Top of the Great Era

Chapter 3039 Don’t Bully Customers

Film is a very risky project.

Although some individual movies can be big sellers and earn hundreds of millions or even billions of dollars, on average the rate of return is very low because most movies are loss-making and the profits are spread out very little.

Therefore, Hollywood film companies will gradually develop into diversified and giant companies.

It is to share the risks of the film business through multiple channels.

The US financial system is very strong, and in fact has a whole set of mechanisms specifically for film investment, mainly the "loan + insurance" service. That is, if you don't have money to invest in a movie, you can go to a financial institution to borrow money, and at the same time purchase the services of an insurance company, which will supervise and guarantee the investor's returns.

This is not very friendly to Hollywood.

  What does it mean to guarantee the returns of investors?

It is equivalent to transferring Hollywood's money to investors, so Hollywood makes less money.

So compared to the model of "borrowing money" to make movies, Hollywood prefers the model of "financing" to make movies.

From the hot money from Japan and Europe in the early years to the patchwork investments launched by Wall Street in recent years, this strategy is all true.

Hollywood does not owe investors money, but instead sells them a portion of their film shares.

After making money, everyone shares it according to proportion.

It looks good, but it's actually not the case at all.

Because this process is full of injustice.

When making the cake, Hollywood and investors are involved together.

When it comes to dividing the pie, it’s a different story. Investors have no say at all. Hollywood decides how to divide it. And with Hollywood’s tyranny and the internal transactions under the current giant model, investors cannot supervise it even if they want to.

Once unsupervised distribution rights appear, whoever distributes will inevitably get the biggest piece of the pie.

  When money is made, Hollywood gets more and investors get less;

When it comes to losing money, Hollywood loses less, but investors lose more.

This is Hollywood's favorite operating model of film capital.

This makes it very difficult for outsiders to come to Hollywood and make money. Not to mention outsiders, even Hollywood insiders, independent film companies are also squeezed by Hollywood giants.

Now, the hot money from Japan, Europe and Wall Street has all subsided.

Who will fill this gap?

With the booming domestic film market, hot money has poured into the film industry, and some large domestic companies with aspirations and ambitions can no longer hold back and rush to Hollywood.

  With such a big piece of fat meat being delivered to their doorstep, people in Hollywood are eager to eat it with red eyes!

Zhou Buqi was embarrassed to be so blatant and said, "There is no possibility of making money when hot money from outside comes to Hollywood to make movies. I have been doing business for so many years and have made many friends in various industries. One of the important reasons why I am respected by so many friends is that my business principle is to insist on mutual benefit and win-win. Relying on hot money from outside to increase profits is a short-sighted speculative behavior. We should build from the institutional level and resolve the risks of film production through institutional design."

Jason Kilar nodded. "Now we mainly rely on revolving bonds and rely on insurance companies to bear part of the risk. But the insurance companies still bear too little. Once we encounter a failed project, more losses will still be borne by the producers."

"That's traditional Hollywood." Zhou Buqi smiled. "Now that it's Internet-based, it may be different."

Jason Kilar looked shocked. "Internet crowdfunding? This seems to be more bullying than using external hot money." Movie crowdfunding is indeed a popular financing method now, but Zhou Buqi does not approve of it at all. "That won't work. It's a complete scam. There are too many tricks in the movie business. As long as outsiders get involved, it's easy for insiders to cheat outsiders. It's best to be self-sufficient. Look at Netflix, streaming media may be a solution."

Jason Kilar groaned, feeling a lot of pressure.

Zhou Buqi said: "Movies lack money and need to borrow money and raise funds. The main reason is that the turnover rate of funds is too slow. It takes three to five years of long-term operation to make profits. Streaming media is different. You can get fixed membership fee income every month."

Jason Kilar laughed and said: "For Netflix, membership fees are equivalent to disguised crowdfunding."

Zhou Buqi said, "Yes, that's what I mean! However, there is an essential difference between membership fees and crowdfunding. In the crowdfunding model, after investors take out their money, they will completely lose the initiative and there will be no guarantee. Once the movie fails, they will lose all their money. The membership system is different. Members purchase services. Even if a movie fails, there will be many other film and television works to choose from. The failure of individual works will not have much impact on the overall service level of users."

Jason Kilar nodded. "There is an even bigger advantage. If a crowdfunded movie makes a lot of money, the producer will have to pay a lot of money as dividends. The membership model of streaming media is different. Even if the movie is a big hit, there is no need to pay any dividends to users."

Zhou Buqi said: "So the streaming media model will change the traditional model of the current film and television industry. The production model, financial model, and distribution model will all change. Streaming media is an important means to institutionally solve the crisis of lack of money in the film ecosystem. Netflix is ​​still in a state of large-scale losses. This is because the streaming media industry has just emerged not long ago, and traditional movie users and DVD users have not yet converted. As time goes by, the streaming media model will definitely be more and more recognized by the market."

Jason Kilar said: "The business focus should indeed be on Peacock. This is long-termism and delayed gratification."

"Yes, let's settle it. We won't fight for the Chinese hot money. Whoever wants to fight can fight. Ziweixing Global must do an upright business and stop cheating!"

Zhou Buqi was not so moral.

Most of the Chinese hot money comes from China, and they are all domestic entrepreneur friends. When I return to China, I will see you everywhere, and then everyone will talk about you... Humph! You, Boss Zhou, are doing so well in Hollywood, and we went to join you. It would be fine if you didn't lead us to make money, but you also cheated and deceived us. Isn't that too much?

Best not to touch.

Don't take the blame.

Jason Kilar asked tentatively, "I heard from Mike that you wrote a script outline specifically for The Great Wall?"

Zhou Buqi said: "The Great Wall is a project controlled by Legendary Pictures. We cannot control what Legendary Pictures wants to do. They want to use foreign hot money to make movies, but we cannot control it. All we can do is to be upright and act according to the rules."

"Ah."

"Also, when Universal Pictures cooperates with some independent film companies in Hollywood, it should try to relax the conditions and not squeeze them too hard. In the long run, gaining control over streaming copyrights is the most important thing, which can make our streaming platform more competitive. Showing a fairer attitude towards cooperation will be more popular, and it is also in line with the current industry status of Ziweixing Universal dominating the market. It is a traditional concept that a big store bullies customers. According to our Internet concept, the bigger the store, the less likely it is to bully customers! Only when the store is big can we provide the best service!"

“It takes time to adjust slowly.”

Jason Kilar believes that this is not an easy thing to achieve and is even more difficult than streaming media.

This is Hollywood after all, and most of the people working here are from Hollywood.

Hollywood, which has been deeply rooted for hundreds of years, is best at bullying customers by taking advantage of its size, and its favorite thing to do is for experts to bully outsiders.

It is not easy to make fundamental changes.

Zhou Buqi smiled and said: "So the most important thing is to make Peacock a success. Only when our streaming media business is a great success can we use this huge success to promote changes in traditional thinking."