Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 45 Overseas Distribution Rights (Please add to your favorites, vote for this chapter, and recommend it to others!)
Chen Bingwen smiled.

As expected, Ng See-yuen didn't mention the overseas box office of "Drunken Master" at all.

He had read the data in his previous life: Drunken Master grossed about HK$676 million in Hong Kong, which was a remarkable achievement, but the real gold mine was overseas!

Especially in Japan, South Korea, and Southeast Asia, the box office revenue reached tens of millions of Hong Kong dollars!
Wu Siyuan regretted it deeply back then because he severely underestimated the value of the overseas copyrights and sold them off at an extremely low price.

In Wu Siyuan's mind, "Drunken Master" was more like a "side project" after the great success of "Snake in the Eagle's Shadow," a spur-of-the-moment idea he came up with while drunk and in high spirits at the celebration banquet.

He didn't have much confidence in the project itself, the budget was kept extremely tight, and the whole crew had a "make do" vibe.

The only meticulously constructed set was "Su Qier's Hut," while the rest of the exterior scenes were all borrowed locations pieced together from various sources.

During filming, they were also unlucky enough to encounter two typhoons, which blew down the small house they had painstakingly built, making things even worse.

He was only thinking about the "action + comedy" formula that was popular at the time, and lacked a clear understanding and attention to the deeper market layout and copyright value, especially the vast blue ocean overseas.

And this was precisely the opportunity Chen Bingwen had been waiting for.

A huge untapped market created by information asymmetry!
“Mr. Wu,” Chen Bingwen said calmly, “I understand the difficulties faced by the production company and I also understand the risks of film investment.”

"Alright then, to show my sincerity and support, and for the sake of our pleasant cooperation, I can completely waive the box office revenue sharing between Hong Kong Island and Taiwan."

"Oh?" Wu Siyuan was taken aback, then overjoyed.

Taiwan is a major box office market for Hong Kong films, with a box office volume more than three times that of Hong Kong Island.

Giving up the revenue share from Taiwan is like a windfall! He almost agreed immediately.

“However,” Chen Bingwen changed the subject, “Mr. Wu, my investment in the film is not only based on my optimism about ‘Drunken Master’ itself, but also on my genuine hope to leverage the film’s influence to help Chen’s brand go further.”

This investment of 200,000 is a considerable sum for me. I need some additional protection, or rather, a hedge against future possibilities.

Wu Siyuan's heart tightened again, and he asked cautiously, "Mr. Chen, what do you mean?"

“I noticed that the script for ‘Drunken Master’ is set in the late Qing Dynasty and early Republic of China, with strong Chinese cultural characteristics and kung fu elements,” Chen Bingwen said slowly. “This type of film, in addition to the Hong Kong and Taiwan markets, also has certain distribution potential in overseas markets, especially Southeast Asia and even Japan and South Korea, right?”

Wu Siyuan nodded: "That's how it is in theory."

Kung Fu films have always had a market in Southeast Asia, and distributors have also tried them in Japan and South Korea, but the results have been inconsistent, especially in the Japanese market, where acceptance of Hong Kong kung fu films has never been high, limiting box office potential.

His tone carried a hint of disdain for the Japanese market.

“Yes, I’ve heard about that too.” Chen Bingwen agreed. “Overseas distribution is indeed complicated. There are costs everywhere, including channels, revenue sharing, and promotion. The risks are not small.”

For a company like Siyuan Pictures, which focuses on content creation, handling overseas distribution rights, especially in less mature markets, might actually be a burden?

Wu Siyuan wholeheartedly agreed: "Mr. Chen is right! Overseas distribution takes up too much energy, and the revenue share is often squeezed very low by intermediaries. Sometimes, after a lot of effort, the money you end up with may not be as much as if you had focused on doing well in the local market."

“So I was thinking,” Chen Bingwen continued, “since I gave up the box office revenue share in Hong Kong and Taiwan and took on this risk, then as a balance, or as some extra compensation for my risky investment, could Siyuan Pictures authorize me to handle the overseas distribution rights of ‘Drunken Master’, or at least the distribution rights in some overseas markets?”

In this way, Siyuan can focus on film production and the core markets of Hong Kong and Taiwan, without having to worry about overseas distribution.

As for me, I have the opportunity to try to expand overseas channels, which can be regarded as an exploration of the internationalization of the Chenji brand.

If it works out, it'll be good for both of us; if it doesn't, the loss will be on my side.

Wu Siyuan fell into deep thought.

Chen Bingwen's suggestion sounds reasonable.

The other party gave up the revenue sharing in Hong Kong and Taiwan, assumed the main risks, and demanded overseas distribution rights as compensation.

Moreover, the other party's initiative to assume the risks and costs of overseas distribution is indeed a way for Siyuan Pictures to get rid of a potential troublesome burden.

“Mr. Chen’s suggestion is worth considering,” Wu Siyuan responded cautiously. “However, the overseas market is divided into many regions, such as Southeast Asia, Japan and South Korea, Europe and the United States. Which specific regions does Mr. Chen want the distribution rights for?”

How are the scope and duration of the authorization defined?

Chen Bingwen was secretly pleased, but after deliberately remaining silent for a moment, he said, "Mr. Wu, to be honest, I am also just beginning to explore the overseas market, and I dare not be greedy."

The European and American markets are too far away, the cultural differences are greater, and the risks are too high; I don't have the capacity to get involved at the moment.

