Hollywood Road

The information mainly comes from the analysis department of CAA and the consulting firm hired by Robert \u0026 Associates. The latter collects more gossip, while the former attaches great importance to Netflix, a newly emerging Hollywood channel provider. In the past two years, it has also established a Specialized database with very detailed data.

These are all helpful for Murphy to make his own judgment.

In any case, Murphy must be cautious when it comes to projects involving tens of millions of dollars. Although he is rich now, he will not be so stupid as to throw tens of millions of dollars for nothing.

Hiding in the study at home, Murphy spent a whole day looking through various materials about Netflix, and gradually understood why Reed Hastings did this.

Combining multiple sources of information and analysis, it is not difficult for him to see that Netflix's demand for content production can only be described as very eager.

In Hollywood, labels with extensive distribution channels occupy a more upstream position in the industry chain than content producers. However, channel supporters like Netflix want to join the industry of downstream content producers. It is both an active choice and a last resort. s reason.

A company that is chasing commercial profits suddenly wants to win cooperation by giving up a large amount of profits. Anyone will be naturally wary, especially a business tycoon like Reed Hastings who has fought all the way. Small sight, if Murphy doesn't understand the situation, he will definitely not respond casually.

Today, entertainment industry operators represented by the film industry are exploring ways to become bigger and stronger. Whether it is building a large entertainment ecosystem or laying out a pan-entertainment industry chain, the pace of expansion of business scope and structural transformation and upgrading of enterprises is getting faster and faster. And firm.

In the current market competition environment where entertainment has no borders and industries have no borders, it is Netflix's strategic plan to integrate and build its own entire industry chain, enriching profit points and profit models.

For commercial companies, the best industry is a monopoly industry. Monopoly means pricing power and producer surplus. Although it is not necessarily a good thing for social welfare, it is definitely better for profitability.

But does Netflix now have pricing power? Murphy read the information and came to a very clear conclusion: Netflix did not!

For a long time, Netflix has not dared to raise prices, because to a large extent she eliminated Blokbuster by relying on the price advantage. Netflix even gave some users a lifetime commitment to keep the US dollar per month unchanged. This is a grandfather clause that many people jokingly call, which refers to maintaining the effectiveness of old contracts for some users.

On the other hand, because it cannot produce content like the six major Hollywood companies, Netflix has no advantage over downstream content producers, and they have no pricing power. If it does not embark on the road of production, Netflix will fall into this fatal cycle in which it cannot raise prices for users and needs to increase its expenditure costs.

The only way to break this dead cycle is to increase prices. If you want to increase prices without losing users, you can only cultivate user stickiness in content, so self-made content has become almost the easiest exit.

Therefore, it is not difficult for Murphy to figure out that Netflix is ​​going to embark on the road of no return for self-made content.

From these points of view, he also understands why Netflix and Reed Hastings came to him to cooperate, not other directors or production companies.

Murphy Stanton is a well-known brand in Hollywood. Since entering the 21st century, it has been synonymous with the production of high-quality works and high profits. Even today, every film that Stanton Studio participates in investment and production is It is relatively easy to realize profits, and the films that Murphy himself participated in are not only profitable, but also have a great reputation...

On the other hand, Netflix, the model of streaming media + original content is more than what they want to do. Judging from the information obtained by Murphy, many companies are instigating this plan, and the threshold of this industry is actually not high. Competent companies basically It means you can do it.

From the information provided by CAA, Murphy saw that Netflix’s opponents in the online video service business lined up to form a mighty team: Amazon launched,

Walt Disney, 21st Century Fox and Comcast jointly launched Hulu and HBO. HBO launched HBO.No and HBO.Go. Internet celebrities, Wal-Mart, which has nothing to do with the media, has acquired Vudu, and even Apple, which is playing sand next to it, is eyeing it. It is not a day or two that they want to do the streaming in person, and they have directly colluded with HBO to develop HBO. .No.

It’s true that Netflix is ​​still a well-deserved industry leader in the provision of online film and television services; but what is choking is that its buttocks are firmly attached to a nest of other industry leaders who are all powerful in terms of strength.

Although there is a slang term for Netflix in North America, it is called, which means "look at li yo yo pao", but Netflix does not dare to make a wrong step. With such a group of big shots on its butt, if Netflix makes a wrong step, it may be doomed.

"That's why they chose you."

