Reborn Capital Empire

Chapter Five Hundred and Twenty Two The Cash Flow Of The Old Film Library

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"Mr. Morris, I have been very sincere. MGM is the most prestigious film and television company in Hollywood. Since its establishment in 1924, we have won a total of 170 Oscar awards. Tony Heston, Clark Gable, Katharine Hepburn, Cary Grant and other great actors who shine in the history of Hollywood are the undisputed symbols of American film and Hollywood, and they are the best among major film and television companies."

"Despite the difficulties we are facing right now. MGM still has more than 4,500 feature films, more than 10,800 TV episodes, including the famous cartoon "Tom and Jerry", the enduring series "007", As well as classic movies like The Wizard of Oz, Gone with the Wind, Rocky, Singing in the Rain, Modern Times, etc.; the huge library can provide us with an annual income of about 530 million US dollars. So even if there is no With foreign capital, we can still operate normally.”

After a pause, Gary Barber looked confident, "If it wasn't for the sincerity of Mr. Guo and Matrix, I would not have agreed to meet today. In addition, Matrix is ​​not our only partner. Sony Columbia, 20th Century Fox , and other investment institutions that are already interested in the film and television industry are all our potential partners.”

Guo Shouyun frowned slightly. In fact, the main purpose of his acquisition of MGM was the film library. For all Hollywood film companies, the huge film library is their "invincible small treasury" and stable financial resources, which can ensure that they can provide stable operating cash flow in the event of a crisis.

The way to develop a film library is also varied in Hollywood.

First, upgrade and re-screen. For example, in the 1980s, Hollywood studios launched the conversion of black and white films into color replays; in 2002, imax developed an imaging technology that can convert 35mm traditional films into 70mm film through digital processing. With the deepening of the commercialization of imax screening, some classic films such as "Beauty and the Beast", "Apollo 13", "The Lion King" and other films have been converted into imax format and re-entered the theater for distribution.

The most famous of all these films is "Titanic," which Paramount and Twentieth Century Fox paid $18 million to turn into 3D and re-release on the 100th anniversary of Titanic's silence , has achieved a good box office, but the box office revenue in China is close to 1 billion Chinese dollars.

Moreover, the cost of converting the film into 3D mode is relatively cheap compared to shooting directly with a 3D camera, and with the advancement of technology, there is a further downward trend. For example: In 2002, the cost of converting an old movie to 3D was $100,000 per minute; but now, for the same time, the cost has dropped to $25,000 per minute. So, using 3D technology to transfer those popular old movies in the studio is a sure-fire business.

Second, television rebroadcasts and audiovisual distribution.

Because the movies that can be accommodated on the big screen are relatively limited, most movies do not have the opportunity to be re-released on a large scale in theaters. But they can still create market value through other distribution channels that can accommodate more films. For example, televisions that became popular after the 1960s, videotapes in the 1980s, DVDs in the 1990s, and Blu-ray discs in the new century, each time a new distribution method appears, it will set off a wave of development of library resources.

In the 1940s and 1950s, after TV entered the stage of history, it was once regarded as an enemy by major Hollywood studios. However, after a run-in, TV became an important source of revenue for the studios, and in the 1970s and 1980s In the 1900s, with the development of new TV networks such as cable TV and satellite TV, some special movie channels, such as hbo, showtime, moviechannel, Sundance movie channel, independent movie channel, etc., emerged one after another, and the demand for movie broadcasting was increasing. increase. The studio's film library resources also glow with endless business opportunities.

For example, Time Warner launched a TV service thistv in 2002, which provided TV stations around the clock with the resources of movies and TV programs in its film library, and the two sides carried out advertisement sharing. The service quickly became popular with local TV stations where the channel proliferated, and is now available to nearly 80 million U.S. households.

In addition, audio-visual distribution is the most important way for Hollywood to develop film library resources. Although the DVD and Blu-ray discs of American movies have generally declined in recent years, the situation of audio-visual distribution of film library films is better than that of new films, because they like Old movie fans are often movie fans with higher education and income levels. They purchase audio-visual products of library movies for the purpose of collection, and their consumption is relatively stable.

