Chapter 49

Mike Cunningham found himself impressed by the reception he received at the apartment. The group had treated this as a business meeting, and dressed and behaved accordingly. Rachelle had given his the customary kiss on the cheek that she always gave him but then it was all business.

Walt took the floor first, smiling in greeting. Mike found odd to see the young man he'd known for more than a year wearing a shirt and tie.

"Mr. Cunningham thanks for taking the time to meet with us here," Walt started. "We do appreciate it. As you know, we recently formed Subarctic Enterprises. We did this for two reasons. First, is because we are extremely interested in pursuing the offer you made last week in regard to a house. We visited it and we find it will fit our needs perfectly. Do we need to discuss that transaction further?"

"No, so long as you are amenable to the terms I stated," Mike answered. He noticed Allie had a laptop in front of her, taking notes he surmised. "A 10-year mortgage at 3.75 percent annual interest on $300,000. I do not expect a down payment and I will carry the mortgage as a personal note to me."

Walt glanced at Sean.

"That is exactly what we discussed and we agree to the terms as stated," Sean answered. "Would you like Arthur or Celina to oversee the closing?"

"Arthur will be fine," Mike said. "I already have him working on it. I understand you have done a cursory inspection but as part of the arrangement, I will have a professional come to look at it this weekend. We can expect to close as soon as next Monday if nothing is wrong. If something major is found, I'll assume the cost of repair. Additionally, I will guarantee all fixed appreciable assets for the first five years of the mortgage."

Sean's eyes widened. He had been relieved when Allie had offered her money to Subarctic because it meant they would be able to split the cost with Mike on the inspection and on any repairs.

"Thank you, we accept, pending a formal vote," Rachelle said before Sean could offer to split the costs with her father. "Walt, back to you."

Walt nodded and Allie clicked something on the computer. A costs analysis appeared on the wall TV in front of Mike.

"As you might have heard from Rachelle, finding income and spending reports for the industry in which we propose we can infiltrate the easiest has been difficult," Walt stated. The group decided they would do their best to refrain from using the works "adult entertainment industry" or "porn" unless it was absolutely unavoidable. "However, we extrapolated these numbers from similar small operations in the mainstream. Obviously, some costs, such as talent, fluctuated greatly between the two. One cost does not: on-location shots and property – or props. Those are fixed regardless of which business is doing it.

"Referring specifically to several projects in the works, either here at Subarctic Enterprises or with Daystar Studios and Dazzle Video, I, along with Miss Mary Rose, have come up with a way to greatly cut those fixed costs."

Mike unconsciously found himself sitting forward on his chair. He was interested in what sort of outside-the-box thinking Walt had done.

"We eliminate them," Walt answered.

"Eliminate?" Mike wondered. "How do you propose to do that?"

"Mechanical and digital technology," Walt answered, please that his opening had led Mike to the right question. "Allie, would you display the file marked Video 1 please?"

A second later, a video appeared on the scene. At first, Mike worried it was a graphic movie because Allie and Sarah were seen sitting at a table talking. But they were fully clothed, to his slight disappointment, and were discussing mundane things.

"Now Video 2," Walt said.

"Whoa!" Mike said. The girls were no longer at a table but on a train, surrounded by other diners with the landscape rolling past. "That's ... wow!"

"A scene similar to that cost a major motion picture studio almost $30,000 to shoot," Walt said as a cost analysis from a film released the year before appeared on the scene. "The cost to Subarctic Enterprises would be whatever two cups of coffee run and however much Allie and Sarah charged us to sit and chat for 12 minutes."

"But the people... ," Mike wondered. "Where did they come from? You'll have to pay for extras even for a simple scene."

"Not if there are only two people in the scene," Mary said. "The only human beings who appeared in that video are sitting in this room. Everyone else is computer generated."

"Damn," Mike said, shaking his head.

"I have designed a prototype for a mechanical horse," Walt said. "I have not yet had the opportunity to manufacture it but the parts I've used in the design are all available commercially or can be easily modified to fit my specifications. I checked with a local horse ranch that provides the animals for movie shoots. The cost is $790 per hour per animal. The cost to build my design would be roughly $1,500 at today's prices. The mechanical horse could be reused and would require only minimal upkeep – plus I won't have to groom it."

Mike smiled at Walt's joke. He had been determined to play Devil's Advocate to the group but he found himself a captive audience, playing right along with the script they had prepared.

"But will it look like a real horse?" Mike asked. "That is just as important as cost. A sense of realism must be maintained."

He had forgotten for a moment the group planned to deal with the porn industry, where realism was left at the bedroom door.

"Video 3 please, Allie," Walt said. A video of Mary on a small pony appeared. The horse was just walking, stopping periodically to graze. Mike got up and walked the 47-inch hi-def scene. It looked for all the world like a real, live horse.

"Now Video 4, if you would," Walt said with a smile.

The scene changed. Mary was still there but she was on something blue's back as it walked on what appeared to be hands and knees. Periodically, it would lower its head to floor as if it were grazing.

"That is me beneath the blue screen," Walt said. "Mary crafted the horse digitally."

Mike turned to gawk at Mary, who smiled sweetly.

"Can anyone do this?" he asked.

