Chinese Entertainment: Starting from 1996

Chapter 526 Use of Funds
After dealing with Golden Harvest's cinema chain in Southeast Asia, Golden Harvest Cinema Company now owns 18 cinemas in the mainland, eight of which are luxury cinemas located in the four first-tier cities, as well as more than 80 pieces of land for building cinemas in nearly 50 second- and third-tier cities.

Then there are 16 cinemas in Hong Kong and 18 cinemas in Taiwan, and we own 42% of the shares of Cathay Golden Harvest Cinemas in Nanyang.

Previously, the cinema chains in Taiwan and Hong Kong were independent of the mainland's Golden Harvest Cinemas. This time, the cinema chains in Nanyang will be integrated and merged into the mainland's Golden Harvest Cinemas Company.

From an independent company to a branch of the mainland Golden Harvest Cinemas, this is also for better coordination of resources and management.

For other mainland film and television companies, if they want to extend their distribution networks into Hong Kong and Taiwan, they have to be cautious and have to find local companies to cooperate with.

For example, in 2008, Huayi wanted to open up distribution channels in Hong Kong and Taiwan through the blockbuster "The Forbidden Kingdom", but it turned to Emperor Entertainment Group in Hong Kong and Warner Bros. in Taiwan.

After the Taiwanese film industry completely collapsed in the 1980s, Hong Kong films and Hollywood films became the mainstream in Taiwanese theaters.

However, Hong Kong films were relatively strong at that time, and Hollywood films were overwhelmed. It was not until the 1990s, starting with "Jurassic Park", that Hollywood used one special effects blockbuster after another to defeat Hong Kong films.

Not to mention Taiwan, even Hong Kong has been conquered by Hollywood movies.

In addition, the Hong Kong production companies later became too greedy and fell out with the Taiwanese film producers, and Hong Kong films began to decline soon afterward. So it can be said that Hollywood movies have almost completely conquered Asia except the mainland.

Only one movie still had some power of resistance. As for India's Bollywood, it had not yet been fully formed at that time.

The main reason why the mainland has not been invaded by Hollywood movies is because of the protection of relevant policies.

Otherwise, how could domestic audiences be interested in domestic films after seeing Hollywood movies with full visual effects in the 1990s and the first decade of the new century?

No matter how artistically valuable your film is, not many people will watch it.

Just like the few films introduced by China Film, each of them was able to take tens of millions of box office in the mainland. "Titanic" even set a record by taking more than 300 million at the box office, which directly silenced the mainland filmmakers.

At that time, the only movie that could truly compete with Hollywood movies with its film strength was this one. Although they also had certain local protections, this one movie really went head-to-head with Hollywood movies, and was slightly better.

"Titanic" is the record holder for movies in almost all countries of the world, but not in one country. The box office champion in film history is "Spirited Away".

But later on, the film industry went astray and became increasingly dependent on animated films, with fewer and fewer excellent original films.

Then in the first decade of the new century, South Korean films began to rise rapidly. Not only were they excellent at the box office, but they were also well-known for their artistic achievements. South Korean films could often be seen in the three major European cinemas.

And what is most admirable is that South Korean films spent almost twenty years laying the groundwork in Hollywood, and then broke out with "Parasite", not only winning the Best Foreign Language Film, but also the Oscar for Best Picture.

Don't think that "Parasite" won the Best Picture at the Oscars just because of its excellent film quality. It would be almost impossible without the operation behind the scenes.

There are so many excellent movies. Why should a foreign movie like yours take away the most important honor of the Oscars?
This is all because the South Korean film industry has spent nearly twenty years laying the foundation in Hollywood bit by bit.

Chinese-language films have never won the Oscar for Best Picture, let alone Best Foreign Language Film. After Zhang Yimou, there has not even been a nomination for Best Foreign Language Film.

As for a movie, Kurosawa Akira won the Oscars for Best Picture and Best Foreign Language Film decades ago.

This is also why when many professional media evaluated the films of these two countries, South Korean films were called a rise, while Japanese films were called a decline.

It's because a movie was once very popular and strong for a long time, while South Korean movies have only become popular in the last 10 to 20 years.

In the twenty years since the new century, although the Chinese-language film market has been catching up with the North American market, the box office of a single film has reached more than 5 billion yuan.

But to be honest, Chinese-language films as a whole are actually regressing.

