Chapter 232: ABC's Rebound
A private airport on South Chicago.
After Daenerys Entertainment's Falcon business jet landed, Robert Iger and Ella Deutchman were very enthusiastic to drop the couple off the plane, and the company's team that was assisting John Hughes in filming "Uncle Buck" also sent a car to pick up people, which seemed to be very attentive.
After the couple left, Iger and Deutchman reboarded the plane, and the falcon took off and continued eastward.
In the cabin, when the plane was in a stable state, Ella Deutchman took out a thick list of Oscar judges from her briefcase, flipped through it and found a name, and remarked a few words at the end.
Today is Monday, January 23rd.
The weekend before, Deichman not only negotiated the rights to adapt six stage plays, but also hosted a reception for public relations for the awards for three consecutive days starting Friday.
The couple, whose husband is a judge of the Oscar photography awards, said at a reception on Saturday that they were going back to Chicago today, and Ella Deutchman was very happy to invite them to board the company's private jet.
This kind of small favor does not cost much, but it can leave a very deep impression on the couple.
This year's Oscar nominations have not yet been announced, but Daenerys Entertainment's PR offensive has already begun.
Robert Rehm was busy expanding Daenerys Entertainment's overseas distribution channels, and the nature of Gorgate Pictures was destined to survive on major film awards, so Simon handed over the company's awards and public relations tasks for several films last year to Doichman.
After losing "Sex, Lies, and Tapes," Ella Deutchman realized that her strategy of buying as many finished films as possible for distribution would not go so well, and while adjusting the plan, the PR results of the awards season became the key to whether or not he would be recognized by Simon during his one-year probationary period.
On her last trip to the UK and this business trip to New York, Ella Deutchman has been working non-stop to visit the award-related contacts she has accumulated over the years, and she is also working in a professional PR agency and award marketing team employed by RC Company.
The Golden Globes, which are the bellwether of the Oscars, will be held this Saturday, and the corresponding public relations work has also ended, and his next focus will be on the Oscars.
Speaking of which, with the current prestige of "Rain Man", under normal circumstances, this film is destined to be the big winner of the awards season.
However, Simon doesn't want "Rain Man" director Barry Levinson and actor Dustin Hoffman to win awards, but he wants to ensure the best picture, and at the same time hopes that "Dead Poets" can win the best director award, which is the biggest difficulty in this public relations.
Iger and Deutchman both agreed with Simon's idea of synergy and practiced it, so they got along very well, and two days of the three-day drinking party on the weekend were held at Egger's house.
The two chatted about work all the way, and after more than two hours, the Falcon business jet landed again, this time again not in Los Angeles, but in Salt Lake City, Utah.
The fifth edition of the Sundance Film Festival opened last Friday, and although the company now knows that any film it has its sights on could be contested by other studios, Doichman plans to see if there are any outstanding films or up-and-coming filmmakers worth wooing.
Moreover, there should be no shortage of Oscar judges at the festival who can contact their feelings in person.
Simon's explanation to Deutschman is to take it step by step.
More than 3,000 Oscar judges, one by one, one by one, one by one, one day can eat them all.
The reason why the Weinstein brothers were invincible at the Oscars in the original time and space was not that the brothers had to invest a lot of energy in public relations every year, but the most important thing was the deep-rooted and strong connections and deep influence accumulated over the years.
The Falcon finally arrived at Los Angeles Santa Monica Airport at around 11:30.
Iger sends two of his entourage employees to Burbank and arrives at Daenerys Entertainment HQ himself, where Amy's assistant Vanessa is already waiting for him.
After a brief greeting, Vanessa said, "Please come with me, Mr. Egger, Ms. Pascal is attending a meeting, and she said that you can go directly to the conference room when you come." ”
Iger was a little confused, so he followed Vanessa to a small conference room in the company's office building.
Pushing the door in, Nancy, who was in front of the slide screen, saw Egger, paused for a moment, and greeted, "Good morning, Bob." ”
"Good morning," Iger nodded at Nancy, shook Amy's hand as she got up, sat down next to her, and said to Nancy, "Sorry to interrupt you, Nancy, please continue." ”
Vanessa handed a copy to Egger, and Nancy continued: "Two years ago, Blockbuster won a game rental lawsuit with Nintendo, gaining the right to sell and rent game cartridges. After the development of "Teenage Mutant Ninja Turtles" is completed, we can also use Blockbuster's channels to distribute goods, and we can take the initiative in North American channels and marketing. ”
Iger listened to Nancy's introduction, and quickly flipped through the information that Vanessa handed over.
It turned out that this was a Nintendo FC game platform "Teenage Mutant Ninja Turtles" video game development plan. Seeing this, Iger couldn't help but think of the Atari collapse a few years ago.
Atari was originally a game console and software development company owned by Warner Bros., and the Atari 2600 game console launched by Atari in 1977 quickly became popular in the United States, and at its peak even reached the popularity of one Atari game console for every three American households.
However, after the success of the Atari 2600, Warner began to squeeze profits out of the platform, allowing all types of game manufacturers to develop a large number of inferior games without restraint. Countless inferior games flood the market, which continues to consume users' patience.
