Chapter 200: The Rise of a New Independent Film Kingdom
On movie box office websites like BOX, the top 10 global box office films of 2002 were led by “The Lord of the Rings: The Two Towers,” a New Line Cinema production that boasted an impressive $925 million; second was Warner Bros.’ “Harry Potter and the Chamber of Secrets” with $878 million, and third was Sony/Columbia’s “Spider-Man” with $821 million, marking the three films that year to gross over $800 million worldwide.
Fifth was 20th Century Fox/Lucasfilm’s “Star Wars: Episode II” with $649 million, eighth was Sony/Columbia’s “n in Black 2” with $401 million, ninth was MGM’s “Die Another Day” with $400 million, and tenth was IFC Films’ “My Big Fat Greek Wedding” with $368 million.
The fourth, sixth, and seventh spots were all taken by the sa independent film company, described by Fortune Magazine as an “explosively expanding” Fla Film.
Following the Golden Globe Awards and the announcent of the Oscar nominations, “District 9” re-opened in fewer than 100 theaters in North Arica, scraping up so missed box office revenue; earlier in the year, it also made its way onto the big screens in mainland China.
Despite the prevalence of both clear and unclear pirated versions of “District 9” on the Internet, where street vendors were selling them for 5 yuan each and deals like “buy ‘District 9’ and get ‘Juno’ for free” or “Get ‘The Hangover’ ‘Paranormal Activity,’ for a scream!” were common, and so even copied a “Wang Yang Movie Collection” also for 5 yuan.
However, under the allure of “Chinese-Arican Wonder Director,” “Widely Acclaid Worldwide,” “Special Effects Blockbuster,” and Wang Yang’s own popularity, “District 9,” with so “non-impactful on viewing experience” bloody scenes cut by the State Administration of Press, Publication, Radio, Film, and Television, managed to garner a fine $10 million in mainland China. “Spider-Man” made $4.983 million, and Zhang Yimou’s “Hero” made $30 million.
Therefore, “District 9” has now raised its North Arican box office to $330 million and global box office to $765 million, ranking it fourth on the overall list for 2002. In Movie Weekly’s “Top 10 Films of the Year” list published in January, it was said: “Many people will hate the ‘Magical Yang,’ it is bound to beco a sci-fi benchmark that will be referred to for decades into the future when discussing both comrcial and artistic values, it’s that kind of film.”
Year-end Top 10 Films lists are essential for many magazines, including Entertainnt Weekly, Empire, Vanity Fair, TI, etc., and also in newspapers by well-known film critics, such as Roger Ebert of the Chicago Sun-Tis, all featuring “District 9.”
“The Hangover,” with a North Arican box office of $320 million and a global revenue of $617 million, ranked sixth overall in 2002, as the highest-grossing cody film of the year and the highest-grossing R-rated cody film in history; “Ice Age,” with a global take of $476 million, ranked seventh as the highest-grossing CG animated film of the year.
“The ticket office miracle of ‘District 9’ can be attributed to the creative new viral marketing, whether it’s viral websites, campaigns, or posters and three-dinsional posters, all have beco the new trend in the movie industry. ‘Superman Returns’ has launched a viral website, ‘The Incredible Hulk’ has launched a viral website too… The novelty for the fans is rapidly decreasing.” — Los Angeles Tis.
“In 2002, Hollywood discovered two gold mines: the massive success of ‘Spider-Man’ led many film companies to refocus on superhero movies, signaling the coming era of big CGI effects productions; facing ‘My Big Fat Greek Wedding’s’ $5 million budget and $368 million global box office, and ‘The Hangover’s’ $25 million budget and $617 million global box office, many independent companies saw hope, and major companies saw a way to reduce investnt risks, with six R-rated codies already scheduled for a big release in 2003.” — Empire Magazine.
In the top 10 box office films of 2002, major studios and independent companies each had five films, with Fla Film producing three of the latter; among the North Arican total box office of $9.25 billion from January 1 to December 31, Sony/Columbia ranked first with $1.407 billion and a 15.2% market share, Disney’s distribution brand Buena Vista had 12%, Warner Bros. had 10.7%, Universal had 8.5%, and Fla Film ranked fifth with a total of $810 million and an 8.7% market share.
Following Fox’s 8.5% share, another independent film company, New Line, ranked seventh with 10 movies grossing a total of $771 million and a market share of 8.3%. Next ca Paramount, which released 19 films and held 7.4% of the market share, and then in ninth place, another independent company, DreamWorks, captured 5.1% with seven films. In tenth place was MGM, which released 19 films and held a 4% market share.
If we only look at the year 2002, Fla Film has already beco the leader among all independent film companies. Indeed, it may still have shortcomings, but undoubtedly, it has been rapidly growing and growing…
In the scenic Santa Monica, a bright executive eting room at the Fla headquarters buzzed with activity as a board eting unfolded. Company executives in suits filled the seats on both sides of the table, with Wang Yang, dressed in a black suit, taking his place at the head of the table as the chairman. Looking at the financial reports and figures, he felt no surprise whatsoever.