Although there is not much comparability between art films and commercial films, the answer can be intuitively obtained by looking at the number of excellent films that appeared before and after the new century.

The number of excellent films that have emerged after the new century is not necessarily more than before the new century, not to mention that the number of films produced after the new century is relatively much larger.

In fact, the main reason is that filmmakers are not so serious about making movies anymore.

In the 1980s, 1990s and 2000s, mainland filmmakers didn’t have much money, but they were able to make good movies. Now they have money, and plenty of it, but they still can’t make good movies.

The first decade of the new century was okay, the film industry was not so impetuous, and there were still some high-quality films, but in the second decade, there were really not many high-quality films.

By the third decade, the people in the mainland who had box office appeal and could produce high-quality films were only Chen Sicheng, Zhang Yi, Xu Zheng, Ning Hao, Wang Baoqiang, Shen Tengmali and a few others. Even Huang Bo had fallen behind.

In the past, netizens always laughed at the fact that Hong Kong movies always had the same familiar faces over and over again. Now mainland movies are almost becoming the same.

The only better thing is that the mainland market is big enough and there are enough filmmakers, so one or two good movies can emerge from time to time, and it will not be as stagnant as Hong Kong movies.

In this life, the sudden rise of Golden Harvest has brought something different to Chinese-language films. At the very least, it has stimulated the industry and the higher authorities to pay more attention to the film industry.

The above even expresses support for heavy industrial films in the form of a policy document, which did not exist in the original time and space.

In the future, domestic science fiction blockbusters will not be excited because of one movie, nor will they be wailing because of one movie.

With the above support, plus the attention of major domestic film and television companies, especially after "Interstellar" raked in more than 1 billion yuan at the box office and broke records, they have become even more enthusiastic about science fiction films.

In a few years, the country should be able to establish a basic film industry, which will not be as fragile and disorganized as the original time and space.

However, it is just getting started now. Apart from Golden Harvest, there is no other company in China that has launched a large-scale science fiction production. Even in Golden Harvest, only Liu Zhou and Zhang Yimou have produced hardcore science fiction works.

This cannot be rushed. After all, science fiction films have just started in the country, and the most important thing now is to lay a solid foundation.

However, Golden Harvest Group now has a solid foundation. As long as the shortcomings of the last cinema chain are made up, and as long as Liu Zhou and subsequent people at the helm do not make extremely stupid and risky decisions, it will be difficult for Golden Harvest to decline.

Even if it remains dormant for one or two years or even two or three years, it will be able to recover quickly thanks to the current ecological chain and strong foundation.

The distribution alone is enough to make Golden Harvest invincible. Establishing distribution channels is a very difficult thing. Just like it took Huayi three years from 2008 to now to open up distribution channels in Hong Kong and Taiwan.

This is still the case when the profits are shared with Emperor Entertainment Group and Warner Bros. Taiwan and Hong Kong are comparable to local areas for Golden Harvest, as they not only have their own distribution channels, but also their own cinema chains.

Not to mention Golden Harvest International, an overseas distribution company. Even if domestic film and television companies were given 20 years, it would be difficult for them to open up the channels.

It is much more difficult to establish a distribution network overseas now than when Golden Harvest first opened up the channel. Otherwise, why do mainland films generally go to Emperor Entertainment Group for overseas distribution?
This is because in China, only Enlight Pictures has impressive overseas distribution capabilities, but no company in the mainland can match Enlight Pictures' overseas distribution capabilities.

However, the distribution capabilities of Emperor Entertainment Group are far from comparable to those of Golden Harvest International.

Therefore, even if Liu Zhou's golden finger expires in the future and the production capacity of Golden Harvest Group declines, the group's influence can be maintained with the help of Golden Harvest International.

This is also why the profitability of Golden Harvest International is much lower than that of Golden Harvest Films. Liu Zhou still regards the two companies as the two most core companies, and even attaches more importance to them than Golden Harvest Cinemas.

Now the Golden Harvest Group still has the spare capacity to continue supporting Golden Harvest International's expansion into Europe, which can be regarded as continuing to build a deeper moat for Golden Harvest International.

However, the distribution channels in Europe cannot be opened in a short period of time, and the funds required are not small. Liu Zhou has made preparations not to withdraw funds from Golden Harvest International in the next ten years.

