Huayu 05, our science fiction movie universe

Chapter 655 State-owned Assets Enter the Market
The plot of "Train to Busan 2" ends with the South Korean army advancing towards the city and gradually recapturing it. The story concludes with Cho Hae-lun and others, along with a group of survivors, being picked up by the army.

At the same time, this perfect ending can be considered a perfect conclusion to the entire "Train to Busan" series.

Yes, Galaxy Group's plan for "Train to Busan" is to only make two parts.

After all, it's a zombie movie, and similar themes have been overdone. Moreover, this kind of virus is a double-edged sword for the [Galaxy Cinematic Universe]. The virus is too strong and difficult to control, which would dilute the Three-Body crisis and weaken the main storyline.

The virus is too weak and meaningless; it can be easily dealt with.

So making two movies would be enough to enrich the story types of the [Galaxy Cinematic Universe].

There are still two Easter eggs at the end of Train to Busan 2.

The first Easter egg is that Zhao Hailun, who has just returned to the military camp, hasn't even had a chance to catch her breath. When she turns around to look for her younger sister, Zhao Xiumei, she finds that she has disappeared.

In the city not far away, two slender figures ran, jumped, and chased each other between buildings, gradually disappearing into the distance.

Clearly, this Easter egg is related to the upcoming StarCraft Cinematic Universe film "The Witch 2". It's anyone's guess what kind of trouble Zhao Xiumei will cause once she goes there.

The second Easter egg, however, involves a South Korean soldier secretly taking a test tube out of the military camp one night and handing it over to someone.

Then someone hid the strange test tube on the ship and quietly sailed away from South Korea.

Then the scene shifts to a dock where a dark-skinned foreign gang leader stands at the edge, looking at the ship containing the test tubes.

The boat captain opened the box in his hand, his smile froze, and the foreign gang leader glanced at it, drew his pistol from his waist, and blew the boat captain's head off.

After the box landed, a playing card with a "J" drawn on it floated out, standing out conspicuously.

This playing card also evoked memories of the movie "Now You See Me" for fans of the StarCraft Cinematic Universe.

It's quite clear that Now You See Me 2 is also in the works.

The release of "Train to Busan 2" has achieved good results in the Asia-Pacific region. On its first day of release, the film grossed more than $1.4 million worldwide.

Of course, while it's said to be a global release, "Train to Busan 2" was actually only released in China, Japan, South Korea, and Southeast Asia.

As for other regions, we can leave it to Galaxy Group to handle through online streaming channels.

This can be considered a new model for Galaxy Group in film screening and distribution, namely, gradually adjusting the proportion of streaming media platforms in overseas distribution.

Everyone says that a film and television winter has arrived in China, but is there no film and television winter in overseas film markets?

In fact, it's not just China; since 2018, the global film market has been gradually declining.

Everyone at Xinghe Group is very clear about this.

On the one hand, the world, like China, is entering an economic downturn, and conflicts between countries are intensifying.

This further increases the difficulty of global distribution of film and television works.

It's not just Chinese films that are getting distributed in the US; it's also becoming increasingly difficult for American films to be distributed in China.

As for the other aspect, it is of course the advancement of technology, which has led to reforms in the film and television industry.

Although many in the industry refer to film as the fourth art.

But since it is the fourth art, it will inevitably face the predicament of the previous three major arts being gradually marginalized.

This situation arose with the development of technology and is not an exception just because you are an artist.

The advent of cameras, projectors, and televisions naturally rendered opera and drama, which were not very convenient, obsolete.

The emergence of the internet, especially mobile internet, and more convenient forms of entertainment such as games, will naturally impact the film industry, a phenomenon beyond anyone's control.

For example, in China, televisions have become mere decorations in the living room and are increasingly unpopular.

The emergence of mobile internet has also impacted traditional internet.

Similarly, the impact of streaming platforms on movies is undoubtedly enormous.

To put it bluntly, aside from blockbuster movies with special effects that require a high-end projection and sound system in a theater, the viewing experience for other movies in a theater is simply not as good as that of streaming media.

Watching movies on streaming services is cheap and convenient. You can pause, fast forward, rewind, adjust the volume, and even turn on comments to interact with other viewers in real time.

These are experiences you can't have by sitting idly in a movie theater for an hour and a half.

