MTL - Best of Hollywood-Chapter 399 got
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In early November, Orion Films officially acquired Netflix for $45 million, including Netflix's original debt.
In fact, Netflix's debt is not very large, only a small part.
That's why Ryan didn't get too entangled in debt.
On November 15, Ryan personally signed the equity transfer agreement with Reed-Hastings on behalf of Orion Films.
From the moment the two parties signed the equity transfer agreement, Orion Films will make a one-time payment of 45 million US dollars within ten days.
With the hot sales of "The Lord of the Rings: The Fellowship of the Ring" and "X-Men", Orion Pictures' funds have once again become sufficient, and there is no problem with a one-time payment of 45 million US dollars.
Of course, Netflix’s next development and operation will require a large amount of capital investment, which will far exceed 45 million US dollars.
According to Netflix’s previous financing plan, Orion Pictures needs to invest at least US$100 million in a short period of time.
In other words, next year alone, Netflix's losses will reach US$70 million to US$80 million.
This is not only a loss caused by operations, but a loss caused by the continuous expansion of the number of customers.
This is an inevitable thing. With Netflix's online disc rental model, if you want to make a profit, you must first invest a lot of money and burn money.
That's how the original Netflix survived.
Until, in 2003, it achieved profitability for the first time, and then continued to burn money.
The real rise of Netflix, in addition to Blockbuster's own death, is mainly due to the increase in sales of DVD players.
During Thanksgiving in 2001, merchants only cost about $200 per DVD player, making it one of the most popular Christmas gifts that year.
By early 2002, the number of Netflix users and business began to grow significantly.
Netflix began to enter a stage of rapid development.
"Congratulations, Mr. Gosling."
At the end of the signing ceremony, Reed-Hastings said with some emotion: "The future of Netflix is definitely not just a website for selling peripheral products."
"Blockbuster's rental model will sooner or later be replaced by Netflix."
The service level of Blockbuster chain rental stores has always been very bad.
It's just that there has been no rental company that can replace Blockbuster and let users choose.
"Netflix will not be merged into Orion Films, but will continue to develop as an online rental disc website."
In this regard, Ryan has no need to hide anything, "This is the future of Netflix."
The merger of Netflix into Orion Pictures will only hinder the development of Netflix, and any Hollywood film company will not easily sell the film network copyright to Orion Pictures.
Netflix is no different.
Reed-Hastings shrugged. Regardless of how Netflix will exist, it has nothing to do with him.
Now he just wants to get the equity transfer funds as soon as possible, pack up and leave Netflix after that, and look for the next investment project.
On the contrary, Mark Randolph hesitated to speak.
Netflix will not be merged into Orion Films, but will exist as a separate Internet company, which makes him hesitate.
Nobody wants to leave the company they founded.
Netflix has been his hard work for more than three years.
Not long after, Reed Hastings, Mark Randolph and others left, and Netflix no longer had any relationship with them.
In the next step, Orion Pictures will send someone to officially take over Netflix.
"Demi, get the $45 million into the account as soon as possible, I need to take over Netflix immediately." Ryan said to Demi, director of financial department of Orion Films.
Only when the equity transfer funds of 45 million US dollars arrive in the account, the equity transfer agreement signed just now will officially take effect.
"By noon tomorrow at the latest, all 45 million US dollars of equity transfer funds will arrive in the account." Demi replied.
"Okay." Ryan nodded.
For Orion Films, 45 million US dollars is only a small number, which can be drawn out at any time.
However, the next capital investment in Netflix will take some time.
"In the near term, you continue to need to raise at least $70 million to $80 million in funding."
That money will go to Netflix.
"I need a little time." Demi thought for a moment and said.
Even if Orion Pictures wants to raise hundreds of millions of dollars in funds, it will take a certain amount of time.
Ryan didn't say anything more, but turned to John Denise and said, "Inform Jon to sort out all the film copyrights of Orion Films, including TV series and TV program copyrights."
"After officially taking over Netflix, Orion Pictures will authorize it as soon as possible."
There is a little trouble here. The disc copyright of the film produced by Orion Films has already been sold.
MGM's film library copyright, which had been licensed to a network before Orion Pictures bought it, was still several years away from expiring.