He paused, as if weighing a less important option: "The Japanese market and the Southeast Asian market. As Mr. Wu just mentioned, they are not very receptive to Hong Kong kung fu films, their box office potential is limited, and they may be more troublesome to operate."

However, it is precisely because of this lackluster nature that it might be a good place for a novice like me to try.
How about this: Siyuan Pictures will grant me the exclusive, permanent, and full rights to "Drunken Master" in Japan and Southeast Asia, including all rights such as theatrical screenings, television broadcasts, videotape distribution, and merchandise development.

Firstly, the market value of these two markets is relatively low, so licensing them to me would not be a significant loss for Siyuan;

Secondly, it's also a way for me to exchange the risk of giving up revenue sharing in Hong Kong and Taiwan for an opportunity to practice in the Japanese and Southeast Asian markets.

What if I get lucky and manage to make some progress? Of course, if I don't, I'll bear all the losses myself, and it will absolutely not affect Siyuan Pictures.

Wu Siyuan quickly made his calculations.

If the 200,000 yuan in cash is immediately in hand, and the film "Drunken Master" can be considered a success if it can maintain its core box office in Hong Kong and Taiwan without being taken away by others.

As for the box office revenue in Japan and Southeast Asia, as Chen Bingwen said, its value is limited and its operation is troublesome.

Delegating authority is actually a way to get rid of a burden.

By this calculation, it seems like I've gotten a great deal.

This Chen Bingwen, either he has too much money to burn, or he has some unknown confidence in overseas markets.
But in any case, the offer is too tempting!
“Okay!” Wu Siyuan no longer hesitated. “Chen Sheng is quick-witted and decisive! I accept this plan!”

The overseas copyrights for Japan and Southeast Asia belong to Mr. Chen! I'll have my lawyer prepare the contract immediately!

"Great!" Chen Bingwen laughed. "Please make sure the contract details, especially the scope of copyright ownership and distribution responsibilities, are clear and unambiguous."

My lawyer will liaise with you.

Regarding funding, HKD 200,000 will be deposited into the account immediately upon signing the contract.

Wu Siyuan hung up the phone, his heart still pounding.

HK$200,000!
The funding gap for "Drunken Master" was filled instantly, and there was even a surplus!
Although he gave up box office revenue sharing in Hong Kong and Taiwan, he gained a seemingly elusive copyright to Japan and Southeast Asia in return. By any measure, this deal was a huge win for him.

"Ah Qiang!" he shouted, "Contact Attorney Chen immediately!"

Tell him to draft the contract as quickly as possible!

Key point: Mr. Chan Ping-man invested HK$200,000 to acquire a 100% stake in the "Drunken Master" project. Based on the investment ratio, he owns approximately 28.6% of the shares. However, he gave up all box office revenue sharing in Hong Kong and Taiwan in exchange for the exclusive, permanent, and full rights to "Drunken Master" in Japan and Southeast Asia, including but not limited to all rights such as theatrical screenings, television broadcasts, videotape distribution, and merchandise development.

The terms must be clear, especially regarding the definition and ownership of Japanese copyright; there can be no ambiguity!

"Understood, Mr. Wu!" Ah Qiang perked up and immediately went to do it.

He had been by Wu Siyuan's side for many years and knew how excited his boss was at that moment.

With this 200,000, the "Drunken Master" crew had a budget of 700,000, only 100,000 less than the budget of "Snake in the Eagle's Shadow".

The filming of "Drunken Master" no longer required being stingy and searching for investors everywhere.

Wu Siyuan leaned back in his chair, lit a cigarette, and as the smoke swirled, Chen Bingwen's young yet remarkably composed face reappeared in his mind.

Is this young man insightful or just burning money?
As a major ticket market in Asia, Japan is one of Shaw Brothers' key markets for expansion.

If Shaw Brothers knew that someone had secured the Japanese distribution rights, they might have viewed it as a potential challenge to their distribution network or a struggle for resources.

But what the hell!

The money is in hand, and the movie can be made—that's the most important thing!
Meanwhile, the Kwun Tong Food Factory.

Chen Bingwen put down the phone, a barely perceptible smile appearing on his face.

Even without the Japanese and Southeast Asian copyrights, Chan Ping-man would still make a profit from the advertising value of "Drunken Master" alone, with a budget of HK$200,000.

What's more, it also includes a goldmine of copyrights from Japan and Southeast Asia worth tens or even hundreds of millions in the future. This deal is worth it!

More importantly, through this collaboration, he successfully linked "Chen's Kitchen" with the soon-to-be-hit "Drunken Master".

Once the movie is released, the line "After the fight, go to Chen Ji for a bowl of sweet soup to soothe your throat" will become the best brand advertisement.

"Brother Wen, did Wu Siyuan agree?" Gao Zhenhai, who had been listening nearby, couldn't help but ask.

"Yes, I agree. The contract will be sent over soon." Chen Bingwen nodded. "Ahai, you need to speed things up on your end too."

Director Ling will officially start work tomorrow. You are responsible for helping her familiarize herself with all aspects of the factory, especially the production process, quality control standards, and personnel structure.

Remember to fully cooperate with her work.

"Understood!" Gao Zhenhai straightened his back. "Don't worry, Brother Wen, I will definitely cooperate with Director Ling."

“Also,” Chen Bingwen added, “for the bottled sugar water project, you also need to start looking for suitable glass bottle suppliers and hot filling line equipment suppliers.”

"As soon as Professor Zhou's plan is released, we must act immediately."

"Okay! I'll get right on it!" Gao Zhenhai agreed with great enthusiasm.

(End of this chapter)