Chapter 791: Amblin

[Chapter 791: The Family]

In the mid-1990s, the American cable television industry stood on the brink of explosion, buoyed by the wave of new technology.

As long as FFM was managed properly, by the peak of this technological wave five years later, its valuation would not merely double -- it could increase five or even ten times, which was a very conservative estimate. Erik's promise to Harvey Weinstein of options worth over ten million dollars might yield returns exceeding one hundred million dollars, provided FFM's development met expectations. Erik was also prepared to be generous in compensating management.

However, Harvey Weinstein did not share this optimistic view. After all, not everyone could see the future. He shook his head and said, "Erik, I can accept a salary of $250,000 a year, but one million shares in options is too little."

Erik replied, "Harvey, after you take over this cable company, if it grows at a 30% annual rate, in five years the company's value will be around four times what it is now. Your total compensation would exceed $40 million, which is very generous. Whether at Firefly or News Corp, there are no more than ten executives earning in the tens of millions annually."

Harvey opened his mouth to rebut but couldn't find the words. He certainly couldn't say he doubted the ability to achieve a 30% growth rate. For enterprises that had already passed their rapid development phase, achieving such growth was indeed challenging, often just about maintaining the status quo. However, for a newly established company like FFM, with ample funding and resources, failing to hit a 30% growth rate would not bode well for success.

Seeing Harvey hesitating, Erik added, "If you think the risk of the options is too high, we can set up a separate bonus structure. If you meet your annual performance targets, you would receive this bonus. But I can only offer a maximum of $5 million in bonuses each year."

When Sony hired Peter Guber to manage Columbia, they used a similar structure, with Guber's contract also spanning five years, and Sony promising a bonus of $50 million. In the end, Guber collected that bonus, leaving Sony with a mess.

Sony got caught because they were outsiders; Firefly and News Corp were not likely to make that mistake. However, at the level of a major film studio CEO, even a bonus of $50 million was significant, and Erik could hardly set a higher limit for Weinstein, lest it upset other executives of the same rank.

Harvey clearly understood the rules, and his expression showed more hesitation. Opting for a bonus was undoubtedly a safer choice.

Though he had made a good amount at Miramax these past two years, that was during prosperous times. The film industry was always unpredictable; he could easily find himself with no dividends the following year due to losses.

But the potential high returns of options were equally enticing, albeit accompanied by high risks. Erik's vision of continuous growth was merely an ideal scenario. Should there be a year of substantial losses causing FFM's valuation to plummet, the efforts of the previous year or two could easily be rendered meaningless.

In the end, Weinstein asked, "Erik, can you give me a few days to think about this?"

"Sure," Erik nodded, not expecting Weinstein to agree on the spot. "If you're not in a hurry to leave, perhaps you could hear my thoughts on FFM. It might help you decide whether to accept this position."

Harvey smiled readily, a hint of flattery in his tone. "I would love to. I think no one would pass up this opportunity."

From its inception, FFM targeted HBO as its benchmark.

Since HBO's founding in the early 1970s, it had changed its slogan eight times, reflecting its exploratory journey into the paid cable model. The current slogan, established in 1993, was "We're Out of Town Today." HBO's most classic and longest-used slogan, which signaled its business model had fully matured, was "This is not TV. This is HBO." That tagline had yet to be unveiled.

"This is not TV. This is HBO" represented HBO's core business principle, offering viewers a viewing experience that was entirely different from regular television programming. Built around this core idea, HBO maintained a commitment to invest heavily in producing a vast array of critically acclaimed original series while introducing hundreds of outstanding films each year.

Since HBO had not yet launched its classic slogan, Erik had no hesitation in proposing, "This is not TV. This is FFM."

Drawing on memories from his past life and recent research, he discussed in detail with Murdoch and Weinstein the development strategy he envisioned for FFM.

Determined to use the slogan "This is not TV. This is FFM," this paid cable channel would have to eliminate the traditional TV model that relied on advertising revenue and instead gain profits through user subscriptions and rights management. While attracting quality content, FFM needed to produce more high-quality original series. However, this didn't mean just throwing money at big-budget projects; rather, it involved creating works that resonated with its audience of elite social demographics, more open, thought-provoking, and artistic in nature.

The three then discussed other specifics like brand building and focusing on user satisfaction until around 8 PM, after which they finished dinner and parted ways.

...

After a busy day, feeling somewhat fatigued, Erik opted not to return to the Liberty City Manor but instead went to Drew's residence at the Trousdale estate.

With no one home, Erik dismissed the driver and used his key to let himself in.

After a quick shower and donning a bathrobe, he settled into the living room, turned the television on, and sat on the sofa with his laptop, flipping through emails while watching TV.

From Weinstein's reaction when he left, it seemed he had nearly decided to accept the job, and was only likely to negotiate over salary. With the right management in place, Erik also began considering his next moves.

In the media realm, the crux of competition ultimately hinged on content.

For FFM to quickly establish its brand, merely acquiring external film rights would not be sufficient; original content that could generate substantial buzz was essential.

Aside from the rights already taken for Lifetime's Sex and the City, the first show that came to Erik's mind was The Sopranos.

In HBO's lineup, The Sopranos held a standing comparable to that of Netflix's House of Cards. Although HBO had previously produced acclaimed shows like Sex and the City, Six Feet Under, and Band of Brothers, it was The Sopranos that truly propelled HBO to dominance in the pay cable industry.

This television masterpiece often ranked as the greatest drama in various media's "greatest TV shows of all time" lists. While Sex and the City had a significant impact, its appeal was largely limited to women, while The Sopranos became a nationwide conversation piece.

