Chapter 336: Rio

Culver City, Los Angeles, California, is a small satellite town that closely combines nostalgia with current trends. Like Burbank, it gathers Hollywood studios of all sizes. The most famous is Sony Columbia Pictures.
Robert Lee was sitting in a coffee shop on West Washington Avenue and asked the waiter to refill Chris across from him a cup of coffee.
"Sony Columbia Pictures' new film copyright, as long as the price is right, authorization is not a problem." Chris added sugar to the coffee and said: "Internet authorization, if you want to do it, Sony Entertainment is also willing to cooperate with you. "
Robert Lee smiled and said, "Can a written agreement be reached?"
Chris thought for a while and said, "No problem. Ronan and I are old friends. I can introduce them to you."
Compared with the traditional offline disc and video tape market, Sony Columbia’s business volume is not large for Internet licensing. The current market volume is limited. Chris knows very well that if the price is right, the company will give it to Ronan’s Internet. The company is not a problem.
Robert Lee said: "This is a win-win cooperation. Netflix is ​​far ahead in the Internet DVD rental industry, and its sales performance is second only to Amazon."
Being in the same Hollywood circle, many things are very convenient to talk about. Chris doesn't go around the circle and directly said: "Robert, Ronan's newly acquired Netflix website is leading. The main reason is that the industry is already small."
This is not the first company authorized by Robert Lee. Several companies, including Warner Bros., had similar views. He smiled and said: "Netflix is ​​a new company and it will take some time to develop. ."
On behalf of Netflix and Ronan in the licensing negotiations with companies in the industry, they did not encounter many difficulties. As a company in the Hollywood circle, it is not difficult to obtain the relevant licensing of new films in the industry when the price is right.
The reason for this is that the licensing fees for new Hollywood movies are very high.
Because of Ronan’s relationship, Chris and Robert Lee are also very familiar with each other, and said:
So, you wait for me to notify you, and then ask your people to discuss specific details with the copyright department of Columbia Pictures. I dare not do anything else. Assure that Sony Columbia Pictures’ new films released in the next five years will not be a problem for licensing Netflix."
Robert Lee put a smile on his face and asked, "Can you tell me about the cost?"
If it is a company outside the circle, Chris will not say anything, but this kind of thing is not secret in the circle. The six major companies have tacit standards.
Chris shook his head: "You don't know, why bother to ask?"
Robert-Lee said: "Netflix is ​​a new company with limited funds. The wholesale price of $10 per unit is still a bit high, in addition to related licensing fees..."
"Specifically, talk to the people in the Copyright Department of Columbia Pictures." Chris said directly: "The $10 is for the wholesale price in Hollywood. Robert, if you and Ronan are not part of the Hollywood industry, the wholesale price will not be low. At $15."
Robert Lee nodded slightly: "Well, let's talk to the copyright department for details."
He knew that there was little chance of lowering the price. After all, he was talking about the new films released by Sony Columbia Pictures in the future, not the outdated old films.
If you want to win the latest movies in the future, the price to pay is definitely relatively high, but the new movies also have an advantage. The license fee can be allocated to the rental fee of each DVD, thereby reducing the company’s huge upfront investment and effectively alleviating the financial pressure .
Chris suddenly said: "In the rental business, film sources are very important. Are you only interested in new films?"
Although I have never been exposed to the Internet leasing business, I want to come and store leasing should have something in common. There are only a few films, even the latest hot films, they cannot continue to attract customers.
"The DVD prices of old movies are too high." Robert Lee said: "Not only are they the same as new ones, they can't be selected by others. Good ones are packaged for bad ones..."
Chris didn't feel embarrassed: "Aren't we all doing this?" He deliberately said, "A few years ago, Ronan, this guy sold me the overseas distribution rights. It was also a good movie with a bad movie."
Robert Lee was speechless for a moment, because Relativity Entertainment did a lot of similar things.
Everyone is all the same, there is really no need to say anyone.
"If the DVD price of old films can be reduced to less than $5." Robert said: "Sony Columbia Pictures' film library we directly package."
Chris shook his head directly: "You know it's impossible."
Robert Lee checked the time and decided to end the interview, saying, "Chris, thank you very much for your help."
Chris shook his hand and said, "You are welcome, this is a win-win situation between Sony Columbia Pictures and Relativity Entertainment, and Ronan and I have been friends for many years."
He asked with concern: "How do you plan to solve the film source? Just relying on new films can not support the rental business, other Hollywood companies will not be cheaper than I said."
Robert Lee knew that Chris was out of good intentions and said, "Ronan has already thought about it."
Chris didn't say more: "I wish you all the best in your business."
"Thank you."
