[Chapter 881: That Works Too]
On Sunday morning, Eric called Chris in Tokyo to catch up on the situation in Southeast Asia. Later that morning, he headed to Century City to meet with Harvey Weinstein. After entrusting FFM to Weinstein for management, FFM's headquarters was conveniently established near the Fox Century City studios.
Last weekend, on June 15th, The Sopranos completed its first season after thirteen weeks of airing. Thanks to Harvey Weinstein's expert handling, the show's reputation spread like wildfire. Starting with a solid premiere that attracted 1.76 million viewers, the ratings soared, and by the time of the season finale, viewership had jumped to 3.25 million -- almost doubling its debut numbers.
The influence of The Sopranos further boosted FFM's visibility, leading to a significant increase in subscription numbers. By the time the first season wrapped up, FFM TV's subscriber count had approached 6 million. Before the show's launch, the network had only around 4.5 million subscribers. Given its low starting point and the strong backing from three major media giants, it was widely expected that FFM would rapidly grow like a seedling sprouting in fertile soil. However, in just a single quarter, the network added close to 1.5 million new subscribers, a growth rate that was still astonishing, especially compared to HBO, which added fewer than 500,000 subscribers in the same timeframe.
From the inception of FFM TV, Eric had intended to compete with HBO. Therefore, while providing substantial support for FFM, he remained keenly focused on the network's operations. Since the network launched last September, Eric had participated in two or three operational meetings a month.
After a brief adjustment period, Harvey Weinstein quickly showcased his exceptional capabilities in managing the television business. The recent quarter saw a surge in FFM's subscriber count; realistically speaking, The Sopranos could only be credited with about 30% of that growth, while the remaining 70% came from Weinstein's outstanding commercial acumen.
Just like his PR operations for Oscar-contending films, once The Sopranos had established itself as a hit, Weinstein utilized every available channel -- newspapers, television, and the internet -- to deepen the show's reach. Over the three-month airing period, each episode generated media buzz, and by the end of the first season, many viewers had firmly labeled The Sopranos as a "cult classic." Accordingly, FFM's brand had become more ingrained in the public's mind, leading to a significant influx of new subscribers.
Interestingly, Weinstein's operations with FFM bore a striking resemblance to the early days of Netflix. After 2013, the mere mention of Netflix led many to instantly think of House of Cards. While House of Cards undoubtedly stood out as a remarkable show, like The Sopranos, both series primarily acted as catalysts; the real success of Netflix hinged on the company's sharp business strategy. Naturally, just as some chemical reactions require a catalyst to proceed, Netflix wouldn't have experienced its surge from 26 million to 40 million subscribers within two years without House of Cards. Likewise, although The Sopranos didn't single-handedly initiate FFM's success, it certainly could not be overlooked.
However, behind the soaring subscriber count loomed rapidly increasing costs for FFM. Despite the backing of three media giants, FFM still functioned as a stand-alone company and had to cover its own expenses; neither Firefly nor Fox could provide free movie rights for FFM.
To compete with HBO, FFM not only bundled a package of content in its early days to fill airtime but, in addition to producing The Sopranos, sought to introduce a new film weekly. By the end of the year, FFM's spending on content was projected to exceed $300 million, with its advertising budget nearing $200 million. When factoring in other operational costs, FFM's total operating expenses would reach $700 million for the year.
To attract new subscribers, FFM also implemented numerous discount promotions, significantly lowering the average subscription cost. Although the subscriber base was growing rapidly, FFM projected its total revenue for the year would not surpass $500 million -- around one-third of HBO's annual revenue. This also implied that FFM would incur losses of at least $200 million for the 1997 fiscal year.
In fact, had Eric been less ambitious, in light of the overall boom in the cable TV industry, FFM could have focused on profitability by significantly slashing content and marketing budgets. Even just with the current subscriber base, the network could have turned a profit and thrived comfortably. However, doing so would have meant losing the chance to become a leading pay cable network. In the forthcoming streaming era, FFM could have risked becoming one of the first traditional cable platforms to get axed.
Eric was determined not to let that happen. It was either all-in or nothing; he would push for the best possible outcome -- even if the final result wasn't perfect, he wouldn't allow FFM to settle for mediocrity from the start.
