Chapter 314 [Internet] and [IP]

Chapter 314 [Internet] and [IP]

Chapter 314 [Internet+] and [IP]

【Internet+】? !

【IP】? !

When these two words came out of Wang Hao's mouth, Li Hua, the vice president of Huaying Group, and Zeng Yingrui, the director of Wanda Group's investment department, were both a little confused.

But when Zhang Ziming of Shenzhen Guotou heard what Wang Hao said, his eyes lit up.

The Internet is great. The traditional film and television industry has a huge market. With the support of the Internet, there will be real potential for development!
“Please tell us more about the ecosystem of [Internet+] and [IP].”

Zhang Ziming asked with great interest, which made Zeng and Li feel a little strange.

However, Wang Hao shook his head.

"Mr. Zhang, this is a business secret.

Judging from your expression just now, it seems that you don't approve of our Galaxy Pictures. Let's not talk about this topic anymore."

Zhang Ziming's excitement was interrupted. He felt embarrassed and angry for a moment, but he couldn't show it. His expression was so interesting.

Fortunately, Wang Hao didn't really want to make things difficult for him.

"Hahaha, just kidding, Mr. Zhang, there's actually nothing that can't be said.

Perhaps it’s because I’m younger than the bosses of those film and television companies, and I’m a science fiction director. From the very beginning when I founded Galaxy Pictures, I realized that the Internet, or ‘streaming media’, is the future of the film and television industry.”

"Mr. Zhang, do you know what streaming media is?" Wang Hao suddenly asked Zhang Ziming.

Zhang Ziming thought for a moment and gave his answer.

"Are you talking about the new Internet media that is more convenient and faster? The term 'streaming media' is really new."

Wang Hao nodded.

“That’s right. Ultimately, the entertainment industry has only two core elements: content and channel platforms.

In the past, channel platforms generally referred to newspapers, magazines, television stations and cinemas.

But now with the development of the Internet, newspapers and magazines have declined, and televisions are no longer popular among young people due to the popularization of computers.

The cinema is also a social institution, so if there are no major accidents in the future, it can be maintained.”

When Wang Hao said this, he raised his teacup and gestured to Wanda's manager Zeng, who also smiled and said:

"Director Wang really gave me a scare earlier. I was worried that I would be unemployed in the future.

Fortunately, it seems that Wanda Cinema Line can still survive."

There was a burst of laughter in the private room. After laughing, Wang Hao continued.

“So compared to the traditional large-scale film and television companies in Hollywood, Galaxy Group’s business has been actively moving towards the Internet from the very beginning.

As I said before, Hollywood's traditional profit ecosystem in the past was movie box office, DVD revenue, and peripheral derivatives.

These are indeed not suitable for China, but if they are endowed with the concept of "Internet +", it will be different.

Needless to say, the movie box office is still the same. As for the DVD revenue, when it comes to China and the concept of the Internet is added, it is actually the current online video platform, isn't it?
As for peripheral derivative products, our Galaxy Group’s recent film “Wolf Warrior” has already set a successful example.

With the help of Taobao online store platform, the distributors and retailers directly put those peripheral products in front of customers.

As long as the price is right and the quality is reliable, today's young people, especially those fanatical movie fans, are more willing to support it than pirated products without any guarantee, right?

In addition to these, [Internet +] can actually give movies more ways to play.

In Hollywood, in addition to commercial blockbusters, there are actually quite a few B-level films, low-cost avant-garde experimental films, and independent art films.

These movies are even shown in small theaters.

But in China, it doesn't work. Why? Because the audience doesn't have the time, energy and money to go to the cinema to watch such a movie.

But what if we move them all to the Internet? Abandoning the cinema model, these small movies that are not suitable for normal releases can be directly put on video websites, adopting the "Internet movie" model.

The Internet has a wider coverage and faster publicity. After deducting the distribution costs and the share of the theaters' revenue, as long as the film costs are controlled, given the size of Internet users, the revenue of online movies may be higher than that of many regular theater movies.

