Chapter 122 Overseas Channels

From the initial release of information to the current withdrawal from all theaters in North America, "The Blair Witch" has caused a severe shock among the audience, from initial curiosity to mid-enthusiasm, and finally to accusations and even curses. In a sense, the reputation of this film has been tarnished.

However, what many media and industry insiders find strange is that even after the key creators have been exposed through media interviews, there are still quite a few audience members who, amidst the criticism, enter the theaters to watch this film, or rather, this non-film, while continuing to criticize it.

This has created a misconception that the heat generated by the criticism could extend to the sequel.

When "The Blair Witch" finally left theaters, its North American box office stopped at $156.52 million.

$156.52 million also temporarily placed "The Blair Witch" at eighth place on the 1999 North American box office chart.

The first seven films were all well-known.

Currently, the first place is temporarily held by "Star Wars Episode I: The Phantom Menace," followed closely by "The Sixth Sense," and behind them are "Toy Story 2" and "The Matrix" and so on...

Being able to stand alongside these well-known films, "The Blair Witch" has also been bestowed by the media with a title that may be recorded in the annals of film history—the pioneer of pseudo-documentary horror films.

As the behind-the-scenes operator, Ronan Anderson remained obscure.

But that's what he wanted.

He wasn't going to foolishly seek the limelight like others.

Not everyone saw things as clearly as Ronan did. For example, the film's director, Daniel Malick.

This director pushed into the spotlight by Ronan appeared on the cover of the latest issue of Time magazine, almost stealing all the limelight brought by "The Blair Witch."

Subsequently, Daniel Malick also appeared on the Oprah Winfrey Show.

This director took all the credit for himself.

For a while, Daniel Malick was in the limelight.

If there were to be a selection for the "Hollywood Personality of the Year 1999," Daniel Malick would definitely be a nominee.

DreamWorks Animation also seized this momentum to convene a press conference and announce the preparation for the sequel to "The Blair Witch."

At this point, the media realized that the filming rights of "The Blair Witch" had already been transferred to DreamWorks Animation.

For a time, a considerable number of media outlets commented that the decision-making brain of Relative Entertainment's entertainment division must be malfunctioning, calling them a bunch of idiots.

Some media reporters even wanted to come for interviews, but Relative Entertainment, following Ronan's strategy, remained silent and quietly counted their money.

Stay low-key; don't make waves.

If one were to make waves in such a situation, they might end up drowned in spittle.

With "The Blair Witch" off the screens, the North American box office proceeds quickly arrived. Since this film did not involve external investment, there was no need for special accounting, and the profit circulated only between Relative Entertainment and Embassy Films.

Inside Embassy Films' conference room, Garcia looked at the report and said, "Yesterday afternoon, all North American box office proceeds arrived, totaling $79.5 million."

As soon as he finished speaking, the conference room erupted in applause.

Thomas, the head of theatrical distribution, Terry, the head of offline distribution, Robert, the vice president, David Vilja, the head of the publicity department, and Fiona, the newly transferred finance director from Mary's side, all applauded warmly, while looking at Ronan.

Their external reputation might not be prominent, but no one understood better than them that this was a victory for Ronan Anderson!

A team leader with such excellent abilities, vision, intellect, and execution, was crucial for a company!

Ronan could feel the cohesion forming within the management of Embassy Films and also joined in the applause. When the applause subsided, he said, "The success of this film is the result of collective efforts of the company. I am having a reward plan drafted based on the revenue from 'The Blair Witch.'"

The applause broke out again, even more enthusiastic this time.

As a leader of a company, the ability to bring real benefits and profits to followers, in addition to the leader's own abilities and charisma, is also a crucial factor for unleashing the team's full potential.

After experiencing the tremendous success of "The Blair Witch," Garcia had to admit that the new boss's ability was beyond doubt, and the $79.5 million was the best proof.

Over the past decade, Embassy Films had never earned $79.5 million in total revenue!

This was just a single film, and there were two more films, "Ace Agent" and "Death is Coming," to come.

Having worked at this company for many years, Garcia's slow-paced work and the conservative operating strategies of the previous bosses had almost worn away his former ambition.

At this moment, he felt that he could do more, see higher, and enjoy even better scenery.

"Let's talk about the financial arrangements," Ronan said.

Fiona, the financial director, with a slightly hoarse voice, continued, "During the entire operation of 'The Blair Witch,' Embassy Films invested $12 million in promotional funds, $7 million in distribution funds, $1 million in acquisition costs and other expenses for the film, and $2 million for the upcoming release of video tapes and discs, totaling $22 million in promotional distribution expenses."

Everyone present, including Ronan, remained silent.

