Chapter 308: The Theme of the New Project

In recent years, merchandise—especially Videotape and DVD copyright sales—had accounted for an increasingly large share of a film's revenue. Major Hollywood studios made corresponding changes. The most obvious shift was abandoning the old practice of selling off a film's Videotape rights for a period of several years. Instead, they either expanded or established their own disc and Videotape distribution departments to maximize profits.

Warner Bros. already had such a department, but it had recently been expanded into a standalone subsidiary dedicated solely to distributing DVDs and Videotapes for films from Warner Bros. and its partners. Relying on the vast platform of Time Warner, the subsidiary's disc-pressing and distribution capabilities were not an issue.

On August 13, 1998, the North American box office for The Matrix finalized at $327.58 million, successfully shattering the North American R-Rated Film box office record previously held by Saving Private Ryan at $325.79 million.

On the day the film ended its theatrical run in North America, its DVDs and Videotapes officially went on sale there. Although the sales figures were not as astonishing as Titanic, they were still enough to make other studios jealous.

Over the four days of its opening week, Videotape sales for The Matrix reached $23.54 million, while standard DVD sales hit $28.02 million. The $199 ultra-deluxe commemorative DVD set also sold 580,000 copies. Combined, the three formats generated $63.10 million in revenue!

Meanwhile, negotiations between Duke Studio and the NBC Television Network concluded. NBC took the North American television broadcasting rights for the film over the next three years for a total price of $20 million.

A massive box-office hit paired with exceptionally strong merchandise sales could generate staggering profits.

Warner Bros. and Duke Studio were arguably the biggest winners of the Summer Season. Compared to The Matrix, Godzilla—which had opened around the same time—was still struggling in theaters, striving to push its $95-plus million North American box office past the $100 million mark.

Walt Disney's Armageddon was doing a bit better, with its current North American box office approaching $150 million. Factoring in overseas and post-theatrical revenue, turning a profit wouldn't be an issue. Michael Bay, the director dubbed "Little Explosion Maniac" by the North American media, was getting closer to his former path.

When it came to merchandising revenue, however, these two films—along with the long-concluded Deep Impact—multiplied by five still couldn't compete with The Matrix.

With The Matrix selling so exceptionally well, a lively celebration party was essential.

Exactly one week after the film's Videotapes and DVDs hit the market, Warner Bros. spent a fortune to rent a private club in Malibu for the celebration party. Duke, who had already headed to New Zealand for work, specifically returned to North America for the occasion.

Since it was a celebration party, Duke naturally became the focal point, surrounded and complimented by the crowd. He had barely managed to finish a round of socializing and slipped into a corner for a moment of peace when Jeff Robinov, the CEO of Warner Bros., took a seat across from him.

"Duke."

Jeff Robinov understood his personality, so he cut straight to the point: "Have you thought about merging Duke Studio into Warner Bros.?"

Duke thought for a moment. "Jeff, is this your personal opinion?"

"No, no..." Jeff Robinov wagged a finger. "I am representing the opinion of Time Warner as a whole."

Duke fell into deep thought.

Jeff Robinov continued, "We would still use a stock swap. Warner Bros. would exchange shares of equal value for the shares you hold in Duke Studio."

"So Warner wants a hundred percent controlling stake in Duke Studio?"

Hearing Duke's question, Jeff Robinov nodded immediately. "That is exactly it."

With one arm across his chest and a hand resting on his chin, Duke thought for a moment and understood Warner's intentions. It wasn't complicated; it had to do with The Matrix, The Lord of the Rings trilogy, and the Harry Potter series.

The Matrix had generated a terrifying amount of revenue, and it was clearly going to be a franchise.

Although The Lord of the Rings trilogy was hailed as the most difficult fantasy epic to film, Duke's continuous success had clearly given Warner enough confidence.

Thanks to vigorous promotion by Harry Potter Studio, the Harry Potter series was already showing a trend of explosive popularity.

Warner obviously wanted to bag all the copyrights for these three franchises, and they were willing to give him more personal shares in Warner Bros. to do it.

Should he consider Warner's proposal? Duke had to weigh this carefully. He had neither the desire nor the ability to scale up Duke Studio. Exchanging it for Warner Bros. shares—which would still allow him to enjoy the dividends brought by these franchises—was not a bad idea. In fact, he saw more pros than cons.

The problem was that only one installment of The Matrix had been released, while The Lord of the Rings and Harry Potter were still in the prep stage. Warner couldn't possibly offer a high enough price for them right now. The timing was simply wrong.

"Jeff..." Duke smiled. "You have to give me some time to consider it."

"Of course!" Jeff Robinov said solemnly. "No matter what, Warner will respect your decision."