Eventually, in 1982, Warner's six-week hastily developed the Alien ET video game, which became the trigger for a crash.
Users who continue to be ravaged by all kinds of inferior games originally thought that the fame of "Alien ET" and the games produced by Warner's official brand must have quality assurance, but as a result, the quality of "Alien ET" is outrageously low, and there are even many low-level bugs that will not appear in the most inferior games.
As a result, only 1.5 million of Warner's 4 million cassettes for "Alien ET" were sold, and the rest were sent to the garbage dump for destruction.
But that's not the worst of it.
After that incident, users completely abandoned Atari.
Sales of Atari consoles and software fell off a cliff in the following years, with the market size of games exceeding $3 billion in the early '80s shrinking to $100 million in 1985.
Some analysts believe that it will take at least 20 years for the North American video game market to recover.
However, after a short period of market 'ice age', Nintendo, which had learned the lessons of the Atari collapse, gradually filled the gap left by the Atari collapse in the North American market through a series of restrictions that strictly controlled the quality of games through a royalty system.
In recent years, the North American video game market has begun to recover again. Of course, this field has unfortunately become the domain of Japanese companies.
Nancy, who was in front of the stage, finished her introduction, discussed a few words with Amy, and humbly asked for Egger's opinion.
With a total budget of only $2 million in his hand and a full 28-page plan, Iger thought about it and asked, "Nancy, it takes $200,000 to buy the rights to the video game of Teenage Mutant Ninja Turtles, but you only plan to use a budget of $500,000 to make this game, can the quality be guaranteed?"
Of the total budget of $2 million, $200,000 will be used to purchase the rights to develop the video game of Teenage Mutant Ninja Turtles, $500,000 will be used for production, $300,000 will be used to maintain the company's day-to-day operations, and the final $1 million will be spent on production and marketing after the game is developed.
Nancy nodded seriously and said, "The main expenditure of video game development is labor, because when I first involve the field of video game development, I only plan to set up a studio of about 10 people in the early stage, and the budget of 500,000 US dollars is enough." ”
Iger asked again: "Marvel's superheroes such as "Spider-Man" and "Fantastic Four" are also very suitable for adaptation into games, and they are all more famous than "Teenage Mutant Ninja Turtles", why did you choose "Teenage Mutant Ninja Turtles"?"
Nancy shook her head and said, "I tried talking to Simon and he said no. ”
Iger wondered, "Huh?"
Nancy was a little helpless: "Simon seems to be very fond of Marvel and doesn't give me room to negotiate at all." I also talked to him about "The Lord of the Rings" and was also rejected, as well as "Lola Run", and he has already sold the surrounding rights. As it happens, the company recently launched a live-action movie called Teenage Mutant Ninja Turtles, and after researching it, I found that its character setting is very suitable for adapting into a side-scrolling fighting game. After approaching Phantom Studios, they hadn't sold the game development rights for Teenage Mutant Ninja Turtles, so I bought them. ”
Iger was not familiar with the field of video games, and since Nancy had already thought of all the problems he could think of in a short period of time, he didn't rush to make any comments.
Everyone chatted a few more words, and it was already noon, so they rushed to the nearby restaurant to eat.
Recently, as soon as she completed her stake in BesTV, Nancy quickly came up with another plan, which once again put a lot of pressure on Amy.
Dabbling in video game development, Amy actually considered it, but didn't have time to push it.
Now, Nancy has come up with this plan, and the game studio will also be affiliated with the consumer goods department, rather than the company's direct departments such as Daenerys special effects and Pixar animation. If it succeeds, Nancy will definitely take the most credit. Even if it fails, the loss of $2 million is really insignificant to Daenerys Entertainment now.
So, at lunchtime, although trying not to show herself, Amy inevitably became closer to Egger.
The mild-mannered Egger is far less energetic and aggressive than Nancy.
Obviously, Amy couldn't possibly know what Simon expected from Egger.
Nancy's consumer goods division is far from comparable to the size of the TV division. Moreover, the consumer goods department is located in Los Angeles and is destined to be controlled by the parent company at all times, while Egger, who is in charge of the TV department alone on the East Coast, is completely at the level of a 'feudal official'.
After a little chat, we quickly talked about work, even though we were eating.
Daenerys Entertainment's TV series production is mainly on the West Coast, and with the arrival of TV spring, Iger has to start flying to Los Angeles every week. This time, in addition to the preparation of several TV series, there are more important things.
"Tom had a detailed discussion about 'Who's going to Be a Millionaire' at lunchtime yesterday, and he said that if we weren't willing to make concessions, ABC would have to cut the number of episodes in the second season and adjust the shows," Iger said, noticing Nancy's puzzled look in his eyes, explaining, "Chairman of ABC, Tom Murphy." ”
Nancy nodded, not answering.
Amy asked, "What about the conditions?"
"The price of each issue is halved, and ABC also participates in the revenue share of the advertising placement in the program. ”
Amy suddenly frowned and said, "This, Simon shouldn't agree." ”
Nancy looked left and right and couldn't help but ask Egger, "Bob, how much do we make on 'Who Will Be a Millionaire'?"
