China Daily Global Edition (USA)
SUCCESS YOU CAN BET ON
The fast growth of China’s film industry has spawned many things, among which is the minimum guarantee from the distributor. reports.
to make up for the shortfall or, rather, the production side’s share of it.
TheMermaid is the biggest case of this kind.
Before its opening, five distribution companies put up a sum that guaranteed 2 billion yuan in grosses.
Luckily for them, the Stephen Chow comedy with an environmental message turned into the biggest Chinese blockbuster of all time, surpassing the 2 billion yuan milestone in as few as eight days and eventually registering 3.4 billion in total receipts. little in common completion bond Hollywood.
“The completion bond applies only to the production side and usually for big or medium-sized independent projects. The six majors tend not to rely on it,” he says.
The distributor who is part of this scheme would come in and promise a minimum payment, which is used by the producer to secure further financing, he adds.
“The US does not have the kind of minimum guarantee that we have. It is the result of too much capital chasing a limited number of big projects. Therefore it is just a gamble by those with abundant capital.”
Yu Dong, the founder of Bona Film Group, is a pioneer in using this financial weapon.
Back in 2002, he paid 4 million yuan — plus 3 million more in marketing costs — for The Touch. That would translate into 20 million yuan as the break-even point in box-office takings. Fortunately, the movie made 30 million, which helped cement his foothold in the industry.
In 2014, he guaranteed that The Continent, Han Han’s directorial debut, would make at least 350 million yuan at the box office. In the end, it raked in 630 million and Yu got 40 percent from the amount above the base.
But this year, he could be in for a shock.
Bona is reported to have put in a bet that the effectsheavy and star-studded League of God would join the with the used in billion-yuan league, but it bombed so spectacularly that it dropped from first place in its opening week to seventh the following week. So, the final tally could be around 300 million yuan, well short of its target. It didn’t help that it became the worst-reviewed film this season.
“This is more and more like sucking blood from the tip of a sword,” says Yu. “So, we should focusonmakingquality movies.”
But for those who are not yet stalwarts in the industry, this represents a shortcut.
After United Entertainment Partners scored big time by betting on Breakup Buddies, it got an infusion of 500 million yuan in financing and went on making more winning bets like Monkey King: Hero Is Back.
For a lot of new entrants to showbiz, a project with marquee names amounts to a siren song. Even though chances of snatching the elusive creature are slim, people never stop making the effort and, once successful, they are amply rewarded by the financial market.
Technically legal, this form of financial manipulation tends to pressure the bettors into shady practices such as buying phantom tickets for the illusion of striking gold, says Zhou Tiedong. Wang Changtian, CEO of Enlight Media, is not happy about it either.
“I don’t think it’s going to be a mainstream financial tool because most such maneuvers have ended up in the red. Think of it, the scheme tends to pass all the risks to one side or all benefits to one side.”
The movie business involves more risks than most others, so it is understandable that longtime players want some stability by passing the risks — and some rewards — to outsiders.
For an outsider with boundless ambition, it is preposterous to assume that one canmake a killing by forecasting a movie’s box-office performance.
A dark horse is not a dark horse if its winnings are known in advance.