All future profits of Golden Harvest International will be invested in it, so it would be better if he could not ask the group for money.

In fact, if you really calculate it, the funds needed by Golden Harvest International to establish a distribution network in Europe may be no less than that required to build the Golden Harvest Cinema Chain.

Golden Harvest Cinemas has currently allocated 2 billion yuan, and may need to invest another 2 billion yuan in the future. 4 billion yuan is just enough to establish a distribution network across Europe.

This is not nonsense. It took Lionsgate almost five years to open up distribution channels throughout Europe, and it invested more than $400 million in total.

This is because they are a North American film company. For a Chinese company like Golden Harvest, it might be more time-consuming and laborious.

However, the expansion of distribution channels has to proceed slowly and step by step, but Golden Harvest Cinemas can start to move forward in big strides.

The current Golden Harvest Cinema Chain in Hong Kong and Taiwan is already very mature and there is nothing that needs to be changed. In Nanyang, only Cathay Golden Harvest’s shares are left, so there is no need to worry too much.

Only the mainland will be the focus of Golden Harvest Cinemas in the next few years.

"Mr. Gao, what is the current construction status of Golden Harvest Cinemas?" Liu Zhou asked.

“Mr. Liu, we only completed the purchase of the land in July last year, and then we started the construction of the cinema in August last year.

Because of previous experience, the current construction scale is relatively larger.

The plan was made at the beginning of the year, so in August, the construction of 14 cinemas in seven cities, including Tianjin, Shancheng, Rongcheng, Hangzhou, Jinling, Wuhan and Chang'an, started at the same time. "

"Oh?" Liu Zhou couldn't help but raise his eyebrows. "Two in each city?"

"No, Shancheng has three because it's a bigger city, and Jinling only bought a piece of land for building a cinema, so they only built one cinema."

"Jinling is a big city. One cinema is still too few. We need to build at least one more."

"I understand, Mr. Liu. The main reason is that when I bought the land before, time was relatively tight. I only found one suitable piece of land in Jinling, so I bought it first and then planned to look for another suitable one before buying it."

“In fact, you don’t necessarily have to buy land and build it yourself. You can also ask if there are properties for sale in commercial centers and build a cinema there.”

"We have purchased quite a few properties in urban commercial complexes."

"It seems that Mr. Gao has already thought of this. So I won't teach you how to do this. How much money is left in the account of Golden Harvest Cinemas?"

"Of the 1.5 billion yuan previously allocated, nearly billion yuan was spent on purchasing land and property for building cinemas. Then, a luxury cinema was built in Beijing, Shanghai, Guangzhou, and Shenzhen, which cost a total of million yuan.

There are also 15 cinemas currently under construction, all of which are luxury cinemas. Although their scale is not as large as those in the four first-tier cities, it is not too different. According to the budget, this will cost about 300 million yuan.

However, last year Golden Harvest Cinemas made a profit of more than 200 million yuan, plus the funds recovered from the sale of overseas cinemas, the total was about 300 million yuan.

After deducting other miscellaneous expenses, Golden Harvest Cinemas still has 6.2 million in its account. "

“How long will this money last?”

"It should be used up this year. The 15 cinemas in the seven cities are the first batch to be built, and the second batch will be launched in May this year.

The scale of the second batch will be even larger, with plans to start construction of 6.2 cinemas in cities at the same time, which may require the investment of all million yuan.

This may not be enough, and we need to invest part of this year’s Golden Harvest Cinema Line’s profits into it.”

"Can you handle such a big thing at once?" Liu Zhou asked in surprise.

“Of course, in fact, building a cinema does not require too much effort. The most important thing is to ensure that there is sufficient funding.

We have quite a lot of experience in building cinemas, and the construction company we cooperate with is also a Chinese company, so its strength and quality are guaranteed.

All we need to do is supervise them to build and renovate the cinema with guaranteed quality and quantity.”

"Just be aware of it and do a good job of financial supervision. Engineering-related businesses are most prone to corruption."

"Okay Mr. Liu."

It now seems that at this rate, the construction of the more than 80 pieces of land and properties for building cinemas should all begin in two to three years, and it will not take more than five years to be fully put into use.

This means that by 2016, Golden Harvest Cinema Line will become a large-scale cinema chain across the country with nearly theaters.

(End of this chapter)