Heads Up Hollywood

Before Facebook has been formally established, Netflix is ​​currently the most important asset under the New Universal Group, and it is an investment in the future Internet era.

Now, Netflix has been strongly attacked by Blockbuster, the industry leader, which immediately caused a shock in the entire New Universal executives.

In the afternoon, Netflix's "board of directors" was held.

Including Dunn Walker, the big boss of New Universal Group, CEO Barry Diller, President Robert Iger, CEO Kevin Turner of the Interactive Entertainment Department, Bill McNick, CEO of the Film and Television Entertainment Department, and the head of Netflix. De Hastings, assistant to the chairman Tosca Musk and others.

But what is surprising is that among such a group of group executives, a relatively unfamiliar face appeared.

In fact, everyone knows that this person is George Paxton, who is Dun En's personal assistant, and will handle some shady matters in secret.

It's just that this is the highest-level meeting, he is an "outsider", what is he doing here?

Does he understand such a big event?

Fortunately, everyone respected Tang En very much and did not attack him.

At the beginning of the meeting, Barry Diller recounted his phone conversation with Redstone at noon.

The result of the communication...was bad!

Redstone didn't seem to have the slightest interest in this matter, and he firmly grasped one point from the beginning to the end - Blockbuster has been separated from Viacom and has independent management rights.

John Antioco is the CEO of Blockbuster, and he has the greatest decision-making power!

Viacom has no authority to intervene.

As soon as the voice fell, he was met with cynicism from Tosca Musk, and said: "Blockbuster has the right to operate independently, but don't forget that Viacom still has 3 director seats on the Blockbuster board of directors! Thunderstone Dong still has a great influence on Blockbuster's decision-making. In my opinion, Redstone... is hoping that Blockbuster will go to war with us."

"No matter what the process is, the battle between Blockbuster and Netflix is ​​probably unavoidable." Barry Diller said solemnly, shaking his head.

Robert Iger frowned and glanced at him, "Barry, Redstone...is there really no discussion?"

Barry Diller snorted, "You can contact him in person!"

"I did not mean that!"

Robert Iger waved his hand, but his face was relatively calm, and he didn't look apologetic at all.

These two people, one is the CEO and the other is the president.

It is inevitable that there will be many differences due to the company's power struggle.

"alright!"

At this time, Tang En made a sound at the right time, letting the undercurrent in the venue come to an end.

However, he has no intention of easing the conflict between the two parties.

As the big boss of the company, balance is the most important thing. It's far better to have two factions at war than to be one.

Tang En said: "Barry, in your opinion, is there still a need for Lei Shidong to operate?"

Barry Diller said categorically: "No! I have known the old man for thirty years, and he will not back down on this kind of thing. Otherwise, he would have bowed to New Universal long ago, and he would not be in Via Kang is making troubles inside."

In September, Viacom spun off Blockbuster.

One and a half months later, new voices came from within Viacom, and the conflict between Redstone and Camasin had become heated. There are rumors that within the year, Redstone will fire Viacom president Meyer Kamasin.

This is definitely a big move.

Tang En waved his fist and said in a deep voice: "Since this is the case, this matter is settled. We will not have any illusions about Viacom and Redstone. If Blockbuster dares to provoke first, we can't sit still Humph, a few years ago, when I was in charge of a small studio of Tang En Pictures, I challenged big companies like Disney and 20th Century Fox. Now, with the powerful background of New Universal Group, we will still Afraid of a little Blockbuster? If they dare to attack, we will fight!"

Robert Iger followed his words and asked: "Reed, what is the situation of Netflix? If we really start a price war, what is the maximum profit margin we have?"

Reed Hastings didn't even look at the materials, and just opened his mouth: "Netflix now has 5.26 million users, and since the beginning of this year, the number of member users has reached 265%! Based on the current situation, it is estimated that Netflix's operating income this year will be around 830-850 million US dollars, of which, the profit is likely to be around 50 million US dollars."

As soon as this data came out, everyone couldn't help frowning.

Profit margins...too low!

But think again, Internet companies, it is not bad to be able to make a profit, but also depends on the profit margin?

Just listen to Reed Hastings continue: "If Netflix maintains the order of 5 million users, the average profit margin for each customer's monthly fee is only $2. That is to say, if Netflix Self-financed operation, the monthly subscription price cannot be lower than $18.”

This data is exactly the same as what Tang En had before.

Robert Iger frowned and said, "Blockbuster's monthly subscription fee is 16 dollars, but we can only open it to 18 dollars? At this time, why do you care about self-financing?"

What is the purpose of the price war?

It is to compete for the market!

Use the means of price reduction and dumping to snatch the market, defeat and drag down competitors.

After forming a monopoly on the market, the price will be raised again.

Gain huge profits with this bet on the future.

Now that Netflix is ​​going to war with Blockbuster, there is no need to care about the gains and losses in front of it, but focus on the future.

Kevin Turner shook his head and said, "Blockbuster offers a monthly subscription price of US$16. It must be operating at a loss and vicious competition. The difference is that Blockbuster has tens of thousands of stores under its umbrella. They have physical stores and online stores. Two operating models. Losses from online stores can be transferred to physical stores, so there is room for substantial price cuts. This is completely different from Netflix. We only have one model of online stores. Price-cutting competition is impossible."

"No! There must be!" Barry Diller shook his head firmly, "With so many companies under the New Universal Group, it is not easy to transfer some book losses? The huge amount of commercials has made the film and entertainment department bear the loss of Netflix!"

Older gingers are more spicy.

The key is obvious at a glance.

Accounting is a common practice in Hollywood. Silicon Valley-based Kevin Turner and Reed Hastings may not understand it, but Hollywood-born bigwigs are all too familiar with it.

As long as the Ministry of Film and Television Entertainment invests a large amount of movie advertisements on the Netflix website and greatly increases Netflix's commercial advertising revenue, it will be equivalent to "subsidizing" Netflix in disguise.

With this subsidy, Netflix naturally has the possibility of further price cuts.

Can really fight a price war with Blockbuster!

It's a good proposition, echoed by Robert Iger, Bill McNick, and others.

However, Kate Turner, Reed Hastings, Tosca Musk and others who were born in Silicon Valley all looked flat and were not interested in this proposal.

is it necessary?

Please remember the first domain name of this book: . Nine Heavens Emperor: