Chapter 307: Pay TV Channels

"Alright, I'll find you later," Arthur said with a smile, giving Nicole Kidman a playful pat on the buttocks.

"Go ahead," Nicole Kidman replied, aware that Arthur Smith's status had changed and he was certainly going to meet with the host Sumner Redstone.

Arthur soon met the 70-year-old Chairman of Viacom, Sumner Redstone. For a man who had declared in the '80s, "Content is king; the channel is not the most important thing. Whoever controls the quality content truly holds the bargaining power!" Arthur had a certain interest in him.

"Arthur, you're so young," Sumner Redstone remarked the moment he saw Arthur. "When I was your age, I had just left school. And here you are, already achieving accomplishments that have astonished the entire United States."

"Good evening, Mr. Redstone," Arthur extended his hand for a handshake, "Your compliments frighten me a bit. Another strong competitor for Galaxy in Hollywood!"

Sumner Redstone raised his glass and clinked it with Arthur's without hesitation. "Is that so? You're Hollywood's golden boy. Who can outdo you in the content arena? Besides, I heard from Sherry Lansing that Galaxy Films' annual market share in Hollywood is no less than the big six studios.

Galaxy has only been around for three or four years, while those six studios have a history of seventy or eighty years!"

Arthur smiled, "I've just been good at discovering new directors and promoting new actors. However, Galaxy Films' performance in the past few years has indeed been decent."

Sumner Redstone laughed, patted Arthur's shoulder, and said, "Alright, this is your young folks' time; go enjoy the party!"

In the corner of the party, John Malone, who was chatting with others, saw Arthur Smith and excused himself from his companions before walking straight towards Arthur.

"Mr. Malone, long time no see," Arthur welcomed him warmly, shaking his hand. "Who would've thought we'd meet here tonight?"

"Yes, long time no see," John Malone replied with a smile. "Shall we chat over there?"

Arthur nodded and accompanied John Malone to a nearby lounge area. As the Chairman of TCI and Liberty Media, John Malone was renowned in the cable TV industry. However, in Arthur's mind, John Malone seemed more like a financial speculator in cable TV. Despite the highly publicized failed merger between Bell Atlantic and TCI earlier this year, Arthur was certain that John Malone was already looking for a new buyer for TCI. After all, wasn't the purpose of creating Liberty Media to spin off its business?

"USA, BET, ESPN - Galaxy has already ventured into television, entertainment, and sports cable TV. It seems, Arthur, you have a promising view on the future of cable TV!" John Malone raised his glass and clinked it with Arthur's before taking a sip.

"Just look at the development of CNN, MTV, and ESPN for cable news, music, and sports channels, respectively. It's hard not to have thoughts about it."

CNN, MTV, and ESPN were the leaders in their respective categories, and Galaxy only owned 20% of ESPN's shares.

"Arthur, Liberty Media is setting up a new premium cable channel, Starz. Are you interested? It's similar to Viacom's Showtime or Time Warner's HBO," John Malone inquired.

"Premium cable channel!" Arthur folded his arms and tapped his fingers. Channels like ESPN were basic cable channels. Of course, Galaxy's USA was also a basic cable channel, broadcasting series, movies, reality shows, etc. Basic cable channel revenues come from both subscriber fees and advertising income.

However, the premium cable channels John Malone mentioned lacked advertising and relied entirely on subscriber fees. Showtime and HBO followed this model, attracting mainly adult audiences due to their higher subscription fees and lack of ads, allowing room for more adult content.

Broadcast TV had to cater to a nationwide audience and couldn't show explicit content. Basic cable channels could push the boundaries a bit to attract adult viewers, while premium cable channels exclusively targeted adults and had no concern for explicit content.

"Galaxy is very interested," said Arthur, who didn't find it difficult to develop some explicit series for Galaxy Television. HBO's future series could be easily outdone.

"Great, let's have our teams talk soon," John Malone saw Galaxy's production capability as key to developing Starz. Galaxy's new movies were always hot properties for TV channels, and the series they produced this year, The X-Files, had excellent ratings - another advantage for Galaxy.

Arthur nodded. HBO became the most profitable cable channel by continually producing quality series. Starz was set to follow HBO's footsteps.

After talking with John Malone, Arthur had plans for Starz. With support from both Liberty Media and Galaxy, investing in high-quality series production wouldn't be a strain. Of course, managing Galaxy's own USA Network was still a top priority.

Afterward, Arthur found Nicole Kidman, ready to leave. By the pool at the Bel-Air Hotel, he saw a man surrounded by bikini-clad women in the pool.

Arthur watched as the guy climbed out of the pool and started making out with Sharon Stone. "Who is that, messing around like this?"

Nicole Kidman laughed, "Hollywood playboy Steve Bing, the grandson of New York real estate mogul Leo Bing."

"He's only 28 this year. When Leo Bing passed away ten years ago, he left a $600 million trust fund. Steve Bing's father didn't want to run the real estate business and sold off the family assets. At 20, Steve Bing dropped out of Stanford and came to Hollywood to live this playboy lifestyle!"

Arthur clicked his tongue. Six hundred million dollars in the '80s was no joke. This guy truly came from a good background - a solid third-generation wealthy kid.

"Let's go. Hollywood is the best magnet for rich idlers," Arthur quipped, wrapping an arm around Nicole Kidman as they left.

"How do you know so much about him?"

Nicole Kidman rolled her eyes. "Young billionaire Steve Bing is quite famous; who in Hollywood doesn't know about him?"

*****

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