Exploiting Hollywood 1980

Ronald did not expect that the news that his "Top Gun" was a great success in the pre-sale of the video market would cause a huge wave that he had never expected.

In the past, the income of movies has always been divided into two parts. One part is the share of the box office income of theaters. The other part is the income from secondary broadcasting on cable TV stations.

Unless otherwise agreed, the latter part of the income is generally distributed to the members of the three union groups in the main creative team according to a fixed small proportion.

They are the Actors Guild, the Directors Guild, and the Writers Guild.

The so-called surplus means that after the TV station broadcasts more than ten times or the income exceeds 10 million US dollars, a few percentage points of the profit will be taken out and distributed to the members of the three unions.

This part of the surplus dividend is led by the union and collected uniformly from the film company, and then distributed to the union members who participated in the filming of the movie every quarter.

However, photographers, editors, makeup, costumes, props and other technical workers have no right to participate in this surplus value dividend.

Because Hollywood generally believes that if a movie gets excess income, it is the outstanding contribution made by those artists, not technical workers.

After the rise of television in the 1950s, a large part of the income of many old directors, actors, and screenwriters depended on this part, the residual dividends brought by the repeated broadcast of old films on TV.

After the struggles and negotiations between the three major unions and the Producers Guild, including the strike of the Writers Guild and the Actors Guild when Ronald first entered the industry, this ratio was gradually determined.

As long as the number of replays or the income of the old movies reaches the trigger condition, the producer will distribute about 3 of the income from the TV broadcast to the three unions. Then let them distribute it to their respective members.

It is easy to see that this distribution method is the least controversial for the Directors Guild, which has the smallest number of members. The Directors Guild stipulates that only one director can be signed on a film, so the 1.2 residual dividends given to the Directors Guild belong to the director.

The Writers Guild gets the least share, and the Actors Guild has the most people to share the money, and they are the ones who want to increase this dividend ratio the most.

On the other hand, this dividend distribution method is only effective for popular movies. If the number of broadcasts on TV or the income does not meet the standard, the main creative staff will not receive any residual dividends.

Of course, the union will not watch those members who cannot make good works starve to death. After the remaining dividends are transferred to the union, the union will extract a part to enrich the union's pension pool.

When those members with ordinary skills retire and can no longer work, they can still get a pension to maintain their lives.

This distribution ratio is a balanced price obtained by the union, members, and producers after a long period of repeated bargaining.

However, the hot sales of "Top Gun" videotapes broke this fragile balance.

Who would have known that as long as the price of videotapes was reduced from US$80 to around US$30, the market could grow tenfold?

The effect of this market size is that the production cost of videotapes has been greatly reduced, from more than US$10 to a few dollars per box. The marketing and distribution costs that producers bear in order to distribute videotapes have also been shared by more customers.

Although the retail price has been reduced a lot, the gross profit obtained by the producers has not decreased much.

All three unions were furious and quickly mobilized their members to accept interviews in the media to criticize this phenomenon.

The main creative staff did most of the work, so why did the producers take the biggest piece of the pie?

"I think Tom Cruise's contract with them needs to be renegotiated. The past share of the videotapes is not suitable for the current development under the new situation."

Paula Wagner has been pregnant for several months. She was wearing flat shoes and holding a document while talking to her husband Niceta.

"Although the legal reason for renegotiation is far-fetched, it just so happens that the actors' union has been speaking out intensively. Can we take advantage of this and put some pressure on the two producers?"

"You should note that your client Tom has signed a separate profit-sharing agreement with the two producers, not the remaining dividends stipulated by the union. A large number of union members are already dissatisfied with the income of stars. If you want to continue the trend of the surge in videotape income to fight for Tom's income, you must be careful that the other party will separate you from other ordinary actors."

"But why can Ronald get 1.2% of the share?" Paula is no longer Ronald's agent. She can't get this part of Ronald's income, so she is a little dissatisfied with her husband's attitude. In addition, the hormonal changes caused by pregnancy made her a little angry.

