N-M Chapter 147 Progress is Difficult
Chapter 147 Progress is Difficult
Chapter 147 Progress is Difficult
The warm yellow lights in the Italian restaurant, like melted butter, flowed in gentle arcs across the snow-white tablecloth.
As Ernst stepped into the Persian-carpeted entryway, the gold olive branch badge pinned to the waiter's collar made him raise an eyebrow.
"Michelin three stars?" Ernst really didn't expect that Robert Iger was going to bleed money like crazy.
Led by the waiter to his table, Ernst stroked the grapevine pattern carved on the armrest of the chair; the leather felt as delicate as a newborn's cheek.
Robert Iger frowned at the wine list, closed the menu, and gave the waiter a standard smile. "This 1982 Petrus, please. Decant it as usual."
Ernst whistled, "I thought the most I'd order was a bottle of '82 Lafite, but I'm quite impressed."
Everyone should know the name 82 Lafite, right?
Of course, what's even more intriguing is why the 82 Lafite has never been finished.
In reality, truly wealthy people after 2010 would hardly drink 82 Lafite, because they knew very well that most of the 82 Lafite on the market was fake.
Only 180,000 bottles were produced, and they couldn't sell them all even after 30 or 40 years. Isn't that ridiculous?
Putting aside everything else, two-thirds of the 82 Lafite went directly into the market back then, and I basically drank it all myself.
The reason this wine is mentioned is because of its appearance in movies and TV dramas.
The reason why the 82 Lafite was so good was because the climate in Bordeaux was good that year, and the red wines of the entire Bordeaux region were good, not just Lafite.
For example, the 82 Petrus that Robert Iger ordered now sells for over $1.2, more than double the price of a 82 Lafite.
Even thirty years later, at the world's largest wine exchange, the London International Wine Exchange, a 82 Lafite was only a little over $1.1, not even as expensive as Petrus is today.
"Even if your son went to college, you wouldn't be this generous, would you?"
Robert twirled his wedding ring on his ring finger. "Completing a long-distance marathon deserves a celebration with some of my savings."
Then, changing the subject, he said, "As for Tannil, I gave him such good educational resources, so it's only right that he got into a prestigious university."
""
Well, Ernst couldn't refute it.
"Speaking of which, I'm about to throw up from that online music copyright report you made Sarah send out three times a week."
The appetizer served by the waiter was truffle cream pasta, with edible gold leaf garnishing the edge of the porcelain plate.
Ernst paused, his hand holding the fork twirling the noodles, and the white porcelain plate made a slight clinking sound.
It would have been better if we hadn't talked about this. But when this matter was brought up, Robert Iger's good mood vanished instantly, and his brows furrowed into a knot. "I expected those guys to try to raise the price, but I didn't expect them to ask for such an exorbitant amount. It's simply unreasonable."
"Universal Music directly asked for $50 million a year, and demanded a 5% annual increase." Robert slammed his knife down on the edge of the plate. "They're treating us like a money-printing machine."
Ernst paused slightly as he held the wine glass. If it were Universal Music, which would monopolize half of the music market twenty years from now, he would pay this amount without hesitation.
However, while Universal Music is a top-tier global record company, its market share is far greater than it will be twenty years from now.
In terms of market capitalization, it would struggle to even rank among the top ten globally.
What truly propelled Universal Music to new heights was its acquisition of PolyGram the following year, a move that could be described as a "David and Goliath" scenario. At that time, record companies were very powerful in the United States, but even more powerful in Europe.
PolyGram, EMI, Bertelsmann, and many other multinational music giants exist in Europe, not to mention Sony Music in Asia.
If MGM were to agree to this agreement, it would have to pay at least $1 billion to $8 billion a year to acquire more than 80% of the world's music copyrights.
In his mind, Universal's online music rights would cost between $20 million and $30 million a year, which is already a very high price for online music rights at present.
Ernst swirled the Chianti red wine in his glass, the liquid tracing graceful arcs on the glass. "Isn't there anything reasonably priced?"
"Yes," Robert Iger nodded. "Bulgari is very sincere; they can negotiate a deal for ten million dollars a year."
However, they are very strict about the duration of network licensing, and only sign a five-year licensing contract at most.
Five years. Ernst smiled bitterly to himself. In five years, the digital music was almost completely finished.
Although MGM won't lose money on this deal, it's clear that it's benefiting others.
Actually, there are ways to acquire the online rights to these record companies, and it wouldn't require much effort, but Ernst clearly wanted something bigger.
If a revenue-sharing model is adopted, allowing Google Tunes to pay a licensing fee to major copyright companies, these companies are willing to sign contracts for three to five years.