Anyone with a bit of intelligence knew that this small production, which cost only $80,000 to acquire, had achieved success by throwing a huge amount of money into the market.

Normally, the promotional expenses of Hollywood films were half of the production cost, some even equaled it.

And this film? Garcia knew how much money had been spent, but hearing the figure of $22 million, he still felt it was too crazy.

Looking back, the initial reason they agreed to and executed this seemingly crazy plan was the enthusiastic market response during the initial test, and the other reason was that the film's copyright was completely in their hands.

The total promotional expenditure of $22 million did not exceed Ronan's expectations. No matter how much money was spent, the revenue from just the North American box office alone was $79.5 million, not to mention the video tapes and discs, television rights, and various overseas rights.

No matter how you calculated it, it was very worthwhile.

This was the benefit of having a distribution company and the advantage of standing at the upstream end of the industry chain.

This $22 million, even if added to the $25 million Embassy Films had spent on acquisition, was worth it for just the distribution of "The Blair Witch."

Robert was indifferent to these costs. Following Ronan's consecutive successes, he was convinced that as long as Ronan spent money, it would inevitably bring in more income.

His mind wandered elsewhere: "Why anticipate Ronan's plan so much? Why look forward to the upcoming trip to India?"

Fiona continued, "The entire $22 million came from loans from Relative Entertainment, and this week we will need to repay the loans and interest. The principal is $22 million, and the interest is a fixed fifteen percent, totaling $25.3 million to be repaid."

"In addition, Relative Entertainment has transferred the offline rights of 'The Blair Witch' to Embassy Pictures for a total price of $18 million."

Among those present were insiders from Hollywood, familiar with such financial maneuvers.

"As for the remaining portion," Fiona continued, "it will temporarily serve as reserve and working capital, remaining in Embassy Pictures' accounts."

To this, Ronan added, "This portion of funds will be prioritized for Embassy Pictures to expand its overseas distribution channels. Our next step is to extend our distribution reach overseas!"

Establishing overseas distribution channels is much more challenging than domestic ones. Currently, aside from the six major companies, only a few firms in Hollywood have the capability for international distribution. Even ambitious studios like DreamWorks currently lack the capacity for international distribution.

However, without attempting to establish overseas distribution channels, Embassy Pictures might end up like DreamWorks, without international distribution capabilities until the very end.

Consider Lionsgate, which initially lacked international distribution capabilities. It was through acquisitions and self-building efforts that they truly expanded their overseas distribution.

Considering the difficulty of the task, the meeting shifted to discuss the establishment of overseas distribution channels.

This work requires dedicated personnel, something Embassy Pictures currently lacks. Ronan plans to seize an opportunity to recruit from competitors.

Ideally, he'd like to poach an entire team.

The distribution work for "Kingsman" and "Final Destination" also became topics for discussion in this meeting.

Ronan reiterated that the promotional and distribution funds for these two films must be resolved through loans from Relative Entertainment.

Relative Entertainment will immediately receive $43.3 million from these loans, eliminating the need to consider repaying banks for now. These funds can be entirely loaned to Embassy Pictures for the operation of new films.

Additionally, the proceeds from Relative Entertainment's sale of sequel rights to DreamWorks will be quickly received.

When proceeds from "Kingsman" and "Final Destination" start rolling in, they can also pocket significant interest.

This constitutes legitimate income for Relative Entertainment.

"Garcia, Embassy Pictures' previous business can continue," Ronan proposed. "Go overseas to acquire independent small productions, either for North American release or distribution of discs and tapes. You've done well in this area before, so don't abandon this business."

Embassy Pictures has previously relied on this business area for survival, indicating there is a certain profit margin.

Since it's profitable, it shouldn't be abandoned.

Some overseas films, with a bit of packaging, can yield decent returns in the disc and tape markets in North America.

In the future, there should also be more visits to film festivals when time allows.

Two days before Halloween, "The Blair Witch" discs and tapes were officially released. Embassy Pictures had distribution channels, with prominent placement in chain stores like Walmart and Best Buy, featuring the movie and related posters.

Sometimes, it's difficult to guess the mindset of audiences. Despite the tarnished reputation of "The Blair Witch," people were still willing to pay. In just the first three days of its release, it earned nearly $7 million in sales and rental revenue.

Negotiations for the TV premiere rights of the film had also entered a negotiation phase.

After Halloween, Ronan planned to host a celebration party. Media personnel were not invited, only internal staff from the two companies, along with some collaborators, such as directors, actors, and other key figures involved in past or ongoing collaborations, were on the guest list.

Of course, invitations were also extended to the main creative team of the film.