In 2018, China's overall box office reached 60.6 billion. As of November 2019, the total box office reached 59.5 billion. China has become the world's second largest box office after the United States. As the box office of Chinese movies is getting higher and higher, we have seen that the investment costs announced by various films are also terribly high. The investment cost of "Journey to the West" is 550 million, and the investment cost of "Journey to the West: Conquering the Devil" is 200 million. According to industry sources, the announced investment cost of such films is significantly higher than the actual production cost of the film, whether it is viewed from the cast or special effects. So, why is there such a big difference between the actual production cost of the movie and the investment cost announced by the outside world?
On July 15, 2018, the "Asura" film official Weibo issued an announcement, announcing that "Asura" will be withdrawn and closed on the same day. The action of the film crew of "Asura" has had a huge impact in the industry. After all, it is a commercial blockbuster with an investment cost of 750 million yuan. It has just been released for three days and has a box office of less than 50 million yuan. Everyone is very curious, where is this 750 million yuan investment? Here we want to popularize the concept of "copyright premium". As the name suggests, investors bid higher than the original price of copyright. Movie premium investment is a normal phenomenon in the current film industry. Generally, movie projects with well-known directors and actors are a seller's market. If more capital wants to invest in the market, they will naturally sell at a premium. Let's take a film with a budget of about 100 million yuan at the time of filming as an example. As the film project progresses, the film copyright may undergo one or two rounds of premiums. In the A round of investment, investors invested 10 million yuan, which can account for 10% of the income right; in the B round, the film copyright premium is 300 million, and the 10% of the income right needs investors to buy at a price of 30 million. Calculated in accordance with the rules of the film copyright investment split, for investors in the A round, the total box office of the film can reach 315 million yuan to protect the capital; for investors in the B round, the total box office of the film needs about 950 million yuan to protect the capital. Why does
have a premium transfer of film copyright? There are generally two reasons: one is that the producer is not sure about the future income of the film that has been invested, and the producer transfers part of the copyright at a premium not only to recover part of the cost in advance, but also to reduce the risk; the other is that the market is optimistic about the movie project of the producer, and the producer can pay a premium Transfer the copyright of the film to new investors, and both parties will get what they need, and win-win cooperation.
So, can movies after premium prices be invested? The production cost of the
movie is a trade secret and will not be disclosed to the public. Only the A-round investors know and get the real production cost. No one is willing to sell good projects without making money or losing money, so the subsequent B round and C round film copyright premium transfers are also normal in the industry. A more typical example is "Wolf Warriors 2" released in 2017. Before it was released, it also went through multiple rounds of film copyright premium transfers and joint investment. But in the end, the box office of the movie was a big hit. All the companies that participated in the investment made money. The time is different, the investment cost is different, the more you earn, the less you earn. What we film investors really want to prevent is to invest in excessively premium film projects. When we are optimistic about which film we want to invest in, we must find the real producer and get the film copyright with relatively low investment cost. After all, investment cost is related to investment income. The rate of high or low.
