Exploiting Hollywood 1980

Ronald did not expect that the news that his director's "Top Gun" was a huge success in pre-sales on the video tape market would cause a huge uproar that he had never expected.

Movie revenue has always been divided into two parts in the past. One part is the share of theater box office revenue. The other part is the income from secondary broadcasting on cable TV stations.

The latter part of the income, unless separately agreed upon, is generally distributed in a fixed small proportion to the members of the main creative team who have joined the three trade union groups.

They are the Screen Actors Guild, the Directors Guild, and the Writers Guild.

The so-called surplus means that after the TV station broadcasts it more than ten times or the revenue exceeds 10 million US dollars, a few percentage points of the profit must be distributed to the members of the three unions.

This part of the remaining dividends is led by the labor union and collected from the film producers, and then distributed to the union members who participated in the filming every quarter.

Technical workers such as photographers, editors, makeup, costumes, props, etc. have no right to participate in this surplus value dividend.

Because Hollywood generally believes that when a movie makes excessive profits, it is the outstanding contribution of those artists, not the technical workers.

After the rise of television in the 1950s, many old directors, actors, and screenwriters relied on this part of their income for a large part of their income. The old films they shot were repeatedly broadcast on TV stations, which brought in residual dividends.

After going through the struggles and negotiations between the three major labor unions and the Producers Guild, including the Writers Guild strike and the Screen Actors Guild strike when Ronald first entered the industry, this ratio has gradually been determined.

As long as one of the number of replays or revenue of an old movie reaches the triggering condition, the producer will distribute about 3% of the revenue from the TV station to the three unions. Then let them distribute it to their respective members.

It is easy to see that this distribution method is the least controversial for the smallest director's union. The Directors Guild stipulates that a film can only have one director's signature, so the remaining 1.2% dividends given to the Directors Guild belong to the director.

The Screenwriters Guild gets the smallest share of the profits, and the Screen Actors Guild gets the most, and they are the ones who want to increase the share of the profits the most.

On the other hand, this dividend method is only effective for those popular movies. If the number of broadcasts on TV stations or income do not meet the standards, the main creative staff will not receive any remaining dividends.

Of course, the union will not just watch those members who cannot produce good works starve to death.

After this part of the remaining dividends is transferred to the union, the union will take a portion to enrich the union's pension pool.

For those members with average level, if they can no longer work and retire, they still have a pension that they can use to maintain their living standards.

This distribution ratio is an equilibrium price reached after a long period of repeated games between the union, members, and producers.

But the popularity of the "Top Gun" video disrupted this fragile balance.

Who knew that as long as the price of video tapes was reduced from $80 to about $30, the market could grow tenfold?

The effect of this market scale is that the production cost of video tapes has been greatly reduced, from a few dollars to a few dollars per box. The marketing and distribution costs that producers bear in order to release videotapes are also shared among more customers.

Although the retail price has dropped a lot, the gross profit earned by the producers has not dropped much.

At this time, the three trade unions were all furious. They quickly mobilized their members and began to accept interviews in the media to criticize this phenomenon.

The creative staff did most of the work, so why did the producers take away the richest piece of the cake?

…

"I think the contract between Tom Cruise and them needs to be renegotiated. In the past, the conventional division of content on the video tape is not suitable for the development under the current new situation."

Paula Wagner has been pregnant for several months, wearing flat shoes, holding a document, and talking with her husband Niceta.

"Although the legal reasons for renegotiation are far-fetched, the Screen Actors Guild is speaking out intensively. Can we take advantage of this situation to put some pressure on the two producers?"

"You have to note that your client Tom and the two producers signed a separate sharing agreement, not the remaining dividends stipulated by the union. There are a large number of union members who are already dissatisfied with the stars' income. If you want to continue the boom in video tape income and compete for Tom's income, beware of the other party separating you from other ordinary actors."

"But why does Ronald get a 1.2% share?" Paula is no longer Ronald's agent. She cannot share this part of Ronald's income, so she is a little dissatisfied with her husband's attitude. Coupled with the hormonal changes of pregnancy, it made her a little angry.

