The diva and I cross each other

Chapter 422 Lin Shuwen's Business Plan
"So the bulk of the profits go to cinemas and theater chains, right?" Luo Ming asked.

"That's about right! But according to the film industry, cinemas get more money because they have to bear high rents and labor costs, equipment maintenance, operations and other daily expenses. The franchised cinemas also have to pay a cut to the theater chain. It seems that the cinemas get the lion's share of the box office revenue, but in fact, the profits are meager."

Luo Ming was somewhat speechless: "Isn't this a typical case of taking advantage and still acting cute?"

“I dare not make a judgment on this. After all, I have never opened a cinema, and our company does not have any cinema business. However, I have a second-generation demolition tycoon classmate in the capital. He took the money to join China Film and opened a cinema in Shijiazhuang. I heard that it paid off in half a year.

I heard him say that the cinema's dividend is sometimes more than 47%, because some directors want to obtain a higher screening rate from the exhibitors by lowering their final dividend ratio.

After all, the producers can only make money if the number of screenings increases. If the number of screenings does not increase, how can the producers make money?
Moreover, ordinary cinemas have no say in box office profits, and it is mainly negotiated between the cinema chains and the producers.”

"Are cinema chains and movie theaters in a hierarchical relationship?" Luo Ming asked.

“Yes, generally speaking, there are three main types of theaters under the theater chain:
One is a vertical direct relationship, that is, an asset relationship. For example, Yida Cinema Line, most of their cinemas are land projects in commercial real estate invested by Yida Group itself, and the cinemas are wholly owned by the parent company.

This type of cinema chain has very strong control over its theaters. For example, the film scheduling of theaters under Yida Cinema Chain is directly arranged by the central cinema chain. Theater managers do not have the right to schedule films. In fact, they are just store managers whose main job is to serve the audience.

The other is a vertical direct affiliation + franchise relationship, which is the path taken by Jinyi Cinema.

The ownership of this type of cinema chain is partly invested and built by the cinema chain's parent company, and the other part is franchised cinemas, which are not owned by the same company as the cinema chain.

The film scheduling of this type of cinema chain is also directly arranged by the cinema chain, and the cinema manager does not have the right to schedule films. However, the owner of the cinema can decide whether to make films according to the cinema chain's requirements. But in most cases, the cinema owner is just an investor and will not care about matters such as making films.

The last type is a purely franchised cinema chain, which is generally composed of cinemas in various regions, and the cinema can freely choose whether to join different local cinema chains.

This kind of cinema chain structure is very loose. Most theaters will just follow the trend and join whichever cinema chain offers them good conditions and benefits. In order to maintain their own performance ranking, theater chains will also try their best to attract high-quality theaters to join their own chains.

These three types of cinema chains basically constitute China’s cinema market.”

After listening to Lin Shuwen's words, Luo Ming had a certain understanding of China's cinema chains.

According to Lin Shuwen's description, China's cinema market sounds quite chaotic. No wonder Penguin was able to gain a certain say in several major cinema chains by acquiring shares in the later stages of its existence.

However, Penguin’s operation in its previous life was around 2017. In this life, Zhuoguang Entertainment can find an opportunity to get involved and follow Penguin’s example by investing in two or three major cinema chains.

As long as you get a certain amount of shares in two or three major cinema chains, you can become a person who shares the cake through mutual transactions and negotiations, and gain a certain degree of voice.

Thinking of this, Luo Ming smiled and said, "Wenwen, do you know anyone at the cinema?"

"I don't know him, but Sister Shan should know him! What? You want to buy shares in the cinema chain?"

"Yes, how did you know?"

"Huayue has made acquisitions before! I remember that it spent more than 1 million to acquire 7% of the shares of a cinema chain that ranks seventh in terms of the number of cinemas in China."

"so cheap?"

"This cinema chain is a franchised cinema chain and does not have its own vertical cinemas."

"Is that so? I was wondering! If it was a company like Yida, how could they buy 3% of the shares for more than 25 million?"

"Ah Ming, I personally think that instead of acquiring shares in a cinema chain, it would be better for us to start our own cinema chain."

"Opening a cinema chain? That would require a lot of money, right?" Luo Ming asked with a frown.

“It’s definitely more expensive to open a cinema in cities like Beijing, Shanghai, Guangzhou and Shenzhen, but it doesn’t cost much in a provincial capital like Bingzhou.

Basically every business district in Bingzhou has its own cinema, and there are still some business districts under construction. We only need to buy a few shops in the business districts under construction, connect them together, and we can build a cinema.

We built it as a medium-sized cinema, with 700 to 1200 seats.

Based on the number of seats, one theater is 150 square meters, seven theaters are 7 square meters, add on another 1050 square meters for ticket collection, ticket sales, and waiting area, and the total area is 50 square meters.

