After a month of screening in theaters, the heat around "The Blair Witch" gradually faded. Like all news events, it couldn't hold the public's attention indefinitely. Most people have a fickle interest, especially considering the constant influx of attention-grabbing news from Hollywood and the film industry. "The Blair Witch" was becoming a thing of the past.
After earning another $5.21 million in its fifth weekend, the daily box office dropped to around $1 million.
However, with a cumulative North American box office of $138.9 million, "The Blair Witch" was steadily approaching the $150 million mark.
Box office revenue was just the beginning for this film. Offline operations were also being prepared.
DVD pressing and videotape production had already begun. Ronan planned to release them in time for Halloween. The offline distribution department had long-standing partnerships with chain stores like Walmart and Best Buy. Embassy Films had been able to sustain itself for over a decade, and videotape revenue was a crucial guarantee.
Ronan was willing to spend a considerable amount of money at this point to acquire Embassy Films because he saw more than just the capability for theatrical distribution; he also saw the well-established offline distribution channels of Embassy Films.
Since the advent of DVDs, film distribution had ceased to be solely about theatrical releases.
No one understood this better than Ronan. Hollywood was on the verge of a DVD explosion in the next decade, to the extent that one could even say DVDs were keeping Hollywood studios afloat.
Ronan took the time to discuss with Garcia and the offline distribution director, Terry, for a day. Embassy Films planned to get ahead in the DVD market, establishing long-term partnerships with several DVD pressing factories.
Compared to the traditional videotape industry, DVDs and related discs undoubtedly had more potential. The production cost for a standard DVD, even in a high labor cost region like North America, was only around 50 cents per disc, with the cost of distribution to terminals ranging from $3 to $5.
The retail price of legitimate DVDs generally hovered around $20. Deluxe sets, commemorative editions, and limited editions could easily go for $100 per unit.
Furthermore, the picture quality of DVDs was generally superior to that of videotapes.
Hollywood was on the brink of a frenzy of blockbuster films, with the biggest selling point being special effects. It was extremely challenging to showcase these effects using traditional videotapes.
For "The Blair Witch," there was almost no room for merchandise. Apart from videotapes and DVD discs, television broadcasts were another major source of offline revenue.
Embassy Films had also begun preliminary discussions with television networks regarding the first broadcast rights for "The Blair Witch."
Hollywood films typically granted broadcasting rights to television networks in two main ways: either by selling the rights outright for a certain number of years or by charging per airing, with the first broadcast fetching the highest price.
For example, the first broadcast rights for Tom Cruise's "Mission: Impossible" fetched a whopping $8 million, with subsequent airings costing nearly $4 million each.
Airings could also be bundled together. Film studios would package two or three blockbuster films along with some ordinary films and hard-to-sell flops, selling them as a broadcasting rights package to television networks.
This practice was quite common and allowed for the recuperation of funds from the flops while effectively diluting the profits from the blockbusters.
During the acquisition process, due to Ronan's limited funds, Embassy Films' film library was divested and ultimately acquired by Lionsgate. Currently, Embassy Films did not hold the rights to any other films. Ronan tentatively planned to have Sahara Entertainment transfer several videotape films for which TV broadcast rights had not been sold to Embassy Films. These films, along with "The Blair Witch," would form a broadcasting rights package to be sold to television networks.
He was responsible for providing the plan, and the specific operation would be handled by the offline distribution department of Embassy Films.
Fortunately, "The Blair Witch" did not involve profit sharing with actors or other parties. Relative Theory Entertainment had bought all the rights in one go, so there was no need to worry about sharing profits or intentionally diluting the pure profits of the film.
Offline operations were on track, with dedicated personnel handling all aspects of the work. Ronan's attention had shifted to other matters, with "Death Comes" already in the editing stage, and Jessica Felton had joined the crew to edit the film.
The editing of "The Ace Agent" was personally handled by Paul Gringlass.
Of course, all final decisions were made by Ronan.
The release dates for these two films had also been determined, with "Death Comes" scheduled for early December and "The Ace Agent" set to open in mid-November, both to be distributed by Embassy Films.
"I plan to hold a premiere for 'Death Comes.'"
In a relatively small meeting room, senior executives from Sahara Entertainment and Embassy Films gathered, with Ronan sitting at the front of the long conference table. "Embassy will be responsible for planning."
Garcia spoke frankly, "We've never held a premiere before and have no experience."
