I am Hollywood

[Chapter 1122: Guess]

San Francisco, Marriott Hotel.

Today marked the release of the third-generation Firefly player, and the hotel's largest banquet hall was packed with guests and reporters, just like last year. However, after listening to Firefly Electronics CEO Victor McNally's introduction of the new product, Larry Ellison, sitting next to Eric, was only half-heartedly clapping, then leaned in and said, "So, is that it, Eric? Bigger capacity, longer battery life, and an audio quality upgrade that's hard for consumers to grasp? Honestly, if I were you, I would fire the entire product development team right after the conference."

Eric watched Christina Aguilera take the stage for the intermission performance, and without turning his head, he replied, "If I did that, Sony, Philips, and even Microsoft, all of whom are eager to jump into the digital music player market, would go crazy. Larry, you're not considering doing the same, are you?"

Larry Ellison retorted, "Hey, I'm worried about you. So many manufacturers are launching digital music players this year, and your team only came up with a mediocre product that's no different from the first generation. Do you really think Firefly Electronics can maintain its edge?"

"Well, let's see," Eric said with a smirk. "By the way, we're already preparing a $100 million lawsuit fund, just waiting for a good fight with everyone."

"I think you're going to incur everyone's wrath," Larry Ellison said with a smirk, suddenly realizing something. He glanced at his watch and thought that if it ended this way, the conference time was too short, so he leaned in again and whispered, "Eric, there's a surprise, right?"

Eric shrugged, "You guess."

...

To be fair, the newly released third-generation Firefly player was indeed just a hardware and software update based on the previous two generations, lacking any jaw-dropping features, which explained Larry Ellison's disappointment, which was shared by the other journalists and guests present.

However, that certainly was not due to a lack of innovation from the Firefly Electronics R&D team. In fact, with a strong-willed boss like Eric keeping a close watch, the R&D team had to be constantly on their toes, bringing forth numerous creative new ideas every year. If needed, Firefly Electronics could always launch an all-touchscreen Firefly player or a miniature button-style Firefly player using flash storage.

But Eric didn't want to overextend Firefly Electronics' product line, creating a plethora of differently styled yet functionally similar digital music players that would lead consumers to experience decision fatigue, ultimately pushing them towards cheaper options, which would lower the average selling price and overall profit of Firefly Electronics' products.

Moreover, Eric and the management team at Firefly Electronics unanimously believed that the most vital task for the company at the moment was to enhance the ecosystem surrounding the Firefly player, such as the digital music store and user payment systems. This was the best "moat" for maintaining the market advantage of the Firefly player.

...

As Christina's performance wrapped up, Tina Brown took to the stage. Under the puzzled and expectant gazes of the audience, she officially began to introduce the mini music store project that Firefly Electronics would soon be launching in partnership with Yahoo.

When the prototype images of the mini music store appeared on the big screen, even before Tina Brown had officially started the functional introduction, there was already a noticeable stir in the crowd. After all, from the design alone, most people could easily guess the purpose of the device.

As Tina Brown began demonstrating the full touchscreen operation, many sharp-eyed media reporters started discreetly passing the news outside. Larry Ellison listened to Tina's brief introduction and then leaned in again, trying to gauge, "Eric, is this machine's operating system customized by Microsoft?"

Eric was surprised that Larry caught onto the most critical point within such a short time, laughing as he replied, "You guess."

From Eric's expression, Larry confirmed his assumption, grinning as he patted Eric's shoulder, then giving him a thumbs-up. "Well done."

Eric chuckled again, choosing not to say anything that might cover it up. It was common knowledge that Larry didn't like Microsoft, and seeing an entirely new operating system for the Firefly electronics mini music store naturally made him think Eric was intending to challenge the market position of Microsoft's Windows operating system, which was thrilling.

Had this been five years earlier, Eric might have entertained such notions, but now, with Windows 98's launch, Microsoft held an unshakeable dominance in the PC operating system market. Eric had no inclination to pursue such a doomed endeavor; his eyes were firmly set on the future of mobile operating systems.

...

The surprise brought to the conference by the Firefly Electronics mini music store far exceeded the third-generation Firefly player, which was supposed to be the main focus, along with Nokia's simultaneous release of the new M-200 music phone. After the conference ended, internet media and that evening's tabloids began flooding with news about the Firefly Electronics mini music store. Some publications speculated along the same lines as Larry Ellison. Many people started calling the higher-ups at Firefly Electronics and Yahoo to gauge their thoughts; even Microsoft couldn't sit still. That evening, Bill Gates called Eric, trying to probe the situation indirectly.

However, the external excitement over the mini music store didn't seem to excite the executives at Firefly Electronics and Yahoo too much. Eric had just rushed from Los Angeles to San Francisco for the conference. The event started at two in the afternoon and wrapped up by four, with most of the remaining guests looking forward to the evening's reception. But Eric, along with the higher-ups from Firefly Electronics, Yahoo, and Nokia, had to head to the Firefly Electronics headquarters for a meeting.

...

"Many shareholders and senior executives within the Seagram Group were already doubtful about Universal Music's cooperation with Firefly Electronics. Now, with this company's massive $12 billion debt, they had to be cautious about creditors' demands, making it reasonable that the other side terminated negotiations with us. Universal Music, Warner Music, and Sony Music are now all out of the picture. We only have the last two options left: EMI and BMG," Bill Olsen explained as Eric perused the documents in front of him.