Moreover, with the averaged annual loss of $200 million, when divided according to each partner's share, it would only amount to several tens of millions of dollars. In recent years, everyone had been doing quite well; spending a few tens of millions on a high-potential pay cable network wasn't unmanageable. Yet Eric also understood that once the internet bubble burst, cable operators who had benefited from the new tech boom would face tough times. At that point, even a loss of tens of millions of dollars each year would be much harder for them to swallow. Eric anticipated being able to buy back the 20% stake originally divvied up among those cable operators when the time came.
With FFM's current growth rate, by the end of 1997, the total subscriber count would surpass 8 million, and there was a strong possibility of breaking 10 million subscribers the following year. However, after exceeding that milestone, the rapid growth would likely slow down, and FFM would face stiffer competition from HBO.
...
In the FFM headquarters conference room, after listening to Harvey Weinstein's report, Eric said, "Harvey, doesn't your contract last for five years? If you can grow FFM's subscriber count to 20 million by the end of that term, I can promise to increase your option share by 50%."
Weinstein returned to his seat from the demonstration area, chuckling, "Eric, your offer is indeed tempting, but it's not an easy task. Neither Firefly, News Corp, nor MGM has a nationwide cable network like Time Warner; the operators in FFM are merely minority shareholders, so their support for the network won't be particularly vested. Time Warner's cable network would surely sideline FFM, while Tele-Communications is eager to build their pay cable network, Starz. Cablevision is very close to Viacom, and all these factors will limit FFM's further expansion. I believe if FFM reaches around 15 million subscribers, it will hit a bottleneck. To push past that, you three must acquire a substantial national cable operating system to support further development. Otherwise, I can only assure that I will develop FFM's subscriber base to 15 million during my tenure."
Weinstein's contract began last July and was set to expire in July 2001, spanning five years. This period coincided with the peak of the new tech wave, and while the internet bubble would likely have burst by the time Harvey's contract expired, Eric couldn't make hasty decisions. Naturally, Eric also couldn't purchase a cable company before the internet bubble burst -- that would simply be throwing money away. Given these circumstances, Eric couldn't meet Harvey's request.
Seeing Weinstein's hopeful expression, Eric shook his head, saying, "I don't have any plans for that in the next few years, but you can discuss it with Rupert."
Weinstein shrugged, having already approached Murdoch about the topic. News Corp had satellite television and cable networks, but they were smaller in scale. Furthermore, News Corp had been focusing more on developing its television stations in recent years, somewhat sidelining its basic cable operations.
Without further ado, the conversation shifted to other topics, and the meeting continued until nearly noon, when it finally wrapped up.
As Weinstein collected the files on his desk, he glanced at Eric's assistant, Peter Rich, who had been sitting next to Eric all along, and with a harmless smile, said, "Eric, how about we grab lunch together afterward?"
Eric smiled back, "Of course. Even if you hadn't brought it up, I would've made you buy me lunch."
Eric had come over not only to join the recent operational meetings but also to formally introduce his assistant, Peter Rich, to Harvey Weinstein. Earlier this year, Eric had mentioned this to Weinstein, so he was well-prepared. When FFM was first established, Eric hadn't heavily involved himself in personnel decisions, so bringing in an additional manager didn't feel significant at this stage.
...
At a nearby restaurant in Century City, most of FFM's management team had dispersed. In the private dining room, there were four people: Eric, Peter Rich, Weinstein, and Brad Grey, FFM's Vice President and head of the production department. As for Weinstein's brother Bob, he was still focused on Miramax and hadn't taken a position with FFM.
Eric initially disagreed with FFM's acquisition of Brad Grey's production company, who had previously been Weinstein's assistant. However, Weinstein eventually brought Grey onto the company as head of the programming department and bought the company for $5 million. This transaction wasn't substantial and was even less than the costs associated with acquiring the rights to a popular movie, so Eric didn't impede it too much.
After ordering lunch, the group discussed The Sopranos' plans for the upcoming Emmy Awards in September. Weinstein then brought up Peter Rich's placement: "Peter, I want you to start in marketing as Marc's assistant. Marc Levinson, as I mentioned this morning, is the marketing manager. Spend some time getting familiar with the role, and if you find another position that interests you more, I can make adjustments."
FFM was still relatively small, with fewer than 200 employees. As a pay-cable network, its core functions depended on film acquisitions, program production, and brand marketing. Once FFM's original content expanded, they might add a rights operation department, but other departments like finance and HR, while important, wouldn't critically impact FFM's growth. Recently, however, during FFM's rapid expansion, the brand marketing department had become increasingly vital. Joining that department provided a larger career scope.