"Ronald helped shoot the Pepsi commercial at the beginning of the video. In fact, if he hadn't helped Pepsi shoot the Super Bowl live commercial that was so effective, it's very likely that Pepsi wouldn't have added the $6 subsidy per video tape this time.

The first pre-sale of the Top Gun videotape exceeded 1 million boxes. To what extent this is due to Ronald's additional contribution, it is difficult to say. I think the two producers may have gotten a big deal. "

Niceta helped her wife open the door with one hand, and held her waist with the other hand to help her get into the car. Paula is already of advanced maternal age and needs to go to the doctor for a checkup.

But in action, Paula looked after her, but in words, she did not give in. "So, Paula, you'd better not let Tom think about comparing himself with Ronald. This will not be good for his future acting career."

"I understand that it is best for Tom to appear in Ronald's movies in the future. This time Top Gun has really improved Tom's status too much.

I'm just a little pity, seeing the huge market potential of video tapes, the seven major studios will not be so easy to talk to in the future. The two lucky guys, Don Simpson and Jerry Bruckheimer, are really lucky. "

…

"This is a contract written in black and white. Why, do you want to disobey it?"

Don Simpson tilted his mouth, holding a big cigar in his mouth, and asked the manager of Pepsi-Cola's marketing department with a smile.

"When we signed the contract, we made a forecast based on sales of 500,000. Now that pre-sales have exceeded 1 million, it makes no sense for us to give a subsidy of six dollars per video tape."

The marketing manager of Pepsi-Cola answered politely.

Originally, Pepsi-Cola had spent six dollars in marketing expenses for each video. After seeing Ronald's Super Bowl commercial, which brought a long period of popularity and discussion to Pepsi, people at Pepsi became a little bit fond of Ronald. superstitious.

Therefore, they increased the price again and gave each video tape a subsidy of six dollars. In other words, for every video tape sold for $26.95, Pepsi would subsidize "Top Gun" by $6.

However, the sales of the video tape were unexpectedly hot. Before it went on sale, pre-sales had already exceeded one million boxes.

tomato

Pepsi's original marketing budget could not include this additional subsidy. So this time, the marketing manager in charge of the project and the lawyers from the legal department came to negotiate with the two producers.

"Why do you think like this? Every box of our video tapes sold is a marketing media for the event.

Every viewer who watches the videotape will watch the one-minute commercial in its entirety. This is an effect that you cannot achieve on any TV program. "

Bruckheimer didn't want to fall out with the big benefactors, and he had some reasons from their perspective.

"We have paid a flat subsidy of six dollars for each video tape. This additional six dollars is based on the estimated sales of 500,000 boxes.

Therefore, this direct subsidy to the producers of "Top Gun" must be stopped when sales numbers continue to rise. "

"You mean to ignore the original intention of the contract written in black and white, and then look for the business logic behind the terms. Do you expect the judge to rule like this? Do you?"

Don Simpson did not believe that there could be judges who would ignore simple clauses.

"Of course there is. Whether you sue in Los Angeles or New York, we are sure to win the lawsuit. In addition, if you do not agree to set a sales cap for video tape subsidies, we will ask the court to issue a temporary injunction to temporarily ban the production of video tapes. On sale.

This means that your sales channels can no longer continue to pre-sell video tapes. "

Several senior lawyers from PepsiCo's legal department standing in the back row stepped forward in unison, putting considerable pressure on the two producers.

"Who do you think you are? You say it's okay? You say it's prohibited? Humph?"

Don Simpson didn't pay much attention to this tough statement. In Hollywood, which star doesn't need such tough coaxing and intimidation to scare him?

I have long been familiar with this kind of game where the cards are bigger than the hole cards.

"Because we are PepsiCo, if we say it can be done, it can be done."

The leading lawyer took another step forward and was almost to Simpson's side.

"In addition, you are fighting between two people this time. We have contacted Paramount. They are also very interested in the video tape sales."

Don Simpson's expression changed. This son of a bitch went to Paramount for an alliance. Paramount's top executives have long been very dissatisfied with the fact that the two of them received most of the profits from the video tape business.