Moreover, this only concerns the audience's experience, not the film and television production company's distribution and promotion issues.

For traditional films to be distributed and promoted globally, the expenses are quite high. Basically, the cost of distribution and promotion is roughly equal to the production cost of the film, and sometimes the promotion cost even exceeds the production cost.

In addition, communicating with cinema chains in various regions and coordinating the global release dates of the film is also an extremely troublesome issue.

Traditional cinema chains and distribution companies are mostly local powers in their respective countries. For example, the six major Hollywood studios invest countless manpower and funds every year to maintain their global distribution systems.

However, streaming media platforms that rely on the internet do not have this problem.

Online distribution bypasses traditional forces such as cinemas and does not require a large number of global distribution personnel, thus streamlining the entire company structure.

In the past, having global distribution capabilities might have been a hallmark of Hollywood studios like the Big Six, but with the economic downturn, turning to streaming media is undoubtedly the best option to ride the wave.

In this respect, both Netflix and TikTok are the best examples.

Even the six major Hollywood studios are shifting their resources and business focus towards streaming media, which is the new direction for global film and television culture.

As for going to the cinema, it may become a new choice for some upper-class individuals to showcase their taste, just like operas, concerts, and plays. Not to mention that Galaxy Group is quietly adjusting its global distribution strategy, "Train to Busan 2" is still playing daily in cinemas across the Asia-Pacific region, earning considerable box office revenue.

At the same time, the popularity of a single film, or even some films, cannot stop the quiet spread of the film and television industry's downturn.

Those working in the industry simply feel that job opportunities are becoming increasingly scarce, and it's becoming harder and harder to get roles.

Some actors even thought it was their own problem, and at some award ceremonies and other public occasions, they shouted to the directors that they were cheap and useful and hoped to be given more opportunities.

But how many problems can this kind of behavior actually solve?

The answer is that it has no effect at all. Capital should use cheap newcomers when it needs to, and use popular celebrities when it can.

As for those cheap and effective actors, they can continue to play supporting roles to elevate their own people's status, and that's already considered very good treatment.

The only good thing is that China still has world-class cultural enterprises like Galaxy Group.

In any case, Xinghe Group has made significant contributions to the industry over the years, played a leading role, and made great efforts to promote the industrialization of the industry, enabling a large number of people working in front of and behind the camera in the film and television culture industry to not only survive but thrive.

Therefore, even now, many actors and actresses behind the scenes are thinking of joining Galaxy Group.

It's like during an economic downturn, when everyone is thinking about taking the civil service exam. Joining Xinghe Group has become a very good option for both those working in front of and behind the scenes in this industry.

However, companies like Xinghe Group that can remain stable during a harsh winter are ultimately only a minority.

According to the "2019 China Film Listed Companies Profit Ranking (First Quarter)" released by China Report Hall at the end of May this year.

In the first quarter of 2019, only 7 out of 17 listed film companies, including Galaxy Pictures, were profitable.

而包括唐德影视、上海电影、横店影视、华谊兄弟、金逸影视、中国电影、万达电影等在内的10家公司皆为亏损状态，亏损金额分别高达0.28亿、0.93亿、1.37亿、1.42亿、1.53亿、2.87亿、6.09亿元。

Some of these companies have been losing money since 2017, which means they have been losing money for three consecutive years. This would be a near-fatal crisis for any company's development.

In this context, the government's support for the film and television industry naturally entered the next stage—the entry of state-owned capital.

From Huayi Brothers to Tangde Media, and earlier Ciwen Media and Huace Film & TV, many established and well-known film and television companies fell into crisis in 2019 and all chose to embrace state-owned assets.

Tangde's "The Legend of Ba Qing" failed to be released as scheduled due to issues with the actors, putting its overall operations in jeopardy. As a result, Dongyang Financial Holdings and Dongyang Juwen were introduced as new controlling shareholders.

Both of these companies are under the jurisdiction of the State-owned Assets Supervision and Administration Office of Dongyang Municipal People's Government. Dongyang is a famous "cultural and film city". Hengdian World Studios, located in Dongyang, is the world's largest film and television shooting base.

Therefore, Tangde's partnership with Dongyang City means choosing local state-owned assets represented by Hengdian World Studios.

Similar to Tangde's partnership with Dongyang City, Huace Film & TV chose to partner with Shanghai.