As head of the consumer goods division, Nancy is well aware of the merch revenue figures for "Who Will Be a Millionaire". However, the company's annual financial audit is not over yet, and she does not know the total revenue scale of this phenomenal hit reality show.
Iger did not hide Nancy's inquiry, and said: "According to last year's financial data, about $180 million. If you count the entire first quarter, it's about $250 million. ”
Nancy's eyes widened a little, and her red lips opened slightly.
She thought she might have misheard, or Iger had misinterpreted, so she asked, "Total revenue?"
Iger shook his head: "Net profit." ”
Nancy had always thought she wouldn't be surprised by anything, but this time she couldn't help but take a deep breath.
Slowly exhaled a big breath, she still didn't believe it, stared at Iger intently, and said, "250 million US dollars, how is this possible?"
To be able to make a beautiful woman show a surprised expression is still very satisfying to a man's vanity, Iger showed a smile on his face and patiently explained: "Compared with TV series with only 13 or 26 episodes per season, "Who Will Be a Millionaire" has 69 episodes in a season, and the transaction price of each episode is $2 million. In the first season of "Who Will Be a Millionaire", according to the settlement rules we negotiated with ABC, after the winter break, ABC has paid us $83 million for the first season, and counting the $30 million for the additional 15 episodes before the season, this part of the income alone reached $110 million. In addition, the total revenue from in-program ad placement was $56 million, and syndicate distribution and overseas licensing revenue was about $27 million. ”
Nancy listened intently and quickly reported the final stats: "The total revenue is $196 million, and the net profit is $180 million, which is really reasonable." God, it's no wonder that our little boss is so profligate, but Daenerys Entertainment has always been financially healthy, and it is so profitable. ”
And, as she thought about it further, Nancy immediately spotted the problem.
As far as she knows, NBC is the best running of the four major television networks.
The fiscal year cycle of the four major television networks is basically calculated from the last quarter of each year.
According to GE's public financial data, affected by last year's writers' strike, NBC's total revenue in the 1987-1988 fiscal year was $3.3 billion, but the net profit scale was only $310 million, a sharp decline from $380 million in the previous year, and the profit margin was less than 10%.
After careful consideration, the season of "Who Will Be a Millionaire" can bring Daenerys Entertainment a net profit of $250 million, but there is no problem.
The network operates seven days a week, and the total number of prime-time programs is about twenty or thirty.
However, just like the films produced by Hollywood studios every year, these TV shows are bound to make a small number of profits or losses, and most of them are basically breaking even. Add to that the huge underlying operating expenses of a national television network, and when combined, it is very rare to be able to make $310 million a year like NBC.
Look at "Who Will Be a Millionaire", this show occupies the most golden three days and eight o'clock slots of the seven days a week, and it is an hour-long show. Because of the phenomenal ratings data, the scale of its advertising revenue is completely comparable to the studio's most profitable box office blockbuster films with a box office of more than 100 million yuan every year.
Compared to ABC's comprehensive investment in running a national television network, Daenerys Entertainment only needs to bear a total production cost of only about $20 million and a small amount of marketing expenses upfront.
Taken together, the revenue of "Who Will Be a Millionaire" is only about 10% of the total revenue of the TV network, but like a blockbuster low-budget high-grossing movie, the show's profit margin is more than 90%.
As a result, occupying the best quality resources and taking away the most lucrative profits, but without having to share the huge operating expenses and loss-making project costs of the ABC TV network, Daenerys Entertainment naturally makes money and makes a soft hand.
Thinking of this, Nancy immediately asked Iger again: "Bob, how much can ABC make on this project?"
Iger thought for a while and said, "If you only count this show, it's about $80 million." ”
When Nancy heard this, her eyes wandered between Amy and Egg, and she tore the corners of her mouth and made a strange grimace.
Amy and Iger also looked at each other in silence.
Daenerys Entertainment made 250 million yuan, but as the owner of the platform, ABC, which should be in a strong position, only has a profit margin of $80 million, which is less than one-third of Daenerys Entertainment.
Tom Murphy was able to patiently negotiate with Daenerys Entertainment, mainly because ABC really couldn't do without "Who Will Be a Millionaire".
Although the average viewership data of a single program is firmly suppressed by "Survivor", compared to "Survivor", which has 13 episodes per season, "Who Will Be a Millionaire" is 3 episodes per week.
With the ultra-high ratings data of "Who Will Become a Millionaire", ABC, which was originally only a little stronger than the emerging FOX among the four major TV networks, experienced last year's autumn file, and has faintly shown a counter-surpassing posture to the first-place NBC TV series.
In such a good situation, ABC will never dare to rashly abandon "Who Will Become a Millionaire".
But at the same time, if Daenerys Entertainment is unwilling to compromise and the distribution of benefits is seriously unbalanced, as long as ABC management has a little foresight, the network will definitely do whatever it takes to get rid of the dependence on "Who Will Be a Millionaire" as much as possible.
Everyone was silent for a moment, and Amy finally said: "This matter is still up to Simon to decide personally, Bob, you can talk to ABC again, and then write a report and send it to Melbourne." ”
Egger nodded, the stakes were high, and that was the only way to do it right now.