Huayu 05, our science fiction movie universe

Chapter 677 Recovery
The less-than-ideal box office performance of "Whale Song" in mainland China was actually within the expectations of Galaxy Pictures.

Moreover, while the box office performance was poor, that was only compared to previous films of similar scale in the [Galaxy Cinematic Universe] series. Compared to other films released in the same period, "Whale Song" was actually quite good.

In this situation, people have long since demystified Western environmental narratives and are no longer very interested in them; only some public intellectuals are lavish in their praise for this film.

Ultimately, the film "Whale Song" only grossed 8 million RMB in China, but 6 million USD overseas, with a total global box office of over 50 billion.

This result is definitely profitable relative to the film's cost, and there will also be additional revenue from copyright and streaming services.

In contrast, "The Eight Hundred," released in the same period, performed better at the domestic box office. After 37 days, "The Eight Hundred" finally grossed over 25 billion yuan, with a cumulative audience of 7120 million, becoming Huayi Brothers' most successful film in recent years.

Even though "The Eight Hundred" grossed over 25 billion yuan, most people could still see that it was still powerless to reverse Huayi Brothers' decline.

In the first half of this year alone, Huayi Brothers achieved operating revenue of 9.07 million yuan, a decrease of 41.51% compared to the same period last year. Its net loss was 3.76 million yuan, an increase of 50.03% compared to the same period last year.

As for the return on equity, which reflects the level of return on shareholders' equity, Huayi Brothers has had a negative return for the past three years, and last year it even fell to a historical low.

As for the current ratio, which represents solvency, generally speaking, a value of around 2 indicates that the company has strong solvency.

For example, Xinghe Group's debt repayment ability was 2.7 last year, which is a very healthy figure.

However, Huayi Brothers' current ratio has dropped from 1.7 to 0.7 in the past five years, indicating that its debt repayment ability is already very weak.

In addition, the cash flow ratio represents the operating cash flow available to repay current liabilities. If it is below 0.5, it indicates that the company has a cash shortage.

According to the disclosed financial reports, Huayi Brothers' indicator turned negative in the first half of this year. Although this was partly due to external factors, it is enough to show that Huayi's cash flow is very tight and its ability to withstand risks has dropped to an extremely low level.

These figures alone are enough to show that Huayi Brothers' decline is beyond what can be saved by producing a good director or a good movie.

The overall decline of such companies is multifaceted. It is the result of their failure to focus on content creation and industry development after going public, instead of hoarding large amounts of capital and rashly pursuing diversified cross-industry development.

What? You mean Xinghe Group is also diversifying its business?

Galaxy Group has never given up its deep cultivation in the film and television culture and entertainment field. Its core focus, the Galaxy Cinematic Universe, continues to thrive, growing in scale and becoming more and more complete in its worldview.

Moreover, Wang Hao is a time traveler with the advantage of foresight. Is Huayi Brothers like that?
It's worth noting that since 2011 alone, Huayi Brothers has been investing in cultural tourism real estate projects across the country, planning to build 20 film towns in 14 provinces, and announcing its "film and television + real-life scenery" approach. To date, it has invested over 100 billion yuan.

This behavior may seem like riding the wave of the real estate economy, but Huayi's cultural tourism real estate business is more about cooperating with local real estate companies and adopting the so-called "asset-light" model.

They only invest and authorize, collecting a share of the park's operation and the project's investment returns, while the operation is handled by local real estate companies.

This approach of only wanting to collect rent without investing energy in operation naturally leads to uneven progress among various cultural and tourism projects, ultimately resulting in more losses than profits.

In contrast, Galaxy Group is extremely cautious in its cultural tourism real estate business and has not cast a wide net.

Their family currently only owns three attractions: [Galaxy Cinema], which integrates film production and experiential tourism, and [Galaxy Amusement Park].

Galaxy Group has full control over all four cultural tourism projects, assigning professional and elite personnel to deeply understand needs, provide excellent service, and create a high-end brand.

Therefore, except for the first few years after its establishment, Galaxy Group's film and television city and theme park projects have been profitable in most cases.

In fact, even without the unexpected events of 2020, the massive investment in [Galaxy Paradise] was projected to achieve revenue break-even in its first phase by 2024.

As for Huayi Brothers' other main business, the Internet entertainment sector, this sector mainly includes new media, Internet games, fan economy, VR technology, etc.