Also this year, Huace Media signed a letter of intent for a "Cooperation Framework Agreement" with the Shanghai Innovation and Entrepreneurship Investment Center.

Among them, Shanghai Innovation and Entrepreneurship Investment, as an important investor in several government-backed parent funds in Shanghai, is supported by resources from the Shanghai Municipal Government and the Shanghai Municipal Party Committee Propaganda Department, and undertakes the mission of supporting the development of Shanghai's cultural industry.

In addition, Huayi Brothers has also partnered with Jining, choosing Shandong Jingda (a wholly state-owned enterprise), stating that the two parties will jointly build "a cultural and creative industrial park integrating the display of Confucian culture, film and television shooting and production, cultural and artistic exhibitions, tourism, internet celebrity economy, and derivative product development and marketing. They plan to jointly invest in Jining cultural industry projects, improve Jining's cultural industry chain, and make Jining's cultural industry bigger and stronger."

In addition, JX Provincial Publishing Group acquired 15.05% of Ciwen Media's shares for 9.29 million yuan, becoming its controlling shareholder.

Even Xinghe Pictures and Xinghe Paradise, both subsidiaries of Xinghe Group, have Beijing Urban Construction Investment Group behind them.

The entry of state-owned capital and the integration of the industrial chain are the solutions proposed by the authorities to resolve the liquidity crisis in the film and television culture industry.

Against the backdrop of a downturn in the film and television industry, this trend of "nationalization" is gradually accelerating in 2019.
Local governments have invested over 200 billion yuan in film and television companies through industry funds, with a focus on supporting mainstream projects and the construction of film and television bases.

This is partly because Galaxy Group's Galaxy Paradise has set a high bar and achieved remarkable results.

On the other hand, when the real estate economy is sluggish, local governments turn their attention to cultural and tourism projects.

Therefore, various ancient cities, film and television bases, and cultural parks have become the favorites of local governments to develop the new real estate economy.

Regardless of their motives, the entry of state-owned capital has at least given those film and television companies that have been losing money for years a much-needed reprieve.

As for whether state-owned assets will suffer losses?
There will definitely be losses, but that's the case under this economic background.

Previously, when the government targeted outdated production capacity in industries such as steel and coal, it used a combination of "policy restrictions + state-owned asset acquisitions" to bring all the large and small private coal mines under state control.

The same applies to the film and entertainment industry today. There are tens of thousands of film and television companies across the country. Some will be eliminated, some will be acquired and controlled by the government, and some outstanding private film and television companies will remain. In the future, the state will lead the film and television cultural industry, which will roughly form a cultural industry system with Chinese characteristics.

This is the general trend of history. Fortunately, Xinghe Group is currently number one in the industry, and Wang Hao is a world-renowned director. In addition, there are his own and his wife's background and connections. As long as he doesn't lose his mind, there shouldn't be any major problems.

Therefore, compared to other capital players in the industry, Xinghe Group has not invested too much energy in capital operations during this film and television winter. Instead, it focuses on "making good content" and "creating high-quality content" as the core of its business, and on "providing high-quality services" to meet the "spiritual needs" of the people.

On June 2nd, the crew of "The Wallfacer 2" started filming at [Galaxy Cinema]. Director Zhang Yimou, lead actor Chen Kun, and producer Wang Hao were all present.

On June 6, several films, including "X-Men: Dark Phoenix," "Chasing the Dragon 2," and "The Best of Us," were released, kicking off the 2019 summer movie season.

On June 11, "Space Cleaners," a spin-off series of the Galaxy Cinematic Universe, produced by Galaxy Group and co-produced by China and Japan, was launched on major platforms in the Asia-Pacific region.

As soon as the series aired, it topped the trending searches on major platforms thanks to its excellent production quality, with clicks, subscriptions, and viewership all increasing rapidly.

Meanwhile, the series also touched on topics such as space debris and human rights to space exploration, which sparked heated responses and discussions in the media.

The popularity of the TV series even caused the box office of the movie "Men in Black: International," which was released at the same time, to fall far short of expectations.

Several subsequent Hollywood films also failed as a result, fully demonstrating what a "film and television winter" is. It wasn't until July 5, 2019, when Galaxy Group's film was released, that the summer movie season truly gained popularity.

(End of this chapter)