"Maybe," she replied. "It doesn't really matter if they can or not. They would want to break the bank if they could and they're not doing it at any rate."

Mike shook his head.

"That is only the tip of the Subarctic iceberg," Sarah said, standing as Walt sat down. "This is also the design of Miss Rose but in order to insure everything is completely above board, only you and I will handle the files in question."

She carried a laptop over to Mike and sat it in front of him. He saw two icons on the desktop – Video 1 and Video 2.

"Please click the videos, Mr. Cunningham," Sarah requested. "They are not attached to the big-screen and will appear only the laptop's monitor."

Mike did as he was bid. Identical videos appeared, both of the first scene of Sarah and Allie drinking coffee at the kitchen table.

"I wanted to demonstrate what the videos are in case there were any questions," Sarah said. "Mr. Cunningham, I hate to ask but how familiar are you with computers? Do you know how to burn a DVD?"

"Yes, I am not completely stuck in the 20th Century," Mike answered with a laugh.

"You would be surprised how many people would have difficulty with that aspect," Sarah replied sweetly. "Do you know what a flash drive is?"

"I do," Mike said.

"And are you familiar with FTP sites?" Sarah inquired.

"Yes," Mike answered.

"OK, first, I would like you to burn these two files to this DVD," she said, offering a blank disc to him. Mike popped the disc into the laptop's DVD burn drive and accomplished the task in a few seconds. As he did this, Sarah brought over a second laptop.

"If you would be so kind, sir, to take that DVD and put it in this computer's drive," she said. "Then copy those files off to the desktop."

Again, Mike had no difficulty accomplishing the task. He was intrigued but he wondered where this was going. Sarah handed him a flash drive and asked him to plug it into the USB port on the first laptop. He did and then copied the files across the drive. Sarah had created a folder on the second laptop and moved the first transferred files into it. He copied the files off the flash drive to the second desktop as Sarah installed an external hard drive to Laptop 1. Mike repeated the process, then moved the external drive to Laptop 2 where he copied the files.

"Now comes the good part," Sarah said with a wide smile. "Do you see the program on the desktop you use for uploading files to your personal or business FTP site?"

Mike used a commercially licensed version of a popular brand and, sure enough, it was there.

"Mary has set up an FTP site for this demonstration," Sarah announced. "Here is the address and verification that the address is housed in the computer science lab at USC. It is not housed in this building or on a computer that any of us have ready access to. Do you have any questions regarding this?"

Mike shook his head.

"Please upload Video 1 using the program you prefer," Sarah instructed. "Now, using Polar Power FTP, please upload Video 2."

Mike complied and watched as the minute hand appeared to tell him how long he would have to wait. It was a surprisingly short time for both programs but it was about 35 second longer for Polar Power FTP.

"Thank you, Mr. Cunningham," Sarah said, again in a sweet voice. "Do you accept that these files are identical and that you have uploaded and transferred a duplicate file to each place?"

"Yes," Mike said with a nod.

"I'll turn this over to Rachelle while we wait for the files to upload," Sarah said, sitting down as Rachelle stood.

"Dad," she said, smiling. "I hope you don't mind if I call you Dad."

Mike laughed.

"I wouldn't have it any other way," he said, grinning broadly. His daughter stood before him looking every bit like the young professional success he knew she would be – or maybe already was.

"Dad," Rachelle said again. "How familiar are you with internet piracy and illegal file transfers?"

Mike considered the question before he answered.

"I understand that it is a revenue hole but I can't say how deep of one," he said. "It doesn't affect my businesses so I have no research or personal knowledge to fall back on."

Rachelle nodded and Allie popped another report on the screen.

"According to the Motion Picture Society of America, illegal downloading and piracy cost them almost $18 billion last year alone. The United States Recording Artists Association contends they lost almost $15 billion last year. Non-industry research suggests the industry in which we propose to enter lost $4 billion. I believe the MPSA and USRAA numbers are high, mostly so they can justify recouping their losses from 84-year-old grandfathers and college sophomores through legal action. But it suggests the other number is about 30 percent too low. What would you say if I told you that Subarctic Enterprises has submitted a patent that will make it possible to all but eliminate those losses?"

Mike's eyes darted from the numbers on the screen to the faces in the room. Could it be possible? Could this group have really come up with a way to save $40 billion a year? What would that be worth?

"Are you serious?" Mike asked, incredulously.

"Are the files uploaded yet?" Rachelle asked in return. When Mike nodded, Shelly took her spot in the center.

"May I call you Mike?" she asked.

"Of course," Mike said. "I've tried for six months to get you to call me that. Now that you've started I would hate to make you stop."

"Thank you, Mike," Shelly responded with a genuine smile. "What I would like for you do is to play the six files you've transferred to what I'll refer to as Laptop 2."

Mike clicked on the files two at a time and they all played with no problem.

"Now Mike, using either laptop you wish or any other computer you choose, I'd like for you to log on to the FTP site where you uploaded the files."

Mike looked around for a moment.

"I'd like to use the one Allie is using," he said. Allie glanced up, nodded and minimized the text program she was using to take notes. She slid the laptop in front of Mike, who logged on to the FTP site and tried to download the file marked Video 1. He was blocked by a window asking for a password.