Heads Up Hollywood

That night, Dunn and Penelope Cruz had a lingering night.

It's a pity that neither Natalie Portman nor Nicole Kidman accepted Tang En's invitation to join them.

Fortunately, his private jet is already in place. Another weekend, Twain can fly directly to the crew of "Unsinkable". There are Charlize Theron and Liv Tyler, both of whom are models and have a relatively open style. Moreover, their personal relationship with Tang En is average, so it is impossible for them to have the courage to refuse.

According to the information provided by Reese Witherspoon, the co-founder and CEO of Netflix is ​​Reed Hastings. He rented a video tape from Blockbuster back then, but the return was overdue because of his busy work. , resulting in a $40 late fee.

Such a high fine directly led Reed Hastings to give birth to a disc rental model that does not pay "late fees", and thus Netflix was born!

Now Netflix, in addition to the early network payment model, has also added a member subscription model, which is the biggest difference from Blockbuster.

Users only need to pay a membership fee of $19.99 per month, and they can enjoy no rental fee, no late fee, no postage, and no rental period, which is undoubtedly very attractive.

Blockbuster's business model is the "landlord model", which means that I have assets, lend them to others for use, and collect rent through asset-heavy stores.

And Netflix’s business model is asset-light, no storefront, online operation, another term that is beyond the age, that is the O2O model!

As someone who has experienced it, Tang En can certainly see the prospect and potential of this model.

In the morning of that year, Tang En grandly received Reed Hastings and his party in his office.

"Mr. Walker, your time is precious. Let me tell you my request first. The sale price of Netflix must be 50 million U.S. dollars!"

Reed Hastings' self-confidence made Tang En laugh dumbly, "50 million US dollars, so simple?"

"ah?"

Reed Hastings was taken aback. 50 million US dollars was not a small amount. He did not expect Tang En to speak so easily.

Tang En said with a smile: "Reed, I have already read all the materials on Netflix, and I have a good relationship with the top students at Stanford University. I might as well tell you that I am very interested in Netflix."

Reed Hastings immediately became excited. He had heard Reese Witherspoon say on the phone that Twain was very optimistic about Netflix. But I didn't expect that he would be so generous, 50 million US dollars, without even asking questions.

"It's... sorry, Mr. Walker... I'm really surprised."

"Surprised? Do you have so little confidence in Netflix's business model?"

"No, I have great confidence in Netflix!" Reed Hastings paused for a moment, hesitating to speak, it can't be said that he has no confidence in Twain, can he?

Well now, the biggest basis for cooperation, no problem.

Everything else is detail, but to Reed Hastings, it's just as important.

"Mr. Walker, you can buy Netflix for $50 million, but not all the shares, you can only own up to 60%."

"Um?"

Tang En raised his eyebrows and glanced at him, "I'm afraid this is not an acquisition, but financing, right? This seems to be different from the original conditions."

Reed Hastings was a little nervous, and immediately said: "No, no, Mr. Walker, this is the plan we discussed with investors, and the 50 million US dollars will not fall into anyone's pocket, it will go to Nai Feifei’s account helps the company develop.”

Tang En said lightly: "That's financing."

"In any case, I must get Netflix's independent management rights." Reed Hastings looked at him cautiously.

Tang En waved his hand, "It's natural, you go to Paypal, I have never intervened in the company's operations. It's just a matter of financing, I need an explanation."

Reed Hastings took a deep breath, and said slowly: "Mr. Walker, the acquisition... oh no, the financing plan, in fact, the shareholding exceeds 50%, which is equivalent to the acquisition. We designed two sets of plans at the beginning , if you are not satisfied with this set of plans, there is a second set of plans."

"Tell me."

"For $60 million, you can get 80% of Netflix's shares."

For Reed Hastings, there is no difference between Twain getting 60% and 80% of Netflix's shares. Anyway, once the deal is concluded, Netflix will become a holding subsidiary of Twain Capital.

Tang En's eyes lit up, "I'm interested in the second plan, let's talk about it."

Reed Hastings said: "Before that, Netflix had two rounds of financing, and 20% of the shares were held by three foundations. However, they were not optimistic about Netflix's prospects and refused the third round of financing. We have already talked with investors, if your bid reaches 10 million US dollars, they are willing to transfer 20% of the equity in their hands to you.”

These days, it is the dream of many venture capital funds to recover the initial investment of high-tech companies.

Tang En understood what he meant, "You mean... I can only own 80% of Netflix at most, right?"

Reed Hastings nodded and said: "Yes, 15.3% is the current management's shareholding, and the remaining 4.7% is the reserved option pool."