A few days ago, Eric was surprised to hear that Universal Music had rejected continuing the licensing negotiations. He had hurried back from the East Coast to meet with Edgar Bronfman again, raising the loan amount he had promised to the Seagram Group to $1.5 billion, which was his maximum offer. He figured this would align with Edgar's original expectations. However, Edgar still didn't budge. It seemed that forces behind the scenes were well-prepared to obstruct the cooperation between Firefly Electronics and Universal Music.

With Warner Music and Sony Music already excluded, losing Universal Music as a potential prime partner left Firefly Electronics with only the two European companies, EMI and BMG, to pursue.

After Bill Olsen finished, Tina Brown spoke up, "The downturn in the music industry continues. I feel that whether it's Universal, Warner, or Sony, they will eventually have to consider transitioning to digital music players."

"The key is that we can't wait for them to transition on their own; the company needs to quickly finalize its content layout."

"Perhaps we can shift our focus to smaller and medium-sized record labels. While the big five have significant power, these smaller labels also have a wealth of content."

"The biggest artists and albums are with the major labels. Gathering a hundred records from small companies may not even match the impact of a single album from a top artist under the big five."

"Our artists like the Backstreet Boys and Spice Girls can already provide a certain influence for the digital music store; we just need to offer users more options."

"..."

After listening to the discussions for a while, Eric looked up and asked Bill Olsen, who was sitting diagonally across the table, "Bill, what kind of response have the two companies in Europe had, or which one do you think is easier to negotiate with?"

Bill Olsen sighed, "EMI and BMG's attitude towards licensing for digital music has been colder than Universal's was. And they've likely had conversations behind the scenes; they've clearly formed an offensive and defensive alliance. We can only pursue both simultaneously or abandon both."

The meeting room fell momentarily silent.

After a moment, Victor McNally spoke up, "Eric, actually, the way to solve this problem has always been simple. Most record labels just want a piece of the digital music player pie. So, you just need to agree to transfer some shares of Firefly Electronics, and the situation we're in now will be resolved."

Eric twirled the pencil in his fingers, slightly shaking his head, "Victor, that's not simple at all."

"Eric, I understand your high expectations for Firefly Electronics; we have ample funds, and our growth has been strong, which are our advantages. But we must face our disadvantages as well; we need partners. Even if you believe this company will be worth $100 billion or even $200 billion in the future, we have to operate according to Firefly Electronics' $30 billion valuation and influence at this moment, that's the reality."

"But everyone should understand that the products under Firefly Electronics are absolutely not just the Firefly player."

Jeff Kleber, who was previously responsible for the Firefly Electronics supply chain after moving from Nokia, raised his hand to get everyone's attention. He looked towards Eric and said, "Eric, are you implying that the Firefly player is not the most important thing for Firefly Electronics? I recall you've expressed similar thoughts before."

Eric nodded, "Although the Firefly player currently accounts for nearly all of Firefly Electronics' profits, much like cassette players and the MD players that were expected to be phased out before full adoption, this product is likely to be replaced by new portable music playback devices in the next five to ten years, such as phones."

"Well, Eric, I might have a solution," Jeff Kleber declared, "We can spin off the Firefly player business, establish a separate subsidiary, and then seek our required partners under that subsidiary's name. This way, other potential departments of Firefly Electronics won't be disturbed. Moreover, if it's true, as you say, that the Firefly player is destined to be eliminated, we could even cash out this operation at its peak, if you're willing to sell."

Upon hearing Jeff's suggestion, everyone's eyes lit up, and Eric's finger that had been spinning the pencil stopped.

In reality, as long as they could quickly promote the Firefly player, Eric didn't mind sharing some profits with a few record labels, but he was quite resistant to allowing record companies to directly invest in Firefly Electronics. For someone who could clearly see the future, the real valuable assets of Firefly Electronics were the ARM company and multiple tech teams related to tablets and smartphones; the Firefly player felt more like a transitional product to him.

Jeff Kleber's proposal sparked a sense of clarity for Eric. Spinning off the Firefly player business into its own subsidiary could not only solve the current problems Firefly Electronics faced but could even lead to the Firefly player operating as a standalone public entity.

After all, while Henry Paulson's words at the Hearst party may have had ulterior motives, there was a truth in it: executives and employees holding shares in Firefly Electronics all hoped the company would go public to gain greater wealth, and such aspirations were entirely reasonable.

Eric slowly circled a section of the documents in front of him with his pencil. After pondering for a moment, he marked the center of the circle, looked up at everyone, and said, "Then it's decided. Now, let's discuss how to execute this plan."

...

Inside the Marriott Hotel's banquet hall.

It was already nine o'clock in the evening. Although the hall was bustling with people, a mysterious air of anticipation spread through the crowd. Despite the event being hosted by Firefly Electronics, several key executives had yet to appear. Only one manager from the public relations department had come out to host the party's opening.

To entertain the guests from all over, the banquet hosted by Firefly Electronics was exceptionally well-prepared, with meticulous attention to all details, leaving guests with little to complain about. However, curiosity among them grew stronger, and many attendees glanced towards the entrance of the banquet hall, eager for the appearance of Firefly Electronics' executives. Some journalists present even retreated to corners to contact their outlets, trying to uncover what was happening.

After more than half an hour passed, the figures everyone had been eagerly awaiting finally appeared at the entrance of the banquet hall, causing the restlessness in the crowd to build.

Eric stayed back for a while before entering the banquet hall. By the time he walked in, everyone, including Victor McNally, was already surrounded by the crowd. As soon as Eric entered, he was cornered by Larry Ellison, who exclaimed, "Eric, tell me what happened! If you hadn't shown up, I would have called the cops!"

*****

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