In Donn's view, Michael Ovitz's ideas are too traditional.

Michael Ovitz believes that the reason why he was able to attract investment for the film was because he was in charge of the film crew, and he could hold the signboard of a big director and a big star to persuade investors to invest in the film.

Even, he can change the director or starring according to the preferences of investors, or provide a brilliant role for investors' "Xiaomi".

Through this way of controlling the crew members, it is recognized by investors, and then fulfills the service commitment to the film company, and completes a series of all-round packaging services such as stars, crew members, and investment.

This idea is of course very correct, movies are the creation of stars, but they are not a way to make a lot of money. The reason why many rich people invest in movies is often not to make money, but for favor, face, image promotion, or to please their little girlfriends.

This kind of thing is very common in the enlightenment stage of the film market.

For example, in Hollywood in the past, there was a very popular BD relationship.

B is sugar_Baby, D is sugar_Daddy, to put it bluntly, it is the relationship between godfather and goddaughter.

However, with the change of social atmosphere and the maturity of the film market, this relationship has almost disappeared in Hollywood, and it is still surviving only in the fringes of the entertainment industry. This category of girls usually has a specific name called "annabes", which refers to people who want to become stars but haven't done it yet.

With the vigorous development of the film market, the "godfather" culture was slowly born, and "annabes" appeared, that is, "peripheral girls".

Don has a vision ahead of his time, his vision is naturally broader and more accurate than Michael Ovitz, and he knows that a correct, healthy, rational and mature film market should exist financing mechanisms.

It is by no means relying on big stars or peripheral women to guide investment!

Don smiled and said, "Michael, I think...... You're narrow-minded. ”

"Huh?"

Michael Ovitz was not very happy.

He admits that Donn is unmatched in the production of films, but when it comes to the company's strategic vision, he has never been convinced by anyone.

Otherwise, he wouldn't have had a violent conflict with Michael Eisner at Disney, just listen to his orders.

Don said slowly: "Michael, times have changed, and the box office appeal of stars to movies is gradually weakening. In the past, the method of attracting investment through the brands of big stars and big directors will gradually lose its effect. ”

Michael Ovitz's tone was not very good, "Celebrities can't be good, okay, then tell me, apart from celebrities, what else can attract investors?"

"Of course it's enough benefits!" replied Don immediately without hesitation.

Michael Ovitz said lightly: "Yes, if you can see enough returns, then the whole world will definitely rush to invest in movies." The point is, most of those investors are laymen, they don't understand movies, they don't have the guarantee of stars, how can you convince them?

Donn laughed and said, "Of course one mouth can't do it, even if it has President Reagan's eloquence, it can't do it!"

Michael Ovitz raised his eyebrows, looked at Don deeply, and narrowed his eyes, "Listen to your tone...... Is there a way?"

"Of course!"

Don En stood proudly and showed indescribable confidence.

Michael Ovitz said in disbelief: "If you can really solve this problem, it will point out a clear direction for Hollywood, and the whole of Hollywood will thank you, and Disney's problems will be solved." ”

Tang En said with a smile: "After all, I am still young, and I can only put forward a general idea, specific details, and you need to help improve and contact investors." ”

Michael Ovitz waved his hand, "Of course, this is not only for you, but also for AMG." ”

As soon as Don stretched out his hand, he asked his secretary for a carefully prepared document and handed it to him, "The first set of data, in 1975, the average production cost of American movies was $5 million, and in 1987, the figure reached 20 million. In 1999, the average production cost exceeded $40 million, and marketing costs reached $15 million. It is conceivable that this number will continue to grow in the coming years, and investors will no longer be able to take huge risks just by looking at the names of a few movie stars. ”

Michael Ovitz looked at the information provided by Don with a heavy face, "With the significant increase in budget costs, even if the conditions in the overseas market remain unchanged, it is impossible to raise enough budget funds through pre-sale of copyrights." ”

"That's right, that's the truth!" Don snapped his fingers, and a smile immediately bloomed on his face, "The second data is good news, the internal rate of return of the film company. ”

"Internal rate of return?"

A little surprise flashed in Michael Ovitz's eyes.

