Reborn Action Star: Starting in Hollywood

Lee Soo-man could hardly believe his ears.

"Mr. Lin? You mean..."

"That's right, you heard me correctly. I hope SM Entertainment will be able to lose money in the future."

"I'm sorry, please forgive my slowness. I didn't follow your intention, and I humbly request your guidance."

Lee Soo-man immediately sat up straight, adopting an expression as if he understood his superior's intentions.

It has to be said that Lee Soo-man has truly mastered all the workplace skills.

He knew that whenever a leader assigned you a task, you shouldn't rush to express your opinion or start working on it.

Instead, you must first fully understand the leader's thoughts and intentions.

Otherwise, the more effort you put in, the worse the result may be.

Seeing Lee Soo-man, the godfather of K-pop and the tyrant of Korean entertainment, being as serious as a primary school student in front of him, Lin Yuan couldn't help but feel pleased.

Regardless of whether he truly meant it, he had no choice but to present a very sincere attitude.

Lin Yuan knew that if he wanted Lee Soo-man to carry out his plan without any compromise, he had to clearly explain his ideas from both the perspectives of benefit and feasibility.

So he asked, "Do you know what the greatest value of an entertainment company is?"

Hearing Lin Yuan use this guiding approach instead of issuing orders, Lee Soo-man was taken aback at first, but quickly replied:
"It's probably not about making money, because the entertainment industry is too small a market. The amount of money earned is nothing compared to other industries."

Therefore, entertainment industry capital is at the bottom of the hierarchy of capital.

At this point, Lee Soo-man suddenly realized his mistake and quickly added, "Of course, this situation has changed because of your appearance, Mr. Lin. Who dares to say that Lin Yuan Film Studio is making less money?"

Lee Soo-man looked at Lin Yuan with trepidation, thinking to himself: Heroes are truly not limited by age.

Lin Yuan single-handedly broke the ceiling of entertainment company revenue and even made Lin Yuan Film Industry the world's most valuable company.

This achievement was simply unbelievable, leaving Lee Soo-man no choice but to admire it.

The reason he wanted to report to Lin Yuan today was not just to flatter and get closer to him, but also because SM Entertainment was at a crossroads, and he genuinely wanted to hear Lin Yuan's opinions to help the company go further.

Lin Yuan smiled and replied, "I'm just an exception. My presence won't change the fact that entertainment companies are not very profitable. Don't be nervous, just keep going."

Seeing how kind Lin Yuan was, Lee Soo-man felt much more relaxed.

Although Lin Yuan has more assets and greater global influence than Li Fuzhen, Lin Yuan is much easier to get along with and doesn't put as much pressure on him.

This further increased Lee Soo-man's positive feelings towards Lin Yuan.

Lee Soo-man considered for a moment and continued, "Although entertainment companies don't make much money, they have a huge influence in the cultural field. They can drive popular trends, export values, and even enhance international cohesion."

I think that's where the greatest value of an entertainment company lies.

“You’re absolutely right. Entertainment companies are a crucial component of a country’s soft power,” Lin Yuan nodded in reply.

"Cultural soft power?"

Lin Yuan then realized that it was 2005, and the concept of "soft power" that people would take for granted in later generations was not known to anyone at that time.

So Lin Yuan explained briefly: "Military, economy, and technology are hard power, which are tangible and quantifiable."

Culture, this kind of 'soft power,' though invisible and intangible, is the most powerful lubricant for human society.

Lin Yuan phrased it tactfully, using the word "lubricant" instead of "mindset domestication" or "ideological output."

But he believed Lee Soo-man would understand, since he had already gone to such lengths.

Sure enough, after Lee Soo-man heard Lin Yuan's words clearly, he became excited and his face turned red, just like at the dinner table last night.

What he feared most was that Lin Yuan, for the sake of his own ideals, would force him and SM Entertainment onto a path "full of ideals" but lacking in profit.

However, if Lin Yuan's proposed plan can be implemented, Lee Soo-man will only benefit more: he will have a wider influence around the world, just like Lin Yuan.

For Lee Soo-man, who is over 50 years old, his physical functions are declining. Material enjoyment is not important; the pursuit of spiritual fulfillment is his greater motivation now.

“I understand now. Compared to the value of cultural ‘soft power,’ making money is not important at all,” Lee Soo-man said excitedly. “When our goal is not to make money, we can more effectively seize the market.”

