Huayu: Starting from joining the mainstream entertainment industry in 96

Chapter 402: The New Landscape of Cinema Distribution
Tuesday, April 2002, 4.

The early morning air in the capital still carried a hint of chill, but the newsstands were already surrounded by a bustling crowd.

Today, almost all the major newspapers across the country, from serious publications like the *People's Daily* and *Guangming Daily* to widely read ones like the *China Film News*, *Beijing Evening News*, *Xinmin Evening News*, and *Yangcheng Evening News*, and even Hong Kong's *Oriental Daily* and *Ming Pao*, have published the same explosive news in their culture and entertainment or financial sections with extremely eye-catching headlines:
"Shaolin Soccer grossed nearly $1300 million in its opening weekend in North America (including previews)!"

"Stephen Chow's charm is irresistible; Chinese-language films are conquering Hollywood!"

"Shengying Media's first international campaign is a resounding success, rakes in $2478 million in just ten days!"

The report detailed the box office figures for "Shaolin Soccer" from its preview screenings on March 23 to its second weekend on April 7.

It grossed $812 million in its opening weekend, $1298 million in its first full week (including previews and the opening weekend), and a total of $2478 million in ten days!
We have spared no praise, hailing this success as "the most landmark overseas victory since the market-oriented reform of the Chinese film industry" and "a perfect practice of the cultural outreach strategy."

Wang Sheng's strategic vision, Stephen Chow's comedic charm, and the operational capabilities of the Sheng Ying team have been repeatedly praised.

A wave of "Kung Fu Football Fever" and "Sheng Ying Fever," led by official media and widely supported by the public, was instantly ignited and swept across the country.

On the streets, in offices, and at schools, people are no longer just talking about the Chinese national football team's upcoming World Cup campaign, but also about this movie that "brings glory to the country" overseas.

On this day, Shengying Media's corporate image and the brand value of "Shengying Productions" reached unprecedented heights.

People are happy to see success, and they only care about success.

……

Jingxin Building, the headquarters of Shengying Media Group.

Wang Sheng's office was spacious and quiet.

He sat behind his large desk, with several newspaper summaries, still smelling of ink, spread out in front of him, delivered by the secretariat that morning.

His gaze swept over the exciting headlines and figures, but his face remained expressionless, as if all of this was within his expectations.

Within minutes, he pushed the newspapers aside as if they were just a few insignificant daily briefings.

His attention had already been drawn to another, even thicker stack of documents—

These were cooperation invitations and equity investment applications from cinema chains across the country, compiled and organized by the Group's Investment and Development Department and "Shengshi Cinema Management Co., Ltd."

With the official implementation of the detailed rules for the Film Administration Regulations on February 1, the reform of the cinema chain system has entered a substantial and explosive phase.

The existing film companies and screening units at all levels are either reorganizing or forming alliances, eager to catch this fast train of reform.

Shengying Media, which controls the most popular and stable content source in China, is undoubtedly the "god of wealth" that all cinema chains, both new and old, are vying to curry favor with.

Whoever can secure the first-run screening rights to films produced by Shengying, especially the blockbuster films personally created by Wang Sheng, will gain an absolute advantage in the fierce competition for distribution channels.

Li Tingting and Qin Yuanzhi, the vice president in charge of cinema operations, stood at the table, carefully reporting on the preliminary findings.

"Mr. Wang, this is a list and basic data of the major cinema chains that have officially invited the group or have a clear intention to cooperate." Qin Yuanzhi handed a form to Wang Sheng.

Wang Sheng took it and calmly scanned it.

The table clearly lists the background of each cinema chain, the number of cinemas it currently manages, the total number of screens, and its core demands.

As of now, excluding the China Film Shengshi Cinema Line, Shanghai Yongle Cinema Line (now reorganized into Shanghai Lianhe Cinema Line), Beijing New Film Union Cinema Line, and Guangdong Southern Cinema Line (now reorganized into Guangdong China Film Southern Cinema Line), which were established in the previous two years after obtaining pilot qualifications, there are 27 more cinemas that are in preparation or about to be established.
The Sichuan Pacific Cinema Circuit was initiated by Sichuan Film Company and Chengdu Pacific Art Cinema.

