Chapter 1047: .This is a sinkhole

For a movie, first establish a project, look for investment, produce, and distribute!
The distribution here is not just a movie release, but also a distribution that covers various copyrights.
The channel resources in this area are completely controlled by several giants in Hollywood.
Maybe they can't absolutely monopolize, but they are relatively monopolistic.
Because maybe there are some small distribution companies, they can also distribute movies, and even some companies can do it, with a lot of screens.
However, in terms of publicity, small distribution companies are far worse.
How do the issuing companies of the giants make money?
First of all, the regular issuance share, this part is the direct profit of the issuing company.
Regardless of the amount of your movie's box office, this part of the distribution company will be drawn proportionally.
The second is to announce the budget.
Generally speaking, for relatively more promising movies, the distribution company will advance the announcement budget.
Including, the publicity budget, as well as the cost of publishing copies and so on.
The latter has nothing to say.
But the former is very much said.
First of all, as far as the issuing company is concerned, although they pay for the promotion fee, it is because this part is profitable for the issuing company.
Especially for giants that control a large number of propaganda channels and resources.
For example, in the budget, how much money should be paid to buy the page of a certain newspaper, but in many cases, they will give priority to companies under the group's parent company.
It can be said that the left hand inverts the right hand.
Then, when the movie is released, the money will be deducted from the box office share of the movie first.
The only possible risk is that the box office share is even lower than the prepaid announcement fee.
But most of the time, this possibility is very low.
Because as a distribution company, most of the time, they can make certain box office expectations for a movie through feedback from various channels in the early stage, and then make a publicity plan.
Therefore, the most profitable and safest is always the issue.
Movies are selling big, so naturally everyone is happy, the distribution company can make a lot of money, and the producers can also get a lot of profits.
But if the film loses money, the producer will lose first, not the distribution company!
For example, the cost of a movie is 10 million, and the distribution is calculated as 10%, and the announced budget is 3 million!
The box office turned out to be only 10 million!
So at this time, if the share with the theater is calculated at 50%, that is to say, the theater will give the issuing company a box office share of the past five million.
At this time, the distribution company must first take away one million of the distribution share, and then deduct the announcement budget of three million. In the end, the producer can only get a one million share.
The fact is that the distribution share is usually a 10% distribution share, which is almost impossible for outsider film companies.
This is also the reason why many domestic films would rather be sold than would be released normally.
Because that is the real sinkhole, unless a director like Wang Yifan has a great reputation and has great confidence in the film, otherwise, on the contrary, most of the time, some domestic movies pass the normal way in Hollywood. Movies released by the way of distribution are often at a loss.
Of course, if the movie sells big, there will naturally be other income, such as income from copyright.
But if the movie can't sell well, then the copyright and peripheral income based on the box office of the movie are not worth mentioning.
The reason why Hollywood giants are more resistant to risks is that most of the time, they are both producers and distributors, and even run their own theaters. Therefore, there is no middleman to make the difference.
To put it bluntly, the issuing company, more often than not, is actually equivalent to a middleman!
......
Although Wang Yifan is not optimistic about Ali Media’s so-called globalization strategy, Ali’s PPT is still quite good.
At least, many domestic film companies are very excited.
Why, in their opinion, there can be one more market, and it is still the world's largest market like North America, at least one more income?
This is indeed the case.
Although this income is likely to be low enough to make these film companies speechless, it has to be said that from this aspect alone, it is indeed an additional revenue-generating channel.
But if it is really based on the North American market, that would be the real sinkhole.
"It's better not to participate. For overseas distribution, cooperation with Hollywood giants is enough. After all, it is not domestic." Wang Yifan said indifferently.
Lin Husheng nodded.
In fact, for Huaxin, for Wang Yifan's film project, Ari's so-called new distribution channel is really not attractive.
Because Wang Yifan’s films are co-operated with giants in Hollywood, so most of the time, they may get a lot of profits, but they can definitely be regarded as a win-win situation.
Because Wang Yifan's movie itself has a high box office potential, so naturally, there is no situation in which stores bully customers.
In fact, this is also a tacit understanding.
As long as you don't get involved in distribution and be your leeks, Hollywood giants will naturally not leave money without making money.
The DreamWorks of the previous life, the ultimate compromise, is to give up the right to distribute!
It can be seen that distribution is the real red line for Hollywood giants! Never allow outsiders to contaminate the bottom line!
"However, it may not be very attractive for us, but for other companies, this attraction is not small, right?" Lin Husheng still frowned.
Wang Yifan nodded and said, "That's for sure!"
"At least in the short term, Ali Media's release of this piece will definitely attract many companies, but this is actually a sinkhole." Wang Yifan sighed.
"How do you say? Isn't it a good thing to have another market?" Lin Husheng asked suspiciously.
"Yes, it's a good thing, but we usually make movies. First estimate the box office potential and return on investment of the movie. It is only for the domestic market, but once someone has high hopes for the North American market, what do you think will be the result? The situation?" Wang Yifan asked rhetorically.
"Are you saying that you would misestimate the size of the market?" Lin Husheng widened his eyes.
"Yes, this is really a sinkhole!" Lin Husheng then nodded with a wry smile.
Why do you say that?
This involves the cost of the movie.
For example, why did movies on Hong Kong Island decline?
To put it bluntly, the movie itself is a money-burning business.
However, in the early days, everyone knew about the local box office market on Hong Kong Island. Coupled with the relatively stable Southeast Asian box office at the beginning, they would control costs based on this scale.
For example, the box office of the head movie is 30 million Hong Kong dollars.
So film companies that use the local country as their ticket warehouse will naturally control costs.
Most of the cost will not exceed the box office ratio of a head movie.
But if they misestimate the size of the ticket warehouse, then at this time, they will have major problems in cost control.