"Ronald helped shoot the Pepsi commercial at the beginning of the video. In fact, if he hadn't helped Pepsi shoot the Super Bowl live commercial, it's very likely that Pepsi wouldn't have given an additional $6 subsidy per video this time.

The first pre-sale of the Top Gun video exceeded one million copies. It's hard to say to what extent it was due to Ronald's extra contribution. I think the two producers may have gotten a big bargain."

Nicita helped his wife open the car door with one hand and held her waist with the other hand to help her get in the car. Paula is already an elderly mother and needs to go to the doctor for a check-up.

But in action, Paula looked after her, but in words, she did not give in. "So, Paula, you'd better not let Tom think about comparing himself with Ronald. This will not be good for his future acting career."

"I understand that it is best for Tom to appear in Ronald's movies in the future. This time Top Gun has really improved Tom's status too much.

I'm just a little pity, seeing the huge market potential of video tapes, the seven major studios will not be so easy to talk to in the future. The two lucky ones, Don Simpson and Jerry Bruckheimer, are really lucky. "

"This is a contract written in black and white. Why, do you want to disobey it?"

Don Simpson tilted his mouth, holding a big cigar in his mouth, and asked the manager of Pepsi-Cola's marketing department with a smile.

"When we signed the contract, we made a forecast based on sales of 500,000. Now that pre-sales have exceeded 1 million, it makes no sense for us to give a subsidy of six dollars per video tape."

The marketing manager of Pepsi-Cola answered politely.

Originally, Pepsi-Cola had spent six dollars in marketing expenses for each video. After seeing Ronald's Super Bowl commercial, which brought a long period of popularity and discussion to Pepsi, people at Pepsi became a little bit fond of Ronald. superstitious.

Therefore, they increased the price again and gave each video tape a subsidy of six dollars. In other words, for every videotape sold for $26.95, Pepsi would subsidize "Top Gun" by $6.

However, the sales of the video tape were unexpectedly hot. Before it went on sale, pre-sales had already exceeded one million boxes.

Pepsi's original marketing budget could not include this additional subsidy. So this time, the marketing manager in charge of the project and the lawyers from the legal department came to negotiate with the two producers.

"Why do you think like this? Every box of our video tapes sold is a marketing media for the event.

Every viewer who watches the videotape will watch the one-minute commercial in its entirety. This is an effect that you cannot achieve on any TV program. "

Bruckheimer didn't want to fall out with the big benefactors, and he had some reasons from their perspective.

"We have paid a flat subsidy of six dollars for each video tape. This additional six dollars is based on the estimated sales of 500,000 boxes.

Therefore, this direct subsidy to the producers of "Top Gun" must be stopped when sales numbers continue to rise. "

"You mean to ignore the original intention of the contract written in black and white, and then look for the business logic behind the terms. Do you expect the judge to rule like this? Do you?"

Don Simpson did not believe that there could still be judges who ignored simple clauses.

"Of course there is. Whether you sue in Los Angeles or New York, we are sure to win the lawsuit. In addition, if you do not agree to set a sales cap for video tape subsidies, we will ask the court to issue a temporary injunction to temporarily ban the production of video tapes. On sale.

This means that your sales channels can no longer continue to pre-sell video tapes. "

Several senior lawyers from PepsiCo's legal department standing in the back row stepped forward in unison, putting considerable pressure on the two producers.

"Who do you think you are? You say it's okay? You say it's prohibited? Humph?"

Don Simpson didn't pay much attention to this tough statement. In Hollywood, which star doesn't need such tough coaxing and intimidation to scare him?

I have long been familiar with this kind of game where the cards are bigger than the hole cards.

"Because we are PepsiCo, if we say yes, then yes."

The leading lawyer took another step forward and was almost to Simpson's side.

"In addition, you are fighting between two people this time. We have contacted Paramount. They are also very interested in the sales of the video tape."

Don Simpson's expression changed. This son of a bitch went to Paramount for an alliance. Paramount's top executives have long been very dissatisfied with the fact that the two of them received most of the profits from the video tape business.

