Chapter 458： Explosion strategy

Dunn's disclosure of his "exclusive secret recipe" has no harm to his film career, but will only bring him a high reputation.

Anyway, this "exclusive secret recipe", that is, the "explosive strategy", will be summarized by many theoretical masters in ten years, and published in a book, which will be known to the world.

He doesn't mind adding the title of "Theoretical Master" to himself.

Besides, in the next few decades, Hollywood's big IPs will basically be in his hands. Even if others understand this, it will be too late.

"What is the explosion effect? ​​No hurry, let's take it slow. Let me ask you a question first, do you know who is the richest man in the world?"

Such an idiot question, almost no one does not know.

The whole audience shouted out a name at the same time: "Bill Gates!"

Dunn smiled and said: "Yes, it's Bill Gates. According to the list of "Forbes" magazine, his net worth...more than 60 billion US dollars. But let me tell you a story, in 1994, Bill Gates Gates is worth $5 billion and he owns 45% of Microsoft."

"According to the generally accepted investment law, eggs cannot be put in the same basket. Bill Gates hired a very good investment manager - Michael Larson, and formed Cascade Investments. Lal After a detailed analysis and research, Mr. Sen asked Bill Gates to reduce his holdings of Microsoft on a large scale, leaving only 3%. The rest of the money was invested in other fields. "

"As a result, everyone has seen that Michael Larson's investment was successful, and he helped Bill Gates become the richest man in the world! However, what would have happened if Mr. Gates hadn't reduced his holdings of Microsoft shares? ? His net worth...will exceed $250 billion!"

Immediately, there was an uproar!

$250 billion...what a horrific number!

Dunn continued: "Since the 1970s, American companies, as long as they have money, invest wildly. It is generally understood that after companies diversify, they can reduce risks. Facts have proved that, except for Jack Wee General Electric led by Berkshire, Berkshire Hathaway led by Warren Buffett, all the diversified companies, are all down, and their stock prices are down.”

"Of course, we are not here to talk about business rules, I just want to tell you a truth: put eggs in different baskets, and the risk of breaking each basket is high, and 80% of eggs fall; In one basket, bet all your wealth and make sure it is a good basket with stainless steel outside and cotton inside, and eggs may rarely break."

"This, this is what I call the explosion effect!"

Most of the audience was film school students, who knew little about business philosophy and were a little dazed.

But the audience in the first row, especially company executives such as Michael Eisner, Amy Pascal, Jim Garnopoulos, and Alan Horn, looked thoughtful.

Ron Mayer looked shocked, looking at Tang En, full of shock: "This kid, is he really going to tell the secret?"

In his opinion, Tang En's remarks are no worse than MBA's business management class!

Of course, these views are not original to Tang En, and in ten years, they will be rotten.

However, at the beginning of 2002, this was still a shocking, different view from the mainstream business view-otherwise, AOL and Time Warner, two companies with little connection, would not have merged, trying to find space for diversified development and reduce corporate risks.

I have to say that Dunn's words seem to make sense.

"Let me tell you another story, I'm a football fan... uh, English football. There is a club in Spain called Real Madrid. In previous years, the club had champions, but the performance was poor and the brand value was almost non-existent, so that this All membership clubs were almost bankrupt. It only took a year for Real Madrid to turn a profit until the real estate tycoon Florentino came to power. Do you know how he did it?”

"He poached world footballer Luis Figo from his arch-rival Barcelona for a record-breaking price of $50 million! Are you wondering? The club is about to go bankrupt, so what will it pay for? This is Ferno. What's great about Lentino is that he sees the value of the hit-and-run effect increasing."

"Through Luis Figo, Real Madrid's popularity soared, sponsorship contracts soared, fans' enthusiasm soared, and sales of team peripherals soared... A year later, he spent another $65 million to buy football superstar Qi. Dane, the brand value of Real Madrid, has reached the level of Manchester United and AC Milan in just two years and has become the world's top football club."

Dunn wanted to talk more about this topic. He is a fan and has this preference.

But the audience at the scene was obviously not interested in this story, English football? do not know!

Dunn was helpless, so he had to skip this paragraph, "Okay, back to movies. I think everyone likes watching movies, and they must understand that even the most loyal movie fans only watch one movie a week. If you want a movie to sell well, just You have to make sure that the movie fans watch is the one you made.”