The key is that there is no problem with scheduling online movies. As far as I know, several major video platforms on the Internet are already preparing to explore this market.”

“But the profitability problem of Internet video platforms has not been solved yet!”

Zhang Ziming had obviously known about this before, and he suddenly raised this question at this moment.

Wang Hao showed great confidence in this.

“It will work out, won’t it?
There are only a few profit models for Internet video platforms, including paid video playback, advertising, and member on-demand services.

The key problem is still online piracy, which makes it impossible to make paid videos, and video websites can only maintain themselves by burning money.

So this is also the reason why our Galaxy Group has not chosen to get involved in this field for the time being, but instead cooperated with the leading video website LeTV.

However, the country has now begun to pay attention to copyright issues. When several other Internet companies also enter the market and the pattern of video website tracks is completely established, I believe that those big companies will definitely join hands to crack down on piracy first.

At that time, viewers will have no choice but to pay to watch the video.”

Wang Hao's words made Zhang Ziming feel that today's trip was really worthwhile. He didn't expect that the other party, a film director, had such in-depth research on Internet video platforms.

"So when we look at the ecosystem that combines the Internet with the film and television entertainment industry, we will find that the most important thing is not the platform or capital, but the content, high-quality original content!"

Wang Hao took a sip of the fragrant tea and continued:

“This is another key point I want to talk about [IP]. What is [IP]? In simple terms, it is intellectual property.

However, the [IP] I am talking about here, in the entertainment industry, is a content product that has a certain degree of popularity and exclusivity, and has commercial value and sustainable development.

For example, "Journey to the West" is well-known, has good commercial value, rich content and strong scalability, but it is not an excellent [IP].

Why? Because "Journey to the West" is a public copyright work. It has no exclusivity and anyone can use its story. Therefore, relying on "Journey to the West" to create a film and television cultural ecosystem is a thankless task.

Other works of the same type include "Romance of the Three Kingdoms", "Water Margin", "Investiture of the Gods", etc., all of which have the same problem.

Therefore, Galaxy Group has been adhering to this concept since its inception, and has acquired a large number of existing [IP] stories on the market, including various well-known or unknown novels, comics, and even overseas works. And the key is that Galaxy Group also has [Galaxy Cinematic Universe], a super IP that is comparable to Hollywood Marvel or DC.

In my opinion, these [IPs] are the important cornerstones that support Galaxy Group to go further in the future.”

“So, does Galaxy Pictures, which needs financing, include these [IP] products that Director Wang mentioned?”

Zhang Ziming pointed out the problem directly, and the other two also turned their eyes to Wang Hao.

Yes, Wang Hao talked about the importance of this [IP] so much, so does Galaxy Pictures include these [IPs]?

Wang Hao shook his head frankly.

“I’m sorry, but Galaxy Pictures is mainly engaged in film production and does not include an [IP] copyright library.

In this regard, we have a dedicated copyright company, Xingtu Culture, which is a wholly owned company of mine.”

"Director Wang, what you did is not authentic. Without these [IPs], especially the most important [Galaxy Cinematic Universe], the valuation of your Galaxy Pictures will be greatly discounted."

Zhang Ziming immediately expressed his dissatisfaction, and Zeng and Li nodded in agreement.

When it comes to interests, even if they have a good relationship with Wang Hao, they have to stick to principles.

Otherwise, someone in the company might use this issue to attack them later, saying that they have transferred benefits.

However, Wang Hao just smiled and explained:
"Galaxy Pictures has signed a 10-year exclusive licensing agreement with Star Chart Culture, and also has the priority right to renew the contract.

So regarding the [IP] copyright, you don’t need to worry about it. I just want to have a backup plan.

As long as Galaxy Pictures is still under my control and is still part of the Galaxy Group, what does it matter whether the copyright of this [IP] is in Galaxy Pictures or not?

Moreover, Galaxy Pictures itself is not without value. It not only has an extremely mature team, but also the most core screenwriting department of our entire group. Those are the talents I have cultivated with great effort.