Although Eric had previously discussed it broadly with him, hearing Weinstein formally present the opportunity made Peter Rich a bit excited. Being the assistant marketing manager was a stepping stone toward becoming FFM's Vice President. While Peter might have looked good at Eric's side, this opportunity truly hinged on a position with a broader scope for growth.
After a brief moment of excitement, Peter Rich nodded, "Thank you, Harvey. I will do my best to excel in this role."
Weinstein kept his smile, glanced at Eric, and asked, "So when do you plan to start? I'll make the arrangements."
Peter Rich turned to Eric for confirmation.
Eric set his silverware down, grinning, said, "Next month. I'm heading to England soon, and it's too short-notice to switch people. Of course, Peter, when you come back from the UK, you can request a month off. I remember you haven't taken a break since you started working for me, right?"
Peter Rich, a little urgent, shook his head and said, "That's not necessary. I can dive right into work."
Eric nodded with a smile, "Of course, it's your choice."
Weinstein laughed as well, "Actually, young people should be like that. Look at us, it's a Sunday, and we're all still working. I have to admire that Eric can manage it. If I had your kind of money, I'd definitely be hiding on some private island enjoying life."
Eric shrugged and chuckled, "Well, I guess my current vibe seems out of place to you all."
After their jovial exchange, they finished lunch, and then Weinstein asked, "Eric, the first three episodes of Prison Break have been completed. Do you want to come by this afternoon to have a look at them?"
"I have other commitments this afternoon; I've already delayed it for two weeks," Eric shook his head and replied, "How about you send a sample copy to Liberty City? I'll watch it when I find time."
"Sure thing," Weinstein nodded, then gave Eric a heads-up, "But Eric, I don't think this series is too outstanding; it's definitely not on par with The Sopranos."
"Of course. The quality of any production company's work can vary, and I never expected every series produced by FFM to be on the same level as The Sopranos," Eric remarked.
The overall strength of a television network has always depended on its consistent series quality, preferably sustained by one or two hit shows -- that's the ideal scenario. It's unrealistic to produce only top-tier series, and even if that were achieved, raising audience expectations could lead to an overall perception of mediocrity.
Eric's hope for Prison Break was simply that it exceeded the average standard.
...
After parting from Weinstein and Brad Grey, Eric drove to Trousseau Manor, dismissed his assistant and bodyguard, and walked into Drew's grand house.
In the living room, Drew was sprawled over a glass coffee table, poring over various airplane materials and blueprints. A selection of papers was strewn across the carpet and couch, with the twins kneeling on either side of the table, quietly advising her.
Noticing Eric walk in, Drew waved a piece of paper excitedly, her tone filled with more enthusiasm than distress as she exclaimed, "Eric, it's so messy! I didn't realize buying a plane could be so complicated!"
Eric walked over, casually sitting on the carpet beside her. As he took the paper from her and began to look through it, he told Natasha nearby, "Could you tidy up a bit before the guests arrive?"
"Sure thing, master," the two girls replied and quietly started to clean up.
Focusing on the blueprints, Drew leaned closer and said, "Eric, I suddenly don't want to buy the 777 anymore."
"Oh really?" he replied.
"The Boeing 777 has two engines, you know. I heard that 747's four engines are safer, which is why the presidential jet is a 747."
Eric chuckled, "If you're worried about that, then flying isn't an option."
"Hehe, I'm just afraid of dying," Drew giggled.
"Then let's go with the 747," Eric smiled, following her train of thought. Recently, he had also reviewed plenty of aircraft materials, and the 747's four-engine design was primarily due to the inadequate power of aviation engines at the time.
Since the Boeing 757, due to advancements in aircraft materials and engine design, Boeing had started to favor a twin-engine configuration. The notion that four engines were safer than two does hold some truth. However, in reality, should all engines fail during a flight, an aircraft wouldn't simply drop out of the sky; it would continue gliding, and with proper handling, could land safely. Moreover, simultaneous engine failure on both sides was far less likely than an aircraft being struck by lightning, which was still a fairly common occurrence during flights. Even if one engine were to fail, it wouldn't significantly affect flight performance; in some cases, pilots might even intentionally shut down one engine.
"But the 777 is bigger! I still want to create a party plane!" Drew implored.
"Then let's go with the 777," Eric smiled.
"Wow, your tone is so dismissive! Be careful, I might just end up buying both!" Drew teased.
Eric nodded again, "That works too."
*****
https://www.patreon.com/Sayonara816.