Huayu: Starting from joining the mainstream entertainment industry in 96

Chapter 17, Section 17: A Word That Must Be Shocking (Revised)

In the morning, the sunlight streamed through the tall windows of the Beijing Film Studio's administration building, casting long patches of light on the terrazzo floor. The air was filled with the distinctive smell of the old building, a mixture of paper, dust, and a faint trace of disinfectant.

Following the report from the factory manager's assistant.

Wang Sheng knocked on the door of the factory director's office.

"Enter."

Han Sanping's voice remained as steady as ever.

Wang Sheng pushed open the door and entered.

Han Sanping was seen hunched over his desk reviewing documents, without even looking up.

The office was filled with smoke, and the ashtray already contained four or five cigarette butts.

"Director."

Wang Sheng called out respectfully.

Han Sanping then looked up, glanced at Wang Sheng, his gaze lingering on him for a second, and pointed to the chair opposite him: "Sit down. Are you fully healed? I heard your business is thriving and you're famous throughout the capital."

The tone of voice did not convey praise or criticism.

Wang Sheng sat down as instructed, his back ramrod straight: "Reporting to the factory director, my injury has long since healed. I dare not be idle, and I always keep in mind the factory director's instructions to give full play to my initiative and face the market. Factory director, I am here today to report to you on the recent progress of 'Shengying Media'."

Although Beijing Film Studio did not directly invest in Shengying Media, its subsidiary, Beijing Film Audio-Visual, held 20% of Shengying Media's shares. By all accounts, Shengying Media was also a subsidiary of Beijing Film Studio. Therefore, there was no problem with the procedure when he came to report to Han Sanping.

"Well, tell me."

Han Sanping put down his pen, leaned back in his chair, and assumed a posture as if listening to a report.

Wang Sheng took out a few pages from his folder and placed them on the desk in front of Han Sanping. He began to report in a clear and organized manner: "First, there's the high-end business. In addition to the 'Golden Jubilee Collection' package for 9999 yuan on May 5th, for which contracts have been signed and deposits have been received, we also had detailed discussions with two potential clients this afternoon and evening. They have a strong intention to place orders, and the chances of closing the deal are very high."

Han Sanping nodded slightly, his face expressionless, but there was a subtle shift in his eyes.

The fact that Wang Sheng was able to attract clients willing to spend nearly 10,000 yuan to film wedding videos proves that his previous "crazy" idea did indeed hit a part of the demand in the high-end market.

"Secondly..." Wang Sheng changed the subject, raising his voice slightly, with barely suppressed excitement, "We have just reached an exclusive cooperation agreement with 'Purple House,' a long-established wedding planning company in Beijing. For the next year, all the photography and videography services in all wedding planning businesses undertaken by Purple House, from low-end to mid-to-high-end, will be contracted out to us, 'Shengying Media.'"

"Clap."

Han Sanping gently tapped the lid of his teacup against the rim, making a crisp sound. He looked up at Wang Sheng with surprise: "Purple House? Exclusive contract? Are you sure?"

This news was clearly beyond his expectations.

He had heard of Purple House's status in Beijing's wedding industry, and the significance of Wang Sheng securing an exclusive partnership with such a platform far exceeded that of taking on a few individual orders. This meant a stable and substantial source of business, and that "Shengying," this makeshift operation, had truly begun to penetrate a large-scale market.

“Absolutely true, Factory Manager,” Wang Sheng replied confidently, pointing to the paper he had just placed on his desk: “This is the contract we just signed yesterday, for a year, with service packages and prices listed.”

Han Sanping picked up the documents on the table and quickly browsed through them.

When he saw the prices of "1999 yuan", "3999 yuan", and "6999 yuan" and the astonishing gross profit margin estimated later, Han Sanping's brows furrowed slightly involuntarily.

Wang Sheng seized the opportunity and pressed his advantage: "Factory manager, this is only the business volume of Purple House."

I conducted a simple survey and calculation of the size of the wedding market in Beijing.

In 1995, the number of couples registering for marriage in Beijing was approximately 8.

Even if only 10% of newlyweds choose professional wedding services, that's still 8000 weddings.

As an industry leader, even if Purple House only holds 15% of the market share, that's 1200 weddings per year.

I got this data offhand while drinking with Manager Zhao yesterday.

