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Don't underestimate this rebate. It's okay for the next two years; there won't be any billion-dollar movies. But after 10 or 11 years, billion-dollar movies will become increasingly common, and we might even see astonishing box office figures of 3, 4, or 5 billion.
Wanda's losses would be enormous by then. 5% of 3 billion would be 150 million in net profit. Even though Wanda is the largest cinema chain in mainland China, their actual profits are only a few hundred million, less than 1 billion.
With this kind of profit-loss calculation, a single misstep could easily lead to losses. This tactic is truly ruthless. Who told Wu Mingxuan that the Wang family father and son at Wanda are truly displeased?
With Wu Mingxuan's template, negotiations with the three major directors became much easier. A low commission was fine, but the calculation of rebates and box office base figures would definitely be different. If you can produce a film that grosses 500 million RMB, we'll give you that base figure.
It can be said that Wu Mingxuan's diabolical scheme completely altered the ultimate structure of revenue sharing between domestic theater chains and productions. While the broader trend and direction remained unchanged, he successfully exploited Wanda's public outrage and dug a huge hole for the company.
After Wang Jianlin's father-in-law stepped down in 2013, Wanda Cinema Line was considered exceptional for avoiding losses, let alone being the most profitable. This naturally significantly slowed Wanda's development and diminished its influence within the industry, leaving Wu Mingxuan with more opportunities for growth.
Wang Jianlin himself didn't understand the film and television industry, let alone business, which explains his subsequent series of poor decisions and blunders.
Yet, how did he manage to become the richest man?
It couldn't be helped; his father-in-law was incredibly powerful. Otherwise, by the second half of 2008—or at best, until 2009—Wanda would have gone bankrupt, and the subsequent Wanda Empire wouldn't have existed.
But the person in power doesn't need to know everything himself, as long as he knows how to use people. Liu Bang was an unlearned scoundrel, but others knew how to use people, were thick-skinned and ruthless, and in the end, didn't they also build a 400-year-old foundation for the Han Dynasty?
So Wang Jianlin summoned a few knowledgeable people and asked them for advice on how to counter those restless old-timers and local tyrants so as not to really fall into a supply crisis.
"Mr. Wang, what we must deal with now is the support of several large film and television production companies, and then get the support of several famous directors.
Those ordinary small companies are meaningless. They are the ones who beg us to show their films. It's not that we don't have any domestic films to show, but we don't have those big films to show, or we can't make any money from showing those big films that could have made a lot of money."
"Why is it so?"
"We made money before because our major cinema chains worked together in unison, squeezing filmmakers and studios to the utmost. This is also why many large studios are expanding their own cinema chains.
Now... we can't work together as we did before, so we've started to rope in the top filmmakers. As long as we can secure the most powerful blockbusters, they'll certainly make less money, but we'll lose more. The most important loss is reputation and brand image, and we'll suffer a serious loss of our regular customer base."
Wang Jianlin knew these basics, so he realized the seriousness of the situation. It wasn't as simple as he initially thought. Hollywood movies aren't immune to every problem, and domestically produced films have their advantages, especially the most anticipated blockbusters.
"Is the 27% to 33% share profitable?"
"If the average attendance rate is maintained at 38%, we will not lose money. If it is above 55%,
we will make a lot of money. If we continue to adjust the film schedule, like this time with "Wushuang", even if we give it 27%, we can still make more than 10 million in profit. If the film schedule is well controlled, it can exceed 15 million. And our actual profit now is 20 million, because we used to take 38%. It can be said that the largest cinema chains in our country have made more than 100 million in pure profit on the movie "Wushuang" alone.
Also because there was a big hit like "Wushuang" last year, The hit movies are what made this the most profitable year in recent years, with every chain making a killing.
Because we're a new type of multiplex, our profit margin, including snacks like popcorn and cola, is nearly double that of our competitors.
Large cinema chains profit greatly from hit blockbuster films, but the vast majority of films themselves don't make much money, so overall profits depend on luck. This year, with so many blockbusters, the returns are excellent. If there aren't any, it's not going to be good, and we might even suffer huge losses.
This is the real reason why Wang Jianlin is trying so hard to loosen the screws on Hollywood film imports and eliminate import quotas. Hollywood blockbusters are generally of a high standard, with large production volumes and low commissions, and reliable attendance. They can be pulled from theaters after just a few days of release, significantly increasing both the profit margin and overall profitability of the theater chain.
However, Wang Jianlin's actions, seen as unsightly and aggressive, have incurred public outrage. Not only are local filmmakers furious, but even other companies that have benefited from this are stepping up to the plate. While reaping the benefits Wanda has secured, they are also criticizing Wanda from the moral high ground of the local film and television industry.
Wang Jianlin was naturally furious about this, but there was nothing he could do. Market economics dictate that if others don't want to release your
films in your theaters or want to work with you, you can't just resort to using connections to force them to release their films, no matter how powerful your connections are. So, Wang Jianli and Wanda now have only two options: either invest in and create a new film and television production company, or invest in an already large and powerful film and television company to acquire a certain level of production capacity.
The former option has already been tried, but it didn't work. Wanda is now an industry-wide enemy, making it impossible to poach truly talented filmmakers. They're forced to either discover new talent or hire those worthless, unskilled talent.
As for investing in shares, Huayi Bona has already explicitly refused, and there is basically no possibility of cooperation with the three major directors.
In fact, they are the ones who are criticizing the most now, because you are touching other people's cake. Therefore, the best choice is the Hong Kong circle and Wu Mingxuan Emperor Entertainment Group. This is the only way to break the deadlock, so Wanda came with sincerity this time.
But Wu Mingxuan does not intend to hang out with the richest man Wang. Now with him, a time traveler who can predict the future, who is the richest man in a few years? Why should I be inferior to you?
"Mr. Lin, don't say anymore. I have no intention of working for others. Perfect World is not short of money now. We don't need investment at all. Please go back."