Nancy Brill once ambitiously hoped that Blockbuster would achieve $5 billion in revenue within three years and occupy half of the video tape market.
In 1991, Blockbuster's revenue was $2.31 billion. In 1992, Blockbuster's revenue was initially estimated at US$3.36 billion, with an annual growth rate of 45%.
With the complete completion of Blockbuster's global chain store layout this year and the continued rapid growth of the global video tape market, it is not a big problem for Blockbuster to achieve the same growth rate as in 1992. The same 45% growth rate means that Blockbuster's full-year revenue in 1993 is expected to be close to $5 billion.
After three years, the triple jump plan was officially completed.
Although there are inevitably some deviations, for example, a large part of the estimated US$5 billion in revenue will come from the same fast-growing revenue from movie peripheral products. However, with Blockbuster's continued expansion, it only takes half of the video tape market share. A matter of time.
Once any company has more than half of the market share in a certain industry, it must consider finding new performance growth points.
In the original timeline, after Blockbuster became an industry oligarch, it also tried to diversify and expand, getting involved in the recording field, operating cable TV, and even opening a theme park, but ultimately failed.
Today's Blockbuster and the bloated and inefficient video chain giant Simon remembers are completely different companies.
However, as the expansion of Blockbuster's existing business is about to hit the ceiling, it is still necessary to find new growth points.
Entering the field of film and television production and distribution is the next expansion route Simon personally determined for Blockbuster.
At the same time, Blockbuster provides a new set of distribution channels for small and medium-sized film producers, which will also help Daenerys Entertainment further strengthen its control over Hollywood film distribution channels.
"Producing and distributing movies independently is only the most basic promotion for increasing Blockbuster's revenue. Having exclusive content can not only further enhance Blockbuster's brand awareness, but also strengthen users' stickiness to Blockbuster. Avoiding churn is a multi-purpose strategy.”
Inside the restaurant, Simon and Nancy Brill talked about the benefits of Blockbuster's direct involvement in production and distribution.
After hearing what Simon said, Nancy Brill said: "But, Simon, the risk of independent production is very high. The reason why many second- and third-tier film producers in Hollywood have gone bankrupt is that they can't see their own position clearly and blindly get involved. Filmmaking."
"So, why did they do this?" Simon looked at Nancy with a smile and said, "The key is that the potential benefits of doing this are too great. Just like the original New Line, a homemade "A Nightmare on Elm Street" movie The sale will directly elevate the strength of this small, studio-style third-tier film company to a higher level."
"But as far as I know, New Line is on the verge of bankruptcy right now."
"That's because New Line itself has insufficient accumulation and foundation, or there is some bad luck," Simon said patiently, "None of these are problems for Blockbuster. Blockbuster's current comprehensive strength is better than Seven The large and medium-sized companies, Columbia and MGM, are stronger and have sufficient funds."
Nancy pointed out a very critical issue: "The videotape channel is exclusive, and there is a lack of theatrical releases and TV broadcasts that can increase the popularity of the film. This also limits the scale of Blockbuster's film production to a great extent. It is difficult for us to afford it." The Making of a Blockbuster Movie.”
Of course, Simon had also considered this matter and said: "So, in the early stage of the plan, Blockbuster mainly focused on 'distribution', buying out the copyrights of completed films from film companies, expanding exclusive content, and at the same time testing the waters for independent investment. Low-cost films. When Blockbuster's strength is further improved and it has a firm foothold globally, it can try large-scale productions. Moreover, Blockbuster is personally involved in film production, and it does not necessarily require a complete video tape channel. Exclusively, it can still be distributed theatrically and on television, but it will be exclusive to Blockbuster on the videotape channel.”
"Actually, I'm thinking," Nancy looked at Simon and said, "Daenerys Entertainment can give Blockbuster exclusive rights to content when releasing its film videos."