Donn laughed: "The internal rate of return, which is the rate of return of the movie. Even though Columbia Pictures has been losing money in the past few years, the return on movies has never been lower than 14%. Especially in 1997, because of the production of a series of films such as "Men in Black", "Air Force One", "Perfect", "My Best Friend's Wedding", the internal rate of return was as high as 23%!"

Since being acquired by Sony, Columbia Pictures has been losing money.

But this does not mean that the films produced by Columbia Pictures are always losing money!

Columbia Pictures has been losing money year after year because of the difference in management styles between the United States and Japan, which has led to a surge in operating costs, as well as the salaries of more than 10,000 employees in the global distribution department.

Since Columbia Pictures was acquired by Sony, many of the original partners of Columbia Pictures have turned to other film companies.

As a result, Columbia Pictures maintains a large global distribution department, but it doesn't have enough films to distribute, and naturally it can't make ends meet.

But the revenue from the movie, although it is not as good as that of Warner, Fox, Universal and other companies, has not been bad.

Michael Ovitz didn't quite understand what Donn meant, "What does this mean?"

Tang En waved his hand, "Don't rush first, listen to me." In the past few years, Twentieth Century Fox and Warner films have been the most outstanding at the box office. I have here a detailed IRR table of Fox for the past 5 years that you can take a look at. The lowest year, 1995, had an internal rate of return of 17%, and the highest year, 1997, had a return of 36% because of the release of "Titanic"!"

Michael Ovitz frowned, not understanding Donn's intentions.

Tang En's voice raised a little, and his expression was a little excited, "Michael, haven't you noticed? If the operating costs of the film company, the salary of employees, and the expenditure of the film in terms of project establishment, halving, cooperation and default are removed, then the rate of return of the film company will be the most eye-catching investment industry in the world!"

"But...... How is this possible to eliminate these operating costs?" asked Michael Ovitz in a deep voice.

Don smiled: "Of course it is impossible to exempt the company's operating costs. But the investment you're bringing in for the film company is for the film, not the film company, right?"

Michael Ovitz's eyes lit up.

Tang En struck while the iron was hot and continued: "No film company can guarantee that all the movies it produces will make money, but every film company has a good internal rate of return, what does this mean?"

Michael Ovitz said quickly: "This shows that the large-scale film output of making a lot of money to make up for the loss-making film projects is the root of the excellent internal rate of return of the film company." ”

"That's right, that's the truth!"

Don slapped his face, very excited, he had always been afraid that Michael Ovitz was a stubborn old stubborn, and his own half-hearted opinion could not move him.

Now it seems that Michael Ovitz's vision and vision are really superior.

In just a few words, Tang En let him understand the truth contained in this.

Michael Ovitz also looked excited, and Donn's proposal was like the hand of God, opening a new window in his life.

In the past, he believed that big stars were the foundation for attracting film investment.

Therefore, after building a "one-stop shopping" service for AMG's agency, it has been poaching some big Hollywood stars to join.

However, Michael Ovitz has a cold relationship with Disney, and there is almost no possibility of cooperation, resulting in A-list stars being reluctant to join AMG, which naturally shattered his idea of attracting investment for the film company.

But Donne's words......

Let him finally understand a truth, movie stars are not the biggest guarantee for investors at all, it is the film company's excellent, excellent, and surprising internal rate of return!

If you only invest in one movie, even if you have the biggest directors and top superstars to join, there is still a risk of investment failure.

However, after taking a large-scale investment similar to a film company, investing in 20 movies in a row, and using money-making projects to make up for loss-making projects, after this large-scale investment, even Columbia Pictures, which is at the bottom of the six major companies, can get a minimum return on investment of 14% in a year!

If you're lucky, it can even exceed 20%, and if you come across movies like "Titanic" and "Spider-Man", the return rate will even exceed 30%!

The documents provided by Donn allowed Michael Ovitz to successfully find the ultimate killer feature to attract investors!

And Donn wasn't done yet, his next sentence made Michael Ovitz almost cheer with excitement-

"You know, I have some friends on Wall Street. According to data provided by Merrill Lynch, Wall Street hedge funds, which usually seek an internal rate of return, are usually between 12% and 18%, but once they encounter a stock market crash similar to this year, they will face losses of more than 20%. In contrast, large-scale film investment is the lowest risk, highest return transaction!"