China Entertainment’s rescue plan is hard to come by

Chapter 868 The war begins

November 19th was an ordinary Monday, with everyone going to work or taking a break. However, those who follow the entertainment industry noticed a major event in the film and television sector, an event no less significant than a magnitude 9 earthquake.

A news item titled "On Adjusting the Revenue Sharing Ratio of Domestic Films" shocked the entire Chinese-language film and television industry.

The China Film Production Alliance was spearheaded by six film production companies representing the upstream of the industry chain, including China Film Group, Starry Sky, Huayi Brothers, Bona Film Group, Enlight Media, and Xiaoma Films. Immediately after the alliance was established, it issued a notice to the cinema chains at the downstream of the industry chain to renegotiate the revenue sharing.

The announcement stated: "We hope that cinemas can consider the long-term development of the industry and increase the revenue sharing ratio from the original 43% to 45%, and for key films, increase it by another 2 percentage points to 47%."

It wasn't an application or a consultation; it was a direct announcement, clearly telling you that this is how we're going to do it.

The news caused an uproar in the industry.

The second major revenue-sharing war among Chinese films has begun!

The relevant media outlets immediately conducted an analysis.

With the Lunar New Year film season about to begin, nine films, including "Back to 1942," "The Last Supper," "Wolf Warrior," "Lost in Thailand," "CZ9," "Edge of Tomorrow," and even "The Grandmaster," which is scheduled for release in January next year, will be involved.

Based on the experience of previous years, the total box office revenue of the domestic Lunar New Year film market is about 40 billion yuan, accounting for more than 20% of the total annual box office revenue in China.

This year is slightly different, with a particularly large number of blockbusters, all of which are big productions. Starry Sky, Huayi Brothers, Bona Film Group, and Enlight Media all have major films to be released. Under these circumstances, it is expected that the total box office for this year's Lunar New Year film season will break through 50 billion yuan for the first time.

The 2% revenue share stated by the production alliance in the announcement translates to roughly 100 million yuan in box office revenue.

This means that in this revenue-sharing battle, no matter which side loses, they will each lose 1 million yuan in profits, and this is only for this year's Lunar New Year film season.

Therefore, the moment the producers' alliance issued this announcement, tensions immediately flared up.

Beijing, Wanda Pictures headquarters.

Led by Wanda, thirteen cinema chains, including Jinyi, Dadi, New Film Union, and Jiangzhe Times, held a meeting here.

Chen Hongtao, general manager of Wanda Pictures, slammed the notice on the conference table and sneered, "Outrageous, too outrageous! A few production companies casually form an alliance and think they can turn the world upside down?"

"I thought that giving them a lesson with the number of screenings would be enough, but they've really gone too far. They even dragged China Film Group into it, thinking we'd back down? Wishful thinking!"

“Yes, Mr. Chen, these production companies are simply ungrateful. If it weren’t for China Film Group’s sake last year, we wouldn’t have made any concessions. We already backed down last year, but they’re pushing their luck this year.” Zhang Yan, the person in charge of Jin Yi, nodded in agreement.

"That's right, so what if it's China Film Group? We live in a market economy now, and China Film Group can't interfere with normal market rules."

"43 percent, it's always been like this. Our land, decoration, equipment, water and electricity, don't they all have costs? What industry development? Without our cinemas, where would they show their movies, and who would they watch them?"

"Yes, that's right, that's exactly the point!"

"Why should we get to eat one less bite if they take an extra portion?"

Representatives from the other companies also spoke, all appearing to share a common hatred of the enemy.

Chen Hongtao waved his hand, looked around at everyone, and slowly said, "Everyone, since you all think this way, then let's give a unified reply: we will absolutely not agree to the unreasonable demands of this so-called production alliance."

"Yes, we won't agree!"

Later that day, 13 cinema chains, including Wanda, Jinyi, New Film Union, and Jiangzhe Times, jointly issued a statement in response.