In the future, video tapes will become an important source of income for the seven major studios. They all understand that this big sale is not because there is anything special about "Top Gun", but because the pricing this time has just found the audience's most popular choice. Acceptable price range.

Then in the future, as long as we continue to set prices in the 30-40 price range, we can put new popular movies and classics in the film library on the market on a large scale.

After "Top Gun," the producers who worked with the Seven on film distribution would never get such good terms as they did.

Even with the terms this time, Paramount has not thought about going back on its word. If they join forces with Pepsi, no matter how powerful the two producers are, they may lose.

Moreover, the two parties can also resort to external tactics to set up obstacles in the sales of video tapes. In this way, if the momentum of pre-sales is blocked, a lot of money will be lost.

"We can discuss the subsidy terms with you again."

Bruckheimer quickly pretended to be the good guy in the game of Good Guys and Bad Guys, extending an olive branch to the other party and giving in.

The two parties negotiated new terms, and within three days of signing the new supplementary terms, the pre-sales figures reached were still within the scope of Pepsi-Cola's subsidy.

After the pre-sales and sales figures after the official launch, Pepsi will no longer subsidize them with a subsidy of six dollars per box.

"It's much better than expected." The two producers were there to settle accounts.

In the first two weeks of pre-sale, sales momentum was strongest, with pre-orders exceeding one million boxes. After three days, this number will rise to close to 1.2 million boxes.

This part of the video tape can earn about 7 million from Pepsi's direct subsidy alone.

"What a good business! We are so lucky, hahaha!"

There is nothing unacceptable to the two of them. Even if the subsequent sales are not subsidized, it is still a huge amount of income. Many Hollywood producers may not be able to earn so much money in their lifetime.

"We continued to party, continued to have fun, and asked Ronald if he was free. The agent we found this time said that we could find beauties from New York's Elite Model Agency."

Don Simpson decided to forget the unpleasantness and continue to have a carnival of wine and meat every day.

…

"Ronald, you are our director's lucky star. This time we were able to renegotiate the terms of the remaining dividends with the Producers Guild, thanks to your 'Top Gun'." An old white man, well-dressed, with a little hair Sparse but neatly combed, he sat behind the desk and said to Ronald.

The old white man sitting in front of Ronald is a famous director in Hollywood. He once won the Oscar for Best Director for "General Patton" and also produced the science fiction masterpiece "Planet of the Apes". Schaffner.

He had just been elected president of the American Directors Association in the general election.

When Ronald received the new Directors Guild ID card last month, he saw the signature of the new president, Schaffner.

"This is a coincidence. I have no credit. No one knew before that only selling video tapes for 30-40 US dollars can bring the maximum profit to the movie."

Ronald replied humbly.

In fact, if it weren't for him, there would have been other movies. Other producers revealed this and they were just lucky and happened to get this opportunity.

"Humility is a good quality, especially for famous directors." Schaffner was born in 1920 and is already sixty-seven years old. No matter how you look at Ronald, a new director of his own nephew's generation, you will be pleased with him.

"But don't be too modest. What you bring to the Directors Guild is not only more residual dividends, but also gives us more bargaining power in front of the studio.

Also, the number of new members joining the Directors Guild is decreasing. But we have a large number of old guys like me asking for pensions.

You have opened up the video tape market, and our Directors Association can also receive a lot of dividends and add to the pension pool. "

Schaffner was elected as president by many retired directors and members from the golden age of Hollywood.

One of his important policy agendas is to develop more financial resources so that these old brothers and fellows can have a more dignified retirement life.

"What? The number of new members is decreasing now?"

Ronald heard what he was interested in and asked the president.

"Yes, there are a lot more advertising directors, but their first-level members can't pay much dues. There are film directors and TV drama directors who can pay large membership fees and bring dividends. The number of new people who have joined the Directors Guild in recent years It’s all slowly declining.”

"Oh? Is that because new directors don't join the union? Or?" Ronald was a little surprised.

