Chapter 2006 Chain Reaction

Palmart glanced at Hastings. Was this Silicon Valley celebrity hiding his weakness?

He thought about his previous experience. He was kicked out of the company he founded and then invited back. In the meantime, something might have happened that made him admire Feng Yiping very much.

No wonder he was so cautious in front of Feng now.

He looked at Feng Yiping, who was leaning on the sofa, looking into the distance, thinking. He couldn't imagine what the other side of this young man, who was generally a very gentle young man and not a jerk like other Silicon Valley celebrities, would look like.

However, even though he had experienced the baptism of the Middle East war, he felt that it would be better not to have the opportunity to see his other side.

"Feng, I think, for one reason, we should also set up our own distribution department," he said.

"One reason?" Feng Yiping thought about it and laughed immediately. "I think we can all guess what the one reason you mentioned is,"

Most likely, it was the part of the profit that he was reluctant to share with the publisher.

The cost of distribution is not low. Even the big director Spielberg, whose DreamWorks movies are distributed by Paramount, has a rate of 9%, or nearly 10%.

And the fees paid to distributors by other studios will account for 13% to 15% of the total box office revenue.

It is indeed a considerable expense.

For people like Palmat, watching the real money being taken away by others is not a happy thing anyway.

Palmat looked at Feng Yiping helplessly. I was wrong. This is also a little bastard who always attacks me with that point. But is there anything wrong with being frugal?

But why is it so difficult for me to get really angry when facing the ridicule of this little bastard?

"You guessed right, but it's definitely not the situation you think," he said.

"Sorry, I was joking, Palmat, you say, I'm all ears," Feng Yiping said seriously.

"I don't know if you have noticed something strange before, that is, some Hollywood movies have always had very good box office revenue, but on paper, these movies are often at a loss,"

Is there a saying here? Feng Yiping really doesn't know this.

"We know that Hollywood's assembly line production method can easily make movies less and less creative. Therefore, another feature of Hollywood is the star system. The appeal of star actors makes up for the inherent weakness of assembly line production,"

This seems to be the case in China later, but the leading actors of these Hollywood blockbusters are at least good at acting, while many of the leading actors of domestic movies and TV shows only have fame.

"But this also, in turn, increases the voice of stars. Now more and more stars will ask for their salary to include a share of the box office,"

This, later, the most popular stars in our great country seemed to be much simpler. They were too lazy to go through so much trouble and directly offered a salary of 100 million or 80 million after tax.

This shows that they are still self-aware. If they follow the Hollywood model, in most cases, they will not get any share - if the movie is so bad that no one watches it, how can they get any share of the box office?

"You mean, the film producers want to make these movies look like losses in order to reduce the salaries of those stars?" Before Palmat could finish his words, he immediately figured out the problem.

"That's it," Palmat said. "For example, a Warner movie costs 30 million to make, and the box office revenue is 100 million. It should be profitable, but on paper, it's not like that."

"Of the 100 million box office, they will set aside 15 million at a rate of 15% as distribution costs, because they distribute it themselves, so this 15 million actually goes into their own pockets,"

"Then, there are 25 million US dollars in advertising expenses, at least half of which they pay themselves, because they have their own publicity department,"

"Add 30 million production costs, which is as high as 70 million,"

"And at least 40% of the 100 million box office, that is, 40 million, belongs to the theater chain," Feng Yiping interjected.

He is quite clear about this.

In the American film industry, the film company and the theater chain do not actually have a fixed share ratio. Generally, the film company's share ratio is high in the first week, which may be as high as 90%, but in the following weeks, the theater chain's share is getting higher and higher.

On average, the film company's share of the box office is about 60% to 65%.

"You're right, the total is 110 million, not counting other expenses, such as the 4.1% that must be paid to the Film Union, which means a loss of 10 million. But it's not just that, there is another important financial expense that has not been calculated,"

"Generally speaking, when making a movie, all expenses are provided by one of their foundations, that is, it is a loan, and the interest is naturally calculated higher,"

"Hahaha," Feng Yiping laughed, patting the sofa, "It's just borrowing from the left hand and generating millions of interest,"

This is the first time he has heard of this, and such a routine really makes him a little amazed.

"I think those people on Wall Street are really wronged. When it comes to making money for themselves, the innovation and shamelessness of these guys in Hollywood are obviously better than them."

"Oh Palmat, Feige, I don't mean to target you."

"It doesn't matter. We just want to do this, but we didn't have the chance before," Feige spread his hands.

"So Feng, do you know now how much revenue will be increased, how much expenditure will be reduced, and how much more profit will be generated if we make our own films, distribute them ourselves, and promote them ourselves?" Palmat asked.

"I understand," Feng Yiping nodded heavily, "We must do the distribution business,"

"But in the short term, for example, this year and next year, if we have a movie coming out, I'm afraid the distribution channels of the Big Six are better,"

A new distribution company with no previous achievements, whether in scheduling or scheduling, naturally cannot have the same say as the Big Six, which has already created a lot of profits for theaters.