Lin Yuan shook his head: "If we think like that, we might not only fail to seize more market share, but we might also lose our existing base."

"what?"

"The goal is not to make money, but we must do things with making money as the standard," Lin Yuan emphasized.

"what?"

Lee Soo-man was stunned again.

Didn't you say you hoped to lose money?

Why must we prioritize making money when doing things?

Why do they lose their core base?

Lin Yuan was not surprised by Lee Soo-man's confusion, because he had no experience in doing "public welfare" in the cultural field.

Or rather, in capitalist countries, there has never been an entertainment company whose goal is not to make as much money as possible.

But Lin Yuan knew very well that if the goal wasn't to make money, the culture simply couldn't be exported.

Because it's easy to fall into the trap of formalism and didacticism.

Without the pressure to make a profit, companies will unconsciously prioritize value output, but when you do this, users will leave.

The cultural products made back then became so popular that no one wanted them even if they were given away for free.

Therefore, products must be made with the goal of making money; otherwise, manufacturers will not respect the market and please consumers, and the idea of ​​cultural export will ultimately become a castle in the air.

"Consumers will only like your product if you want to make money from them; otherwise, it will just become self-indulgence," Lin Yuan explained.

A shrewd person like Lee Soo-man naturally understood immediately.

He quickly realized: "I understand. The more users are willing to spend money, the more you've impressed them."

Following Lin Yuan's line of thought, Li Xiuman continued, "So the losses you mentioned aren't in product marketing, but rather that we make money first and then spend it purposefully?"

Lin Yuan nodded, it seemed that Lee Soo-man had fully understood his thoughts.

"Then... in which areas should we make concessions?" Lee Soo-man asked.

"Both public welfare and artist contracts are primarily for public welfare," Lin Yuan said.

“I understand charity; taking from the people and using it for the people can greatly enhance the company’s appeal and influence. But what does ‘artist contract’ mean?” Lee Soo-man asked.

“SM Entertainment’s contracts are too harsh right now, which is not good for the company’s long-term development. The revenue sharing can be more lenient, and the management contract terms should be stricter,” Lin Yuan said.

After Lin Yuan gave his answer, Lee Soo-man did not respond immediately, but began to seriously consider it.

SM Entertainment's contracts are known for their stringent nature.

首先就是被称为奴隶合约的超长期限合同。    合约期通常为13年，若算上练习生时期（通常2-5年），艺人实际绑定时间可能长达15-20年。

This is almost the most precious time of an artist's youth.

TVXQ, Super Junior's Han Geng, H.O.T., S.E.S.... These early artists who were made famous by SM Entertainment almost all had serious contract disputes with the company.

If it's just a long term but the treatment is good enough, it can't be considered an unequal treaty.

After all, jobs within the system are for life, so no one complains about the long term.

SM Entertainment's exploitation of its artists... is enough to make countless capitalists envious.

Album sales were required to recoup the company's costs first, with artists receiving only 5%-10% of the profits (the industry average at the time was 30%-50%).

In reality, SM also transferred revenue through affiliated companies, so artists actually received less than 1% of the total revenue.

Such an outrageous profit-sharing mechanism is very likely to cause complaints from the artists under its management, but most of them dare not speak out.

Because the cost of breaking ties with the company is too high.

If an artist unilaterally terminates their contract, they must compensate the company with three times their expected future revenue…

That's absolutely outrageous! It's three times the "future" or "expected income"!
Before you've even earned the money, they've already estimated an amount and are demanding you pay three times the amount!
Even if an artist survives until the end of their contract, if they refuse to renew it after the contract expires, they must compensate for the "training costs" (including food, lodging, and training expenses during their trainee period).

It can be said that in its early days, SM Entertainment was a huge star-making factory built on blood and tears.

Lee Soo-man was well aware of how unseemly his actions were, and he also understood that the core asset of an entertainment company was its people. If he wanted the company to achieve stable and long-term development, he had to "put people first."

Everyone understands the principle, but it is often difficult to put into practice.

Because the success rate of artists in the entertainment industry is very low, just like in movies and games, success in the cultural field is extremely difficult to replicate, requiring the right timing, location, and people.

It's even gotten a bit mystical, which explains why movie directors, game producers, and agency owners like to go to temples to burn incense and pray for blessings whenever a product is released, or even hold press conferences there.

Most entertainment companies are in a state of not making any business for three years, but making a profit for three years when they do make a profit.