The statement expressed its refusal to accept the unreasonable demands of the so-called film production alliance and its extreme dissatisfaction. The statement was lengthy and used strong language such as "demanding exorbitant prices," "ignoring the rules," "ignoring history," and "being greedy and forgetting morality" to criticize the film production alliance. It also threatened to take all legal means to protect the interests of the theaters and said that it would not rule out the possibility of "refusing to screen" the films.

The producers' alliance issued a notice in the morning, and a response came out before the end of the workday that same afternoon.

It's clear that the theaters were well-prepared.

The two sides were locked in a fierce battle, completely breaking off relations.

Faced with this situation, the happiest people are undoubtedly two groups: entertainment reporters and the vast majority of netizens.

The former provides topics to discuss, so there's no need to worry about KPIs; the latter provides juicy gossip, so there's no need to be bored.

The hashtag #ProducersAllianceBattleTheaters immediately trended on Weibo.

Netizens have begun to take sides, with some favoring the production alliance and others siding with the theaters. "It really should be changed so that production companies can earn more and make better films."

"Bullshit, I wouldn't watch these terrible domestic films even if you paid me. They're not worth it."

"I admit there are many bad movies, but we can't generalize. There are good ones too, like Starry Night."

"Besides Starry Sky, are there any other companies? I think we should just increase Starry Sky's revenue share; there's no need to do so for the others."

"Same as above!"

"+1"

Netizens are discussing it wildly, and even some bloggers who run their own media outlets are jumping on the bandwagon, explaining the revenue-sharing model in China online.

Sun Yi's phone was ringing off the hook that day. Media outlets he had worked with, friends in the industry, and various people in the field all called him, trying to find out the inside story.

"Old Ning, it's not that I didn't contact you, this negotiation is from the perspective of the production company, not the director."

"Oh, don't worry, if anything really happens, I definitely won't forget you. What kind of relationship do we have?"

"Okay, okay, it's alright. Just go about your business and don't worry too much about it."

Sun Yi put away his phone, looking at the low battery level flashing on the screen with a helpless expression.

He was so overwhelmed by all the phone calls he received that day that he probably stopped charging and let his phone shut down automatically.

"Old Ning asked me if this was a joint operation with the director, and why I didn't notify him in advance."

Liu Yifei smiled, "Then why did he call you? Shouldn't he have just asked President Li directly?"

Sun Yi shrugged. "Who knows? Why are they all calling me?"

Actually, everyone in the industry knows what's going on. From the credits on the entire announcement and the fact that Starry Sky isn't as proactive as usual, it's clear that Starry Sky is the one in charge of this matter.

As a leader in the film and television industry, everyone wants to find out Sun Yi's true thoughts: is he serious this time, or will he quit while he's ahead, like last year?

Such revenue-sharing negotiations are major events in the industry, involving numerous interests.

Putting aside other factors, one can glean many clues simply from the stock market.

As soon as the production alliance released its announcement this morning, all film and television stocks instantly turned red, with Starry Sky leading the way and almost hitting the daily limit. Huayi also rose significantly.

When the cinema chain issued its response in the afternoon, the stock price immediately fell, and industry stocks quickly turned green. Only Starry Sky remained relatively strong and did not fall below the opening price of the day, but it also continued to fluctuate. By the close, it had neither risen nor fallen.

The opposite is true for cinema stocks.

For stock market speculators, this news means nothing but cash.

Therefore, everyone who could speak with Sun Yi asked him about it.

After my phone automatically shut down, I finally had a lot more free time.

Sun Yi had a rare moment of mental blankness.

Regarding this negotiation, he dared not say he was absolutely certain; he could only take it one step at a time and see which side would give up first.

"Okay, okay, stop frowning, it looks awful," Liu Yifei scolded playfully, then gently patted her thigh. "Come here, lie down."

Upon hearing this, Sun Yi raised an eyebrow and quickly moved closer.

Cool fingertips pressed against his temples, it felt very comfortable, and there was a faint fragrance lingering around him.

Sun Yi closed his eyes comfortably.

Liu Yifei lowered her head slightly, her hair brushing against his cheek, and said softly, "No matter what, just know that your Qianqian will always be by your side."

(End of this chapter)