I am Hollywood

[Chapter 856: Who Bullies Whom]

"Eric, do you mean we should leverage the distribution contracts of these films to negotiate an early settlement for Titanic's box office with the Southeast Asian distributors?" As soon as Eric finished speaking, Robert Thompson, the president of the distribution department, immediately asked.

Eric nodded but quickly shook his head. "We can do that, but it's not limited to just that. What I mean is, we need to prepare for the worst in the Southeast Asian economy. While we work to get our share from Titanic as soon as possible, we should also consider directly pre-selling the distribution rights for upcoming films to Southeast Asian distributors at a buyout price."

It was quite common for Hollywood films to pre-sell distribution rights, especially for second and third-tier film companies with limited distribution capabilities. Even in the United States, they often adopted such strategies to quickly recuperate funds.

However, after years of expanding distribution channels, Firefly Group, even with some of its mid-to-low-budget films, had rarely resorted to this lower-yield pre-sale strategy. After all, it was akin to farming -- using the same piece of land for primitive slash-and-burn agriculture versus meticulous cultivation would yield vastly different harvests.

Sure enough, Eric's statement was quickly met with opposition.

"Eric, Titanic's box office is almost guaranteed. Trying to get our share back early won't incur any loss. But if we sell off distribution rights for films that haven't been released yet, not only would it be hard to get a high price, but if some films unexpectedly hit big at the box office, the decision we made now to avoid a potential economic crisis could cause us even greater losses. Southeast Asia accounts for about 30% of our overseas box office, so I strongly advise against this."

Eric recalled the Titanic box office data he saw last Friday night, confirming that Southeast Asia indeed accounted for around 30% of the overseas total, with Japan making up nearly 20%. He remembered that during the Southeast Asian economic crisis, the Japanese yen's depreciation was only about 20%, much lower than the dramatic declines other Southeast Asian currencies had faced.

Moreover, Japan's recovery speed compared to other Southeast Asian nations would likely be faster. Given this, a 20% currency depreciation was something Firefly could still manage.

As for the other Southeast Asian markets, there was simply no reason to hold on to them. It was easy to imagine that when the economic crisis hit, these smaller markets, already holding just over 10% of the overseas share, would plummet to around 5%, with no short-term recovery in sight.

In the coming years, it could very well be that the already declining Hong Kong films fell into complete silence, which would likely be related to the significant shrinkage of the Southeast Asian market.

After contemplating for a moment, Eric said, "Let's do this -- Japan will maintain its existing distribution strategy, while the other markets like Singapore, Malaysia, and Thailand will go with the proposal I just outlined."

Excluding Japan, the remaining smaller Southeast Asian markets combined would be even less than in Latin America, so the higher-ups stopped insisting. After discussing the detailed execution plans, they moved on to the next topic.

The meeting lasted all morning, and after having lunch at the Burbank headquarters, Eric began heading back to the Liberty City Cottage.

...

While still in New York, Madonna had called several times, eager to visit after Eric returned to Los Angeles. By this time, Madonna had started a legal battle with Warner Records over digital distribution rights. Although the outcome was uncertain, this issue had evidently sparked more attention from musicians regarding online music sales. Coupled with the close collaboration between both parties on the Yahoo Music Store, Eric had decided to block out half a day for their meeting, scheduling it for that afternoon.

Of course, Eric knew that Madonna's visit might also involve her nudging him to write her a song, something he had promised over a month ago.

Tomorrow marked the celebration party for Titanic crossing the $1.8 billion mark at the box office. Katzenberg would also be heading from Burbank headquarters to Playa Vista Studios in the afternoon, so he arranged to catch a ride with Eric and sneak in some business talk.

As Eric mentioned his intentions of heading back to the Cottage, Katzenberg said, "Speaking of the Yahoo Music Store, even though Warner and Universal Records didn't participate in this lawsuit, Barry Weiss from Firefly Records called a while back. It seems Warner secretly intends to poach the Backstreet Boys from us."

Eric asked, "If I remember correctly, their contract should be for five years, right?"

"Yes, until around 2000," Katzenberg replied, then added, "Barry mentioned they were enticed, but Warner might be unwilling to pay their full termination fees, which is why nothing has materialized. However, once the contract expires," he paused and glanced at Eric before continuing, "I fear they won't stay with Firefly Records."

Eric understood that the close collaboration between Firefly Records and the Yahoo Music Store could raise some concerns among the artists signed.

Due to the large-scale promotion from other record companies, many singers instinctively felt that the cooperation between Firefly Records and Yahoo Music Store was at the expense of their interests. Under the manipulation of the major record labels, even the American Music Association was reluctant to acknowledge the sales figures of digital music albums, which undoubtedly resulted in much lower reported sales for Firefly Records' artists compared to actual numbers.

Eric, however, did not believe this. With the impact of the internet, the physical music industry was inevitably heading toward decline.

Firefly Records' cooperation with Yahoo Music Store, by pioneering the online music sales market, could greatly diminish the damage caused by internet music piracy to the artists under Firefly, while also allowing them access to a wealth of promotional resources offered by Yahoo's network.

Eric was confident that as Fireflyer gained more ground, this advantage would soon become clear over the next few years.

"As for what Universal and Warner want to do, we can adapt to their moves," Eric said, gazing out the car window as they drove along Venice Boulevard. He caught sight of a massive poster for Godzilla flashing by.

...