"I have also thought about doing this," Simon shook his head and said, "But first of all, Blockbuster's current strength is not enough to fully stimulate the commercial potential of a blockbuster Daenerys entertainment film on the video tape channel. This is The most important point. Secondly, Daenerys Entertainment’s market share is now high enough. If it does this, it is likely to attract antitrust lawsuits from other video chain companies.”
Content exclusivity is not uncommon in the distribution process of Hollywood movies.
During the theater distribution process, some powerful theater chains often request to monopolize the theater distribution rights of a film company. There are countless similar cases in video tape chains, TV networks and other channels.
The problem is that the current goal of Daenerys Entertainment is too obvious.
For example, if Daenerys Entertainment hands over last year's box office hit "Wonder Woman" to Blockbuster for video distribution, not to mention whether this rental-focused chain company can fully release "Wonder Woman" Considering the commercial potential of "Wonder Woman", other video tape manufacturers that cannot intervene in the "Wonder Woman" piece of meat will definitely not be willing to do so.
It just so happens that Blockbuster is a subsidiary of Daenerys Entertainment, which gives competitors enough excuses to sue Daenerys Entertainment for alleged monopoly.
In comparison, if it were a second- or third-tier film studio that sold off the copyrights of some works to a videotape manufacturer, it would not attract much attention at all.
There are about 500 Hollywood films that can enter theaters every year, but the actual number of films produced has more than doubled. These films that cannot be released in theaters can only be released on video tapes or TV. There are even some film producers who do not expect theatrical distribution at all, and have focused on the video and television markets from the beginning. Relying on the strong demand for content in these two fields, many small film producers have also been very prosperous.
As the conversation continued, Nancy Brill gradually understood another meaning from Simon's words. She even stopped eating, stared at the man opposite without blinking, and said: "Simon, if I guess That's right, do you want to develop Blockbuster into the 'eighth largest' in Hollywood?"
Before annexing MCA, Daenerys Entertainment had basically jumped to the eighth-largest studio level with the traditional seven major studios in Hollywood.
With the completion of the merger of MCA, Hollywood has once again returned to the coexistence of the seven major companies, but this time the seven major companies, to be precise, should be Daenerys, Warner, Disney, Paramount, Fox, MGM and Columbia .
In today's Hollywood, Daenerys Entertainment not only occupies nearly 40% of the market share in movies, but also indirectly controls MGM. Although this company, with the support of Daenerys Entertainment, lost its film market share last year. It’s still only 7%, but it’s still one of the big old Hollywood movie companies.
With control of two major Hollywood studios and such a high market share, it is simply unrealistic for Daenerys Entertainment to expand further by annexing other studios.
Even if the Westeros system has a deep interest relationship with the incoming Bill Clinton, it is impossible to cross the antitrust threshold.
Therefore, if you want to expand further, you must find another way.
Eliminating second- and third-tier film producers and weakening other studios is a strategy that Simon has previously set.
Further expansion of Blockbuster is another move by Simon.
First of all, Blockbuster's current strength is not weaker than that of some Hollywood studios, and there is no shortage of room for further expansion. Second, the video chain's superficial attributes could allow competitors and federal regulators to ignore the company's threat.
Finally, there is another point. Netflix in the original time and space completed its counterattack on Hollywood by positioning itself as a video rental company and became a super media group alongside Disney.
The rise of Netflix can provide many references for the further development of Blockbuster.
If the Internet wants to enter the streaming media era, even if the Internet industry in this time and space has exploded in advance, it will still take at least ten years.
Therefore, it is definitely not possible to completely copy the Netflix model, and Blockbuster must also carve out a development path of its own.
The other major film companies in Hollywood are already suffering under the influence of Daenerys Entertainment. Simon is trying to build Blockbuster into the "eighth largest" in Hollywood. This idea must be that the fewer people know about it, the better. He didn't expect that just after briefly talking about his thoughts, Nancy would be able to draw inferences and directly see through his intentions.
Seeing that Simon didn't answer, Nancy knew that she had guessed correctly.
