Due to licensing agreements with several entertainment companies in South Korea and island countries, Netflix's film library has been enriched to a certain extent, but the film source is still seriously insufficient.

Compared with now, there were fewer Netflix film sources in the past, because of many factors such as funding and latecomers outside the Hollywood circle, Netflix's contact with the copyright owner at that time was very difficult, and it had to find a way to collect film sources.

Among them, there are a considerable number of art films with a very large scale, and even reach the level of forbidden viewing under the age of 18.

And quite a few of these films are licensed from the famous San Fernando Valley.

However, in the San Fernando Valley's art films, it belongs to a relatively small scale genre.

"I hope to get this part of the film removed. Ronan is not motivated by any moral issues, but by the future: "We can get enough licenses this year that we don't have to take that risk." ”

Relativity Entertainment has been making preparations in this regard since the acquisition of Netflix, and it has already made preparations.

Mark Randolph said with a little helplessness: "We know there is a risk in this, but this is also a way out for the previous Netflix. ”

Many companies are not standardized in their start-up and early development, and sometimes special means are used, and Ronan was once one of them, so he can naturally understand what Mark Randolph said.

"Netflix has passed the most difficult stage, now let's withdraw. "I don't want to be dragged into court in the future to be accused of some kind of obscure behavior, and the reason is simply that some local prosecutor is behind in the polls and wants to use that as a reason to attract attention." ”

"Okay. "Mark Randolph believes Ronan can bring enough footage to Netflix.

Ronan has learned more about Netflix lately, and also knows that Mark Randolph and Reed Hastings have done a lot of risky initiatives in the early days of Netflix, and some of them have gone too far than that.

For example, in order to attract users, Mark Randolph and Reed Hastings hit Zipper and Lewinsky with the idea of burning Zipperton's questioning and grand jury testimony into DVDs and renting them on Netflix.com, which attracted more than 1,000 new sign-ups and sold thousands of DVD copies.

This was a successful operation for Netflix at the time, but it was politically risky.

In addition, according to later records in the distribution room, because Netflix had just included a batch of San Fernando Valley art films at the time, the result was a shipping error, and hundreds of customers received DVDs with popular art films, not Zipton's testimony.

Fortunately, the customer who received the wrong film chose to remain silent, otherwise Netflix would face very big trouble if someone complained to the regulatory authorities.

In the second week of Ronan's arrival in San Jose, the second $30 million in funds from Relativity Entertainment were in place, and Mary led the capital increase and share expansion to take care of it, so he didn't have to be too distracted, and his main focus was still on working with Netflix management to solve key problems.

Netflix is preparing to expand the "Sky Dome Project" that it has been promoting before, that is, customers can become paid Netflix users for a monthly fee of $14.9, and they can choose 4 movies per month, and Netflix will pay for the mailing costs.

This plan was formulated as early as 2000, but the promotion did not go well, mainly due to library and funding problems.

"If there is a large enough film library, cooperate with appropriate publicity and promotion ......"

In Netflix's somewhat cramped conference room, where all the executives gathered, Mark Randolph sat on Ronan's left hand side and said loudly, "Project Skydome will bring tremendous customer growth to Netflix. ”

Leslie Kilgore, head of marketing, said: "We are liaising with the media. ”

Ronan answered at this time: "The head office can assist in promotion, and there is an Internet publicity department under Embassy Pictures, they have rich practical promotion experience, and they can promote Netflix on major film and television websites." In addition, I have had people connect with a wide range of film and television media and portals, such as Premiere, Variety, Entertainment Weekly, Vanity Fair, Yahoo and so on, and Relativity Entertainment has worked well with them. When Netflix is ready, it will launch Netflix ads on a large scale. ”

His words continued: "In the promotion and promotion of the new film of Relativity, Netflix also has room to use it. I'll have someone contact you to negotiate a deal with it. If Netflix has enough users, I can make Netflix the only online rental and seller of some big-selling videos. ”

"I don't have a problem anymore. Leslie Kilgo suddenly felt that her marketing work was half easier, and this was the opportunity brought about by the support of a big platform behind her? She instantly became more confident: "I will fully cooperate with the head office." ”

Mark Randolph continued: "The most important thing we need to solve in the next phase is to reduce costs! ”

Tom Dillon, who took over as chief operating officer, said: "Our main model is still stuck at the stage of charging $4 for rental and $2 for shipping per disc. But with the addition of the authorized lease share, labor, shipping, and mailing costs, the cost of each order is as high as $6.5. ”

It was very quiet in the room, and everyone knew what that meant.