Tang En showed a satisfied smile on his face, "It seems that you have all planned."

Reed Hastings sighed, "The stock market crash is becoming more and more harmful. I only hope that Netflix can survive."

Tang En smiled and said: "Tell me, how do you plan to operate after the 50 million financing is obtained?"

Reed Hastings obviously has a well-thought-out plan, and he is familiar with Netflix's strategic layout, "Currently Netflix's movies are delivered to customers by mail, but because of the distance factor, the mailing time is a problem, which will give Customers bring a very bad experience. If the funds are in place, I plan to set up at least 30 distribution warehouses in major regions of the United States, greatly shorten the mailing time, and strive to place an order the day before, and receive the disc the next day.”

Tang En was a little silent and heaved a long sigh.

This is the year 2000. Laomei’s technology companies already have such a strategic concept. Thinking about some domestic online trading companies in the previous life, they came up with such a concept more than ten years later, and clamored for a world-leading business model. Satire.

"The information says that Netflix still has online on-demand services. Is this okay?" Tang En looked at the information in his hand, a little surprised.

Reed Hastings explained: "This is just an idea. The current Internet speed is too slow, and it is too unrealistic to watch movies through the Internet. However, with the development of the Internet and the improvement of Internet speed, I think this is a very important piece. promising development direction.”

The real rise of streaming media began in 2010.

Netflix spent 1 billion US dollars to buy the five-year streaming media authorization of Paramount, Lionsgate, and MGM movies, and signed agreements with HBO, SHO and other famous cable TV stations to become paid distributors.

But in fact, in the late 1990s, the streaming media business had already taken shape.

Netflix's current online on-demand business has a certain concept of streaming media.

Tang En nodded, "Narrowband Internet is destined to be replaced by broadband. Netflix must make plans in advance to welcome the era of WEB2.0. The online on-demand business, no matter how much it loses, can't be cut!"

Reed Hastings couldn't figure out Tang En's routine. He didn't know whether he was echoing his point of view or showing his authority. He asked tentatively, "Mr. Walker, what do you think of Blockbuster?"

Tang En laughed immediately, "I heard that before this, you visited Blockbuster's headquarters?"

Reed Hastings blushed, "Blockbuster is the leader in the video rental industry after all, I thought..."

Tang En waved his hand, and a bit of disdain flashed across his face, "Leader? Shit! Lei Shidong is old, and he can't keep up with the trend of the times. The future world is a world of technology and a world of the Internet!"

Surprise flashed across Reed Hastings' face. He didn't expect that Tang En, who was a layman, would have the same views as him.

Now is the period of Internet bubble crisis, even many people in the industry have lost confidence in the Internet.

But I didn't expect Tang En to be so sure.

Tang En was still not satisfied, and said lightly: "Best is nothing to worry about. Sooner or later, it will be overwhelmed by heavy assets. Netflix's structure should be large. In essence, Netflix should not be an entertainment company, but a technology company. .”

Tang En's words set the tone for Netflix's future strategic development.

The future of Netflix is ​​based in Silicon Valley, not Hollywood!

Tang En holds major shares in Apple and Google. It is conceivable that Tang En in the future will definitely have a pivotal position in Silicon Valley.

And what about Hollywood?

It's complicated and shady. Even if Tang En Pictures can easily pass through Disney, he still doesn't know what kind of problems will be waiting for him in the future.

Netflix is ​​Tang En's last position.

For Dunn, it was the safest strategy for Netflix to establish itself in Silicon Valley and stay away from Hollywood.

Even if the future is difficult and Tang En really encounters a hurdle in Hollywood, he can still rely on Netflix, which is backed by Silicon Valley, to rise again.

Of course, Tang En's decision was extremely correct for Netflix.

The Internet is the direction of the future. If it is as powerful as Hollywood, it will be forced to transform and move closer to the Internet.

...

Three days later, Dunn Capital, under the leadership of Scott Swift, completed the contract with Netflix.

Tang En Capital invested 60 million US dollars to completely control Netflix!

And Reed Hastings also got 50 million US dollars in financing as he wished, and he still holds 10.7% of Netflix shares in his own hands. .

At the same time, Tang En, as an intermediary, also connected Netflix and Paypal.

This is a win-win cooperation. Netflix can cancel the development of the payment system and directly use the stable, free, and powerful current largest payment platform to complete online payment;

Paypal can use Netflix as a platform to increase the number of users.

Every Netflix user is also a Paypal user, and the development of Paypal ushered in a new opportunity.