The eighth largest.
Daenerys Entertainment already occupies 40% of the market share in Hollywood. Because of its close cooperation with MGM, Nancy also knows that this originally dilapidated film company has made a comeback in the past two years despite shelving its signature 007 series. Instead, it has begun to accelerate. At least in the past year, MGM's share of the local box office market has surpassed Columbia and Paramount, and further development is just around the corner.
With control of two major Hollywood film companies, the expansion of the Westeros system in Hollywood has obviously reached an extreme.
Neither the federal government nor its competitors will allow the Westeros system to continue to annex other major studios.
Under such circumstances, a certain ambitious guy unexpectedly thought of such a different approach.
Develop a powerful video chain company into the "eighth largest" Hollywood company that can compete with other major studios.
However, after this speculation was generated and confirmed by Simon's silence, Nancy Brill did not have any emotions that a guy should not do this, but was slightly excited.
But, can a video chain company really develop into the eighth largest company in Hollywood
Knowingly no longer asking a question, Nancy had completely forgotten about the meal. She raised her little face slightly and looked at the opposite side, saying: "In the early stage, I accumulated exclusive resources by purchasing the film copyrights of independent film companies, and at the same time participated in small-production films, and started to invest in the later stage. Blockbuster bombs and counterattacks in the theater and TV markets, this development route seems very attractive, but, Simon, what next?”
With a smile on his face, Simon said: "If we can achieve this step, it will be a pioneering work for Blockbuster. Of course, we will talk about the future in the future. You have to know that the world is always changing. The television set in the 1950s and the video recorder in the 1970s all brought fundamental changes to Hollywood. Now we are in the 1990s, and I think there will definitely be things that change personalities in the future."
"internet?"
"Well, I have to say, you are really smart."
Some information about Blockbuster's online platform came to Nancy's mind. In the past, Blockbuster Online achieved revenue of over 100 million. Although it only accounted for about 3% of Blockbuster's annual revenue, this aspect of the business was It can no longer be ignored. The man opposite once described the future of the Internet to her. If it really enters a universal Internet era, the influence of the Internet platform will definitely be no less than that of the current TV network.
"I suddenly felt that I should buy some more AOL and Cisco stocks."
Simon smiled and said: "How many do you have in your hand now?"
"It's less than 10 million U.S. dollars," Nancy glanced at the guy opposite and said, "The salary you gave me is far less generous than Amy."
"Amy is equivalent to one of the founders of this company. She has received very little," Simon shrugged and said, "However, if you need money, I can lend it to you."
Nancy leaned forward slightly, with a hint of joking in her tone: "Do you need to pay it back?"
Simon admired the delicate little face across the dining table, and there was a hint of teasing in his voice: "It's okay not to pay it back."
Nancy immediately sat upright, and at the same time looked at the female assistant who had been quiet next to Simon, and began to complain: "Jenny, he is flirting with me."
The female assistant rolled her eyes at Nancy, then glared at the guy next to her, but said nothing. She quickly lowered her head and continued eating quietly.
Seeing that Nancy's complaint was ineffective, Simon raised his chin at her provocatively.
The small female executive was not polite and said: "Lend me US$20 million, calculated at an annual interest rate of 5%. I will not take your things for nothing."
Simon nodded: "No problem. Since you want to follow the rules, this money should be mortgaged, right?"
"Well, I pledged myself to you."
"Very good, I'll give you another 5 million."
“…”
Nancy couldn't help but roll her eyes.
After lunch, Simon took care of some trivial matters and then set off again to fly to the east coast.
Tomorrow is January 20, the inauguration of the new President Bill Clinton. Simon does not plan to appear at the inauguration ceremony, but plans to attend some receptions after the inauguration.
And, that’s just incidental.
The business is about AOL.
In the new year, AOL will promote another ASDL network construction plan involving billions of dollars of investment. Simon had to rush to AOL's East Coast headquarters to discuss the final plan.