I am Hollywood

[Chapter 1194: The Release Schedule Dilemma]

The opening weekend box office for Gravity had already surprised everyone, but when the second week's numbers were released, both North America and overseas, the entire film industry could no longer remain calm.

From November 26 to December 2, Gravity's second week saw a remarkably low drop of just 5.1%, bringing in $138.63 million. In just half a month, Gravity had already made a staggering $284.69 million at the North American box office.

As of December 2, the only films from 1999 that grossed over $280 million in North America were Iron Man and The Mummy 3. Gravity had swiftly secured the third spot on the North American annual box office chart after just two weeks.

Moreover, with Gravity's unstoppable box office trend, which had crushed Iron Man and The Mummy 3, it was only a matter of time before it claimed the title of annual box office champion.

Simultaneously, the overseas markets where Gravity had recently opened were also reporting impressive figures.

Being the first major release in 3D and IMAX formats, many overseas theater operators had adopted a wait-and-see attitude. Firefly Group managed to open 1,630 3D screens and 63 IMAX screens simultaneously overseas.

Although 100 standalone IMAX theaters had already been established, 37 additional IMAX locations were temporarily closed to align with varying market schedules.

Nevertheless, the fewer than 1,700 overseas screens that opened in tandem brought Firefly Group $97.3 million in their first week.

Additionally, as the positive word-of-mouth spread, Gravity's overseas box office enjoyed a reverse drop of 8.3% in its second week, adding another $100.53 million.

In just two weeks, Gravity's overseas total reached $202.67 million, with a combined global total of $487.36 million!

In half a month, $487.36 million made all noteworthy box office records in Hollywood appear insignificant next to Gravity. Even Titanic, just three years prior, hadn't seen such a feverish box office performance.

Many media outlets had already begun speculating whether Gravity could surpass Titanic's all-time global box office record of more than $2 billion and become the ultimate box office champion.

In light of Gravity's success, no one in the industry could question the commercial prospects of 3D and IMAX films anymore.

As the year came to a close, a large number of executives from production companies across North America and overseas, along with cinema managers and even the lower-level suppliers of film projection equipment, began congregating in Los Angeles, eager to stake their claim in this new transformation of the film industry.

However, as the movie industry began to prioritize 3D and IMAX films like never before, many started to realize that Firefly Group had gained absolute control over this industry revolution, from lower-tier projection equipment to top cinema chains.

...

In Burbank, inside a screening room at Warner Bros., over a dozen executives from Warner Bros., Universal, Paramount, and other industry players were watching a 3D film segment.

The sample was a clip of under three minutes from Universal's The Mummy 2, converted by the Shadowlight's 3D team, and presented on equipment that Shadowlight had assembled, utilizing dual-machine polarized 3D technology.

However, once the clip ended and the lights came up, the expressions on the faces of several industry leaders in the room were nearly devoid of emotion, and the overall atmosphere felt quite oppressive.

Polarized 3D technology wasn't exactly groundbreaking; similar attempts had been made in the industry as far back as 1922.

Yet just like comparing a five-star chef to an ordinary person who couldn't cook, the results were vastly different. In contrast to the dazzling visuals produced by Firefly Group's RealD technology, the three-minute sample had to be described as trash.

Richard Parsons removed his 3D glasses and adjusted the regular glasses he had put on over them. Though he'd worn them for only three minutes, he felt unusually uncomfortable.

Recalling how a month prior, he and Michael Eisner attended a screening of Gravity, where they experienced wonderfully crafted 3D glasses that were friendly to the near-sighted, Richard Parsons realized just how far ahead Firefly Group had left them.

After a moment of silence, Richard Parsons, as the host, spoke first, waving to dismiss the unnecessary attendees.

Soon, only a few individuals remained in the room, including Michael Eisner, Tom Freston, and Autodesk CEO Carol Bartz.

After assessing the expressions of the remaining attendees, it was clear that Michael Eisner seemed distracted, while Tom Freston appeared to be deep in thought. Richard Parsons turned to Carol Bartz, asking the pressing question on his mind, "Bartz, given our current foundation, how long do you think Autodesk will take to develop conversion software that rivals Firefly Group's 3D effects?"

Carol Bartz, a middle-aged woman with sharp hair exuding a competent aura, answered without hesitation, "If it's just the software, Autodesk can get it done in six months. But Richard, you need to understand that you're facing more than just a software issue. Firefly Group has built an entire ecological system around 3D films. If you can't unite to break through each other's ecological barriers, Hollywood will only be left to Firefly's terms."

Since the incident in May, Sherry Lansing had been forced out, and Tom Freston, acting as Co-President of Viacom, had become the temporary CEO of Paramount Pictures. Surprisingly, that arrangement had continued for over six months.

During that time, Paramount had been searching for a suitable CEO for their studio due to well-known reasons.

Transitioning from group president to subsidiary CEO had significantly diluted Tom Freston's authority, which had only intensified his resentment towards Firefly Group.

Upon hearing Carol Bartz's remarks, Tom Freston couldn't help but retort, "While we've fallen behind a bit, we all possess the resources that Firefly Group has, and I don't believe it's as dire as you've suggested."

Listening to Tom Freston's obviously emotional response, Carol Bartz countered, "If Firefly Group were to invite Paramount to join the RealD and IMAX repository of films, would you decline?"

Tom Freston hesitated briefly before shaking his head. "No, we wouldn't."

Carol Bartz continued, "Then conversely, if Warner, Universal, and Paramount teamed up to launch a brand-new 3D screening system, do you believe that Firefly Group would refuse to provide you with content?"

Tom Freston's lips moved, but he didn't respond.

However, the answer was evidently clear.