In the future, video tapes will become an important source of income for the seven major studios. They all understand that this big sale is not because there is anything special about "Top Gun", but because the pricing this time has just found the audience's most popular choice. Acceptable price range.

Then in the future, as long as we continue to price within the 3040 price range, we can put new popular movies and classics in the film library on the market on a large scale.

After "Top Gun," the producers who worked with the Seven on film distribution would never get such good terms as they did.

Even with the terms this time, Paramount has not thought about going back on its word. If they join forces with Pepsi, no matter how powerful the two producers are, they may lose.

Moreover, the two parties can also resort to extravagant tactics to set up obstacles in the sales of video tapes. In this way, if the momentum of pre-sales is blocked, a lot of money will be lost.

"We can discuss the subsidy terms with you again."

Bruckheimer quickly pretended to be the good guy in the game of Good Guys and Bad Guys, extending an olive branch to the other party and giving in.

The two parties negotiated new terms, and within three days of signing the new supplementary terms, the pre-sales figures reached were still within the scope of PepsiCo's subsidy.

After the pre-sales and sales figures after the official launch, Pepsi will no longer subsidize them with a subsidy of six dollars per box.

"It's much better than expected." The two producers were there to settle accounts.

In the first two weeks of pre-sale, sales momentum was strongest, with pre-orders exceeding one million boxes. After three days, this number will rise to close to 1.2 million boxes.

This part of the video tape can earn about 7 million from Pepsi's direct subsidy alone.

"What a good business! We are so lucky, hahaha!"

There is nothing unacceptable to the two of them. Even if the subsequent sales are not subsidized, it is still a huge amount of income. Many Hollywood producers may not be able to earn so much money in their lifetime.

"We continued to party, continued to have fun, and asked Ronald if he was free. The agent we found this time said that we could find beauties from New York's Elite Model Agency."

Don Simpson decided to forget the unpleasantness and continue to have a carnival of drinks and meat every day.

"Ronald, you are our director's lucky star. This time we were able to renegotiate the terms of the remaining dividends with the Producers Guild, thanks to your film Top Gun." An old white man, well-dressed, with a little thinning hair, But he was combing his hair neatly, sitting behind his desk and facing Ronald.

The old white man sitting in front of Ronald is a famous director in Hollywood. He once won the Oscar for Best Director for "General Patton", and also produced the science fiction masterpiece "Planet of the Apes" by Franklin Shah. Fner.

He had just been elected president of the American Directors Association in the general election.

When Ronald received the new Directors Guild ID card last month, he saw the signature of the new president, Schaffner.

"This is a coincidence. I have no credit. No one knew before that the maximum profit for the movie can be achieved by selling the video tape for US$3,040."

Ronald replied humbly.

In fact, if it weren't for him, there would have been other movies. Other producers revealed this and they were just lucky and happened to get this opportunity.

"Humility is a good quality, especially for famous directors." Schaffner was born in 1920 and is already sixty-seven years old. No matter how you look at Ronald, a new director of his own nephew's generation, you will be pleased with him.

"But don't be too modest. What you bring to the Directors Guild is not only more residual dividends, but also gives us more bargaining power in front of the studio.

Also, the number of new members joining the Directors Guild is decreasing. But we have a large number of old guys like me asking for pensions.

You have opened up the video tape market, and our Directors Association can also receive a lot of dividends and add to the pension pool. "

Schaffner was elected as president by many retired directors and members from the golden age of Hollywood.

One of his important policy agendas is to develop more financial resources so that these old brothers and fellows can have a more dignified retirement life.

"What? The number of new members is decreasing now?"

Ronald heard what he was interested in and asked the president.

"Yes, there are a lot more advertising directors, but their first-level members can't pay much dues. There are film directors and TV drama directors who can pay large membership fees and bring dividends. The number of new people who have joined the Directors Guild in recent years It’s all slowly declining.”

"Oh? Is that because new directors don't join the union? Or?" Ronald was a little surprised.