"Our goal was to keep the cost of a single order down to $2 so that the canopy project would be a success," said Mark Randolph. ”

Tom Cook said: "The cost of delivery is not a high proportion of the cost, and we can't afford to push the shipping cost of a single piece at a lower level than $2 at this stage. ”

Leslie Kilgore said: "The real cost of purchasing the DVD and the associated licensing fees are the higher costs. The average cost of purchasing a Netflix DVD is $15 per sheet, which is the lowest price the distributor has given us. ”

Ronan said directly: "The cost of the new film DVD can be reduced to about $10, and the old film will be lower." ”

Embassy Pictures has the ability to distribute DVDs, and the cost of converting and printing DVDs on the spot is less than $3 per copy on average, and with the advancement of technology, the price has shown a significant downward trend.

"During this time, we were in contact with the big six Hollywood companies. Leslie Kilgo looked at his colleagues, after Netflix was acquired, they also wanted to make some achievements as soon as possible, to show the new owner, but also to prove the ability of the original management, but the most important aspect of DVD licensing is quite unsatisfactory.

"They don't change the $15 wholesale price of DVDs, tell us it's definitely not going to work, and say they'll give us DVDs and licenses, but don't expect any discounts," she said. ”

This is no different from Hollywood's previous attitude towards Netflix, and if Netflix could get the license at a high price, it would not have dragged on until now.

Ronan asked, "The same as the old film and the new film?"

"Yes. Leslie Kilgo replied, "They are very arrogant, just like Pescar. ”

Ronan had dealt with Pepsi too much and was naturally aware of Pestech's situation, and the arrogance caused by its long-term monopoly position caused customers to become increasingly disgusted with the chain giant's late fees, limited options, and poor customer service.

The six major Hollywood companies monopolize the vast majority of the North American film industry, especially in copyright, and they compete and cooperate with each other, and have tacit understanding and consistent interests in many aspects, and it is too difficult for them to make a profit for a small customer.

But it is impossible to give up Hollywood film licensing, after all, this is North America, even if you get more overseas licensing, it can't change the reality that the main audience of film and television works is Hollywood.

"Leave the licensing negotiations with Hollywood to the head office. Ronan was prepared at the beginning of his acquisition of Netflix, and if Netflix could handle it itself, it would not be the current situation: "Other companies are okay to say that the six major companies are a hard bone, and it is not easy to let them reduce prices." ”

Everyone at Netflix knows this, after all, the arrogance of large companies has been appreciated in recent years.

Ronan thought of Robert Iger's suggestion, if Relativity Entertainment has a huge film library, in fact, these are easy to solve, the interests of the industry are intricately entangled, the six major companies have their own peripheral channels, if there are enough film copyrights, in the case of mutual authorization, in fact, Relativity Entertainment can get the relevant authorization without much effort.

The problem is that in Relativity Entertainment's film library, even with the previous videotape movies of Shahai Entertainment and the films bought by Embassy Pictures from overseas in recent years, there are only more than 20 movies.

At the end of the meeting, almost everyone was very optimistic about the future of Netflix because of Ronan's relationship with Relativity Entertainment.

Ronan knew that buying Netflix was just the beginning.

Excessive costs are one of the key issues that must be addressed as soon as possible.

In his office, Mark Randolph told Ronan: "We still have a lot of problems. ”

Ronan asked bluntly: "Mark, don't you think that once we solve all these problems, we will create a particularly high barrier to entry for this industry, which is difficult to achieve? ”

Mark Randolph can imagine that if two years earlier, companies like Pepsi and Hollywood Video decided to venture into the Internet business, Netflix would not be competitive at all.

"That's right!" Mark Randolph is as confident in Netflix as ever: "In this industry, no one can catch up with us!"

He looked at Ronan, "Do you have a plan for authorization?"

"Frankly speaking, even if Relativity Entertainment is a member of the industry, it is difficult to talk to the Big Six. Ronan does not shy away from this: "The cost of a single film is not high, but we can't have the opportunity to choose at random, the film library of the six major companies is huge, and they will inevitably use the way of packaging and licensing." ”

Good movies and bad movies are authorized together, which is a common method used by Hollywood, and Ronan has not done less.

Ronan started from himself and said: "There is another point, we will talk directly to the six majors, in addition to these, we also have to buy DVDs from them, which is even more expensive. ”

No matter how many DVDs you buy, as long as you use them for your own use, there is no problem, but for commercial operations, you need to pay for them.

Despite all the difficulties, Ronan was calm: "The theory of relativity has already begun to work. ”