Chapter 86: International Release

[Chapter 86: International Release]

As Paranormal Activity became a box office sensation in North America, the international distribution efforts were also underway. Due to Guess Pictures being a relatively new company without overseas capabilities, the international release of Paranormal Activity was primarily handled by Sony Columbia Pictures. Behind Sony Columbia stood the Sony conglomerate.

After Paranormal Activity crossed the $100 million mark at the North American box office, the major Hollywood studios and foreign distributors flocked to Guess Pictures, hoping to secure the overseas rights for the film. During negotiations, Sony Columbia Pictures made the most generous offer: a $15 million base licensing fee, a 20% cut of overseas box office receipts, and an 18% revenue share from video distribution.

Sony Columbia also aimed to secure the rights for a sequel to Paranormal Activity, hoping that the director would continue to steer the franchise. This proposal proved more favorable and secure than offers from foreign studios, offering a quicker return on investment.

After deliberation, Link agreed to collaborate with Sony Columbia, albeit with a few modifications to the terms. The licensing fee and percentage splits remained unchanged. He opted to sell the video distribution rights for $6 million, ensuring Guess Pictures would not take a cut regardless of how many copies they sold. He decided to sell the rights for the sequel for $8.5 million, allowing Link to write the scripts for two sequels and serve as a producer, though he would not direct them.

This arrangement was beneficial as it allowed for a swift return on investment. For a large company like Sony Columbia Pictures, the long-term income from video distribution could bring in millions, or even tens of millions of dollars over a span of years. However, for Link, receiving a lump sum upfront was more advantageous than earning piecemeal royalties over time.

After reviewing the revised terms for the deal, Sony Columbia responded two days later, accepting the proposal but with one condition -- they wanted to sign Link for a three-film deal. This would give them the right of first refusal for any future films he directed, with an investment stake of no less than 30%.

After considering their terms, Link modified the deal to a one-film agreement, with the option for two more depending on how the first collaboration turned out. If it went well, they could work together again, but if not, both parties could amicably part ways. Additionally, given that his previous two films had performed exceptionally well, Sony Columbia recognized that future projects may not yield the same success. If his next film underperformed, Sony Columbia could alter their stance, choosing not to invest further in his work. This arrangement could serve informally, without needing formal contracts.

Sony Columbia accepted this perspective. Their willingness to negotiate stemmed partly from their unique situation.

...

In 1988, Japan's electronics giant, Sony, sought to break into Hollywood. After months of negotiations, they acquired CBS Records from CBS Columbia in January 1989. By October, Sony successfully bought Columbia Pictures for $3.4 billion, absorbing Columbia's $1.6 billion in associated debt. What had been one of Hollywood's Big Six became a Japanese company, creating significant ripples in the industry, provoking reactions such as 'cultural invasion' and fears of a 'new Pearl Harbor.'

In their initial stages, Sony encountered considerable turmoil, opting to place many Japanese employees in key management roles. Unfortunately, the clash of cultural practices nearly led to bankruptcy. By 1990, Sony had to withdraw all Japanese personnel from Columbia and acquired Gulber and Peters Entertainment for $200 million, bringing in the notable producers Peter Guber and Jon Peters as co-chairmen.

As Columbia began stabilizing, despite its historical roots of nearly 70 years, the acquisition by Sony transformed it into a modern cinema powerhouse. To survive amidst fierce competition in the film industry, Sony significantly increased its investments in films, continuing collaborations with independent companies.

...

For a $15 million for the overseas distribution rights and video and sequel rights to Paranormal Activity, it represented a trivial expense for Columbia, considering their financial backing. When they seemed unfazed during negotiations, Link speculated whether his offer had been too low and regretted not asking for more.

Once negotiations concluded, Columbia Pictures quickly transferred $29.5 million in three installments to Guess Pictures' account. Upon seeing the figures in his account, Link felt slightly underwhelmed.

...

After securing the overseas distribution rights for Paranormal Activity, Columbia quickly set to work on the film's launch. In its first week, the film opened in 21 countries outside North America, generating about $36.29 million. The results exceeded expectations, prompting the president's office of Sony Pictures to send congratulations to Link, praising the film's enormous box office potential and expressing excitement about future collaboration.

He felt similarly enthusiastic about their partnership.

...

Suddenly, the phone rang. Link placed down the documents and picked up the receiver, only to find it was Jennifer Connelly on the line.

Jennifer, with her striking looks, was known for her somewhat aloof demeanor -- often serious, as though the world owed her a few dollars.

"Hey, Director, are you busy?" she asked.

"A bit. But if I get to hear your voice, I can put everything else on hold."

"Really? Why's that?"

"Because you have a delightful way of speaking, and talking with you is more enjoyable than the work itself."

"Is that true? Sam says I'm not great at socializing and can't hold a conversation. You really find it pleasant to chat with me?"

"Absolutely. Sometimes, I don't even need to hear your words -- just knowing it's you on the other side is enough. Listening to your breathing is a joy in itself."

On the line, her breathing suddenly quickened.

"I'm not that great. I can be moody and sometimes throw fits. My mom says I can be quite stubborn."

"You probably get frustrated when people don't heed your opinions or respect your choices, right?"

"How did you know?!"

"I could tell you're different from other pretty girls. You possess not just beauty but a strong and independent spirit. You dislike being controlled, rebelling through fits of anger to assert your freedom and independence. That shows you're a brave woman."

"I'm not that remarkable."

Her voice softened, "So, what are you working on now?"

"I'm going over box office data -- North American and international figures. There's a lot to sift through, but I need to analyze market trends to decide whether to ramp up promotions or coordinate with distribution."

"You're incredible! Not only can you act and write scripts, but you also produce films and manage a company. There's no one as talented as you out there."

"Is that genuine? Many in the industry say I'm a hack of a director who only knows how to make money."

"They're just jealous of your talent. They can't compete with your box office success, so they try to diminish your achievements in other ways. In reality, the artistry of Buried and Paranormal Activity isn't less than mainstream films; people just refuse to recognize it. Acknowledging your skill would mean admitting their own failures. That's Hollywood for you -- a place that thrives on dragging others down to elevate themselves, so vain."

"Jennifer, you're delightful to talk to."

"Ha! It's just easy and fun chatting with you."

"Same here. So, what are you up to these days?"

After an hour of conversation, the director hung up the phone, glancing at the unfinished documents with a smirk.

*****

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