Today was already Friday, June 24.
Just yesterday, after another round of voting, the Writers Guild of America once again rejected the latest contract proposed by the Alliance of Motion Picture and Television Producers. This meant that the Hollywood writers' strike, which had already lasted three and a half months, would continue.
The AMPTP represented more than 350 film and television entertainment companies, centered on the Hollywood Big Seven studios and the four major broadcast networks. However, it was ultimately impossible for it to represent everyone. As the prolonged strike made business unsustainable, many second- and third-tier small production companies had been forced since last month to sign the contracts demanded by the Writers Guild, including no small number of producers who defected from the alliance.
At this point, the strike had completely evolved into a lose-lose situation.
Many people had long anticipated that the Producers Alliance would eventually "settle scores after the autumn" with those production companies that compromised early. Simon, in particular, remembered how events would actually unfold. Even so, standing at the doorway of an audition room at Daenerys Pictures' headquarters and hearing Amy suddenly deliver the news, he could not help but smile bitterly as he probed, "They didn't mention Who Wants to Be a Millionaire in the announcement, did they?"
Simon was neither a member of the Writers Guild, nor had Daenerys Pictures joined the Producers Alliance. Throughout the entire strike, his original intention had been to remain an observer. However, the sudden emergence of a phenomenon-level reality show like Who Wants to Be a Millionaire, which did not require writers at all, had destined Daenerys Pictures to be dragged into the fray.
Meeting Simon's hopeful gaze, Amy shook her head regretfully and likewise gave a bitter smile. "They did mention it."
After hearing a few exchanges between Simon and Amy, Jonathan Friedman and the other two roughly understood what was going on and tactfully excused themselves.
Simon returned to the audition table and sat down again, frowning as he pondered.
Before the strike, because he had refused to join the Writers Guild, several of Simon's scripts from last year had been ignored by the WGA, leaving him empty-handed during the awards season earlier this year. That, in itself, had not been a big deal.
But now, with the war between the Writers Guild and the Producers Alliance reaching a fever pitch, Daenerys Pictures' launch of a hit show like Who Wants to Be a Millionaire, which could completely bypass writers, was equivalent to handing the Producers Alliance a "nuclear weapon" capable of determining the outcome of the war.
And Daenerys Pictures had more than one such "nuclear weapon" in reserve.
Just yesterday, the Writers Guild had once again rejected the Producers Alliance's contract, and last night, Who Wants to Be a Millionaire had coincidentally posted a dazzling 17.3 million viewers in an otherwise off-season summer slot. The situation already carried a clear sense of confrontation.
Today, the Producers Alliance decisively announced a blacklist, even deliberately singling out Who Wants to Be a Millionaire. The counterattack could be described as fierce.
One could easily imagine that in the upcoming negotiations, the Writers Guild, already at the end of its rope, would have absolutely no advantage.
Even without any intention of taking sides, under the current circumstances, Daenerys Pictures had effectively offended the Writers Guild beyond repair.
At their core, the relationship between the Writers Guild and production companies was still one of employees and employers. The Producers Alliance could blacklist those production companies that signed agreements with the WGA ahead of time, but without a legitimate reason, the Writers Guild could not do the same to Daenerys Pictures.
Reality shows like Who Wants to Be a Millionaire clearly did not constitute such a reason.
However, as long as an opportunity arose, the Writers Guild would definitely cause trouble for Daenerys Pictures, both openly and in secret. Most directly, it would become extremely difficult for films produced by Daenerys Pictures to win awards such as Best Screenplay at the Oscars.
It could be said that in the war between the Producers Alliance and the Writers Guild, Daenerys Pictures, this so-called "innocent fish in a boiling pond," could no longer remain uninvolved no matter what.
By the time Amy closed the door and came over to sit down, Simon had already made up his mind to respond calmly to whatever came. From beginning to end, he had never once considered siding with the Writers Guild, as doing so would bring no benefit whatsoever to Daenerys Pictures.
With that thought, Simon looked up and asked Amy, "How did the talks with Daniel Burke and the others go?"
Amy shook her head. "ABC rejected our two-million-dollar-per-episode quote. They're only willing to offer one million."