Bill Rossis, who came to Wave Manor, said to Murphy, "Because you are the guarantee of success. Even if Netflix loses profits, it can further increase user stickiness and attract more users through word-of-mouth. Lots of new users!"

For film and television production, Netflix is ​​just a new recruit.

Murphy closed the documents in front of him and said with certainty, "Although filming is not the only way out for Netflix, it is the easiest way."

Faced with such fierce business competition, it is no wonder that Reed Hastings offered such generous terms.

So in the final analysis, if you want to compete for users, you must have excellent content. Those technologies and data are all fake, and others can imitate them if they want to.

For Netflix to be able to continue to roll the snowball of rapid development, it must have the best original content, and must have the ability to increase prices, or even double the increase. We cannot expect much potential in the global market.

In today's international political environment, it is extremely difficult for the cultural film and television industry to fully penetrate the global market. For example, the supermarket on the other side of the Pacific Ocean can make any company salivate. Netflix can only surrender, so Netflix had better go The best way is to rely on high-quality content to attract customer resources in accessible markets.

After carefully reading Netflix's information, it is not difficult for Murphy to find that the subscription fee is the only income of li's streaming media service, so maintaining the growth of the number of users is the most direct goal.

How can this be achieved? Putting out great shows that make people feel compelled to watch, while at the same time making Netflix easier for them to enjoy.

However, why do people have to choose to watch it on li?

Murphy and Bill Rossis exchanged opinions, and the common answer was "exclusive and original".

Originals are also for exclusive broadcasting, at least in the first few years only on their own platforms, these programs make people feel that they must watch, of course, on the other hand, successful original series can also advertise for Li and improve the company The popularity and recognition of the company will eventually increase the number of new users.

"Netflix will make great efforts to develop the series, not only because of the advantages of the series." Bill Rossis said to Murphy with certainty, "It is also because of the exclusive rights to do so!"

Bill Rosses further analyzed for Murphy, "Now streaming media sites are very competitive, and the cost of broadcasting rights is also rising. Netflix purchased the content of "Mad Men" for nearly 100 million U.S. dollars, and the average cost of a single episode is as high as several hundred. Tens of millions of US dollars, and the exclusive broadcast fees of other popular dramas such as "Doctor House" and "Gossip Girl" are also expensive."

Murphy nodded slightly, Netflix's cooperation is indeed very sincere.

"And such exclusive broadcasting rights are only the second round of broadcasting rights." Bill Rossis continued, "For episodes that are being broadcast on TV stations, Netflix usually can only be launched after the TV station has finished broadcasting."

"So," Murphy has already figured out Netflix's intentions, "it's actually more cost-effective to produce the series yourself?"

Bill Rossis nodded solemnly, "Exactly! This is not only my analysis, but also the conclusion drawn by CAA."

When it comes to tens of millions of dollars of investment from super clients, not to mention Murphy, even the brokerage company behind him is quite cautious, and everything must be planned before making a move.

Business investment is not about the other party saying that I won't cheat you, then I won't cheat you. Murphy has done so much, and it's just the most basic understanding work before investment and cooperation.

If you don't even know about a company, and you rush to cooperate with others, that's not called daring, but your head is flooded.

After confirming that Netflix has the sincerity of cooperation, rather than digging a trap, Murphy believes that the two parties can start formal negotiations.

"Well, Bill." He directly ordered, "You give Reed Hastings an answer next week, and after Gale goes to Boston to sign an agreement with the Boston Globe, formal negotiations will begin."

Bill Rosses reminded, "What about the episodes?"

"I will sort out a story outline as soon as possible." Murphy thought for a while and said, "As long as Stanton Studios and Netflix negotiate and reach an agreement, they can immediately hire a screenwriter to write the script."

He added, "I will be the producer and Paul will be the director. I talked to Paul before."

"I know what to talk about." Bill Rossis, who has rich experience in this area, stood up and said goodbye. "Then let's stop here today. I'll go back to the Death Star Building and do some preparations."

Murphy waved his hand, and when Bill Rosses walked to the door, he remembered something again and said, "Bill, don't forget to come to my engagement party with Gail on Saturday night."

Bill Rosses looked back and said, "I'll be here on time."

There are few secret news in Hollywood, not to mention that Murphy did not intend to keep it secret at all. The news about his engagement to Gal Gadot has been widely circulated in the circle.