If he disregarded all prior information from memory, the upcoming summer slate still boasted a thrilling lineup.

Besides the animated blockbusters Finding Nemo, The Lion King 2, and Ice Age, three major live-action films were set to release that summer. Alongside Casino Royale, directed by Eric himself, Batman & Robin from Warner Bros., and Sony's Godzilla, all of them had production budgets exceeding $100 million. Casino Royale's production cost finally reached $110 million, making it the lowest among the three. Batman & Robin cost $120 million, while Godzilla's production ballooned to a staggering $150 million.

Moreover, as the only CG-heavy blockbuster of the summer, perhaps motivated by Titanic's massive success, Sony displayed plenty of confidence in Godzilla. Despite its $150 million production cost, they unflinchingly allocated a $70 million marketing budget, bringing Godzilla's total expenditure to $220 million. Thus, this monster movie would need a worldwide box office return of $600 million to break even.

Eric couldn't recall what Godzilla's global box office had been in his past life, but based on its poor reputation that had been criticized for over fifteen years, it clearly would be far less than the $600 million mark.

Although Sony was the producer of Godzilla, the special effects were entirely managed by Digital Domain, making it easy for Eric to access the film's materials. Just the fact that this version of Godzilla resembled the Tyrannosaurus Rex of his previous life was enough for Eric to doubt the film's chances for success.

As for Batman & Robin, it was best left unmentioned.

Nevertheless, Warner and Sony were evidently confident. Perhaps noting that Firefly had no CG-heavy blockbuster scheduled for the summer, they opted for a release date aligning with Firefly's customary June slate, with intentions that were not as straightforward as they might seem.

This was evident from the specific dates of these two blockbusters' releases.

Firefly maintained its "trilogy" strategy for its summer slate, yet unlike previous years, due to the absence of Jurassic Park 3, Firefly would release only two films in June: Con Air starring Cage and Pixar's latest animated film, Finding Nemo. Another film, Disney's Tarzan, was scheduled for mid-July, deliberately avoiding a direct confrontation with Casino Royale, which premiered at the end of June.

The other two films, Con Air was set for May 30 and Finding Nemo for June 13.

Perhaps Warner and Sony felt some trepidation regarding the Jerry Bruckheimer-produced, Nicolas Cage-starring Con Air, leading them to strategically place Godzilla's release on June 6 and Batman & Robin on June 20, which were respectively the week before and after Finding Nemo's release. Clearly, Sony and Warner aimed to ensure their major films dominated the box office while also elbowing out Finding Nemo.

When Eric first saw the detailed summer slate, he felt an impulse to mourn for the two rival companies.

Two massive flops stirring up a billion-dollar ticket sales seed.

By that time, who knew who would be bullying whom.

Besides the main studios, New Line Cinema also planned to release two films during the summer slate: Bad Boys 2 on July 4 and Final Destination 2 on July 18, raising Firefly Group's total summer release count to five.

In previous years, New Line had typically avoided making a big fuss about gathering for the blockbuster summer slate to concentrate their promotional resources. However, following the previous year's successes, New Line was now officially gearing up, and it was clear from the release dates of the two films that they aimed to emphasize the summer month of July, seamlessly connecting with Firefly's June releases.

The reality of Firefly's dominance had been thoroughly exposed since Forbes magazine referred to it as an "oligopoly" earlier in the year.

Thus, Eric stopped minding if Firefly appeared to be more prominent.

At this point, Firefly's film division firmly held about 30% of the annual box office share, but if they could elevate that to 40%, Eric would definitely spare no effort.

With small talk, Eric dropped Katzenberg off at Firefly Studios before heading back to Malibu.

He returned to Liberty City Estate around two in the afternoon.

...

Madonna had already arrived early, sitting on the sofa by the glass wall, chatting comfortably with Drew. This had been Eric's intention; he did not want to be alone with the bold and outspoken pop diva.

Upon seeing Eric walk in, both Madonna and Drew got up to greet him.

After hugging the two women, Eric smiled and asked, "What were you two talking about?"

Drew, playfully linking her arm with Eric's as they sat on the couch, leaned in and said, "We were just talking about Scream 2. Madonna is curious about who's going to get killed off at the beginning this time."

Scream 2 was also set to be released that summer. Although it didn't carry the same weight as some major blockbusters, it was still generating interest.

In the first film, Drew had played the character who got killed off at the start. Since her influence level was entirely different now, it became a topic of fascination among viewers. As usual, MGM certainly wouldn't miss the opportunity to promote this point, and it was highly likely that the sequel would invite other well-known stars for similar roles.

Eric took the coffee cup Natasha handed him and curiously asked, "Oh, I don't know who it is either. Can you tell me who it might be?"

"Take a wild guess."

Eric eyed Madonna and shook his head with a smile. "I doubt I could guess that. It must not be you coming back just to get killed off again, right?"

"Haha, how could I be that boring?" Drew playfully shook Eric's arm and said, "It's Rachel."

Before Eric could even react, Madonna exclaimed in surprise, "Rachel Weisz?"

Drew nodded.

With Titanic's explosive box office success, both Leo and Rachel had skyrocketed to fame. Even Julia and Nicole could not compare to Rachel's overwhelming popularity during this time.

It was easy to imagine how shocking it would be for fans to learn that "Rose" had unexpectedly been "killed" in a horror movie.

Eric was genuinely curious now and asked Drew, "How did you manage to get her on board?"

*****

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