Based on a viewership of twenty million, in the 1980s, a show airing in a prime fall-season slot could command around two hundred thousand dollars for a thirty-second ad. Who Wants to Be a Millionaire was a one-hour program, though its actual content ran only forty-five minutes, with the remaining fifteen minutes devoted to advertisements.
By this calculation, the advertising revenue per episode could reach six million dollars.
Operating a nationwide broadcast network was extremely costly.
Among ABC's more than two hundred affiliated stations across North America, the number of stations directly owned by the network was actually quite limited. A large number of local affiliates broadcast network programming during prime time each evening. Much like film distribution through theater chains, they naturally had to receive sufficient returns. After accounting for network operating expenses and program acquisition costs, the actual profit retained by the network was not that high.
Taking Who Wants to Be a Millionaire as an example, of the expected six million dollars in ad revenue per episode, roughly fifty percent would be taken up by network operating costs and affiliate revenue sharing. The remaining fifty percent would be the portion to be split between the network and the production company.
Out of that three million dollars in shared revenue, Daenerys Pictures taking two million was entirely reasonable. After all, in theory, Daenerys Pictures also had to bear the production costs of the show. However, reality was not so simple.
Who Wants to Be a Millionaire was not an ordinary fall-season drama with twenty-three episodes per season. If there were only twenty-three episodes at two million per episode, Daenerys Pictures would earn just forty-six million dollars per season. After deducting theoretical production costs, the net profit would be even lower.
But—
In reality, according to the original contract, each season of Who Wants to Be a Millionaire would consist of sixty-nine episodes, three times that of a standard one-hour drama. At two million per episode, Daenerys Pictures' total revenue would soar to 138 million dollars.
Then there was cost.
According to initial estimates, the production cost per season was twenty million dollars. However, Daenerys Pictures also retained the rights to in-program product placement advertising—the kind where the host rattles off brand names at length, or bottles and cans are placed on the contestants' desks.
At the time, ABC had not been optimistic about the show's prospects and had therefore voluntarily relinquished this portion of revenue to allow Daenerys Pictures to offset part of the production cost.
Now, given the current explosive popularity of Who Wants to Be a Millionaire, there was no shortage of brands willing to pay top dollar for sponsorship. This revenue alone was enough to completely cover production costs and even turn a profit. Whatever Daenerys Pictures received from selling the show to ABC would essentially be pure profit.
Under Daenerys Pictures' proposed terms, ABC would earn less than seventy million dollars in profit per season from the project, perhaps not even half of what Daenerys Pictures would make.
ABC clearly found it difficult to accept that a small, newly established program producer could earn more than twice its own profit.
Looking at Amy's expression, Simon noticed that his top executive also seemed somewhat uncomfortable with this fact. He smiled and asked, "Amy, how much do you think we can negotiate?"
"$1,5M per episode," Amy replied. Noticing the smile on Simon's face, she inexplicably felt a little uncertain, but still gave her honest figure. She added, "Recently, we've received sponsorship inquiries from many companies like AT&T, Mars, HP, and IBM. Mars alone has offered twenty million dollars to become the main sponsor of Who Wants to Be a Millionaire. From ABC's side, one point five million per episode, with profits split evenly, should be the best outcome."
Simon neither agreed nor disagreed. "What else?"
Amy continued, "ABC also wants to revise the contract. They want to participate in the production of the show. In addition, they hope to order more episodes and begin regular broadcasting in July. However, I don't think that's a good idea. Putting out too many episodes in a short period will cause audience fatigue and shorten the show's lifespan. I think one season per year is enough. A six-month gap between seasons will help maintain freshness and give us more time to adjust and innovate."
In Simon's memory, after Who Wants to Be a Millionaire exploded in popularity, ABC broadcast it year-round without restraint, even increasing it to four episodes per week. As a result, the show was completely drained of its potential within just a few years.
By comparison, Survivor, with much better pacing, ran continuously for over a decade.
Therefore, Simon strongly agreed with Amy. "You're right, Amy. Rushing out more episodes might bring us huge short-term profits, but it won't last. On this point, we stand firm. There's no room for bargaining."