The Fla Group currently consists of five main parts: FF Company, FM Company, Fla Ho Entertainnt, Blue Sky Studios, and Image Engine. Blue Sky Studios and Image Engine do not contribute much profit, as most of the investnt costs go to the salaries of the special effects technicians and animators. At the sa ti, the I&B Departnt needs to develop new technologies, which ans that the parent company has to pour money into them. This is precisely why many companies can’t afford to support animation and special effects companies.
The group’s primary business is still the film market, with FF producing high-cost, high-quality films they have confidence in, FM handling mid-to-low-budget films, and Ho Entertainnt in charge of television business. The business strategy is divided into two parts, “theatrical release films” and “ho video market,” with the forr generating box office and various post-release peripheral inco, and the latter relying on rentals, copyright taxes, pay-per-view, and other smaller markets, as part of their “Film Library” plan.
“Sweetheart” with a global box office of $170 million, “Ice Age,” “District 9,” “The Hangover”… “Mr. Hughes” with $160 million… DVD, original soundtracks, copyrights… allocating $175 million for Blue Sky Studios to produce “Ice Age 2,” “Kung Fu Panda,” “Prison Break”‘s 22 episodes with a production cost of $30 million, “Furious” with a production cost of $60 million, “The Hangover 2,” with a production cost of $50 million, “MIT-21-TEAM,” with a production cost of $25 million…
“Hmm…” Wang Yang studied the list of inco and expenses. The company naturally had to pay taxes and administrative expenses, and they had also distributed dividends to shareholders at the beginning of the year. Now, the company’s account had over $384.5 million in liquid cash, while his personal account had over $301 million. Previously, he had invested $100 million to establish a charity fund, managed by a dedicated team without a specific target group, but mainly focusing on out-of-school children worldwide and sudden disasters.
Obviously, Fla Group’s cash was not limited to the $384.5 million. The value of the studios, worth $100 million, all subsidiary assets and business, and the movies in production… The entire group’s value was estimated to be around $1 billion, and it was debt-free and not publicly listed.
However, today’s eting was not about financial reporting; otherwise, Wang Yang would not have “specially” returned from Las Vegas. After half a month of shooting, the crew had completed their work in Boston and moved to the gambling city of Las Vegas for nearly a week of filming. It was now March, and Wang Yang had co back because the company was finalizing a major purchase, waiting for his final decision.
It wasn’t the acquisition of the won’s website iVillage—that project was still under negotiation. This ti, the target of the acquisition was Artisan Entertainnt, for $160 million US dollars.
“With just our approval, we can acquire Artisan Company’s film library of over 6,000 titles,” Mark Slant said excitedly from the chief seat on the left, looking at his smiling colleagues and Wang Yang before adding emphatically, “6,000 titles! Adding to our own 2,500, that’s 8,500 titles! Warner Brothers only has 1,400, Universal 4,000…”
In recent years, Fla Film had consistently adhered to the Film Library plan, buying film rights from all over the world, which naturally included Chinese films from mainland China, Hong Kong, and Taiwan. Last year’s “Infernal Affairs,” which was hailed as the film to “save the market,” had its overseas rights owned by Fla, including the adaptation rights.
“With these 6,000 films, we’re estimated to generate $200-300 million cash annually from the ‘ho video market,'” said Mark Slant, pausing for a mont with a sense of achievent in his eyes, and continued with a smile, “This sum is enough to cover all of the company’s day-to-day operations.”
“””
With a library of 6,000 films, it’s like the Super Mushroom in “Super Mario” or the fruit in “Pac-Man” — once consud, the film library plan would quickly get on the right track… Wang Yang gazed at the “Artisan Films” docunts in his hands, vaguely recalling the situation from 5 years ago when he took a deep breath and walked confidently into the doors of Artisan, Nicole Kidman, Stephen Thomas…
“Let’s buy it,” Wang Yang nodded and scanned the crowd before stating, “Let’s purchase it.”
Although this was expected, the chairman wouldn’t have agreed to initiate the acquisition plan otherwise, but the boardroom still erupted in excited applause, and everyone cheered and laughed. Mark Strong, who had proposed the plan, was particularly pleased and laughed heartily, saying, “This is insane! Our company’s developnt just sped up by 5 years!” Wang Yang raised his hands and shouted, “The rocket has launched, everyone hold tight, Let’s-GO!”
After signing the contract, the acquisition paynt of $160 million could be imdiately transferred to complete the purchase, and the remaining $224.5 million in Fla Movies’ account was more than sufficient for this year’s release plan. The independently operating FM Company planned to release 4 major films this year, including “Saw,” which caught attention at the Sundance Film Festival earlier in the year and would be released in April. FF is currently set to release three films: “MIT-21-TEAM” at the end of July during the sumr slot, “Step Up” in the slower month of October, and “The Devil Wears Prada” during the Christmas season.
