Chapter 396: Sony DVD

Tokyo, at Sony headquarters, Arthur Smith met with Norio Ohga, the father of the CD and one of Sony's three key leaders, upon his invitation.

Akio Morita, Masaru Ibuka, and Norio Ohga were the main figures behind Sony's rise!

The 64-year-old Norio Ohga led the acquisition of Columbia Records, which was restructured into Sony Music Group. After that, he also acquired Columbia Pictures, restructuring it into Sony Pictures Entertainment, which is now facing severe backlash.

"Mr. Ohga, making movies is not simple, right?" Arthur smiled. Currently, Norio Ohga's biggest controversy was the high-priced acquisition of Columbia Pictures!

Norio Ohga shook his head, "Sony's future lies in both hardware and software, that's also Mr. Morita's idea."

"The challenges of Hollywood are not as easy as inventing electronic products," Arthur knew that Akio Morita had suffered a stroke last year and had gone to Hawaii to recuperate. 

Sony's CDs replaced vinyl records, their home game console PS was launching next month, and now they were also involved in the development of DVDs. Sony had quite a few cards up its sleeve, not to mention its accumulated technologies in batteries, robotics, chips, and semiconductors!

Norio Ohga looked at Arthur, "The VCD gave us inspiration; the scale of the home entertainment market is something everyone admires. Now, we're just waiting for the new generation of DVD format to hit the market. Compared to the currently expensive videotapes and VCRs, DVDs and players will be cheaper. Once DVDs are launched, it will take much less time to capture the market compared to videotapes and VCRs!"

"DVD, huh!" Arthur also looked forward to it. Now, over 95% of American households had VCRs, but the prices of videotapes weren't affordable, leading to fewer sales and more rentals. But with rentals, due to the price, stores couldn't prepare many copies of each videotape, hindering the complete development of the home entertainment market!

"Arthur, you also know, the home entertainment market surpassed box office sales a few years ago. And now, for a movie's revenue, box office sales account for less than half, while videotapes and pay TV make up the other half."

"But the box office is the biggest reliance and guarantee of a movie's revenue. Without the box office's locomotive effect, everything else is a joke," Arthur admitted some movies didn't have high box office sales but did well in videotape revenue. However, in general, videotape revenue was still linked to box office success. B-movies focusing on the videotape market couldn't make big money either, as costs and marketing expenses weren't insignificant. Because the box office is the best promotion!

...

At night, in the bathroom of the InterContinental Hotel in Tokyo Bay.

Emily Shead reported to Arthur about the negotiations with Sakura Bank.

"It's good that it's handled," Arthur said as he looked out the window. "I heard the Russian economy is in pretty bad shape right now, huh?"

Emily Shead nodded, "Since the Soviet Union collapsed, the shock therapy implemented by Yeltsin didn't stimulate economic recovery. It caused severe losses.

The economy is sluggish, and with low oil prices, Russian exports are affected, causing domestic shortages of goods. Privatization of state-owned enterprises failed, creating an oligarchic economy. The ruble devalued significantly, and inflation is rampant.

Even though they stopped the shock therapy this year, Russia's industry has problems. They can't even produce basic consumer goods for themselves!"

"Heh, heavy military industry," Arthur recalled that some people from Seraphim were smuggling weapons from Russia to sell to Africa.

The crew of GoldenEye was currently filming in St. Petersburg, Russia!

...

Arthur took Oishi Megumi to Karuizawa for hot springs.

While in the hot spring, Arthur's phone rang, "Who's calling?"

He leaned back on the stone, enjoying the view of the mountains and forests.

"Boss, it's Horst Schulze!"

"Oh, Horst, is there a problem with the hotels again?" It was Horst Schulze, the head of The Ritz-Carlton Group.

"Marriott International wants to buy half of our shares in The Ritz-Carlton Hotel."

"Marriott," Arthur frowned. At this time, Marriott wasn't the hotel giant it would become, owning brands like Renaissance, Courtyard, Starwood, Sheraton, and Westin. For now, Marriott just had the JW Marriott luxury brand, a mid-tier Marriott brand, and a budget chain.

"How much are they offering?" Arthur knew this was the start of Marriott's acquisition spree, and The Ritz-Carlton was a top luxury brand.

"$300 million for 49% of the shares."

"They don't know that the Ritz-Carlton hotels in New York, Los Angeles, and overseas are managed with equity stakes, do they?" Arthur was referring to equity management where Ritz-Carlton actually owns shares in some hotels.

"This isn't a franchise or management contract, but actual ownership of hotel assets!"

"Ignore them. Ritz-Carlton plans to go public itself. Marriott wants to swallow us up. We can consider selling 20% of the shares, but they're asking for too much."

Arthur wanted to develop The Ritz-Carlton to the scale of Four Seasons Hotels in the future; he wasn't going to let it become just a subsidiary brand under Marriott.

"Understood!"

"By the way, have negotiations started with the Shilla Hotel in Seoul, Korea?" Arthur remembered that Lee Boo-Jin had mentioned it to him before.

"Oh, they're ongoing. The Shilla Hotel isn't doing too well right now, so it shouldn't be a problem!"

"Okay, let me know when there's news," Arthur seemed to miss Lee Boo-Jin.

*****

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