He pulled out the spreadsheet he'd been working on all night, his speech quickening as he presented the numbers clearly: "Assuming that out of these 1200 weddings, 60% choose the low-end package, about 720 weddings, with a gross profit of about 1000 yuan per wedding, resulting in an annual gross profit of 72 yuan. 30% choose the mid-range package, about 360 weddings, with a gross profit of about 2000 yuan per wedding, resulting in an annual gross profit of about 72 yuan. 10% choose the mid-to-high-end package, about 120 weddings, with a gross profit of about 3000 yuan per wedding, resulting in an annual gross profit of about 26 yuan."

Wang Sheng didn't tell the truth; the gross profit was much higher than he said.

He paused for a moment, then continued, "In other words, the annual gross profit from the Purple House contracting business alone is estimated to reach 1.8 million yuan. This doesn't even include the high-end business handled by our own brand, 'Shengying Media,' which has an even higher gross profit margin. If we can get 4-5 high-end business deals per month, even just the most basic Golden Jubilee Collection package, each deal has a gross profit of 4000 yuan, which adds up to about 200,000 yuan in gross profit per year. All the business combined... 2 million yuan!"

Wang Sheng looked intently at Han Sanping: "Factory Director, this is just a very conservative estimate, only counting Zifangzi. If we can further expand the market ourselves, or cooperate with other wedding companies, earning hundreds of thousands a month, or even reaching a million, is not impossible!"

The words fell.

The office fell silent.

Han Sanping put down the documents, leaned back in his chair, interlaced his fingers in front of him, and scrutinized Wang Sheng with a deep gaze, as if he wanted to get to know this young man from the Beijing Film Studio all over again.

He never expected that in such a short period of time, Wang Sheng would not only achieve a breakthrough from zero, but also draw such a big pie in the sky.

This pie is not a castle in the air, but is based on a newly signed physical contract and a set of seemingly rough but logically clear calculations.

The profits are very attractive, and the prospects are bright.

But Han Sanping almost immediately saw the huge shadow behind this bright prospect.

"Your algorithm is based on an ideal state where there is sufficient equipment and manpower, and everything is operating efficiently." Han Sanping slowly spoke, hitting the nail on the head: "But what do you have now? With the old equipment supported by the factory and a loan of 50,000 yuan, how many machines can you run at the same time?"
If orders for Purple House come in quick succession, can you handle them? Where will you get the manpower? Will the temporary staff you hire have the necessary skills?
Where will the money for equipment depreciation and replacement come from?

He paused, then emphasized, "More importantly, the biggest cost item in your algorithm—equipment purchase and depreciation—has been obscured by leasing and extremely low depreciation rates. If you really want to operate at scale, the investment in equipment will be a bottomless pit."

Wang Sheng met Han Sanping's gaze and said in an extremely calm tone, "Factory Director, you are absolutely right. So, I'm here today not only to report on our achievements, but also to request the factory's continued support."

He took out another plan and handed it to him with both hands: "This is our preliminary equipment procurement list and personnel expansion plan. In order to realize the service capabilities promised to Purple House and further seize the commercial-grade wedding video recording market, we urgently need to supplement equipment, as well as corresponding lighting, recording, and post-production support. The preliminary estimate is that we need to invest at least one million yuan, mainly for equipment procurement."

"one million?"

As Han Sanping took the plan, his brows furrowed completely, and he even softly repeated the number.

This was an enormous sum of money at the Beijing Film Studio in 1996.

The factory is facing a severe cash shortage. Many legitimate film projects are struggling to make ends meet. How can they possibly allocate a million yuan to support a "tertiary industry" business that produces wedding videos?
It’s simply a fantasy.

He looked at Wang Sheng, whose face was full of confidence and desire, with the fearless spirit of a newborn calf, just like his own when he was young.

But as the factory director, he had to be responsible for the entire Beijing Film Studio.

The atmosphere in the office instantly became tense.

Han Sanping remained silent for a full minute, clearly engaged in a fierce internal struggle.

Finally, he slowly raised his head, his gaze regaining its usual calm: "The factory can't possibly give you a million in cash."

Han Sanping said in an unquestionable tone, "Beijing Film Studio is a place for making movies, not a bank. So many eyes are watching, so many projects are waiting. It's impossible for them to invest so much cash in a pilot project. The risk is too great, and there's no such rule."

