章 826: Chapter 827: Explosive News
[Chapter 827: Explosive News]
As a world-class financial center, Wall Street functioned like a giant capital distribution hub, where retirement funds, insurance companies, and investment funds from across the U.S. and abroad used investment banks and various exchanges as intermediaries. This influence even extended to controlling the U.S. economy and, by extension, the global economy.
The notion that Wall Street controlled the U.S. economy wasn't merely an exaggeration; most of the top 500 companies in America had their fate tied to Wall Street capital through public listings. The ability to penetrate the U.S. economy and even overseas economies to achieve control had almost become instinctive for Wall Street's capital forces.
Thus, in recent years, the rapid rise of Firefly Group, which had seemingly broken free from capital control, became all the more conspicuous against Hollywood, which was largely under Wall Street's influence.
For a company's shareholders, unless they harbored a speculative mentality, it was almost unheard of for any business to choose to go public and gradually relinquish control to Wall Street.
Eric admitted that he initially had a strong speculative mindset, but as Firefly's structure expanded and his personal perspective broadened, those initially restless thoughts faded away. Although he wouldn't easily let go of opportunities for quick profits, like the Asian financial crisis and the internet bubble, he never seriously considered taking Firefly Group public. As Firefly grew stronger, that idea became even less likely.
However, Wall Street clearly wouldn't back off easily in their attempts to penetrate Firefly Group. Pushing for Digital Domain to go public seemed to be an initial test by Wall Street.
Since they couldn't force Firefly Group to go public as a whole, they might try to gradually break it apart, slowly connecting it to capital markets. This, perhaps, was the strategy of some capital forces on Wall Street.
Katzenberg, who had been completely focused on the operations at Firefly Group over the past few years, likely hadn't noticed David West's ulterior motives in pushing for Digital Domain's public listing. Eric, however, paid much more attention to the capital markets than Katzenberg.
After a moment of contemplation, Eric said, "Jeffrey, have you considered that if we agree to let Digital Domain go public this time, then maybe next, it'll be Pixar, followed by New Line Cinema, Firefly Films, and then Disney. Ultimately, one day you might wake up to find Firefly Group has become just another pawn on Wall Street's chessboard. At that point, it would be difficult for us to run this company at our discretion.
Why did the seven major studios in Hollywood only see Firefly creating Digital Domain? It's because we could invest hundreds of millions into CG effects technology without worrying about immediate results on the balance sheet for years. But other companies? They aimed to please Wall Street and secure prettier financial reports year by year, quarter by quarter. They simply couldn't afford to do the same, even if they were laying plans for the long term; they would struggle to gain capital's approval."
"Alright, I see your point," Katzenberg smiled. Eric hadn't outright rejected the idea of taking Digital Domain public; instead, he had thoroughly analyzed the pros and cons with him. Katzenberg naturally understood that Eric was being considerate of his personal feelings.
In truth, Katzenberg thought Eric didn't need to go to such lengths; after all, when he found some of his subordinates' suggestions lacking, he often demonstrated his disapproval with a blunt "That's nonsense," rarely explaining anything. Glancing at Eric's ever-present copy of Financial Alchemy, Katzenberg half-jokingly said, "Maybe I should take some time to read books like this."
"If you're interested," Eric smiled and handed him the book, "this one's for you -- I bought several copies."
Katzenberg gratefully accepted it but still asked, "I've seen you reading this book lately. What's it about?"
"Soros' investment diary," Eric briefly explained. "If you don't have three to five years of forex investment experience, you probably won't understand much of it. So I suggest skipping the initial theories and going straight to the case studies. You don't need to grasp every obscure forex technique. Just try to understand Soros' way of thinking; he's a guy with grand vision and ambition."
Katzenberg silently noted Eric's words. His educational background wasn't high; he had dropped out of high school to enter the workforce. However, this didn't mean he lacked ambition; otherwise, he wouldn't have reached his current position.
Throughout the '80s, Soros had based his work on the theory of reflexivity, using the global financial market as his laboratory. Through substantial financial maneuvers that significantly influenced many countries, he tested his theories, which was why the book was titled Financial Alchemy.
If you disregard the moral implications of Soros's destructive impact on many nations' economies, this financial mogul, who could flip the economy like a cloud, rightly deserved praise.
Skipping the digression, Eric stated, "So let's not revisit the public listing for Digital Domain again. However, since we broached the subject, we should discuss our next developmental plans for Digital Domain."
...
On January 19, the 54th Golden Globe Awards ceremony took place. Miramax's Shakespeare in Love and Firefly Films' The Thin Red Line led the awards, each winning Best Motion Picture in the musical/comedy and drama categories.
The Weinstein brothers initially aimed for an Oscar, but with the formidable rise of Titanic, Harvey Weinstein quickly realized that Shakespeare in Love would struggle at the Academy Awards. Thus, he decisively shifted focus to the Golden Globes, securing wins for Best Motion Picture, Best Director, Best Actress, Best Supporting Actress, and Best Screenplay.