For over a decade, Embassy Films had been buying independent small productions from overseas for distribution in North America. This high-profile promotion method, such as holding a premiere, was something they had never done before.
Ronan hadn't held a premiere either and was worried about messing up the first one. He said, "Let's hire an agency to handle it."
There were many similar agencies in Hollywood that could provide comprehensive services for films, including premieres and even editing promotional trailers.
A classic example of this was Warner Bros.' promotion of "Suicide Squad" in a similar manner. The film was shot poorly, and Warner Bros. realized this early on. They hired a professional company specifically for promotion, which condensed the film's few highlights into trailers. The result was a sensational response, and the film's box office exploded in the first week.
Even though audiences who watched the film found that the trailers were the only highlights, resulting in widespread criticism, it didn't stop "Suicide Squad" from achieving tremendous commercial success.
Thomas, the head of theatrical distribution, then asked, "Are we doing a premiere for 'The Ace Agent' as well?"
"No need," Ronan vetoed directly. "The cast of that film doesn't have any influence. Holding a premiere won't attract much attention."
The true cost of this film was only $10 million, and all the actors were B-listers from Hollywood. Spending hundreds of thousands of dollars on a premiere wouldn't be cost-effective.
Ronan then said to David Bilja, the head of marketing, "The promotion for 'The Ace Agent' needs to be targeted, focusing on minority groups, with preliminary promotion costs kept under $3 million. The main focus of the promotion will be 'Death Comes,' and I'll give you an $8 million promotion budget for that."
With the tremendous success of "The Blair Witch," the entire Embassy Films team had great trust in Ronan's abilities. David Bilja replied, "I'll give you a detailed plan next week."
Ronan thought for a moment and then said, "I have an idea for the promotion of 'Death Comes.'"
All eyes in the meeting room turned to Ronan.
"Let's spread rumors on the internet that 'Death Comes' is based on a true story," Ronan proposed. While still within the realm of viral marketing, it was definitely more conscientious than the plan for "The Blair Witch Project."
However, he felt it might not be appropriate, considering the magnitude of "The Blair Witch Project" debacle. Stimulating the audience's sensitive nerves with a similar approach might backfire.
Ronan quickly came up with an idea. "Robert, I'll assign this task to you. Find some cases of people escaping disasters, especially plane crashes, followed by unexpected deaths. Hand them over to the marketing department for hype."
Robert rested his chin on his hand. "I think I've seen such cases in a newspaper."
George Clint, who had previously worked in the media industry, chimed in, "There was a case in the seventies. Members of the Evansville University men's basketball team died in a plane crash. Only one player didn't join the trip due to illness, but he was hit by a drunk driver two weeks later."
As George spoke, a chilling feeling swept through the room.
Unaffected, Ronan continued, "Keep searching; there must be other cases."
Ronan then turned to George Clint. "When will 'Ace Agent' be done with post-production?"
"By early October at the latest," George replied.
"Keep a close eye on Paul Greengrass," Ronan asked his financial director, Mary. "How are our finances?"
Mary glanced at her notebook. "Once the North American box office share from 'The Blair Witch Project' comes in, our financial situation will significantly improve. We'll have enough funds for the promotion and distribution of 'Death Comes' and 'Ace Agent.'"
Ronan made a decision. "The promotional and distribution funds for these two films will still be borrowed from Embassy Films to Relativity Entertainment, with a distribution cut of 30 percent. No, make it 40 percent!"
The standard distribution cut in North America is 30 percent, but even within the same group of production and distribution companies, the distribution cut can be set at 40 percent.
It's a typical game of robbing Peter to pay Paul. Originally, the profits from the left hand would be shared with investors, but with the higher cut from the right hand, the profits from the left hand would naturally decrease.
"Is it just the box office share?" Garcia tentatively asked. "Shouldn't the promotional and distribution costs be calculated separately?"
As it turned out, everyone had a dark heart.
Ronan weighed the pros and cons, especially considering the possible impact from Abu Dhabi.
If it were just a private foundation, he wouldn't hesitate, but the Investment Bureau was, after all, an official institution of the United Arab Emirates, and he had some concerns.
A country, even an Arab one, had tremendous power.
Relativity Entertainment wasn't Warner Bros., a massive company with the strength and resources to turn a profit from everything, including box office receipts and merchandise, as evidenced by the "Harry Potter" franchise...
"Let's tentatively set the distribution cut at 40 percent," Ronan decided.
It was still early before the film's release; he would wait and see how things unfolded.