by the now eighty-eight-year-old Vann Kennedy. The NBC affiliate KRIS had been founded by one T. Frank Smith, Jr., in the same year. The three owners—McKinnon, Kennedy, and Smith—went way back. TCI could try to divide and conquer, but the three owners trusted each other to hold the line. They knew full well that if one of them struck a deal with TCI, the other two might have to cave in without getting paid. If all three of them held out, TCI would ultimately pay for their programming.
When the negotiation deadline passed without an