Amy nodded and went on, "Also, ABC wants Survivor."
"They can't have Survivor. And they can't have Big Brother either," Simon rejected decisively. "If they want something else, then it can only be The Real Housewives of Beverly Hills. By the way, have you finalized the wives yet?"
Compared to the importance he placed on Who Wants to Be a Millionaire and Survivor, Simon had invested far less time and energy into Big Brother and The Real Housewives.
Hearing his question, Amy's lips curved into a faintly different smile. "There weren't many applicants at first, but after Who Wants to Be a Millionaire premiered, a lot of people have been calling over the past few days asking to participate. The project team is re-evaluating some candidates. How about we host a party and let you choose personally?"
Simon leaned closer to Amy, lowering his voice with anticipation. "Will their husbands be there?"
Amy rolled her eyes very obviously. "Boss, if there's nothing else, I need to get back to work."
"All right, just kidding," Simon straightened up again, his expression turning serious. "Amy, there's no law saying we can't earn more than the network. Two million per episode—this point is also non-negotiable. ABC would still earn one million per episode, which is already more profit than most of their programs generate. Most importantly, Who Wants to Be a Millionaire can boost ABC's overall ratings. That's actually far more significant for the network, and they can't possibly be unaware of that. So we stick to two million. If ABC doesn't agree, we shelve the project for now. They can go look for a program that makes them more money."
Amy's lips moved slightly, but she ultimately nodded. "Then, Simon, what about Survivor and [?]?"
She clearly had no interest in revisiting Simon's questionable sense of humor.
Simon didn't mind. "The last time I spoke with Barry Diller, the basic strategy for those two shows was that we get the profits, and the network gets the ratings."
"But we can't yet prove that Survivor and [?] can achieve the same success as Who Wants to Be a Millionaire."
"Then we can only gamble," Simon shrugged. "If the network doesn't even have that much courage, there's no point in talking."
After finishing their discussion, the two were about to get up and attend to their respective tasks when Amy suddenly remembered something. "Simon, it'll be July soon. We should start preparing for next year's film projects."
"I know," Simon spread his hands. "But do you have time lately?"
"No."
Amy shook her head and glanced at Simon. He clearly didn't either.
Studios usually began preparing film projects a full year in advance. For blockbuster productions, filming often had to start in the second half of the year.
As for Daenerys Pictures' current slate, excluding Batman, the rest could only carry through to next Easter at most. The projects left for next year were essentially Katherine's Blue Thunder Angel and two low-budget independent films from Sundance, Metropolitan People and Sisters. These films clearly had little commercial appeal.
Yet although Daenerys Pictures had been steadily expanding, the company was now juggling so many projects that everyone was stretched to the limit, leaving no capacity to think about next year.
Building a studio team took time. Daenerys Pictures' current slate had already reached the maximum Simon could personally oversee. He could not recklessly hire people and throw potentially huge projects at them. Being too impatient would only lead to failure, and some films would be far too regrettable to fail.
Ultimately—
Daenerys Pictures was still far too weak.
Simon could not help but want to acquire New World Entertainment as soon as possible.
After all, aside from Marvel, which he was determined to obtain at all costs, New World Entertainment also had a complete film and television production and distribution team. Even if it wasn't top-tier, it was far more reliable than scrambling to assemble low-paid teams from scratch.
With that in mind, Simon said to Amy, "In that case, keep an eye on whether there are any decent projects in Hollywood lately. If possible, we'll invest."
When Harry Met Sally and Pulp Fiction were already confirmed to bring substantial profits, but their payback cycles were long. Amy Pascal had always been carefully monitoring the company's cash flow. Now, with the success of Who Wants to Be a Millionaire, these issues were instantly resolved.
Whether through advertiser sponsorship fees or advance payments from ABC, Daenerys Pictures would soon receive a large influx of cash. If not for this, Amy would not have raised the topic with Simon at this time. For such a small company spreading itself so thin, her original plan had been simply to finish all existing projects properly.
As for next year, that could wait until next year.
Standing up and leaving the audition room with Simon, Amy nodded. "I'll keep an eye out."
[?]: I forgot to list the 4 reality show that simon created, list all of it here please!