There are indeed preparations for this. Robert Lee has collected a lot of relevant information. Some things are not available only from Hollywood related companies. Since the popularization of video tapes, Hollywood film companies will be stored in the film library. Moldy old films are taken out and profited from the home entertainment market through direct distribution or various authorization methods.
Especially in the 1980s and 1990s when the video tape industry was extremely prosperous, there were many companies that obtained the right to rent and sell a large number of old films.
Not every one of them is as successful as Blockbuster and Hollywood Video.
In the following days, Robert Lee, representing Netflix and Relativity Entertainment, made a preliminary conclusion with more Hollywood movies.
Relativity Entertainment reorganized the previous legal department and copyright department, and merged Robert Lee's team into the legal department, with Robert Lee as the director, responsible for copyright and legal affairs.
Robbit-Lee also took on more work. Ronan gave him full responsibility for this discussion with the Hollywood industry.
Its main purpose is to negotiate the purchase of new DVDs and related copyright authorization issues for Hollywood medium and large film companies.
Most of the negotiations went smoothly, especially the six major Hollywood companies, as long as the price is right, they will not exclude cooperation with companies in the industry.
After Robert-Lee reached some agreement, he soon sent Netflix a question. After all, it was a question of funding. If Netflix bought DVDs at a price of $15, these film companies, led by the six major Hollywood studios, would not refuse them at all. .
But this price was simply unaffordable by Netflix.
Negotiations were not all smooth sailing. There are also many companies that do not pay attention to Hollywood. When Robert Lee contacted New Line Films, he did not know whether New Line Films was because of the great confidence brought by the success of "Lord of the Rings: The Fellowship of the Ring". Conditions that are unacceptable.
New Line Pictures and Relativity Entertainment can reach a future Internet license for new films, but there is one condition: New Line Pictures must participate in the investment in the two sequels of "The Bourne Shadow 2" and "Human Removal Project 3".
Robert Lee directly refused, which is simply a cake for relativity entertainment.
"This is not about Relativity Entertainment and Netflix's demand for New Line Pictures!"
This irrational request also made Robert Lee go back: "This is a brand-new peripheral sales channel. Cooperation is a win-win situation, and it can increase the income of New Line Films in peripheral copyright!"
In addition to New Line Pictures, negotiations with Lionsgate and DreamWorks are also not going well.
Lions Gate Pictures made similar demands to New Line Pictures, and Spielberg of DreamWorks directly refused to cooperate with Relativity Entertainment.
While the negotiations were in progress, Robert Lee made contact with a number of people named Stuart Coleman.
This is what Ronan specifically explained before going to San Francisco.
Stuart Coleman's Reo Video Services is an option that Ronan has prepared to solve the problem of Netflix's film library.
A large amount of information has already been in Ronan's hands, and Ronan also specifically communicated with Mark Randolph. As originally planned, Netflix has two ways to buy DVDs of film and television works and obtain related authorizations.
The first is to talk directly to the six major Hollywood studios, who are the copyright owners.
The second is to talk with Blockbuster. Except for the new films in recent years, Blockbuster has the right to re-authorize those old films.
This is also the choice made by major Hollywood companies to fully distribute goods in North America when they did not have sound video peripheral channels.
To put it bluntly, it means that the manufacturing company sells to large agents, and then relies on the large agents to sell to scattered small agents.
But Ronan's research found that there is a third option-to buy a rental company that has many film licenses.
Looking at the United States, Blockbuster is the super giant in this industry, followed by Hollywood Video, and then there are countless companies large and small engaged in related businesses.
Some of these companies developed very well in the 1980s and 1990s and can directly discuss peripheral copyrights with Hollywood companies.
But some companies have developed, and some companies have declined over time.
Stuart Coleman's Reo Video Services Company, headquartered near the University of Southern California, mainly develops video tape chain rental business in Southern California, and owns a total of 18,500 film and television works from all over the world.
However, ~EbookFREE.me~ Ruiou has been on a decline since 1998, and the situation is not so good now.
The reason for this company's decline is interesting-they are engaged in almost the same business as Netflix.
In 1998, Stuart Coleman also discovered Internet business opportunities and used the copyright in his hands to create an online store in Ruiou, engaged in video rental business.
Both parties have invested heavily in this business, but REO and Netflix are completely different in the selection of rental materials. Netflix chose DVD discs that represent the development trend, while REO uses bulky and gradually outdated discs. Videotape.
Perhaps it is the difference between video tapes and DVDs, or perhaps it is more difficult for Hollywood peripheral industry companies to start businesses on the Internet. After several years of development, REO has only 20,000 registered users, only one-tenth of Netflix.
(Rio is a real company. It has 18,500 video tape rental and sales authorizations for film and television works. It was later annexed by Hollywood Video for $100 million.)
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