"Every director of a movie released in America must join a union, except of course that weirdo like Lucas. His own Lucasfilm handles his own distribution business."

Schaffner sighed. If Lucas could return to the Directors Guild, there would be a lot more dividends to be collected.

"Today's production costs are already very expensive. When you joined the club, it was still possible to make a movie with one to two million yuan. Now the lowest low-cost movie requires 6 to 8 million yuan to be made.

And without training in low-cost films, film directors have no chance to enter the industry. Only now do I realize how many qualified members Roger Corman's New World Pictures has provided to Hollywood and the Directors Guild.

Unfortunately, drive-in theaters are also in decline across the country, and his exploitative films that cost hundreds of thousands of dollars are not doing well at the box office. "

"Fortunately, I entered the industry early. If I had entered the industry now, I would have had to wait another ten years before I had the chance to hold a guide tube for the first time, right?" Ronald secretly said he was lucky.

The first movie I participated in, "Rock and Roll High School", was made with a small budget of several hundred thousand. The director's first "Fast Pace" was made with a small budget of three million.

If now, all of a sudden, eight million were given to a new director, Ronald asked themselves, they might not have so much confidence to believe in themselves who had never made a feature film.

"I will convene senior members of the union and lawyers to discuss how to negotiate with the Producers Guild to add the video to the remaining dividends.

We plan to imitate cable TV and set a bottom line on sales. Any movie that sells video tapes above a certain amount needs to allocate a portion to our Directors Guild.

I will also coordinate my position with the two actors' unions (the Screen Actors Guild and the TV Screen Actors Guild) and the Writers' Guild.

In short, everyone agrees with you this time, and directors who produce hit movies will have an extra income in the future. "

"Haha, I'm glad that I can bring some benefits to everyone." Ronald is a member of the Directors Guild. The union also gave him a lot of support back then. He feels very happy to be able to repay something."

"When it's time for the meeting, you can come too and let the old guys meet you." The more Schaffner looked at Ronald, the more satisfied he became.

"If I have time, I will definitely come. You know, unlike you in the big studio era, I have the opportunity to observe and learn from great directors. I really hope to have the opportunity to communicate with other directors, preferably by their side. Look at their experience making movies.”

"Ha, okay. We in the Directors Guild still have some old men who can meet your requirements. Billy Wilder is an old friend of mine, and he must also want to meet you."

…

When Ronald returned home, he received another call from Daydream's general manager Eddie.

"Ronald, the Producers Alliance president, Nick Conte called me and he invited us to join the American Film and Television Producers Alliance as Daydream Films."

"Huh? That's an alliance between the employers... No, I'm the employer now."

Ronald reacted and opened Daydream Pictures and got involved in the distribution business. Now he is a proper investor.

"Yes, you are already the employer, my boss.

The Producers Alliance (Producers Alliance) is a loose alliance that negotiates profit-sharing contracts with major labor unions.

The seven major studios are all members of the alliance, as are several medium-sized studios, such as Heimdall Films, which made The Terminator, Orion Pictures, a regular Oscar winner, and the old Italian De Laurentiis Pictures. industry, and there are dozens of small producers like us.

This is different from the more official film association "MPAA". The Producers Alliance is mainly a loose organization and is jokingly said to be established to sign contracts.

Nick Conte used to teach at the Stanford University Law Department and also worked as a labor lawyer for many years. Now he is responsible for negotiations between the entire league and major unions.

So this time, it was him who invited us to join and coordinate our positions. "

"Oh, well... I am a member of the Directors Guild and the Writers Guild. Now if I join the Producers Guild, which side should I stand on during negotiations?"

"Haha, normally in your situation, you would avoid all discussions and negotiations." Ed had already inquired about the details. Spielberg had a similar identity to him and would automatically avoid every negotiation.

"Okay, ask a lawyer to take a look at the documents, and we'll join as soon as possible." Ronald realized that in the future, the remaining dividends from movies produced by Daydream will be allocated to the three major labor unions as soon as possible.

For some operational tips, it is better to join the alliance early and learn them honestly.

Please remember the first domain name of this book: . :