"This requires studios to pool their limited resources and, at all costs, let the film sprint to the top and become a hit, thus creating a sensational effect and attracting fans to the arena, rather than rashly involving the long tail of fresh water. Market. The essence of the explosion effect is the Matthew effect, the stronger the stronger, the weaker the weaker, and the winner takes all!”

There are also many entertainment reporters at the scene, and the school is also recording images for preservation, and the flash is always on.

As the topic unfolded, the content of Dunn's lecture became more and more in-depth.

The applause disappeared, everyone was listening quietly, and fell into thinking following Dunn's rhythm.

It's just that the Hollywood executives in the first row didn't think it was very enjoyable. Dunn's lecture...was too basic. After talking for a long time, he didn't get to the core part.

The explosion effect is very powerful, everyone understands it, but how can we make explosions?

Tang En must not be in a hurry. The manuscript he has worked so hard to prepare must be perfect. He also wants to finish this speech, ask a few professionals to consult and be elegant, and then publish a special book!

From the theory of explosion models in the film market, the theory of explosion models for the entire commercial market, and then generalized to the usual "28 rules".

This kind of theoretical teaching material, Tang En did not publish a book, and sooner or later it was discussed by others.

Ten years later, the two theories in the business world are the most popular - the long tail effect and the explosion effect.

Two typical companies: Google with a long-tail strategy and Apple with an explosive strategy.

Tang En is not interested in the long tail effect, he is taking the route of commercial blockbusters, which is a real explosion strategy. He didn't mind taking this as a base and became a master of business theory in one fell swoop.

His education is very low, and in the upper class, many people look down on him.

Hollywood is okay, New York's business world is completely different.

After the "911 Incident" last year, he went to New York to attend various charity dinners. Those business tycoons were very contemptuous of Dunn.

I think this kid is a nouveau riche, he can make a few movies at most, he has no background and lacks literacy!

If Dunn can publish a professional book on business theory, it will definitely blow up the global business community like a blockbuster!

Therefore, Dunn's speech must be done step by step. He changed the slides, and a set of data appeared on it.

"Here is the overall revenue of Universal Pictures in the past 5 years. We can see that the top 5% of the film investment accounted for about 20% of the overall budget, and 25% of the global revenue; the top 10% of the production cost 34% of the investment amount, but also contributed 40% of the overall revenue; the bottom 25% of the budget rank only accounted for 6% of the total cost, but their proportion of the box office contribution was only 5%. As for the 10% the bottom of the budget, their contribution to box office revenue is directly negligible.”

Dunn opened his arms and looked excited, "Did you see it? The data tells us that the bigger the investment, the higher the rate of return! Let's continue to see, here is the comparison between Pixar Animation and DreamWorks Animation in the past 8 years. Fig. Pixar’s average cost per cartoon is $85 million, with an average annual profit of $65 million; DreamWorks’ cartoons have an average cost of $32 million and an average annual profit…negative $23 million.”

"Is Jeffrey Katzenberg less capable than Pixar head John Rust? Apparently not, Mr Katzenberg is known to be Mr Rust's animation mentor. Last year's Shrek " was Katzenberg's biggest investment in animation, and as a result, everyone saw it, and it was a big hit and a big sell!"

"I told two stories and listed two sets of data, just to tell everyone that the theory of explosion models is correct! Big investment is not about ignoring the huge risks hidden in the explosion model strategy, nor is it denying that small costs cannot be successful. Probability proves that while the risk is huge, the explosion strategy is also the safest strategy.”

Michael Eisner's job is very busy. He works more than 15 hours a day. Even at lunch, he has to eat and talk with executives.

Dunn has been talking for more than half an hour, but he has not focused on the main point. This made him very anxious, and he wanted to stand up and ask questions.

The explosion strategy does have its advantages, but what is the difference between this and the theories of "blockbuster" movies and "event" movies a few years ago?

Dunn was paying close attention to the expressions of the executives in the first row. This speech was actually prepared for them.

Let them get the benefits, thus ignoring the loss of benefits that Dunn brought to them in the process of exposing the Golden Globes' favoritism.

At this time, Tang En's speech was more than halfway through, and finally came to the core topic - "So, how can we create a real blockbuster movie?"

As soon as these words were spoken, it was clear that the audience in the first row had different spirits and spirits. Everyone straightened their backs, opened their eyes, and were full of curiosity.

like a child.

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(Sanqi Chinese)