After Jeff Robinov left, Duke thought it over for a bit longer before deciding to shelve the matter for now, waiting for the right opportunity to handle it.

A tall figure slipped past him from behind, sat down opposite him, and handed him a glass of champagne.

Charlize Theron gathered up her newly lengthened hair. "I came over specifically to thank you."

Duke clinked glasses with her. "You look even more beautiful and confident now."

"You gave me all of this." After Duke finished his champagne, Charlize Theron downed hers as well. "Without you, there wouldn't be the Charlize Theron of today."

"How does it feel to be extremely popular?" Duke asked with a smile.

"Absolutely fantastic!"

Setting her glass down, Charlize gestured for a waiter to bring two more glasses of champagne. "I've never felt this good in my life."

"Every place I visit in North America, countless men and women go crazy for me." She leaned in slightly. "Even when I went to the Far East, the screams and cheers didn't die down at all."

In Duke's version of The Matrix, although he had ensured the male lead Neo received the primary screen time so the film wouldn't feel unbalanced, Trinity's room to shine was vastly greater than it had been originally. The Gun Kata and combat sequences, specifically tailored to Charlize Theron's physique, were absolute eye-catchers.

One of the many changes brought about by The Matrix was making Charlize Theron just as extremely popular as Keanu Reeves.

For some people at Warner Bros., Duke's return from New Zealand presented a prime opportunity for face-to-face discussions on collaborative projects. Doug Walter soon came looking for him.

"Duke, how long is your new project scheduled to take?" he asked.

"Starting in September: two months for prep, two months for filming, and two months for post-production and promotion." Duke thought for a moment. "It will definitely be finished before next year's Oscar Awards Ceremony."

"Summer Season?" Doug Walter asked.

Duke held back the urge to roll his eyes. "Come on, Doug. This is just a low-budget film. It would get completely drowned out in the fiercely competitive Summer Season."

"I think your small productions are perfectly capable of competing with the major blockbusters from other directors." Doug Walter turned to look at Charlize Theron. "Isn't that right, Miss Theron?"

"I think Mr. Walter makes a very valid point!" Charlize said earnestly. "Who would dare underestimate you now?"

"Hardcore fans of The Lord of the Rings..." Duke spread his hands. "After the news leaked, many hardcore fans of The Lord of the Rings objected to me bringing the series to the big screen. They think I'll ruin their beloved fantasy classic."

Doug Walter shook his head. "Every era has its conservatives. They never understand that you only achieve success by looking forward."

"Haven't you heard?" Duke offered a helpless smile. "Some hardcore fans of The Lord of the Rings are planning to form a group and head down to New Zealand to protest against me."

"They won't be able to stop your march to continued success!" Just as Doug Walter finished speaking, someone walked over and whispered in his ear. He nodded to Duke. "I have some matters to attend to, so I must take my leave for now."

The surroundings quieted down a bit. Charlize Theron and Duke continued to chat as they drank.

"The Matrix just ended its theatrical run in North America," she said curiously. "And you're already preparing a new project?"

"It's just a small production I'm using for practice," Duke said casually.

Ever since going to New Zealand in mid-August, he had been gathering a crew to do the prep work. Warner Bros.' approval had gone through by the end of last month, and the initial $8 million in funding, along with the corresponding financial supervisor and production manager, had quickly been put in place.

Coming back this time wasn't just to attend the celebration party, but also to sign the directorial contract with Warner Bros.' producers. For such a small production, Duke took only a symbolic $500,000 as his fee to reduce the crew's upfront expenses.

Of course, a tiered profit-sharing agreement tied to the film's revenue numbers was still essential. Just like with The Matrix, his maximum share could reach up to twenty percent of the film's global box office and fifteen percent of its merchandising revenue.

However, whether the new project would ultimately succeed was something even Duke didn't dare guarantee, despite his confidence in himself.

At this stage in his life, he held shares in Apple, Yahoo, and Microsoft, and was a major shareholder in Victoria's Secret and Warner Bros. He had a personal net worth in the billions, and the combined global box office of his six completed films was approaching $3 billion. Never mind the failure of a small production—even if a hundred-million-dollar blockbuster flopped, it wouldn't severely impact his status in Hollywood.

Besides, to ensure The Lord of the Rings trilogy was as successful as possible, using this kind of multi-narrative small production for practice was an indispensable choice.

When the party ended, Duke and Charlize Theron didn't exchange a word. In silent agreement, they slipped into the same car and drove off toward the western part of Burbank City.

"Did you hear, Duke?" Charlize asked. "Sony Columbia Pictures is preparing to cancel the sequel to Godzilla and shelve the franchise for the time being."