Therefore, once a group of artists succeeds, the company must recoup the costs of other failed projects by leveraging that group of artists.

It's not enough to just let successful artists shoulder all the costs. Major shareholders aren't here to do charity; they're also waiting for dividends and returns, and to cash out their shares when the company's performance improves.

Under these circumstances, Lee Soo-man was forced to exploit the artists under his management.

If he didn't do that, he would be the one to die.

but……

Things seem different now than before?

Currently, the vast majority of SM Entertainment's shares are held by external parties, namely Lim Won and Samsung Group.

Although there are a few other investors, as long as Lin Yuan is willing to buy back their shares, he can achieve a complete change in the company's development direction.

In the future, SM Entertainment will no longer need to worry about performance pressure, and will naturally be able to offer more benefits to its artists.

I don't expect these artists to live a life of luxury, but at least they won't have to be "slaves" like they are now.

"I understand. I will prepare a specific plan right away and then come back to ask for your guidance," Lee Soo-man said solemnly.

"If you need any support, just contact Ms. Aragaki. Whether you need manpower or money, I will always be your strong backing," Lin Yuan replied.

Lee Soo-man rose from his chair and bowed deeply to Lin Yuan.

It took him a full five seconds to get up.

Today's harvest far exceeded his expectations.

The thought that his later life might reach its peak because of this filled Lee Soo-man with enthusiasm.

Sure enough, for older men, women are not important; power is the most attractive thing.

Li Xiuman's ambition was seen by Lin Yuan, and he needed that kind of ambition.

Ambition is the driving force for work.

However, since the matter was almost settled, Lin Yuan waved his hand, indicating that Lee Soo-man could leave.

Lee Soo-man didn't linger, bowed to Lin Yuan again, and left.

Watching Lee Soo-man's departing figure, Lin Yuan felt a weight lifted from his heart: he was one step closer to his grand entertainment vision.

To outsiders, given Lin Yuan's current abilities, why would he need to waste his energy on the small pond of K-pop?

That's because, having experienced the future, he knew that K-pop would be the most successful in internationalization over the next twenty years.

Even those who dislike K-pop have to admit that the international influence of Korean dramas, movies, and pop songs is growing day by day.

You can laugh at small countries for being unable to compete in high technology and only being able to resort to childish things like building a nation on culture.

But it is precisely this kind of childish approach that has greatly enhanced South Korea's cultural soft power, just like Japan.

When people from other countries come to consume your cultural works, they will naturally come to understand your culture, your history, and even your values.

Cultural works, as a medium, can be seen as a huge advertising display, exerting a subtle and pervasive influence.

Many Chinese people understand Japanese culture in this way: ninjas, the Warring States period, and many are very familiar with Akihabara, Shinjuku, and Hokkaido.

This influence, in turn, brings cultural affinity and cohesion.

Otherwise, given the heavy historical burden between China and Japan, it would be impossible for the vast majority of Chinese people to choose Japan as their first travel destination when going abroad.

(Thailand and Japan are neck and neck, but considering Thailand's lower costs, Japan is definitely number one in terms of actual total spending.)
In Lin Yuan's previous life, Japanese cultural products mainly influenced young Chinese men. Short films, which were a necessity, along with anime and games, formed an extremely powerful cultural product matrix.

Korean culture, primarily expressed through pop songs, variety shows, and dramas, has contributed to the popularity of young female users in China.

Of course, this is just a stereotypical label, and the reality is far from it.

For example, in the new century, Japanese dramas also had many wide influences, such as "Legal High," "The Full-Time Wife Escapist," "Unnatural," and "Hanzawa Naoki."

For example, Korean comics have also captured the hearts of many Chinese men, including one called "Love Swap Agreement"...

Many people know Shaoen, Xiangyu, Zhouxi, and Zhongxun...

Lin Yuan has a great influence in both Japan and South Korea.

What he can do is not only integrate high-end manufacturing, but also integrate a large cultural and entertainment industry.

The development of the cultural and entertainment industry in China is affected by the economy and well-known factors, so it can be disregarded for the time being.

However, his next plan is to build a super cultural empire based in Hollywood and with Japan and South Korea as its foundation.

By then, Lin Yuan Film Industry may have to change its name to "Lin Yuan Entertainment".

Lin Yuan seemed to have already envisioned a cultural and entertainment empire spanning oceans and covering the globe, slowly taking shape. (End of Chapter)