After all, online copyrights are just sitting there unused; any revenue they generate is a bonus.
Even if Google Tunes really makes online music a success, they will still get a share of the profits.
If Google cannot offer a price that satisfies them when the three-to-five-year contract expires, they will terminate the cooperation directly.
Ernst's idea was to achieve everything at once, with MGM collecting the online copyrights from major record companies and then playing the licensing revenue-sharing game with Google.
But now it seems that making progress is quite difficult.
"We need to find a typical example," Ernst said, putting down his wine glass and stroking his chin.
The power of online copyright needs to be combined with Google Tunes and MP3 players to be realized, and these two things are unlikely to be released before the end of the year at the earliest.
MGM's acquisition of these online music copyrights is a complete loss-making venture, a pure waste of money.
At this point, a negotiation was reached with a company that was making tens of millions of dollars a year for free, while MGM was unable to demonstrate any revenue from online music copyrights, as if it had been stuck with a bad deal.
Even if the management of the remaining record companies can look to the future, the shareholders cannot accept it.
Robert Iger immediately understood Ernst's meaning, his brow furrowed, and the information in his mind kept flashing through his head.
"Warner Bros. Records? No way, they're too tied to Time Warner. EMI? The British arrogance is harder to swallow than their afternoon tea—"
Robert Iger quickly identified his target.
"Bertelsmann Music Group, compared to other record giants, does not place much importance on music copyright."
Bertelsmann is an indispensable behemoth in the entertainment industry.
At its peak, the Bertelsmann empire had six major subsidiaries, almost all of which were renowned in their respective industries.
RTL Group, a Luxembourg-based media group, owns 54 television stations and 29 radio stations in 10 European countries.
Random House, the world's largest book publisher by sales volume.
Gunnarschild is Europe's largest and the world's second-largest magazine publisher.
Arvato, an international media services provider and editorial company.
Direct Group, the world's largest book and music club group.
There's also Bertelsmann Music Group.
What's even more alarming is that Bertelsmann Group is a private company.
The Moen family holds 19.1% of the shares, while the remaining 80.9% are managed by the Bertelsmann Foundation, established by the Moen family. This means that the Moen family is the sole shareholder of the Bertelsmann Group.
However, this has nothing to do with Ernst. As can be seen from Bertelsmann Group's business layout, compared to music records, Bertelsmann's business focus is more on magazine publishing.
"Do you think it's possible for us to acquire Bertelsmann Music Group?"
Robert Iger was caught off guard by Ernst's abrupt change of thought. They were just talking about online copyrights, and now he suddenly wants to acquire them.
Seeing Robert Iger's surprised look, Ernst grinned. "Isn't this more to your liking?"
Although Ernst may not visit MGM more than once a month, he is very familiar with the internal workings of MGM. His secretary, Sarah, sends him daily briefings via email.
Although he valued online music copyrights more, Robert Iger clearly had bigger plans and wanted to take this opportunity to fully develop MGM Records.
Ernst invested heavily in developing the record industry; this was a once-in-a-lifetime opportunity.
Therefore, MGM Resorts has been very active recently, and is in talks with many small music labels about acquisition or investment, hoping to bring them under its wing and integrate them.
"Bertelsmann would never agree to that." Robert Iger paused in mid-air, holding his knife and fork, thought for a moment, and shook his head, indicating that it was simply impossible.
Although Bertelsmann doesn't prioritize music copyrights, Bertelsmann Music Group generates substantial revenue for its parent company every year, so how could it possibly let go of them?
Ernst, however, did not think so. If he did not want to let go, there would have been no merger with Sony Music in 04, and he would not have sold all his shares to Sony in 08.
Everything is about interests and bargaining chips; it all depends on whether MGM can afford to pay them.
Ernst tapped his fingertips lightly on the table, making a rhythmic tapping sound that seemed to have a hypnotic power, enticing him, "Where there's a will, there's a way. Be bolder with your ideas; what if you succeed?"
His words lingered in Robert Iger's mind like a haunting whisper, impossible to shake off.
If it really succeeds, then MGM Music can instantly become one of the world's music giants, achieving that in one step.
And as Ernst said, what's wrong with giving it a try? It's just a matter of asking a question; it doesn't cost anything.
What if it succeeds? The rewards will be enormous.
Robert picked up his glass and took a huge gulp, the red wine leaving a burning trail in his throat. "This is insane. But you're right, what's the harm in trying?"
The violin music in the restaurant had changed to opera excerpts at some point, and Ernst looked at Robert Iger with a smile on his lips.