Super Zoo

Chapter 581: Revenue Sharing Model



Huashi Company is not large, but over the years, it has specialized in the overseas distribution of Chinese-language films and indeed maintains business relations with numerous North American cinemas. The best-case scenario for the film is a successful limited release in a few cities, followed within a week by wide release in major North American cities, then DVD distribution and online streaming; The worst-case scenario, which is what most domestic blockbusters encounter, is that after the limited screening, there's no chance for a wide release. The film would then rely on unsellable DVD distributions and the support of overseas Chinese to recoup a box office take of maybe a few hundred thousand US dollars. "How does your company charge?" Suming asked with a smile, "I remember you just mentioned that the intermediary fees are not low." They're absolutely not low, but neither are they high. Huashi operates on a profit-sharing model, and the specific amount of money depends on the actual North American box office revenue. After taxes and the cinema chains' share of 48%, half of the remaining 52% goes to Huashi, meaning the producers earn about a quarter of the total box office revenue. Looking at the profit-sharing ratio, Huashi, this intermediary, earns even more ruthlessly than domestic producers. No wonder Huashi continues to specialize in the overseas distribution of Chinese films, despite the overall earnings not being substantial. The profits are just too large since, other than labor, there's barely any tangible expenditure. But then again, resources are money, and without being responsible for production, Huashi controls a range of distribution approvals as well as the commercial network of cinemas across North America. From this, it's clear that Huashi Company has much larger connections than one would imagine, likely throughout the domestic film industry. Suming is inclined toward the profit-sharing model, much like paying taxes; the more the other party takes away, the more it signifies that he's earning. He would love for Huashi and the North American cinemas to take away billions of US dollars... Of course, given the current status of Chinese films in North America, that's clearly impossible. Having established the general intentions, Suming let Jiao Shou and Mr. Liang negotiate the specific details of the contract with Cai Liming. Suming didn't expect to make much money from the film; it was more about officially dipping into the North American market for a trial run. After signing the contract, releasing the film in North America would require a series of procedures and approvals, post-production work including subtitle addition, and even dubbing in English for certain cities if required—these were now Huashi's responsibilities. Suming continued playing the role of a hands-off boss. He shifted his attention to the previous box office revenue of 150 million yuan. With this 150 million, together with funds from his other companies, he could just about put together 1.8 billion yuan. This money certainly shouldn't be left idle—even doing something, anything, would be more beneficial than leaving it in a bank to collect interest. The acquisition of the zoo and the 4A rating application had been on hold for quite some time, ready to burst forth. Wang Jian She's secretary had already called three times to inquire about the acquisition. It was clear that after the film's big success, which demonstrated his capabilities, the city's attitude had become apparent. As for the 4A scenic area, it wouldn't be difficult to earn that rating now. With a little money to grease the wheels, and a renovation of Taoyuan's three main peaks and the ancient tomb exploration, even a 5A rating could be within reach. Yet, precisely for this reason, Suming had to hold off on the rating application. Once awarded a 4A or even 5A rating, the zoo would transform into a scenic area, and the purchase price would be on a completely different scale. Just the zoo alone would stretch his finances; the entire acquisition, after undergoing an internal valuation by appraisers, gave a conservative figure well over two billion yuan. Two billion yuan, even when calculated at the lowest possible prices and after stripping away all the entertainment businesses like live streaming and fish riding to Taoyuan Entertainment Company. If the government conducted the valuation, the figure wouldn't be lower but rather higher, with offers of three to four billion yuan not being unusual, along with many additional conditions. Despite the zoo's remote location and some areas looking rundown, it was still a large operation. Just combining the park and the land of the back mountain was staggering. Even though it couldn't be used for commercial development, if someone wanted to buy it, that would be another story. It's like with my car—I can choose not to drive it, let it collect dust in my garage until it falls apart. But if someone wants to buy it, they would have to pay the market price. The government has invested decades of effort into the zoo, and this year, it also turned a profit. Acquiring the zoo is essentially like buying a state-owned enterprise, only with the zoo's infrastructure, land, and animals taking the place of a state enterprise's equipment, technology, and production facilities. This is also the main reason why Suming has temporarily halted all new projects in the back mountain; a fully developed back mountain would mean an even higher acquisition price. So how to invest this 1.8 billion yuan on hand? Making movies is a good choice; the box office has confirmed that films starring animals have a strong pull in China. But where would the screenplay come from? The success of Terror Animal City is significantly tied to the animals, as well as to the screenplay. Now, where to find a script or a story of the same caliber? The last horror story was the result of Suming's labor over the last six months. His plan included making films, and whenever he had the chance, he would think about screenplays, luckily coming across a stroke of genius. Asking him to produce another compelling story on short notice, while not impossible, would almost be as likely as winning a lottery—like suddenly becoming enlightened overnight. Moreover, from a psychological perspective, for the first animal film, the audience's main focus was on the animals. For the second film, the demands on the screenplay would be much higher. The story of Terror Animal City, to be strict, was not very mature, with plenty of room for improvement. The investment for the second film would definitely exceed the ten million of Animal City. To surpass the first installment, a better screenplay is a must, or at least one that is on par. Otherwise, a flop could spoil the reputation built by Animal City, costing Suming a hefty loss. The movie can wait; it's better not to shoot at all than to rely on a poor script and damage the brand. Even if the intention is to make a poor film to scam money, it would be prudent to produce one or two more quality films first. Suming would wait until Taoyuan Film and Television's reputation was solidly established among the top film companies in the country before considering such moves. For now, he absolutely could not waste the good name accumulated through Animal City. Concerning the screenplay issue, Suming talked with Long Wu and Wang Jin, hoping to use their channels to announce news in the Xiangjiang circle and acquire good screenplays. Resources and connections must not be wasted. Besides reaching out to Xiangjiang, Suming also specifically contacted a professor from the Beijing Film Academy who had previously joined him in calling for the establishment of an art-house cinema chain. He hoped the professor could help scout in the capital's circle and various film and television schools for good stories and talented new screenwriters. If there were good scripts, Suming was fully prepared to buy them.

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