"This is impossible!" Hastings was stunned for a moment, then he heard the old man continue, "I know your next development plan is to launch a streaming media platform online and eliminate the disc rental business, directly providing high-quality video services through video websites. Am I right!"
"Yes!" Hastings' face was a little pale. He thought his future development plans for Netflix were so brilliant, but now it seemed others had already seen through them.
"But the future path you envisioned, Huang He is already doing it with Los Gatos Television!" the old man said with a smile, "Now his Los Gatos Television has launched its own video website. Although it is nominally a network television station, all the TV resources he has ever broadcast are placed online for users to order."
"As this television station continues to broadcast more videos, the resources in his resource library will only grow! By the way, I heard that Huang He also transferred resources from Netflix's resource library, right? These resources must also have been stored in the Los Gatos Television resource library."
"Finally, Huang He plans to spend over $1 billion to purchase and create more TV resources. All of these can continuously enrich Los Gatos' resource library. I think within a few years, Los Gatos Television will transform into Los Gatos Film and Television Center, which would be exactly the same as the future Netflix you envisioned!"
"We are also an enterprise under Jiangnan Group. Jiangnan Group should not allow two companies to have business conflicts!" Hastings said with a stiff expression.
"This is very easy to solve. We can just merge the two companies directly in the future. Netflix can be merged into Los Gatos Television, or Los Gatos Television can be merged into Netflix. It doesn't matter, as Huang He controls Los Gatos through a holding company, and Netflix is 60%. After the two television stations are merged, his controlling shares will be even more!" the old man said with a smile.
"No, he has no right to do that. The control of the company is in my hands!" Hastings couldn't help but say, "We have signed a contract. No matter how many shares Huang He holds, the company's operational rights are in my hands. As long as I refuse, he cannot interfere with any company decisions, nor can he fire me from my position as chairman and CEO. As long as I don't agree, no one can merge Netflix with other industries!"
"But Huang He has the right to refuse Netflix to accept any investment, and to refuse Netflix to go public, etc. He has the right to refuse any financial business related to Netflix. You only hold the company's operating rights, which is also reflected in your contract, right!" The old man's words made Hastings' face change instantly.
This point was indeed clearly written in the contract, and Hastings didn't think this clause was anything at the time. Because if Huang He handed over the financial rights and daily operating rights to Hastings alone, then Huang He would not only be unable to interfere with the company's management, but would even lose the right to supervise the company.
Hastings had the right to use all sorts of financial methods to dilute Huang He's shares in the company, or to directly transfer various company assets. To put it bluntly, if the financial rights were also handed over, as long as Hastings' methods were sufficiently rigorous, he could weaken Huang He's shares to less than 10% and then directly kick Huang He out of the board of directors.
If Huang He wanted to withdraw his investment, he only needed to make the company's assets negative, and then all of Boss Huang's investments would be wasted.
Therefore, any investor who signs such an agreement that absolutely does not interfere with operating rights would never hand over financial control. Hastings' plans to finance or go public would have to be approved by Huang He. Otherwise, the company would truly not belong to Huang He.
Hastings was very clear about this at the time, so he didn't think there was any problem with this clause in the contract. But now, with the old man mentioning it, Hastings realized that he was directly tied down by this clause.
"As long as Huang He refuses to inject any more funds into Netflix, and also refuses Netflix to obtain funds through other means, does your Netflix have any room for development in the future?" the old man retorted.
"Netflix is still profitable, and these profits are under my control!" Hastings insisted.
"Okay, although I don't know how you achieved profitability through accounting methods, your profit last year was only $12 million, right!"
"Have you ever thought about how much copyright fees and content production costs you need to increase if Netflix is to enter the era of online streaming media?"
"The reason why your Netflix can support the huge DVD rental market is because, according to the law, purchasing DVDs and then renting them out does not infringe on copyright restrictions. Therefore, you can freely purchase DVDs of various TV shows and movies published and distributed by various companies, and then rent them to your members. These are all legal!"
"But once you enter the era of online media, you need to put all the content on your online servers and provide it for all users to watch. Then you can't use the methods from the DVD era. You must purchase the content copyrights from various content production companies before you can put them in your resource library for playback!"
"Have you ever thought about how much the cost of video content you need to increase? How much video content can your $12 million buy?"
"Huang He's 24-episode 'Ephemeral Journey' TV series version was eventually sold at a high price of $140 million!"
"Of course, your original idea was very good, you could rely on the video and cultural resources under Jiangnan Group to develop yourself for free, but Huang He has now established Los Gatos Television, so I believe these resources will be injected into Los Gatos Television in the future."
"Your only choice is to merge Netflix with Los Gatos Television. However, in that case, Huang He will definitely not let you retain control of the merged new company. You might still be able to be the president of this company, but Huang He will surely insert countless of his confidantes into the company, interfere with your operations, and expose all your usual tricks of hollowing out the company!"
"Sir..." Hastings was now covered in sweat, because he realized that what the old man said was exactly his future. If he were Huang He, he would definitely do this!
"It seems you have come to your senses, so work with me! I am also very optimistic about this future. I want to invest in a future online streaming media platform, and you are the most suitable person to lead this platform!" the old man said with a smile.
"Thank you for your kindness, sir, but as you know, I don't have the financial authority of the company, and Huang He probably won't agree to Netflix accepting financial investment!" Hastings said helplessly.
"Child, what do you think is the most valuable thing about your Netflix?" the old man asked.
"That's naturally our users!" Hastings said without hesitation, and at the same time, he had an epiphany and understood the old man's meaning.
Although from an asset perspective, the most valuable thing for Netflix should be the tens of millions of DVDs in his hands.
But in an era where DVD discs are eventually to be abandoned, the most valuable thing is undoubtedly Netflix's 6 million users. So Hastings only needs to find a way to separate these 6 million users from Netflix, and then transfer these users to a new company. Then this company will fully take over all of Netflix's assets, equivalent to a golden cicada shedding its shell.
"But sir, it's too difficult to take out these 6 million users, and the cost of illegality..." Hastings hesitated.
"What's so difficult about that? At least in Huang He's eyes, this matter is very easy. You just need to learn from his operations!" the old man said with a cold smile.
"..." Hastings was a bit confused and indicated that he didn't understand, so the old man had to explain helplessly, "Is Huang He planning to give all Netflix users a network TV box for free?"
"That's right! It's just that the supply is insufficient now, and only 500,000 boxes have been sent out!"
"That's right. When he sends his network TV box to all Netflix users according to their registered names, wouldn't that be equivalent to all users becoming users of Los Gatos Television? Your 6 million user data will also be directly transferred from Netflix to Los Gatos, and firmly controlled by Huang He himself!" the old man said indifferently, and Hastings instantly felt cold all over. At this moment, he felt infinite terror.
"So, you can learn from it. I'll teach you the simplest trick. You can first establish a fast-food delivery company, and then let this fast-food delivery company cooperate with KFC. Then, under the name of KFC, cooperate with Netflix. Offer an activity to all Netflix members: rent a DVD and get a free fried chicken!"
"I think no member will refuse this activity, but what accompanies the activity is that Netflix members must also register as members of this fast-food delivery company, and bind their credit cards to this delivery company. Only then can they get a fried chicken meal. In this way, all Netflix members will become members of this fried chicken delivery company!"
"After that, you can directly leave Netflix and join this fast-food delivery company, and then directly transform this company into an online video service provider. Then all the previously registered members will naturally become members of this new online video platform!"
The old man said expressionlessly.