In comparison, The Thin Red Line was slightly less remarkable, winning Best Motion Picture in drama but losing Best Director and Best Screenplay to Shakespeare in Love. However, despite Firefly not aggressively marketing the film, both media and fans couldn't ignore that this was Cameron versus Bigelow again. Consequently, The Thin Red Line garnered more attention than the heavily promoted Shakespeare in Love.
Following the Golden Globes, both Shakespeare in Love and The Thin Red Line significantly increased their screens, and box office revenue began to rise.
...
Three days after the Golden Globes ceremony, on January 22, the nominations for the 69th Academy Awards were announced. Titanic, with its 14 nominations, was undoubtedly the most anticipated film of the year. All of Titanic's nominations were well-deserved, and as the announcement emerged, media channels playfully mocked the recently concluded Golden Globes.
Stimulated by the back-to-back topics of the Golden Globes and the Oscar nominations, Titanic's box office achieved a miraculous reversal in its fifth week, reaching $42.62 million for that week alone and accumulating $252 million.
A week prior, faced with Titanic's second-week box office rebound and the subsequent slight drops, North American media had only speculated that the film might reach the heights of Star Wars and Jurassic Park. Yet, with the fifth week's figures emerging, the latest surprise made all the media tread cautiously.
After patiently waiting a week, Titanic brought in $32.83 million in its sixth week, again achieving a slight 22% decline in box office revenue.
Thus, the once-cautious media began to voice predictions that Titanic might become the all-time highest-grossing film in North American history. However, nobody dared to predict how much Titanic's final box office might total; who could possibly make that leap?
Over the past six weeks, Titanic amassed $285 million in North America and $147 million overseas. This brought the global total to $432 million, allowing Firefly to net $200 million, making it only a matter of time before recovering the total budget of $265 million.
At the same time, many media outlets discovered that out of the five major European box office countries -- England, France, Germany, Italy, and Spain -- Titanic had only released in the UK and Spain. The box office potential from Germany, France, and Italy, which had yet to release, was still untapped. Additionally, the largest box office market in Asia, Japan, had also yet to screen the film. Combined with Latin America and Southeast Asia still in the distribution phase, Titanic's overseas box office might just hit a terrifying number exceeding that of North America.
...
Before the impact of Titanic's box office could even settle, Firefly Group dropped another bombshell.
On February 1, Firefly Group abruptly announced that after fulfilling existing special effects orders, Digital Domain, including its branches in Los Angeles, Florida, and Sydney, would cease accepting special effects orders from outside parties beyond the companies they partnered with -- MGM and 20th Century Fox. Instead, their primary focus would shift to project production within Firefly Group and its alliance.
However, the Firefly Software Company, which mainly developed foundational software tools for Digital Domain and Pixar Animation, would continue to sell software such as Maya and 3Dmax, along with other effects solutions. Studios using Firefly Software's tools would be given priority for any surplus special effects outsourcing orders from Firefly Group.
As a private company, Firefly merely shared a brief announcement on the Yahoo portal page.
Yet the uproar this decision incited within the industry far surpassed even Titanic's box office miracles.
Before Titanic's release, due to its unprecedented $215 million production budget centered on CG effects, the media and industry began to reflect on the surge of high-budget productions in recent years. Many speculated that as CG technology emerged, it might hit a "glacial period" following Titanic's potential box office flop.
But after Titanic's box office surge, the original rhetoric dissipated. In fact, from the moment Titanic's box office rebounded its second week, production companies started seeking out projects for special effects blockbusters, eager to negotiate partnerships with Digital Domain.
Prior to Titanic, Digital Domain maintained a generally welcoming attitude toward external orders. Other studios recognized that Digital Domain was executing this open cooperation strategy due to the need for technological accumulation. Therefore, nobody anticipated that after Titanic, Firefly Group would suddenly shift to a complete 180-degree stance.
Just how strong were Digital Domain's technological advantages? There was no need for comparison; in recent years, every prominent Hollywood film involving CG effects had collaborated closely with Digital Domain, often tackling the highest-difficulty special effects tasks.
Therefore, when Digital Domain abruptly closed its doors to external collaboration, it became apparent that, absent the Digital Domain's technical support, Hollywood's major studios would struggle to bridge the technological gap over the next few years, even if they were willing to invest heavily financially.
Without top-tier special effects technology backing them, Hollywood's leading studios would inevitably enter several years of a special effects film drought. While Hollywood didn't lack other special effects companies, such as Industrial Light & Magic, films produced by those studios would increasingly show a glaring difference in special effects quality compared to those produced by Firefly Group. And audiences wouldn't be naive enough to overlook that disparity.
Just a day after the announcement, the phones of almost all core executives at Firefly Group rang off the hook. Media outlets, like sharks smelling blood, ferociously dug into the depths of what this decision meant for Firefly Group.
*****
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