Film and Capital Intimate contact

This newspaper correspondent Wang Yueping with the Huayi Brothers Gem listing approaching, as well as by its production of "the founding of the Great Cause", "Wind", "Love with the Afterlife" and "The Last 99 days" and other exciting film and television dramas and hit, so that Huayi Brothers not only become the biggest national day screen winners, at the same time in the capital market, but also become a Film and television companies listed first.　　As a result, the investment film and television boom, especially those with the past performance of film and television investment funds have entered the public's vision. However, in the highly risky film and TV market, how Huayi Brothers control risk?　　How can the investment organization invest in film and television specifically? Returns high as early as 2004, Merrill Lynch, Credit Suisse First Boston, IDG, Endgame, Providence Equity, Texas Pacific Group and DLJ Merchant The big Wall Street capital, such as company, has been unable to stand alone, starting to enter Hollywood's 50 billion-dollar film industry.　　Along with the "Spider-Man", "Transformers" swept the world, all kinds of capital began to close contact with the film, but also the trend of the blow to China. Hedge funds and private equity firms from Wall Street have become the main economic pillar of Hollywood in the current form of film investment funds, according to the Merrill Lynch analysis. From 2005 to 2006, about $4.5 billion pledged investment inflows in the 1.5 period.　　At least 30% of the overall film production costs of the six Hollywood plants and their companies also come from such film funds, with an average annual capital of $2.5 billion trillion. If there are any drives that lead to the future of Wall Street bosses and the entire private equity fund, it is clear that the drive is a big profit.　　And the film is one of the industries in line with its standards, whether in China or the United States, South Korea, the early private equity investment in the film brought high returns to investors excited, and thus attracted more and more private capital to enter. In Hollywood, the average production and promotion cost of each movie in 2004 was about $98 million trillion, but the steady income from DVD sales and copyright overseas transfers earned at least 5 billion dollars. The returns are even more alarming if they add to the profits of other derivatives.　　In other words, for investors, investment films can be said to be "discriminating" trading.　　High returns have led to more and more funds frantically entering, including the American Film Fund Endgame, which is typical of the 120 films it invests, with a total return of 48% per cent. The film fund came to China has seen the "Yangtze River Seventh" People, I believe no one can forget Stephen Chow and the Aliens "Yangtze River seventh," the miracle. Outside the film, the "Yangtze River No. Seventh" production model is also in the "forefront of fashion"-as early as 2006, the "Yangtze River Seventh" crew began to contactPrivate equity, finally won the Tsinghua Source Hing Bio-Pharmaceutical Co., Ltd. President Yang Xiangyang support. With the further development of the Chinese film industry, the huge potential of its market also attracts the venture capital institutions to enter. According to the "2009 Chinese Film Industry Research Report" prepared by China Film Association Industrial Research Center, China's film investment reached 2 billion yuan in 2008, and the total box office reached an unprecedented 4.3 billion yuan.　　It is reported that the next 5-10 years Chinese film will also reach the box office of 10 billion yuan. The huge market attracts the influx of risky capital from countries. The Iron Pool fund, which surfaced as a result of investing in "Chibi", was one of the 2008.　　As a private equity fund that entered Chinese films in 2005, the Fund is funded by the Endgame Film Fund of the United States. "In the United States, about 50% of the films are made by various funds, and in China it is rare." It can be said that the current development and financing of Chinese film is only equivalent to the United States in the 70, 80 's level, but also in the film industry and the middle stage of the workshop, the future development has a long way to go. Therefore, this is a good opportunity for venture capitalists to enter the film industry.　　"China Film Foundation vice president, Guo Ying Investment Management Co., Ltd., Iron Pool Investment Management Co., Ltd. CEO Wang Guowei told reporters." IDG's dynamism in China also confirms the enormous potential of the Chinese film market.　　As early as 2007, IDG began to operate the "New Media Fund", only in the first half of 2007, has invested in the film and television, the Chinese film Group, the impression of innovation, including three film upstream companies, of which a maximum investment of 50 million U.S. dollars. May 2009, IDG joined hands with China Shadow group to further enter the film market.　　