The Rise of Chinese Entertainment in 2008

"The film is very well made; it's a decent commercial film."

Director Chen laughed and said, "It seems that the Beijing Film Academy will soon have another well-known director."

"Director Chen, you flatter me. Let's talk about the distribution instead," Gu Ning said.

"Um."

Director Chen pondered for a moment and said, "Xiao Gu, you should know something about film revenue sharing, right?"

"Understood." Gu Ning nodded.

The box office revenue of a movie is divided among theaters and production companies. After deducting 5% for the movie special fund and 3.3%, the remaining 91.7% is split between theaters and production companies.

Ultimately, the production company receives 43%, and this is after deducting the distributor's cut.

The distributor's commission ranges from 5% to 15%, with newcomers almost always receiving 15%, meaning that the production company can only get 28% of the total box office revenue.

The claim that box office revenue can break even with three times the production cost only applies to directors or companies with a certain level of fame.

Gu Ning raised a total of six million yuan during filming, and still had more than one million five hundred thousand yuan left unused.

The reason it cost so little is that, apart from the two lead actors, the rest were all extras.

Anyway, the female characters didn't get much screen time.

The handsome guy who played the third male lead in the film even acted in it himself.

Since the script and director were already factored into the investment, there was no extra cost.

However, the subsequent promotion will cost money.

Even at a rate of five million, a box office of twenty million is needed to break even and make a small profit.

The promotional budget for a typical film is typically 10% to 20% of the expected box office revenue.

In other words, if the expected box office revenue is 50 million, the minimum investment in promotion costs is 5 million.

Of course, low-budget films can't be made like this.

But the remaining million or so is definitely not enough for advertising.

This would require more

"Since you understand, I won't say any more."

Director Chen said, "China Film Group invested two million yuan in publicity and distribution, and will charge you 15% of the publicity and distribution fee."

"Director Chen, this is too high," Gu Ning said.

The two million yuan in advertising expenses were not invested by China Film Group, but rather advanced by China Film Group.

Ultimately, it will be deducted from the share.

"Xiao Gu, I also graduated from Beijing Film Academy. I'm not lying to you. China Film Group treats all newcomers this way. Moreover, with a publicity budget of two million, China Film Group is under a lot of pressure," Director Chen said.

If China Film Group advances 2 million yuan for publicity expenses, and the final production company's share is less than 2 million yuan, then China Film Group will lose money.

Although you could seek compensation from the production company, these are low-budget films, and the company doesn't have much money. At worst, they can just go bankrupt and liquidate.

"Director Chen, since you are willing to spend two million on publicity, you must have certain expectations for the box office and believe that you can recoup the money."

Gu Ning said, "Business is business. If Director Chen insists on 15%, then I'll give it a try at Guangxian."

"Guangshan has only been in the film promotion and distribution industry for a short time, and it is far behind China Film Group."

Director Chen said, "Publicity and distribution have a huge impact on a film's box office."

"But they're asking for a small share."

Gu Ning said, "As a newcomer, my box office is limited. Even if the publicity and distribution are a little worse, as long as the commission is less, the final profit will not be much different."

"If the box office is a hit, then I'll make money, right?"

"You really don't seem like a newbie."

Director Chen smiled and said, "12 points, that's my greatest sincerity."

"Deal!" Gu Ning said with a smile, knowing when to stop.

"hehe."

Director Chen had expected Gu Ning to continue haggling, but he was slightly taken aback when Gu Ning agreed so readily.

"Young people these days are becoming increasingly remarkable."

Director Chen chuckled, shook hands with Gu Ning, and said, "Then let's talk about the release date."

"Director Chen, I haven't finished speaking yet. I have no objection to the revenue sharing, but I have one condition: I would like to schedule the filming for the first day of the Lunar New Year," Gu Ning said.

During this period, some movies have been scheduled for release, but he checked the movies scheduled for release around the first day of the Lunar New Year and couldn't recall any of them except for "Crazy Racer," which means that those movies didn't do well at the box office.

"There's only a little over a month left. Your film hasn't even been submitted for review yet, and it touches on sensitive topics like the Spring Festival travel rush and scalpers. I'm afraid it will need some revisions," Director Chen said, frowning.

Although the country has been working hard to improve the Spring Festival travel rush, many people still cannot buy tickets every year at the end of the year.

People are naturally resentful because they cannot go home and reunite with their families, in addition to problems such as scalpers hoarding tickets.

Although it was only mentioned briefly in the film, who knows what kind of impact it will have?

"This is simple. We can add the Spring Festival travel data from the past few years, as well as some cases of the country cracking down on scalpers, as subtitles at the end of the video so that the public knows about the country's efforts over the years."

People have difficulty buying tickets every year during the Spring Festival travel rush, and they are unaware of the country's efforts and progress in this regard, so it's natural for them to have complaints.

"But as long as the public knows that the country has been working hard and making progress, most people can understand," Gu Ning said.

"Um?"

Director Chen's eyes lit up upon hearing this. Although China Film Group had no connection with the railway and highway departments, the film still had a promotional effect.

Whether it's effective or not, it's still publicity.

Within the system, although there is a saying that the more you do, the more mistakes you make, doing something without making mistakes and not doing it at all are two completely different things.

Even if you do something and it doesn't work, you've still tried. But not doing anything is just giving up.

"I can't answer that right now; I need to communicate with several departments within the railway system."

Director Chen said, "If they agree, it will definitely be released on the first day of the Lunar New Year, but then there won't be much time left for promotion."

"It's okay. I value the release date more than the publicity," Gu Ning said.

He's a new director; no matter how well he's promoted, how many people will actually buy tickets for him?

Even Xu Zheng and Wang Baoqiang's contributions were not as significant.

Gu Ning was very clear-headed; compared to publicity, she couldn't compete with the praise of her peers.

With so many bad movies around, waiting for word-of-mouth to spread is much more reliable than advertising.

"Okay, submit the video for review as soon as possible. I'll contact you when I have any news." Director Chen nodded.

After seeing Director Chen off, Gu Ning took out his phone and called Liu Sanxi.

It was the same club as last time. When Gu Ning arrived, Liu Sanxi and his two companions were having a great time, with women on either side of them.

"Old Gu."

When Liu Sanxi saw Gu Ning enter, he smiled and said to the waiter who was leading the way, "Go and call some girls over."

"No."

Gu Ning said, "Let's talk about business first."

"OK!"

Liu Sanxi turned to Bai and the other two and said, "Alright, let's play later, let's talk business first."

Once only the four of them were left in the private room, Gu Ning sat down on the sofa and said, "President Xiang and President Peng, you didn't send anyone to supervise the filming process. Now that the movie is finished, I need to talk to you about how the money was used."

"Director Gu, there's no need for that. We trust you and Lao Liu," Xiang Bai said.

"Business is business, this isn't a matter of trust or distrust," Gu Ning insisted.

Liu Sanxi waved his hand and said, "Alright, let Old Gu speak."

Upon hearing this, the two of them fell silent.

Gu Ning said, "The initial funding for the film was six million, and the three of you each invested two million."

He paused after speaking, observing the expressions of the two people.

The total investment was six million, and each of them contributed two million, so they should each own one-third.

Even if Gu Ning were to calculate the investment based on the director's role and the increased costs, it's impossible for him to only give them a 15% share.

A normal person would definitely get angry and ask questions after hearing this.

Fortunately, neither of them rushed to speak, waiting for Gu Ning to continue.

Seeing this, Gu Ning nodded inwardly. If the two of them had rushed to question him before he finished speaking, their cooperation would have been limited to this one time.

The two of them are able to remain calm, and if they need money later, they can bring the two of them along.