In 2002, Library Films earned $2.1 billion in distribution revenue, accounting for 44 percent of total U.S. film and video distribution revenue, 10 percentage points higher than in 2001.

For Hollywood studios, re-release of old movies can generate higher profit margins, especially Blu-ray discs, which usually sell for more than $20, and generally a more successful Blu-ray disc can sell for 100,000-20 million. In order to increase revenue, studios began to increase the number and variety of old movies released, and they also carried out special topic planning or promotional activities, such as release kits, commemorative editions, etc. Universal Pictures, for example, celebrated its centennial in 2001, and used it as an opportunity to restore some of its best-known films for Blu-ray release, including Quiet on the Western Front, Spartacus, and 1983 "Scarface", etc., created nearly 20 million US dollars in revenue.

Finally, new opportunities for online development.

As Internet users grew, video sites like netflix provided a new market for studio stock footage. The Netflix website alone pays more than 1 billion US dollars in licensing fees to several major Hollywood companies every year, and most of its tens of thousands of film titles come from the resources of the Hollywood film library.

And Hollywood studios are increasingly aware of the value of online development in the long-tail market of film libraries. For example, last year, Time Warner and Matrix jointly established the hulu company, and Amazon has already planned the primevideo company.

In addition to online broadcasting, some companies are also targeting the online entertainment application market to tap the value of the film library. For example, under the suggestion of Guo Shouyun, Ruby Company and Matrix jointly developed a game system. By selecting some classic movie clips, technicians can erase the main characters through the computer, and users can synthesize their own images into In the scene of the movie clip, perform with the original characters of the movie. Users can say the original lines of the movie, or they can say the lines created by themselves. The game software is also equipped with an electronic teleprompter and a location prompt program. Users can try any number of times to Get satisfactory results, and upload the synthesized video to social and video sites such as facebook and youtube.

To use these features, users need to pay $169 for a dedicated camera and buy movie clips for $1.99 or $2.99 ​​each, with the original copyright owner getting a cut of each download. Through this innovative development method, Ruby Company has obtained the most desired user stickiness and increased advertising revenue; while the revenue obtained by Matrix Company through the old film library has increased by a large amount.

Officially aware of the increasing value of the old film library, Guo Shouyun planned to rush to swallow MGM and its subsidiary United Arts before Sony Columbia and other consortia. If this deal can be reached, then the matrix that is sitting on Universal, MGM and United Arts will have a huge library of more than 9,600 feature films and nearly 20,000 TV series. He already owns three of the eight major Hollywood movie giants in the last century, and his annual cash flow from the old film library reaches 1 billion US dollars.

In addition, it has Marvel Universe, Pixar, Pirates of the Caribbean series, Harry Potter series, National Treasure series, The Hobbit series, Transformers series, Fast and Furious series, etc. The matrix of many hit movie rights also owns the brightest future in Hollywood.

If Hollywood's No. 1, and also the world's No. 1 old film library represents the past; Marvel, "Harry Potter" series and other hit movies represent the future; then Matrix will be the most brilliant film and television company in the past, present and future, This result will not change for at least thirty years.

Of course, if you want to achieve this grand goal, you need to take the stubborn-looking MGM CEO below.

"I admit that MGM and United Art's film libraries do have high value. But that can only mean that you have a good past. UU reading www.uukanshu.com really wants to talk about production capabilities, and now MGM is in The whole of Hollywood is second-rate. The failure of Wind Whisperer is the best example."

Guo Shouyun's unscrupulous words of revealing the scar hurt Gary Barber. However, Guo Shouyun did not give him a chance to speak.

"...after the failure of Wind Whisperer, MGM's debt has climbed to a staggering $2.73 billion. The annual debt repayments alone are close to $200 million. Although you can get about $530 million from the library The US dollar revenue, after paying off the interest and part of the debt, and deducting part of the working capital, does not have much money to invest in the shooting of new movies." After a pause, looking at Gary Barber with an ugly face, Guo Shouyun smiled lightly, " And as far as I know, MGM has a debt of over $640 million due in July next year. How will Mr. Gary Barber repay this loan?"

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