"So, Feige, you will then join forces with Netflix and our six major studios. I prefer Disney or Fox to see if we can negotiate a three-year distribution agreement, and try to keep the share at around 10%."

"With Hastings' support, I think I should be able to complete this task," Feige said.

Hastings is the key figure in their DVD rental and sales.

"Then next, we must set up a distribution company to serve Marvel and Netflix in the future. Hastings, don't be unhappy. One more channel means one more way. This is always a good thing, right?"

"I didn't," Hastings said hurriedly, "Feng, I think you are right. It's not for showing our movies in theaters, but just for winning awards. We also need professional organizations to help us operate."

This is another open secret. For example, the Oscars, those movies that are interested in competing for the Oscars, all have various public relations for this.

It's actually the same in our country. Otherwise, why would some stars with little acting skills get awards with high gold content? Do you really think those judges are blind? It's just that they did their job too well.

"In addition, I suggest that we seek Cummins's opinion on the candidate for the head of this distribution company. There are many executives in Hollywood investment banks who are responsible for film investment," he added.

"Well, I will remember this," Feng Yiping nodded.

If Wall Street has a suitable candidate, it would be good.

Wall Street is a place that connects the world. Those who become executives there are not only smart people, but also everyone has their own connections.

"Then, the next question is how to make the distribution company we set up survive,"

If a distribution company is established to serve Marvel and Netflix full-time, the cost is too high.

"In addition to looking for opportunities at various film festivals, I think we can also try to create some opportunities,"

He looked up at the clear sky again and began to think about this problem.

When he lowered his head, he vaguely saw that there seemed to be two people sunbathing in the backyard of the house below. Collins must have skipped class.

"I think, can we do this, Randolph, YouTube, add a new project, initiate and host a world-class micro film competition,"

"Micro film competition?" Randolph's eyes lit up, "This is good,"

Although in China, the "Murder Caused by a Bun" that almost angered the great director has not yet been released, but micro films have become a new trend worldwide.

For YouTube, it is definitely a good thing to be able to hold such an event that attracts a lot of attention.

"You can plan it yourself, I just hope..."

"Let the newly established distribution company have the opportunity to meet some new or cutting-edge directors?" Randolph understood Feng Yiping's meaning in seconds.

"Not only to meet, the distribution company can also invest in these newcomers' films depending on the situation,"

Instead of envying the fish in the abyss, it is better to retreat and make a net.

It is conceivable that it is always a small chance to pick up leaks at the film festival-of course, with the help of Feng Yiping, the chance will naturally be greater, but it is definitely more useful to make friends with a group of good seedlings first.

Generally, the investment in newcomers' movies is not too big, and these movies with not too big investment are likely to have the opportunity to make a lot of money.

It's very simple. It's not easy for a movie with an investment of 300 million US dollars to have a box office of 1 billion US dollars. Even if it is achieved, the box office is only more than 3 times the investment.

But if a movie with an investment of 3 million US dollars is operated properly, it is not impossible to get a box office of 30 million US dollars. Then its box office income is 10 times the investment!

"I hope that in the future, many film directors will feel honored to have the logo of our distribution company appear in the title of their films,"

"It seems that this job is not easy to do," Palmat said.

The subtext of Feng Yiping's words is naturally that the movies released by the distribution company have won many awards, or the movies released by the distribution company have generally received praise from movie lovers.

Neither of these two things is easy.

"I think this is a challenging job," Hastings said.

"Okay, how you guys will cooperate with each other is up to you guys, I won't take care of it," Feng Yiping said, looking at the two children leaning against each other and about to fall asleep, "I promised them that I would take them to the playground."

They all came to Los Angeles with their children, and it would be unreasonable not to take them to the playground.

"Zuck, it's good that you're here, and you have something to do with this. Think about it, Facebook will definitely undertake some of our promotional activities in the future, do you want to make money?"

"If I don't make money, the boss will definitely be unhappy, so I think,"

Zuck's answer made everyone laugh.

"So, just listen to the user's requirements, don't be impatient, otherwise the boss will be unhappy,"

"Haha," Hastings and others laughed again.

But in fact, they envied Zuckerberg, who looked quite immature. He was so young and was valued by Feng Yiping. Needless to say, his future was bright.

Feng Yiping suddenly remembered something. Speaking of micro-films, there is one that left a deep impression on him. It was the Australian one. Although it was very heavy, it was touching and tear-jerking. It seemed to be called "Father's Love Countdown 3 Hours". Can Netflix use this idea to make a movie and make a splash in the film industry?

Wu Qian came over and whispered in his ear with a strange look on her face, "Yiping, another girl came to see you. Owen seemed to know her. Her name is Alison Brie."

Oh, she's here too?