Typically, series of equal quality garnered higher ratings on public networks than on basic cable, which usually outperformed paid cable. Due to the fewer potential viewers, very few paid cable programs made it into the top rating spots, yet The Sopranos did exactly that. During HBO's peak, it achieved viewership exceeding ten million, a staggering feat considering that the total subscriber numbers for other pay cable networks only reached several million. The Sopranos' miraculous ratings were pivotal in cementing HBO's reign over the paid cable sector.

The rise of The Sopranos stemmed from numerous factors, but the show's high quality and its alignment with American media and audience tastes were paramount.

...

While Erik's presence altered Hollywood's history, writer David Chase still penned the script for The Sopranos, as the idea had been conceived from his own childhood experiences that had brewed in his mind for years.

David Chase had already garnered some recognition in the television industry, having produced the hit CBS series Northern Exposure.

However, selling The Sopranos' script was not straightforward. By the time Erik became aware of this, major networks, including ABC, had received the script but ultimately rejected it. The executives at these prominent networks showed no interest in a stylistically dark and unconventional mob drama, leading to unanimous rejections.

In the annals of history, The Sopranos' production journey was fraught with difficulties. After failing to sell it to major networks, David Chase aimed for smaller cable channels. HBO finally acquired the script in 1997, but interest in production was lukewarm. It wasn't until David Chase insisted that HBO approved funding for a pilot. Chase directed the pilot, but HBO shelved it for over a year. Only in 1999 did The Sopranos finally premiere on television, resulting in its astonishing rise.

Recently, Erik had also instructed Firefly's rights department to reach out to David Chase again to secure the script. There was another intriguing twist: David Chase's agent, named Brad Grey, had been Weinstein's assistant and had now started his own production company.

Erik certainly wouldn't deal with this directly; that would only invite others to pounce.

He specifically instructed the head of the rights department to keep him updated on the negotiations for The Sopranos. After opening his inbox, he soon found an email related to it.

Perhaps sensing Firefly's changed attitude towards The Sopranos, David Chase had begun demanding to direct and produce the series himself, along with involvement in casting, while Brad Grey was reluctant to relinquish control of the project's production entirely.

Compared to the bigness of Firefly, Brad Grey's production company seemed more like a small workshop. As long as the other party wasn't greedily trying to share the rights, Erik didn't mind giving them a taste of success. As for David Chase wanting to be involved in the production, that was something Erik was keen to see.

...

After drafting a reply, Erik closed his email window and opened Yahoo to browse the latest news.

After what felt like forever, as Erik was nearly dozing off on the sofa, Drew finally returned from the outside with the twins, adorning a blue evening gown.

"Erik," she called as she walked in, leaping into his arms and planting a sweet kiss.

Erik pushed aside the laptop that was wedged between them and wrapped his arms around her waist, asking, "Where have you been? You're so late!"

"I haven't been gallivanting! It was a godfather's party! I couldn't very well not go," she replied, wriggling closer to him and raising her little legs to shake them. The twins quietly approached, helping take off her high heels and automatically tidying the laptop that had tipped over. One of them softly asked, "Boss, do you want to take a shower?"

"Sure, Eric and I will shower together."

Erik grinned, noting, "But I've already showered."

"Then we'll just take another shower together," she cooed, clutching Erik's neck like a child.

Feeling unable to say no, Erik nodded. Once the twins left to prepare hot water, he asked, "What did Steven invite you all to this time?"

"It was still about some business collaborations," Drew replied, clearly uninterested in talking about it. "Anyway, I just feel that godfather won't make it big this time."

Erik chuckled. At the end of last month, with Microsoft's backing, Steven Spielberg announced a new studio plan in partnership with David Geffen, George Lucas, and others. Perhaps Erik had appropriated DreamWorks' name ahead of time, as they chose not to rename the new studio but rather consolidated all the resources under Spielberg's Amblin Entertainment.

Microsoft's initial investment was $500 million and promised to provide technological support in visual effects and computer animation, gaining a 25% stake in Amblin. George Lucas merged his Lucasfilm and Industrial Light & Magic into the company, also acquiring a 25% stake. Amblin would also obtain the rights to produce Star Wars. For the remaining 50% stake, with Spielberg retaining only 30%, while Geffen, as one of the project's original initiators, held a mere 20%. This implied that he was being subtly pushed out of the core group, and it was predictable that as Microsoft conducted second and third rounds of funding, the first shares to be diluted would certainly be Geffen's.

Additionally, Amblin signed an agreement with Paramount for the distribution of eight films over the next five years.

Erik had been closely monitoring these developments, and like Drew, he felt that the likelihood of Spielberg and the others expanding the studio was low.

Putting aside issues like distribution channel weaknesses or the suppression from the original big seven studios, both Spielberg and George Lucas were not particularly ambitious individuals. Although many referred to Spielberg as a film mogul, his somewhat indecisive nature was ill-suited for running a major studio.

During the recent negotiations, it was rumored that Spielberg had expressed to his partners that he would do his utmost to run the company while maintaining the right to engage independently with other film companies. Did that sound like something someone ambitious could say?

There was no doubt that Spielberg had talent in filmmaking, but he could not match Erik, who had the advantage of foresight. In the original timeline, even after years of establishment, DreamWorks had seen very little profitability from live-action films, with the solitary stable business being the animation division, which was overseen by Katzenberg. Eventually, that too opted to split from DreamWorks and go public, leading to an inevitable estrangement among the partners, ultimately parting ways.

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