In this respect, the gap between Huayi Brothers and Xinghe Group is even greater.

For example, Huayi Brothers has consistently emphasized in its annual reports that it is very optimistic about the future development of the fan economy and internet games. However, looking at its performance in this sector over the past five years, it has declined year by year, with no achievements to speak of.

On the contrary, Galaxy Group not only made a fortune from its AAA title "Black Myth: Wukong".

This year's single-player game "Black Myth: Nezha" also sold out as soon as it was released.

Originally, this game was planned to be released and screened in conjunction with their company's "Ne Zha 2: The Demon Child Conquers the Dragon King". Unfortunately, due to environmental factors, "Ne Zha 2: The Demon Child Conquers the Dragon King" was pulled from its release date, so the two games had to be released at different times.

However, the release of "Black Myth: Nezha" in the first half of this year was not without its advantages. On the one hand, the influence of the previous "Black Myth: Wukong" was still there, and everyone had been looking forward to their new works for a long time.

On the other hand, the external environment has led to a boom in the "stay-at-home entertainment" market, with game sales increasing significantly compared to previous years. "Black Myth: Nezha" can be said to have successfully benefited from this trend.

In addition, regarding the internet sector, not to mention those video novel websites, just one platform like Douyin is enough to make Xinghe Group a leading internet company in China that can rival Alibaba, Tencent, and Baidu.

Moreover, with the success of Xinghe Group preceding it, Huayi Brothers' failure is undoubtedly all the more conspicuous.

Furthermore, the competition during the summer movie season is not over yet.

In July, Huayi Brothers' "The Eight Hundred" surpassed Xinghe Pictures' "Whale Song" at the domestic box office, but given Huayi Brothers' current financial situation, it is becoming increasingly cautious in film investment.

In August, another film from Star River Pictures, Now You See Me 2, was also released.

This film is still a Sino-US co-production, and it is one of the last co-productions produced by Galaxy Group. After all, when the project was initiated, the relationship between the two sides was not so tense.

The story of Now You See Me 2 also takes place after the "Cosmic Blink" incident, and the timeline is the same as that of Operation Red Sea.

The story mainly revolves around the four-person heist team that joins Dr. Chen's team and, after being "upgraded" by the doctor, gains even stronger abilities.

Then they received a mission requiring them to travel to Hong Kong, China. It turned out that after "Operation Red Sea," China obtained a rare and unique mutated red algae sample at sea, intending to transport some back to China for scientists to study, and hand over the rest to the UN government.

And the handover took place in Hong Kong.

So the four-man thief team infiltrated Hong Kong to carry out their theft mission, and outwitted the joint government agents who came to receive special red algae samples.

As for the ending of the story, the four thieves successfully completed their mission, but then received news that their hideout, the Antarctic base, had been destroyed because of the witch.

Fortunately, Dr. Chen Ang, a powerful villain, did not die in "The Witch 2".

In the post-credits scene of Now You See Me 2, Dr. Chen Ang calls them after they've succeeded in their heist and left Hong Kong, suggesting they've found a new base.

Compared to "Whale Song," which leans towards environmental protection and overseas narratives, "Now You See Me 2," a purely commercial film, is undoubtedly more popular with Chinese audiences.

Moreover, the market environment in August, when the movie was released, was significantly better than the previous month, with people going out more frequently and cinemas becoming more crowded.

Therefore, "Now You See Me 2" grossed 3.4 million yuan on its opening day in China. Although the box office did not surge or explode afterward, it did not plummet either, and its trend remained very stable.

When the film finally finished its run in September, it had grossed 17 billion yuan in China, double the amount of "Whale Song". Although it was still not ideal, the film's producers still made a profit when combined with the more than 400 million US dollars in overseas box office.

However, judging from "Now You See Me 2" and the earlier "Whale Song," it's clear that the appeal of Hollywood movies in China has declined to a certain extent.

Even with the support of the Galaxy Cinematic Universe and domestic teams and capital, Hollywood movies are no longer performing as spectacularly at the Chinese box office as they did a decade ago.

It can only be said that after watching movies like "The Three-Body Problem," "The Wallfacer," "The Martian," "Operation Red Sea," and "Sky Ladder," the new generation of Chinese audiences still prefers traditional Chinese culture and narratives.