Fortunately, what Netflix needs is online disc rental and sales authorization, not all copyright authorization.
In this way, Orion Pictures has room to operate.
At least the license from the MGM Video Copyright Library does not include online licenses.
Even before the establishment of Netflix, there was no such thing as online film authorization in Hollywood.
However, when it comes to the specific terms of the film copyright contract, the legal department of Orion Films needs to review them one by one to see if online authorization was included in the terms when the copyright authorization was signed.
Even if it includes online authorization, Orion Pictures can take back the online authorization through negotiation.
This is not difficult.
For a long time in the future, no one will pay attention to online licensing of videos.
No one cares about the online copyright of videos.
"Who are you going to find to manage Netflix!"
Leaving the signing ceremony and returning to the car, Sofia Coppola asked curiously, "Online disc rental business?"
"It's a new industry and very few people understand how it works."
"Your suggestion is!" Ryan glanced at her sideways, "Why are you suddenly interested in Netflix!"
"It's not me, it's Jeff Bezos," Sofia Coppola said. "He called yesterday and said he wanted Netflix to be merged into Amazon."
Incorporated into Amazon!
Ryan shook his head and said, "Tell him that Netflix will not be merged with Amazon, nor will it affect Amazon's business."
Jeff Bezos is simply worried that, with the backing of Orion Pictures, Netflix will become another Amazon.
When Amazon was first established, it was only an online bookstore, and gradually expanded to an online retailer.
In this regard, it is very similar to the current Netflix.
However, the difference between the two is that the future of Netflix is not the online retail industry, but streaming media.
"Find time to make an appointment with Mark Randolph for me." Ryan has already thought about who will manage Netflix.
That's Mark Randolph.
The co-founder of Netflix is also the person who formed the online disc rental team.
"Mark Randolph!"
Sofia Coppola looked surprised, "You plan to bring Mark Randolph back to Netflix?"
"In a short period of time, I can't think of a better candidate than Mark Randolph." Ryan knew that the next few years would be a critical period for Netflix's development and expansion.
So he needs to ensure the stability of Netflix's management.
The best option is to bring Mark Randolph back to the helm of Netflix.
At least for a short period of time, there is no more suitable candidate than him.
"He really fits." Sofia Coppola nodded.
In fact, besides Mark Randolph, Ryan still has two good candidates, John Antioch and Ivan Gillis.
The former is the current CEO of Blockbuster, the same person who refused to pay $50 million for Netflix.
According to the development of the previous life, in early 2003, Netflix announced that it had reached one million subscribers, realized a profit of 6.5 million U.S. dollars, and a total revenue of 272 million U.S. dollars.
At the time, Blockbuster CEO John Antioco began focusing on the online rental business, spending $1 million to acquire a small online DVD rental company.
By the end of 2003, John Antioco asked Ivan Gillis to operate the online rental disc business alone.
Backed by Blockbuster's powerful resources, film sources and customer base, Blockbuster's online business has become Netflix's biggest competitor.
At this time, Netflix made another serious mistake, causing Blockbuster's online business to once surpass Netflix.
In desperation, Netflix hoped to buy Blockbuster's online business at a price of US$200 per user, or a total price of US$600 million, but was rejected by John Antioch.
Still, Netflix isn't worried for long.
This time it was Blockbuster's turn to die.
In 2007, Blockbuster's board of directors dismissed John Antioch from his post ~www.novelbuddy.com~ and even proposed him to Blockbuster.
At the same time, Blockbuster has rediscovered the former CEO Case, who will be in charge of Blockbuster.
Ever since, Blockbuster returned to pre-liberation overnight, and its online business dropped sharply.
In contrast, Netflix developed rapidly again in 2008. By 2009, Netflix reached 10 million users, leaving Blockbuster far behind.
On September 23, 2010, Blockbuster, a rental giant with 60,000 employees and 9,000 stores, declared bankruptcy.
Faced with such a strongman, Ryan naturally hopes to dig him to Netflix.
It's a pity that with the current size of Netflix, it is impossible for John Antioko to agree, or even consider it.
Ivan Gillis also won't leave Blockbuster for Netflix.
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