The Zhejiang Times Cinema World Circuit was initiated by Zhejiang Film Co., Ltd.

The Hubei Yinxing Cinema Circuit was initiated by the Hubei Provincial Film Corporation.

The Jiangsu Oriental Film Company (later developed into Oriental Cinema Circuit) was initiated by the Jiangsu Film Company.

The Jiangsu Provincial Joint Cinema Circuit was initiated by the Seven Anti-Kings (seven municipal film companies in Jiangsu Province), China Film Group, and Shengying Film Group.

The Heilongjiang Swan Cinema Circuit was initiated by the Heilongjiang Film Company.

The Liaoning Northern Cinema Circuit was initiated by Liaoning Film Company, Bincheng Film Company, and Shencheng Film Company.

The Fujian Zhongxing Cinema Circuit was initiated by Fujian Film Company.

The Lu Province New Century Cinema Circuit was initiated by Lu Province Film Company.

The Henan Oscar Cinema Circuit was initiated by Henan Film Company.

Hunan Chuxiang Film Industry Company (later developed into Chuxiang Cinema Circuit) was initiated by Hunan Film Company.

The Hebei Provincial Zhonglian Film Industry Circuit was initiated by the Hebei Provincial Film Company.

The Anhui Zhong'an Cinema Circuit was initiated by the Anhui Provincial Film Company.

The Jilin Changying Cinema Circuit was initiated by Changying Film Studio.

The Ganzhou Huaying Cinema Circuit was initiated by Ganzhou Film Company.

The Bagui New Union Cinema Circuit was initiated by the Bagui District Film Company.

The Gansu Dunhuang Cinema Circuit was initiated by Gansu Film Company.

Yunnan Rongxin Film Company (later developed into Rongxin Cinema Circuit) was initiated by Yunnan Film Company.

The Shanxi Yanmen Cinema Circuit was initiated by the Shanxi Film Company.

The Guizhou Starry Sky Cinema Circuit was initiated by the Guizhou Film Company.

The Shancheng Wanhe Cinema Circuit was initiated by Shancheng Film Company.

The Shaanxi Chang'an Cinema Circuit was initiated by Qin Province Film Company.

The Tianjin Cinema Circuit was initiated by Beijing Film Company.

The Inner Mongolia National Cinema Circuit was initiated by the Inner Mongolia Film Company.

The Ningxia Screen Cinema Circuit was initiated by the Ningxia Film Company.

The Qinghai Kunlun Cinema Circuit was initiated by Qinghai Film Company.

The Western Regions Film Company Cinema Circuit was initiated by the Western Regions Film Company. It comprises a total of thirty-one cinemas.

Among them, the cinema chains that have obtained inter-provincial licenses are China Film Shengshi Cinema Chain, Shanghai United Cinema Chain, Beijing New Film Union Cinema Chain, Liaoning Northern Cinema Chain (limited to the Northeast region), and Jilin Changying Cinema Chain.

The rest are all provincial cinema chains.

Excluding China Film Shengshi Cinemas, as of now, the total number of effective screens nationwide is 2032 (the number was 1585 after the completion of cinema chain reforms in the past two years; this is normal, as it has increased in the past two years driven by the four pilot cinema chains).

"Effective screens" refers to the situation where, before the reforms, although there were nominally more cinemas nationwide, many had closed, changed industries, or were unable to screen films normally due to poor management.

These 2032 screens can be seen as the first batch of "effective screens" integrated into the market-oriented operating system after the reform.

If China Film Group's Shengshi Cinema Circuit is included, the total number of effective screens nationwide is 2672.

In other words, China Film Group Corporation (CFGC) accounts for one-fifth of the national film market.

The data of 2672 blocks, which should have appeared in 2005 (2668 blocks), was brought forward by a full three years.

One screen corresponds to one theater.

Assuming an average capacity of 150 viewers per theater.