The area of ​​shops is divided differently depending on the positioning of the shopping mall. However, most shops follow the rule that shops below 20 square meters account for 10% of the entire shopping mall area, shops of 20 to 4 square meters account for 30%, shops of 40 to 80 square meters account for 20%, sales floors account for 40%, and the remaining 10% are shops of 100 square meters and above. These large shops are all on the top two floors or the underground floor.

If you open a cinema in Bingzhou, a 1100-square-meter shop would cost about 1 yuan per square meter per day to rent out, which is 1 yuan per year. Generally, cinemas of this type need to be rented for at least 2 years, which costs 792000 yuan. With the initial investment in various audio-visual equipment, plus decoration, I estimate that 3 million yuan is enough to open a cinema.

I don't recommend buying a shop directly, because if you do, the current shop in Bingzhou with a good location costs about 1 yuan per square meter, so a shop of 8 square meters would cost 1100 million yuan, which is too expensive. It is better to rent it out.

Bingzhou's housing prices and commodity prices are considered to be at an upper-middle level among provincial capital cities and can be used as a reference.

If we open such a cinema in all the provincial capitals of the country, that would mean 23 cinemas, 23x600=1.38 million. If we double the cost of the four cities of Beijing, Shanghai, Guangzhou and Shenzhen, that would be 4800 million. The total cost would not even reach 2 million. We can just add some risk budget and say 2 million.

China's film market will surely flourish in the future. An investment of 2 million yuan will definitely make back the money in one year at most, or even less than one year. If our cinema chain can be established, we can have 1 screens nationwide, and we will be among the top 2000 cinema chains in China. By then, we will have a real say in the film industry."

After hearing what Lin Shuwen said, Luo Ming looked at her with a strange expression.

Lin Shuwen was frightened by Luo Ming's gaze. She frowned and asked, "Luo Ming, why are you looking at me like that?"

"Nothing, I just didn't expect you to know so much about the theater."

Lin Shuwen's expression flashed with embarrassment when she heard this. She cleared her throat and said, "Ahem! Ah Ming, I'll tell you the truth. I've thought about opening my own cinema before."

"Theatre?"

"How is that possible! It's just an ordinary movie theater. What I'm thinking is that when I retire and have 2 or 3000 million in my hand, I will open a movie theater."

"So this is your dream?"

“It’s a retirement plan!”

"Is that so? Then Wenwen, don't give me 2 million. I'll give you 10 billion. Go open a cinema chain! If we're going to open one, we'll open a large one, an extra-large one. What's the point of opening a medium-sized one?"

Lin Shuwen got a little anxious after hearing what Luo Ming said: "No, no, no, I was just saying that. Ming, you don't have to really take the money. The company has many other places to spend money."

"It's okay. The company's profit this year is over 110 billion. It's okay to give you 10 billion to open a cinema chain."

Lin Shuwen was silent. After a long while, she asked, "Ah Ming, are you serious?"

"Of course I'm serious."

“I understand, but I don’t need 10 billion yuan. 5 million yuan will be enough. Yida’s film and television cities are all very large, covering an area of ​​5 to 6000 square meters. However, their film and television cities are not only cinemas, but also shopping malls.

Our company is not a construction company, so we don't need to follow theirs. We can build the extra-large theater you mentioned, with 1800 seats, 11 theaters, and 2000 square meters. It will cost less than 5 million yuan." Lin Shuwen said while pressing the calculator on her phone.

"Okay, then 5 million. After the annual leave, I will go and tell Rong Mu that as long as it is what you want to do, no matter how much it costs, I will support you."

"Ah Ming, what you said sounds like the domineering CEO in a TV series."

"Am I not the overbearing president now?"

"You are at most a president!"

"Brother, you are too impulsive!" Lin Haizhou said, slapping his thigh.

"At that time, my mind was full of revenge for my brother, so I didn't care about so many things."

"Brother, didn't your leader protect you in this situation?"

"Yes." Luo Jianguo replied.

"That's what I told you! Revenge for a dead brother. Law enforcement agencies turn a blind eye to this kind of thing. If your leader strips you of your clothes, the people below will probably object. So why did you resign, brother?"

Luo Jianguo smiled and said, "No matter why I did this, I definitely made a mistake. Even if the leader is willing to take the blame for me, I can't get over it. I am wrong, and I have to take responsibility for my mistake."

"So you resigned, brother?"

"That's it!"

Lin Haizhou was silent for a long time before he said, "Brother, if I were in your shoes, I wouldn't be able to be as carefree as you are."

"What do you mean by free and easy? In my wife's words, my boss was willing to help cover it up, but I threw away my stable job. I was stupid."

"What do women know? Brother, you are sticking to your principles!"

The two men were chatting happily, and the women were also laughing.

"Mother-in-law, was Luo Ming really so withdrawn when he was a child?" Zhou Qingping asked in surprise.

"Yes! This kid didn't have any friends until he graduated from high school. He used to stay at home during the Chinese New Year and never went out. Later, he met Xiaorong and gradually became more cheerful."

(End of this chapter)