Moreover, most of the movies released during this period were actually experimental films thrown out to explore new avenues. Truly good works, such as "Ne Zha 2", Wang Hao's "Game Era 1", and Zhang Guoshi's "Wallfacer 2", have not yet been scheduled for release.

Those true movie fans are actually paying close attention to the situation.

According to the latest information, the 2020 Spring Festival film season may be a year packed with blockbuster movies.

Before these blockbuster movies were released, audiences didn't actually have a strong desire to take the risk of going to the cinema.

Moreover, even if you stay at home and don't watch movies, TV series and variety shows are enough to pass the time.

Putting everything else aside, if 2020 was a low point for the film industry, it was definitely a high point for Chinese TV dramas and variety shows.

Perhaps due to the downturn in the film and television industry in recent years, capital has become more cautious in its investment in film and television works, and at the same time, it is more inclined to invest in high-quality dramas.

This caution and favor borne fruit in 2020.

For example, back in May, the historical romance comedy "The Romance of Tiger and Rose" became a huge hit, making the male lead Ding Yuxi famous and the female lead Zhao Lusi a popular post-95 actress.

If this is just an appetizer, then Galaxy Entertainment's suspense drama "The Hidden Corner" is definitely a deluxe feast.

The drama tells the story of three children from a coastal town who inadvertently film a murder while playing at a scenic spot. Their adventure begins from there, and the perplexing case entangles several families, leading them toward an unpredictable future.

Since its premiere on June 16, "The Hidden Corner" quickly went viral through Douyin clips and the "mountain climbing" meme.

Then, actors such as Qin Hao, Rong Zishan, Shi Pengyuan, and Wang Shengdi in the drama also quickly "gained popularity" with their superb acting skills, making it the most popular TV series in 2020.

As a TV series adapted from Zijin Chen's novel "Bad Kids", "The Hidden Corner" has many more surprises than the original work. Whether it is the actors, the production team or the plot design, there are many new ideas, and it is well-deserved to receive a high score of 8.9.

Another film adapted from Zijin Chen's novel, "The Silent Truth," also ignited the film and television industry again in early September, following in the footsteps of "The Hidden Corner."

The drama tells the story of Jiang Yang, a prosecutor with a promising future and a stable career, who, due to a seemingly simple suicide case, goes through many years, pays countless prices, and even risks his life to finally uncover the truth of the case.

This series is so highly regarded that it even surpasses "The Hidden Corner," with a Douban score of 9.2.

However, due to its heavy subject matter, the show didn't have many meme-worthy scenes, so its popularity on Douyin (TikTok) was relatively low, and it didn't achieve the widespread popularity of "The Hidden Corner".

However, both "The Hidden Corner" and "The Silent Truth" have far surpassed the popularity of other films released at the same time.

Both of the aforementioned works are from Starry Sky Video Network's "Mist Theater," a new section created separately by Starry Sky Video outside of its "Galaxy Cinematic Universe" section.

For this new section, Starry Sky Video mobilized a lot of resources within the group, not only utilizing many suspense novels acquired by the copyright department, but also having Star River Pictures specially assign a professional team.

This emphasis has naturally been effective. The "Mist Theater" premiered on June 3 with "The Long Night," followed by "The Bad Kids," "The Witness," "Kidnapping Game," and "The Silent Truth."

With its fast-paced approach of airing 12 episodes every two weeks, coupled with high-quality production, this brand, which has been deeply involved in the suspense genre, became an instant hit and won the hearts of many.

In response to this situation, other platforms such as Tencent, Youku, and iQiyi have also launched similar mini-dramas, with "Missing Persons" going live in early June, followed by "Thorns" and "White Moonlight" in July and August respectively.

It can be said that after internet capital entered the entertainment industry and acquired video websites, exclusive self-produced dramas have become an absolute weapon for major video websites to increase user stickiness.

Similar to exclusive self-produced dramas, there are also exclusive variety shows.

Examples include iQiyi's idol selection variety show "Youth With You 2", Tencent Video's similar show "Produce Camp 2020", and performance variety shows such as "Actors Please Take Your Seats 2" and "I Am an Actor 3".

However, none of these self-produced variety shows can compare to Xinghe Video Network's new female growth and inspirational variety show this year, "Sisters Who Make Waves".

(End of this chapter)