Wang Sheng had anticipated this, so he didn't rush to speak.

He really wasn't trying to fool Han Sanping; he needed one million to purchase equipment.

According to Li Weiguo's calculations, if all the equipment used is home-grade, it wouldn't cost a million at all; a few hundred thousand would suffice.

However, the entry barrier for home-use products is too low, making it impossible for them to significantly impact the current wedding video recording market.

What Wang Sheng wants to do is not only to achieve a disruptive advantage in the high-end market, but also in the low-end, mid-range, and mid-to-high-end markets. To achieve this, he needs to use equipment that is at least at the business-grade level.

Seeing that Wang Sheng remained calm and composed, Han Sanping recalled the contract he had just reviewed and couldn't help but threaten Wang Sheng, saying, "If you fail to complete the Purple House order on time, you will have to pay a penalty of 500,000 yuan. If you can't afford it, you'll end up in jail."

Wang Sheng raised an eyebrow and said loudly, "What's 500,000? At least 80,000 couples get married in Beijing every year. Even if the average wedding cost is only 1,000 yuan, the entire wedding market is worth 100 million yuan. In the future, with the upgrading of consumption and the rise in wages, it may reach a scale of 1 billion or even 10 billion yuan. If I can take over 50% of the wedding video market in the country, I will never have to worry about anything for the rest of my life. I can also help out our factory and invest in a few movies for fun."

"You're quite the braggart, kid. You're almost as good as Boss Mou..."

Hearing Wang Sheng casually mention hundreds of millions or billions, Han Sanping couldn't help but think of an investor he often visited—Boss Mou, who traded canned goods for airplanes. That guy was even more outrageous, saying he would install elevators in the Himalayas... He couldn't help but make a sarcastic remark.

But thinking about it carefully, it's actually quite possible!
But in the factory...

wrong.

This kid is so calm and collected...

We have a backup plan!
Han Sanping stared at Wang Sheng and asked, "If you have a solution, just say it. I'll see if I can find some inspiration."

"Lend me some money..."

Wang Sheng made a startling statement: "There are at least five hundred families of technical workers in the factory. Although the film and television industry is still in a downturn these years, it is much better than before. There are more opportunities to earn extra money. It is not uncommon for each family to have two thousand yuan in savings. I will kneel down and explain the business prospects to each family and help them get rich. I do not believe that we cannot raise one million yuan."

Wow, what a young man!
A hint of admiration flashed in Han Sanping's eyes.

This kid has that same tenacity he had back in the Emei Film Studio when he was working on "cassette films" with a do-or-die spirit.

That happened in the 80s...

Cassette films from the 80s often contained erotic content.

Regardless, Han Sanping brought in four million yuan in revenue for Emei Film Studio with his "cassette films," leaving behind valuable funds for the studio's revival. This was one of the important reasons why Han Sanping was transferred to Beijing Film Studio as its director.

"Hmm..." Han Sanping pondered for a moment: "Raising funds from workers is indeed a good method. Back in my day..."

Han Sanping suddenly changed the subject, saying, "Workers today are indeed richer than before. In the 80s, workers didn't have this much money in their pockets. However, your method of raising funds is inappropriate and too undignified."

Wang Sheng humbly asked for advice: "Factory manager, what do you suggest we do?"

Han Sanping sized up Wang Sheng: "The 80% of the shares haven't been distributed yet, have they?"

Damn, I thought you'd forgotten about this.

Wang Sheng shook his head calmly: "No, the company is still in its early stages and the staff is not yet stable, so it's difficult to allocate positions."

Han Sanping seemed to see through Wang Sheng's thoughts. Like an old fox, he curled his lips slightly and said, "Young man, don't always think about taking all the benefits for yourself. Human resources are limited. Only by concentrating our efforts can we accomplish great things. Being able to bake the cake is far from enough. You also need to know how to divide it. The factory's shareholding cannot be changed. Otherwise, it will be difficult for me and the other leaders in the factory to explain, and it will be difficult for you to continue working in the factory."

"Understood, factory manager. I'll go back and write a proposal."

"Go."

Han Sanping's eyes were filled with expectation...

(End of this chapter)