According to a memorandum of cooperation between the Chinese media funds signed by the two sides, the fund will be mainly used to explore new Chinese films and will jointly invest in more than 5 feature films over the next two years. In addition to IDG such as foreign funds, domestic funds have also entered the film industry, Fortune is one of the venture. "We have been tracking in the film and television industry for a long time, there is such a shareholder background, Hunan Radio and television in the domestic provincial television stations, both in terms of content, the reform is to go more than a former media group." With such a shareholder background, film and television will naturally be the focus of investment.　　September 25, held in the Qing branch of the Cultural Industry Forum, Fortune Venture capital Beijing General manager Yanxiaoping publicly said. "We hope to set up a film company in partnership with others in the near future, and invest 60 million ~8000 million to make a film similar to" Painted Skin ", which will be screened next summer or national day.　　"After the failure of the film production 10 years ago, Beijing Wo Qin audio and Video Co., Ltd. has recently attempted to re-enter the film industry." It is understood that at present, including the establishment of the Bank of several funds are also active in the preparation of cultural industry funds, in the film, television industry to share a cup of soup. However, venture capital will be specifically involved in film investment when? "Film investment is a very special investment, and its specialization is very strong." Generally speaking, film investment focuses on the creation of value, the main cost is people. But people are often difficult to quantify, can only be said to be ' pricing ', such as the Olympic investment assumption of 100 million, then presumably can budget director Zhang Yimou's contribution of 30%, that is 30 million. If you invest in a film directed by Zhang Yimou with a budget of 3 million yuan, the cost of paying the director is 900,000, and the actors are almost similar. In addition to the cost of these people, the remaining costs, such as operating expenses, can be quantified. And in terms of return, the current in China is mainly divided into hospital lines. In addition, there are overseas screenings of copyright revenue.　　Wang Guowei told reporters. "In the long run, especially in the television industry, the separation of broadcasting is a trend." Although it is still more than television production, but independent producer direction is an irreversible trend and trend. In this field, we focus on the stronger team and its ability to create, as well as the strong content production capabilities of the enterprise. These excellent enterprises are our focus on tracking the object, the film, television industry has a relatively high threshold, some relatively good actors have been signed, on the formation of a certain monopoly, for the new Chinese companies, into the film and television production has a certain threshold. The first concern of fortune is the ability to make or provide the content, and the second to have the ability to get through the whole industry chain. Huayi Brothers strong resistance to risk, in the film, artists brokerage, advertising, derivative development has a comprehensive industrial chain to enhance the ability--Feng Xiaogang, Jizhong such director-led, there are six to eight studio model, in the artist broker signed Zhou Xun, Jane Zhang and so on. Capital markets are most concerned with the ability to sustain development, and the success of a film does not mean that the next film will be successful. A lot of film and television units is a film fire, the back is unknown. We hope that an enterprise has the ability of sustainable development, this is the core.　　"Yanxiaoping said. It is understood that in the return on investment in the fund, in the domestic, in addition to the hospital line, the fund can be received in return, including television, DVD and other audio-visual screening channels, and the copyright return period of up to 50 years. And if you draw on the Hollywood model, the rewards will be even more alarming. In Hollywood, major studios distribute DVDs and home videos each year at $25 billion trillion, close to 3 times times the box-office receipts of cinemas. By 2003, the income of video games has exceeded the box office income, in fact, the box office revenue is only one-tenth of the peripheral product income, so the box office is no longer a key indicator to determine the success or failure of a movie.　　Now, before considering investing in a movie, Hollywood should not only be concerned about the projected box-office, but more importantly about whether the film will be produced and how to extend profitable peripheral products.　　Film investment "Not sincere don't disturb" Chengye, Xiao. "Non-interference" Once let actor Ge gained a great reputation, and "breathless" also let it bearThe huge market pressure has validated the film and television investment, even the famous actor, the famous director does not necessarily let the film obtain 100% successful iron law.　　In the film investment process, because of the huge uncertainty need investors to invest before must do "not sincere don't disturb". "Outright investment in movies is also risky in Hollywood, because every movie has a profit." In order to avoid the risk, in addition to the use of funds for strong supervision, often also use mezzanine loans or preferred stock form, speed up the turnover of funds, which can also spread the risk of the film not box-office.　　