During this ti, Lauren Weisberger, the author of “The Devil Wears Prada,” had already reached an agreent with Fla to sell the adaptation rights, and Fla Movies imdiately started production preparations. It was first announced that the lead role of Andrea would be played by Jessica Alba; now there was widespread dia speculation that Wang Yang would personally adapt and direct it, although Fla’s officials had not yet responded.
This was also a marketing tactic: let the market speculate first, generate curiosity and interest among movie fans, and only then officially announce sothing that’s 99% certain to attract more attention than if they’d laid it all out at the beginning.
After the eting ended, the executives left the boardroom with smiles, and Wang Yang headed towards the chairman’s office, while saying to Mark Strong beside him, “Mark, I’m planning to start my own music label. You know a TV station always needs music, MVs, and stuff. It can even collaborate with Fla Movies’ original soundtrack business.” He said, laughing, “Robert Downey Jr. has a pretty good voice; I told him, I’d produce his album.”
Mark Strong knew he ant starting it on his own, unrelated to Fla’s finances; besides, to a person worth over a billion dollars, owning a music label was nothing extraordinary. Many film and sports celebrities owned their music labels and signed artists, typically only collaborating with larger companies for distribution. Having nothing to persuade or suggest, Mark responded with a jest, “Yang, you could release an album yourself. You sing very well; the sales would definitely be good!”
“? Singing off-tune could be quite entertaining, right?” Wang Yang replied with an enthusiastic look, then imdiately waved his hand dismissively, saying, “Maybe not now, I’m too swamped.”
“To be honest, boss, I truly wish you could make 12 films a year,” Mark Strong said with a covetous look, chuckling, “One every month, then we wouldn’t have to consider this issue. Once the foundational phase of our film library plan is complete, we can think about increasing production.”
Wang Yang, reflecting on this, knew increasing output ant the snowball would roll faster but also ant higher risks and the beginning of financing and borrowing. He pondered and said, “Regardless, I do not agree with borrowing money to increase production when we’re financially healthy; it’s not wise. We are already moving quickly; what’s most important is to stand firm and not fall back or collapse.”
“I never said to borrow money for filmmaking; the interest rates are too high now, and the return on investnt is hard to guarantee,” responded Mark Strong with a shrug. Wang Yang humd in agreent. Why is borrowing money bad? DreamWorks had always relied heavily on financing to produce movies, with gains and losses but accumulating debts. From what he rembered, eventually, it would be acquired by Paramount. Appropriate financing can accelerate the pace, but over-reliance would only dig your own grave.
“””
Mark seed to have thought of this as well, and he continued, “However, borrowing money could allow us to continue acquiring and rging, speeding up the expansion of our film library. The risk involved in this project isn’t high.”
“Let’s talk about it later, one step at a ti. We haven’t acquired Artisan Entertainnt just yet,” Wang Yang turned to look at the CEO. The company’s rapid developnt these past few years was linked not only to blockbuster films but also to the hard work of the senior managent. He smiled as he shared the plan he had long considered, “Mark, by the end of this year, I’m planning to adjust the company’s equity. Everyone will receive a reward.”
“Oh… what a pleasant surprise!” Mark Slant imdiately grinned with wide eyes. No one disliked rewards—it was invigorating! He exclaid with excitent, “It looks like this Christmas will be full of surprises!”
Wang Yang firmly patted his shoulder and said with a laugh, “This isn’t a Christmas gift. By the way, do you really think I sing well?…”
A couple of days later, a fresh piece of business news from the movie industry was served hot: Fla Film completed the acquisition of Artisan Entertainnt for 160 million US Dollars! Just like the previous acquisition of A-PIX, this was a total purchase—Fla acquired everything about Artisan, not excluding even a broken chair from the company headquarters.
Fla Film announced that it would cut and reorganize the original staff of Artisan Company, integrating them into Fla’s business operations; also, Artisan’s films would no longer carry the “Artisan” brand na and would uniformly be rebranded as “Fla.”
This was not a bailout-style capital injection and restructuring but an asset swallow. Many business dia were puzzled—injecting capital into a broken company was evidently worthless, so what was the point in swallowing it up? Fla Film naturally offered no explanation, as this was a trade secret, only to be revealed when the market stabilized; now, countless competitors were speculating about the thoughts of Fla Film and the enigmatic Wang Yang.
Actually, with so deduction, the answer was easy to arrive at: Fla definitely wasn’t after the office chairs; what they coveted were the copyrights to those more than 6000 films. However, there was a stark reality—nearly all of those were “junk movies”! The highest-grossing film from Artisan Company was “Veggie Baby Adventures,” a CG animated film released in October 2002. Made with a 14 million dollar budget, it had garnered only 25 million in global box office revenue.
Was Fla Film not satisfied with “Ice Age”? Buying over 6000 films that had virtually no market value, was it just for the sake of appearances?
Regardless, Fla Film’s latest acquisition once again showed the dia and the public its relentless stride and ambition. Based on past experiences, they had every reason to believe that this was yet another successful purchase for Fla; they had every reason to believe that a new kingdom of independent cinema was on the rise.
※※
PS: Wow, thank you everyone for your blessings! Thank you so much!
Reviews
All reviews (0)