Chapter 782: The Best Platform

[Chapter 782: The Best Platform]

Elisabeth stood just one step away from becoming the president of Fox, equipped with significant power due to her father, Rupert Murdoch's, unique status. However, any major project requiring an investment of over $50 million still needed board approval. As expected, her father was the chairman of Fox.

Eric proposed that Fox participate in a portion of the investment for Titanic, which was essentially a way to probe Murdoch, all while secretly helping Elisabeth gain more influence. He understood that as a typical businessman, Murdoch would never agree to throw money into a bottomless pit like Titanic. In Eric's past life, Fox's cautious nature had led them to sell the North American distribution rights to Paramount for a mere $60 million, avoiding risks. Unfortunately for them, Titanic went on to gross $600 million in North America, causing Fox considerable regret.

This time, if Titanic did not achieve significant success, it would be fine. However, should the film explode at the box office like its predecessor, Murdoch would surely pay more attention to Elisabeth's recommendations in the future, granting her greater decision-making power within the company.

The next day, Eric received a call from Elisabeth in his office, and the outcome was entirely as he had anticipated.

...

Following the Oscars, Forrest Gump had snagged six major awards out of thirteen nominations, including Best Picture and Best Director. Tom Hanks's consecutive win became a hot topic for the media. The film's box office, which was still showing in hundreds of theaters across North America nine months after its release, saw a remarkable resurgence, raking in over $3 million in a single week. Firefly, having secured not only the North American rights but also other distribution rights to Forrest Gump, began planning the next phase of its release strategy.

...

At Firefly Pictures on Friday, after some time researching, Katzenberg presented the assessment plan for 3D and IMAX technologies.

"According to the detailed research from the strategic planning department, it seems that while there may still be potential for promoting 3D technology, IMAX simply isn't feasible at this time. The limitations on this technology are too restrictive, making large-scale rollout impossible."

The two were sitting in a cafe within the studio. Eric pushed his coffee aside, flipped through the materials organized by Katzenberg, and asked, "What are the primary reasons?"

Between 3D and IMAX, Eric actually favored the latter a bit more, perhaps due to the overabundance of poorly executed 3D films in his previous life.

"The main issue is cost," Katzenberg stated, clearly well-prepared. Without even needing to look at the research, he replied, "When it comes to theater upgrades, most cinemas only need to replace their projection systems for 3D. The most advanced polarized 3D projectors cost around $100,000. Including 3D glasses and other hardware, the total upgrade cost wouldn't exceed $150,000. However, IMAX is different. The smallest IMAX screens are four or five stories high. Over 99% of cinemas in the U.S. and Europe won't meet the upgrading requirements. To build an IMAX theater, you have to start from scratch. Construction and projection equipment costs around $1.5 million, which is ten times the cost of upgrading to a 3D cinema."

Listening to Katzenberg's explanation, Eric suddenly comprehended why, in his past life, China had become the fastest-growing region for IMAX technology. There, the proliferation of IMAX cinemas had almost coincided with the explosive growth of the film industry, allowing many new theaters to be built to IMAX specifications from the get-go. North America and Europe, however, were different. These regions had long-standing film industries, and their existing theaters were already established, meaning most wouldn't meet the IMAX retrofit standards. Given the high costs of IMAX theaters, traditional chains would have little incentive to rebuild their facilities.

After scanning through the materials, Eric realized that aside from the theater upgrade costs, the entire process from shooting a film to transferring it to IMAX prints came with exorbitant cost demands.

In comparison, the challenges of popularizing 3D technology were far lower. At that moment, IMAX couldn't yet support a full 90-minute film, whereas 3D technology was already reasonably developed. Its primary hurdle was the lack of 3D film sources and 3D cinemas. Furthermore, 3D technology had a somewhat tarnished reputation, mainly showing quirky films that were deemed gimmicky.

Eric wasn't a blind idealist and understood that many ventures needed to progress step by step. After a moment of thought, he said, "I noticed that IMAX is recently developing DMR technology to convert regular film into IMAX prints. You might want to keep an eye on their financial situation; it doesn't seem very promising. We could invest a little money as angel investors. Additionally, we should set up a dedicated 3D technology research department on our side. Once I finish Casino Royale, we might consider experimenting with 3D for my next project."

Katzenberg nodded, as he had already considered most of Eric's suggestions. However, as soon as Eric finished speaking, Katzenberg added, "Eric, I also believe that 3D technology is certainly a new development field for the film industry in the coming years. So, don't you think it's a perfect opportunity for us to enter the theater business?"

"Theater business?" Eric raised an eyebrow in surprise; he hadn't thought about that angle.

During the Reagan administration in the 1980s, federal restrictions on the entertainment industry were loosened gradually. The Paramount Decree, which separated film companies from theater chains, had become nearly obsolete. Viacom, Time Warner, and Universal all owned their own theatre chains, with Viacom holding the largest chain of over 3,000 screens across America.

However, Firefly had emerged later and had not yet ventured into the theater business, still shackled by the deep-rooted notions of the Paramount Decree. Eric hadn't instinctively considered this matter until now.

With Katzenberg's reminder, Eric realized that the recent years were indeed the best timing for Firefly to enter the theater business.

Though many believed Avatar marked the dawn of 3D cinema, the truth was that 3D films had already existed in the years around the turn of the century. Well-known titles from his past life, like Spider-Man and Harry Potter, had 3D versions, but various limiting factors prevented them from achieving the influence of Avatar.

Both 3D technology and IMAX had been around for over 30 years, so promoting these technologies was not technically the challenge; the difficulty lay in the absence of a strong institution to drive them forward. Thus, it might not be a bad choice for Firefly to take the lead in this venture.

After all, according to historical patterns, the North American film market would begin to saturate around the year 2000. The subsequent growth in the following decade occurred primarily through ticket price increases. If 3D and IMAX could be widely promoted, it would inevitably circumvent the limitations of market saturation and lead to further industry growth.

After considering it for a while, Eric set down his empty coffee cup and said, "Jeffrey, we can incorporate this into Firefly's next development plan, but I hope you proceed with extreme caution. I've always envisioned Firefly growing even stronger, but I also fear that blind expansion could weigh it down and make it sluggish. Do you understand?"

"Of course, I won't undertake this lightly without 100% certainty," Katzenberg affirmed.

Eric nodded, poured himself another cup of coffee, and added, "Do you know what Steven and the others are working on?"

"David did mention to me that he hoped I could help out, but I turned him down," Katzenberg replied candidly. "They will likely make an official announcement next month, but I don't know the details."

Eric was aware that David Geffen and Katzenberg had always been good friends. However, friendship alone wouldn't drive a determined business elite to switch allegiances. Katzenberg, being previously without options, now understood that Firefly was the best platform for him to showcase his talents.

*****

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