"Wang Guowei thinks.　　The development scale of the Chinese film market billions of, the law of the film development, and the requirement of the investor's professionalism also restrict the investor's enthusiasm and raise the investment threshold. "We've been paying attention to Paulie for 2005 years, but we've only been watching until this year, when we've confirmed there's not too much risk to get started." "When Paulie received a second round of funding, Yuan, a founding partner, told reporters.　　The experience of the Jingwei VC investment also reflects investors ' attitude towards film investment--although bullish on the industry, it still needs to be cautious in the face of huge risks. "From an investment point of view, I am now more optimistic about the following areas: First, the company in the field of hospital line; The second is a co-production, with the pace of China's going out, the film will become a big trend; the third is the film, which is invested by big organizations, because it has the core elements of film investment, such as the hospital line or actors and so on.　　Wang Guowei told reporters. And from the development experience of American film--American anti-industry monopoly "Paramount Law" promulgated, directly prompted the film industry chain further differentiation (artists broker gradually evolved into an independent industry, film and television company's competitiveness is mainly focused on copyright and marketing influence). In the industry chain subdivision at the same time, across the entire industrial chain of the company also with the direct development, and eventually formed the American film industry, "eight King Kong."　　It can be seen that the Chinese film and "Hollywood" there is a huge gap, and this is worthy of investor attention to several major areas, Wang Guowei analysis. First, the field of hospital line. The so-called "channel is King", in the film field is the same. Compared with the courtyard line of good docking, there is still huge development space in the construction of Chinese hospital line. According to statistics, the United States more than 200 million people, each year into the movie theater 5.7 times.　　From 1996 to 2004, the number of cinema screens continued to expand, from the original 28905 blocks up to 36012, up 25%, but the number of theaters has dropped 22%, after 2004, has dropped to 5629, the two are reverse development trend. Not only in quantity and the United States there is a huge gap in the people's view of the demand, there is a huge gap between the two: in the United States, there is the art of the line, a special screening films, there are children's school line, a special screening of child movies, as well as the line of love The world's first compound line chain Group is the Regal Entertainment set headquartered in Knoxville, Tennessee, USAGroup, there are 6273 screens in the United States alone. AMC, the world's second-largest compound, has a total of 3500 screens, all over the country's major cities, and is the leader of modern American "big screen", with 8 outlets overseas and more than 200 million people each year and AMC.　　In China, there is no similar hospital line and the emergence of professional line, even in the field of domestic hospital line occupies an important position in the Poly Bo Na, in the scale still can not be compared with Regal, AMC. Second, the big film Company's development opportunities. In the United States, Hollywood is made up of eight film studios such as Fox, Disney, MGM, Paramount, Sony, Universal, Warner Bros., DreamWorks and so on, in 20th century. The eight film companies make up 60% to 70% of the total number of films produced in the United States each year.　　But in China, no company produced a film to occupy the entire film market 40%, so this for Huayi brothers, the Sky Orange Entertainment and other domestic production and distribution companies, there are huge opportunities for development. Third, the integration opportunities created by the promotion. In Hollywood, it is the whole industrial system that makes up the film, all of which are inseparable from the industry mechanism, from the studio system, the Big Star, the big production, the way to the independent production, and the way of the big companies ' distribution.　　With the continuous development of Chinese film industry and the continuous improvement of production level, there will be a new round of integration opportunities. And American film can form today's industrial mechanism, and in the 20 years after 20th century, the United States in the media enterprise integration closely related. In this major integration, there have been a lot of vertical, horizontal integration.　　Through the vertical integration of the film production, distribution, screening the entire system to restructure, horizontal integration is through the integration of television, cable, plane and network media, and eventually formed a "eight King Kong"-oriented Cross-media, Cross-industry Super large group. In China, whether it is the Chinese film Group, Shadow Group or poly Bo na, and Huayi Brothers and so on, have not carried out large-scale expansion and acquisition, and as the fund influx, industry consolidation is about to begin.