"Every director of a movie released in America must join a union, except of course that weirdo like Lucas. His own Lucasfilm handles his own distribution business."

Schaffner sighed. If Lucas could return to the Directors Guild, there would be a lot more dividends to be collected.

"Today's production costs are already very expensive. When you joined the club, it was still possible to make a movie with one to two million yuan. Now the lowest low-cost movie requires 600 to 8 million yuan to be made.

And without training in low-cost films, film directors have no chance to enter the industry. Only now do I realize how many qualified members Roger Corman's New World Pictures has provided to Hollywood and the Directors Guild.

Unfortunately, drive-in theaters are also declining across the country, and his exploitative films that cost hundreds of thousands of dollars are not doing well at the box office. "

"Fortunately, I entered the industry early. If I had entered the industry now, I would have had to wait another ten years before I had the chance to hold a guide tube for the first time, right?" Ronald secretly said he was lucky.

The first movie I participated in, "Rock and Roll High School", was made with a small budget of several hundred thousand. The director's first "Fast Pace" was made with a small budget of three million.

If now, all of a sudden, eight million were given to a new director, Ronald asked themselves, they might not have so much confidence to believe in themselves who had never made a feature film.

"I will convene senior members of the union and lawyers to discuss how to negotiate with the Producers Guild to add the video to the remaining dividends.

We plan to imitate cable TV and set a bottom line on sales. Any movie that sells video tapes for a certain amount of money needs to allocate a portion to our Directors Guild.

I will also coordinate our positions with the two actors' unions, the Screen Actors Guild, the TV Actors Guild, and the Screenwriters Guild.

In short, everyone agrees with you this time, and directors who produce hit movies will have an extra income in the future. "

"Haha, I'm glad that I can bring some benefits to everyone." Ronald is a member of the Directors Guild. The union also gave him a lot of support back then. He feels very happy to be able to repay something."

"Come to the meeting, let the old guys meet you." The more Schaffner looked at Ronald, the more satisfied he was.

"If I have time, I will definitely come. You know, I am not like you in the big studio era, where you have the opportunity to observe and learn from the big directors. I really hope to have the opportunity to communicate with other directors, and it would be best if I could be with them and see their experience in making movies."

"Ha, good. There are still some old men in our Directors Guild who can meet your requirements. Billy Wilder is my old friend, and he must also want to meet you."

Ronald returned home and received a call from Eddie, the general manager of Daydream.

"Ronald, the president of the Producers Guild, Nick Conte called me and invited us to join the American Motion Picture and Television Producers Association as Daydream Pictures."

"Hey? That's the alliance of the investors, no, I am the investor now."

Ronald reacted and opened Daydream Pictures himself, and also got involved in the distribution business. Now he is a proper investor.

"Yes, you are already the capital side, my boss.

The Producers Guild, AiaioeevisioP, is a loose alliance that negotiates profit-sharing contracts with major labor unions.

The seven major studios are all members of the alliance, as are several medium-sized producers, such as Heimdall Pictures, which produced Terminator, Oscar-winning Seat Pictures, and the old Italian De Laurentiis Pictures, and there are dozens of small producers like us.

This is different from the more official film association "MPAA". The Producers Guild is mainly a loose organization, which is jokingly called for signing contracts. Founded.

Nick Conte used to teach at the Law Department of Stanford University and has been a labor lawyer for many years. Now he is responsible for the negotiations between the entire alliance and major unions.

So this time, he invited us to join and coordinated our positions. "

"Oh, I am a member of the Directors Guild and the Writers Guild. If I join the Producers Guild now, which side should I stand on during the negotiations?"

"Haha, in your case, you should avoid all discussions and negotiations." Ed had already inquired about the details. Spielberg was a person of similar status to him, and he automatically avoided every negotiation.

"Okay, you ask a lawyer to take a look at the case, and we will join as soon as possible." Ronald reacted, and in the future, the remaining dividends of the films produced by Daydream will also be allocated to the three major unions as soon as possible.

For some tricks in operation, it is better to join the alliance early and learn them honestly.