Chapter 1546 Pricing Power
Albrecht has been under a lot of pressure recently.
For many years, Starz has been licensing its film library resources to Netflix in exchange for an annual licensing fee of 30 million, allowing everyone to get what they need.
But people's greed has no limits. Starz's board of directors saw Netflix's stock price rising, and they were very jealous. They believed that a large part of the reason why Netflix is what it is today is because of the support of its own film library, so this contract renewal negotiation is
The lion opened his mouth and asked Netflix for 300 million magnesium dollars.
Netflix thought Starz was crazy. After repeatedly asking if there was an extra zero, Netflix reacted the same way as Li Rui, and immediately stopped the negotiation without even cutting the price.
From 30 million to 300 million, there is no need to bargain.
Starz didn't expect Netflix to react like this, and was in a dilemma for a while.
In their cooperation, it is not only Netflix that needs Starz’s film library, but Starz also needs Netflix’s money to beautify its financial reports.
They both need each other very much, and it can be regarded as a relationship in which both parties will benefit from peace and lose from fighting. However, the price of 300 million Mg was announced, and Netflix actually ignored it and stopped the negotiation, which hurt Starz.
Heartbroken, starz couldn't swallow this sigh of relief and began to look for other customers everywhere. This led to what happened last time when Albrecht found Li Rui's head.
Originally, Albrecht heard that Blockbuster, owned by Li Rui, was looking for film libraries everywhere and was very generous with its offers. He thought he had encountered a victim. But what he never expected was that the victim was also cheated by 300 million yuan.
Mei Yuan was startled and didn't even dare to ask more questions.
What Starz didn't expect was that Li Rui's reaction was the same as Netflix's, not even cutting the price.
So Starz's film library was shelved, and the contract with Netflix was about to expire. Not to mention 300 million, there was no one willing to pay 30 million!
The board of directors was anxious, and so was Albrecht, so they took advantage of the gathering of Hollywood big names today and approached Li Rui again.
"Li, Starz is very optimistic about Blockbuster's future development and is very willing to have more in-depth cooperation with you." Albrecht didn't hide it anymore.
Li Ruidao: "This...to be honest, even if your company cuts the asking price in half, Blockbuster can't afford it."
Albrecht's face turned red: "What if it can be lower? For example, 100 million magnesium dollars?"
Li Rui chuckled: "I can't afford it."
"How much can Blockbuster pay?" Albrecht couldn't care too much anymore.
According to the previous 30 million Mg contract with Netflix, Starz will earn less than 100,000 Mg every day it holds its library.
If Starz's film library is delayed in finding a home, their financial report this year will become very ugly, and may even trigger a series of chain reactions, leading to the deterioration of the entire television network. This is something that the company's senior management will never tolerate.
Starz's current situation is like that of an arrogant girl who originally had a loving boyfriend. When it was time to get married, the lion asked for a high-priced gift that the man could not afford, which made the man angry and ran away.
Unfortunately, Starz still doesn't recognize its own value, and hangs on to money for betrothal gifts that are not in line with market rules. Until the girl becomes a leftover, she has to lower her prices all the way just to marry a reliable family.
If we had known today, why bother in the beginning?
Li Rui hesitated and said, "I'm afraid you won't be able to accept the number I told you."
"Say it," Albrecht encouraged.
"Forty million magnesium yuan." Li Rui said with a smile.
Albrecht's smile froze on his face. Li Rui was afraid that he would suddenly run away, so he quickly took half a step back.
Albrecht took a long breath, like a drowning man who had just been fished out of the sea, squeezed out a miserable smile and said: "Li, this price is too low. If it is this price, why should we
Do you want to continue cooperating with Netflix? I think you still don’t understand the content of Starz’s library. We have licenses from Disney and Sony, which are very valuable and can definitely help..."
Li Rui waved his hand to interrupt his boasting, and said in surprise: "Don't you know it yet?"
"What do you know?" Albrecht was stunned.
Li Rui looked around, lowered his voice and said: "I heard that Netflix is contacting Disney, hoping that Disney will end the licensing relationship with Starz and instead license it directly to Netflix, and they have offered a price that is very exciting for Disney!"
Albrecht was taken aback, and beads of sweat instantly appeared on his forehead: "Li, don't make such a joke!"
Li Ruidao: "I never joke about this kind of thing."
Albrecht looked horrified: "Where did you get the news?"
"I can't disclose the source of the news, I can only say it is absolutely true. Maybe Disney will come to you after a while." Li Rui said, "I'm sorry to say this, but there is no more Disney's film source and starz's film library.
It has definitely lost a lot of its appeal.”
Li Rui is not talking nonsense. Disney and Netflix did this in the previous life and severely cheated Starz.
In the early days of the online streaming industry, large companies such as Sony and Disney packaged and licensed content to Starz, and Starz only reached a low-priced five-year long-term contract with Netflix. They did not realize the huge value space and potential of this market.
Development speed.
When Netflix grew rapidly, not only Starz, but also Disney, the source of content, became red-eyed and began to recalculate the price of original content.
It can be said that both Disney as a content producer, starz as an intermediary, and Netflix as a channel provider are all looking for content and trying to control the pricing power of content.
After the negotiation between Netflix and Starz broke down in the previous life, Netflix found another way to skip Starz and go directly to Disney, offering a pretty good price, which made Disney make a wrong judgment and terminate the licensing cooperation with Starz.
It has reached a multi-year content licensing agreement with Netflix, and all its movies will be released on Netflix after the theatrical release period.
This has created the biggest disruptor in the film industry, and will also cause huge obstacles for Disney to develop its own streaming business in the future. All the small gains made in the past will have to be repaid tenfold and a hundredfold in the future.
Albrecht is so panicked because what Li Rui said is very likely to be true. With Netflix's usual way of doing things, it is really possible to do such a thing!
If Netflix and Disney get rid of the middleman Starz and join forces directly, they can greatly reduce the intermediate costs, which will be of great benefit to both of them.
Chapter completed!