With 2672 cinemas nationwide, theoretically, they can accommodate 400800 people at the same time. If a movie ticket costs 20 yuan, it can generate 8016000 yuan in box office revenue.

Assuming a movie is 90 minutes long, including time for cleaning the theater, it's 120 minutes. The theater opens at 10 am and closes at 10 pm, so it can show six movies a day.

Assuming every screening is sold out, a 90-minute film with 100% screening rate can generate 48096000 yuan in box office revenue per day.

Of course, the above are all assumptions and extreme values ​​under extreme conditions.

However, this figure reflects the overall market situation, namely the scale of 175.55 billion yuan.

But the actual output is less than 20%.

Before China's accession to the WTO, thanks to administrative protection and the trial operation of cinema chains, Wang Sheng's films achieved a 100% screening rate in a single cinema chain (such as "The Proposal"). However, this approach is certainly no longer viable after China's accession to the WTO.

These data clearly show the purpose of the higher authorities' forced implementation of the cinema chain system—"to investigate land ownership and manage it centrally."

By using capital or film supply as a link, cinemas are allowed to freely choose to join the distribution network, directly breaking the old distribution network based on administrative regions.

This is equivalent to transferring the "fields" (cinemas and screens) that originally belonged to the various levels of "feudal lords" (local film companies) back to the management of the "manor owners" (cinema chains) who are directly responsible to the central government (representing film producers and macro-management).

Integrating all "effective screens" into the cinema chain system and connecting them to a computer network means that the state (through the Special Fund Office) and film producers (such as Wang Sheng's Shengying) can grasp the "output" (box office) of each "field" in real time and accurately.

Only with a clear definition of "land area" can a fair "tax system" (revenue sharing system) be established.

There is now a transparent and unified standard for how much each party—the film producer, distributor, theater chain, and cinema—should receive.

This greatly stimulated the enthusiasm for content production, because producers could finally clearly know how much their labor would be rewarded with.

Even if it doesn't completely plug the loophole of underreporting income, it does provide a reliable data foundation for the revenue-sharing system.

therefore.

This is the list in Wang Sheng's hand.

It's not just about the cinema data of various theater chains, but also a prototype of the future distribution channel structure of the Chinese film market.

By controlling the content platform, Shengying has gained the power to define the rules of the game.

Wang Sheng instructed Qin Yuanzhi: "'China Film Prosperity' is our core business. We must prioritize its scheduling and resources, and we cannot slow down its development."

For other cinema chains... cooperation is possible, but the principle remains the same: either accept the output management of 'Shengshi Cinema Management' to ensure service standards and screening efficiency;

Alternatively, they could offer their best cinema assets or equity in future high-quality projects in exchange for the first-run screening rights to our key films, or even strategic investment.

The specific scale is up to you and your team to determine, but the bottom line is to ensure Shengying's content maintains a dominant position and maximizes profits on the distribution channels.

"Understood, Mr. Wang." Qin Yuanzhi nodded and took notes.

"In addition, we should focus on cinema chains in economically developed regions such as Jiangsu, Zhejiang, Heilongjiang, Jilin and Liaoning, Sichuan and Chongqing, and Chang'an, and we can make in-depth contact with their investment offers."

Tell them that Shengying welcomes valuable partners, but what we want are high-quality assets that can generate synergies, not simple financial investments.

"Yes!"

Qin Yuanzhi accepted the order and left.

Wang Sheng knew very well that this battle for distribution channels had only just begun.

Of these 31 cinema chains, less than one in ten will survive in the future.

Real estate, digital cinemas... there are many challenges ahead.

The only way for Sheng Ying Group to survive is to burn money.

Where did the money come from?

Lending; IPO financing.

Without going public to raise funds or taking out large loans, relying solely on profits from proprietary business to burn through capital will only lead to the market being dominated by more powerful capital.

Therefore, Shengying Media's listing is inevitable.

"Mr. Wang."

Standing to the side, Li Tingting, who hadn't left, spoke up: "President Wang, Mr. Xu is still waiting outside. Do you have time to see him now?"

"Oh……"

Wang Sheng snapped out of his daze: "Please let him in."

(End of this chapter)