In addition, the online broadcasting rights of Galaxy Cinematic Universe's past and future film and television works are still in the hands of Galaxy Pictures.

With our cooperation with LeTV, the sale of online broadcasting rights alone will generate considerable income in the future.”

After Wang Hao said this, the three investors pondered for a long time.

They have basically agreed with Wang Hao's statement. In fact, even without Wang Hao's series of long speeches, they would not necessarily give up investing in Galaxy Pictures.

After all, anyone with a discerning eye can see that Wang Hao's company is now on a strong upward trend, and [Galaxy Cinematic Universe] will also have great potential in the future.

Investing in his company will bring visible profits and benefits in the short term.

As for the future?

This company is not theirs, so why should they care about the future? It is enough for them to do well in the present.

As for the rest, we can trust the wisdom of later generations.

So the question now is, what is the appropriate valuation for Wang Hao’s Galaxy Pictures?
This is actually the key issue involved in their verbal confrontation just now.

One side is trying to find problems and suppress it, while the other side is trying to raise prices by talking about advantages and making false promises.

Now it seems that Wang Hao's eloquence is better. He successfully convinced the three people and increased the stakes.

After hesitating for a moment and looking at each other, Zhang Ziming finally asked the question.

"Mr. Wang, since you are so confident in your company and we already know the general situation, why don't you talk about the amount of money we invested and the proportion?"

Finally, the topic of money came up. Wang Hao was not embarrassed at all and said directly:

“As everyone knows, our company’s latest project is my new movie, with a total investment of 1.5 million U.S. dollars and a production cost of million U.S. dollars.

Among them, the investment share held by our Galaxy Pictures is nearly 40%, which is about 6000 million US dollars.

According to today's international exchange rate, it is about 400 million Chinese yuan.

We will use this price as a benchmark and raise 400 million yuan.”

Zhang Ziming, Zeng Yingrui and Li Hua almost gasped when they heard this, and their expressions were almost out of control.

Four hundred million Chinese Yuan, and it’s a Series A financing. Director Wang must be talking nonsense.

Fortunately, Zhang Ziming still had some sense and did not refute him. He just asked: "What about the transferred shares?"

"10% of the shares," Wang Hao said calmly:

“It’s called a Series A round of financing, but to be honest, Galaxy Pictures is now considered a mature company. This round of financing is also considered the PE stage. There will be another Series B round of financing in the future, and it is estimated that it will go public within two to three years. So it is definitely different from the venture capital of those start-ups.”

Zhang Ziming didn't need to calculate, and blurted out: "10%, that's a valuation of 40 billion. Director Wang, your offer is so high, how can we bargain?"

Mr. Li Hua, the general manager of Huaying, also had a not very good look on his face.

"Director Wang, our Huaying is a state-owned enterprise. You have raised hundreds of millions of yuan in financing all at once. This is not something I can decide."

I didn't intend to let you make the decision. In the end, it will be up to Mr. Han San to make the final decision.

Of course, Wang Hao only thought about this sentence in his mind and would not say it out loud to offend anyone.

"You two think this valuation is too high, but Wanda's CEO Zeng seems to be able to accept it."

When Zeng Yingrui heard what Wang Hao said, he immediately waved his hand.

“Director Wang, please don’t say that. Who doesn’t like money? I’m just wondering if the shares you’ve released are too small. If it’s only 10%, then Wanda Group will only get 3%.

In that case, why don’t we let Wanda Pictures directly participate in the investment of your new film project instead of investing in your company?”

Obviously, at this point, the purposes of the three companies representing investing in Galaxy Pictures are already very different.

Among them, Shenzhen Guotou is a pure investment, Huaying has the political mission of supporting domestic science fiction films, and as for Wanda, it is entirely for the diversified development of its own group.

It seems that Shenzhen Guotou, which seems to be the most difficult to talk to, is actually the easiest to fool. On the contrary, Wanda's side is very delicate. The bait given to the other party is too little, and the other party is not interested. It is better to start a new business.

Giving the other party too much bait may make him have inappropriate thoughts.

(End of this chapter)