To preserve its own interests in RealD and IMAX systems, Firefly would absolutely refuse to supply content for any new systems launched by Warner and the other studios.

Thus, the situation became increasingly one-sided.

Warner, along with other Hollywood producers, wanting to share the profits from 3D and IMAX films, would have to succumb to the Firefly system. In contrast, having already secured a significant advantage, the Firefly system wouldn't permit the emergence of any competing standards in 3D and IMAX.

Noticing the expressions of the three men beside her, Carol Bartz suddenly felt a twinge of regret. She had hoped to encourage these Hollywood moguls but had inadvertently quashed their enthusiasm instead.

As the top-tier design software company in the industry, Autodesk's biggest strategic misstep in recent years had been their initial refusal to collaborate with Firefly Group on developing CG software.

Due to that oversight, the sectors of film visual effects related to CG production, image rendering, and solutions had essentially been monopolized by Digital Domain under Firefly Group.

Years ago, Firefly Group even established Firefly Software Company to attempt to commercialize their in-house software.

However, as the market for design software is inherently limited and cannot compare with the vast sphere of essential operating systems, even Autodesk, the world's largest design software company, barely earned $2 billion in annual revenue, with net profits often under $500 million.

Firefly Group's film visual effects software would only see significantly lower profits from commercial operations. Yet controlling Hollywood's entire visual effects production chain could yield tremendous potential advantages for Firefly Group.

Consequently, Firefly opted to abandon their original strategy, shifting towards a relatively closed commercial licensing model, inadvertently gaining control over a considerable portion of Hollywood's visual effects production, making the potential benefits far surpass simple software sales gains.

The end result was that, from the stunning Mercury Man in Terminator 2 to the present day, nearly all of Hollywood's best CG effects films came from a few companies under Firefly Group.

Nonetheless, now that they had come to this realization, Autodesk had no intention of simply relinquishing this market.

Gathering her thoughts, Carol Bartz addressed Freston and the others again, "While the ecological barriers erected by the Firefly system are formidable, I believe you must breach them. Otherwise, Warner, Universal, and Paramount will forever watch as the Firefly system continues to capture the most lucrative segments of Hollywood's film industry.

To my knowledge, last week's North American box office totaled $196 million, but Gravity alone had divided $138 million of that, accounting for 70%. That's already a very alarming signal."

Finishing her point, none of the three showed the upbeat response that Carol had hoped for. Clearly, those holding high positions in Hollywood's major companies were not easily swayed.

Richard Parsons stated, "Bartz, I think we should focus directly on the specific measures we need to take."

Carol Bartz replied, "It's straightforward. First, the three of you must abandon short-term profit and loss considerations and shake off as much influence and control from Firefly as possible."

"We've always been trying to do that," Tom Freston said. "Otherwise, we wouldn't all be gathered here today."

"But you can actually do a lot more. For instance, in the case of visual effects, Autodesk's software is already incredibly adept; if you can entirely break away from technical dependency on Digital Domain, more opportunities for technical advancements and optimizations would open up, freeing you from the limitations imposed by the Firefly system in terms of effects."

Richard Parsons interrupted Carol Bartz, saying, "Bartz, we really should discuss the issues regarding 3D films today."

"The reasoning is the same, isn't it?"

...

Michael Eisner listened to the discussions, arguments, and negotiations among the three and suddenly felt a sense of disinterest.

The strength of the Firefly system lay in Eric Williams' absolute control over the companies within it.

Even 20th Century Fox had followed Firefly Group's interests almost without question. When Eric Williams announced a ban on Blockbuster, a subsidiary of Paramount, 20th Century Fox quickly issued a statement in alignment with the decision.

However, for Warner, Universal, and Paramount, fully uniting to counter the Firefly system was almost impossible.

They spent the entire morning deliberating and, although they put forth some proposals, they ultimately made no decisions, as Michael Eisner was not in a position to call the shots.

After having lunch together, Michael Eisner said his goodbyes and climbed into his car.

As soon as his vehicle left Warner Bros., Michael Eisner dialed Jeffrey Katzenberg's number.

Instead of spending time with a few superficial allies, he preferred to reach out to those who could genuinely offer him benefits.

Yet Katzenberg was not at the Firefly Group headquarters in Burbank, but rather at the Playa Vista Firefly Film Studio.

...

With the tremendous success of the 3D and IMAX cinemas, Katzenberg had been remarkably busy in recent days.

After having lunch with Richard Gelfond, head of IMAX, just earlier, they were discussing business affairs while taking a walk around the studio when Katzenberg received the call from Michael Eisner.

Following a brief chat with Eisner, during which they planned to meet for dinner the next evening, Katzenberg then turned to Richard Gelfond and said, "You can let those IMAX theater operators know that there's definitely no copy of Gravity available right now, and making the 2D-IMAX version won't be feasible in time. However, next month, the company can provide 2D-IMAX copies of The Lord of the Rings, but the split has to be 70% for Firefly; that's non-negotiable."

With Gravity's box office explosion, IMAX theaters in museums and science centers across North America and overseas began to express interest in sharing in those profits.

However, aside from the brand-new IMAX theaters owned by Firefly Group, which could choose to show either 2D or 3D formats, most existing IMAX screens still only showed 2D films. Moreover, many institutions with IMAX screens were not primarily profit-seeking, and the initial distribution plan had led Firefly Group to exclude these IMAX theaters.

Now, however, given the strict demand for tickets at Firefly Group's IMAX theaters, the company had to reconsider these resources.

Nonetheless, this was not about Gravity; it was about next month's upcoming release of The Lord of the Rings.

Given Gravity's strong box office trajectory, it wouldn't be possible to free up many 3D and IMAX theaters in the short term, and the first installment of The Lord of the Rings was facing serious scheduling issues ahead of its release.

*****

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