Capítulo 535: Chapter 535: Online Bookstore Amazon
[Chapter 600: Online Bookstore Amazon]
Jeff Bezos, only 33 at the time, was still quite young when Arthur met him in the cafe inside the Galaxy building.
"Mr. Smith, you're interested in investing in Amazon?" Jeff Bezos seemed puzzled, after all, Amazon was just a small online bookstore at that point.
Arthur sipped his coffee. "I've always found the internet fascinating. Recently, a few novels published by Galaxy caught my attention. It led me to discover Amazon, and after researching your company, I thought it looked promising."
Jeff Bezos smiled slightly. "So, Galaxy is looking to expand in the publishing business?"
Arthur shook his head. "Is Amazon limited to selling books online? Before long, MGM's movies Twister and Independence Day will launch on DVD. You should understand that DVDs represent a revolution for movies. Compared to videotapes, they're significantly cheaper."
Of course, Jeff Bezos wouldn't restrict Amazon to selling only books online; videotapes and DVDs were also high on the list of products.
"Currently, videotapes are mainly rented, and if DVD prices drop, the sales will surely soar."
Arthur nodded. "With Galaxy's support, many things will become simpler. The home entertainment sector has a sizeable market. And right now, Viacom's Blockbuster controls a significant portion of that market, which is a competitor for Galaxy."
Jeff Bezos looked at Arthur. "Mr. Smith, may I ask, does the future of DVDs really mean they'll replace videotapes?"
"Clearly," Arthur said, holding up two fingers. "In the beginning, the videotape market was mainly a competition between Sony's Betamax and JVC's VHS formats. Then, Japan's Funai Electric developed a CVC format, but it couldn't shake the market from the other two companies; it was quickly phased out. But why did Sony's Betamax, which clearly offered better quality and clearer images, lose to JVC's VHS?"
"Price -- VHS was simply cheaper, which was the primary reason for market dominance," Jeff Bezos understood this, realizing that while Betamax still existed, it was on a much smaller scale compared to VHS.
"Exactly, price," Arthur chuckled. "The advantages of DVDs are undeniable -- they're easy to store, transport, and they're cheaper too. That's an indelible advantage."
Arthur then glanced at Jeff. "Currently, Amazon's stock price hovers around $24, and Galaxy is proposing to acquire 20% of Amazon's shares at $30 per share, which means an investment of $146 million."
What Arthur meant was that Galaxy would pay a 25% premium to acquire 20% of Amazon.
"I need to discuss this with the board," Jeff Bezos explained.
"Of course."
...
Later that evening, at the Midtown Club Hotel in Manhattan.
Monica Bellucci, just returning from a promotional event for Tomorrow Never Dies, stood by the window with Arthur, admiring the night view of New York.
"Now, the media is calling you one of the sexiest Bond girls," Arthur said, planting a kiss on Monica Bellucci's cheek. Her sexy halter dress showcased Monica Bellucci's incredible figure.
Monica Bellucci smiled, leaning tightly into the man's embrace, then turned and kissed him passionately. Arthur returned the kiss eagerly, his hand roaming to caress the voluptuous curves of her 36D -- a true femme fatale!
"However, the Malaysian actress in this film stands out with her clean and crisp action sequences, portraying a completely different vibe. She's a remarkable Bond girl," Monica remarked, while she embodied the beauty and allure in Tomorrow Never Dies, and Michelle Yeoh partnered with James Bond in action.
"You can't compare. She had already starred in many action films in Hong Kong and is recognized as an action star," Arthur noted, knowing well that Michelle Yeoh had not practiced martial arts until she entered the entertainment industry.
Then, Monica Bellucci brushed her fingers across Arthur's face. "Darling, I'm heading to the Cannes Film Festival soon. Are you coming too?"
Arthur shook his head. "I think I'll be heading to Asia for a while."
"Yes, Asia seems to have attracted quite a bit of attention lately," Monica was well aware of the intensifying Southeast Asian financial crisis.
"That's why I need to keep an eye on things," Arthur reasoned, revealing one of the main reasons he was often in New York.
...
By the end of the month, after three weeks in theaters, Tomorrow Never Dies had already grossed over $90 million, and overseas releases were beginning to push it past the $100 million mark.
"Are you proposing a 50% premium?" In the conference room at Galaxy's Times Square building, the Amazon representatives hoped to acquire 20% of the company's shares at $36 each.
At $36 per share, the asking price for 20% of Amazon's shares would be $175.2 million.
Arthur didn't dwell on it long before nodding in agreement.
However, he decided that Galaxy would team up with California Pacific Investment Company to jointly purchase 20% of the online bookstore Amazon at the proposed price of $175.2 million. Galaxy would hold 15.1%, with Arthur's private investment company owning 4.9%, contributing proportionally.
...
After returning to his office, Tom Rothman reported to Arthur, "Both Twister and Independence Day are among the first major films to issue DVDs, and they're getting considerable attention."
Arthur shook his head. "It's tough. Right now, the penetration rate of DVD players isn't high enough; the rental market for videotapes still constitutes the bulk of home entertainment revenue. It will take time, but as DVD player brands multiply, their prices will also drop."
Tom Rothman laughed. "Yeah, Blockbuster's stock has tumbled quite a bit mainly due to the impact of DVDs on the videotape market."
It was an unavoidable outcome; the cost of DVDs simply outstripped that of videotapes, and people understood that videotapes would inevitably be replaced by DVDs. Compared to easily storable DVDs, videotapes were considerably more delicate. Although Blockbuster held significant market power in videotapes, DVDs didn't require much specialization.
Every supermarket, convenience store, and mall could sell and rent DVDs. Although Blockbuster had a vast number of franchises, it would eventually become a major player in DVD sales and rentals;
But at least in terms of importance, Blockbuster wouldn't hold the same sway as during the videotape era, and a drop in market value was unavoidable!
*****
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