Chapter 219: Huge Profits from Source Code
After parting with Zhang Weiping and Zhang Yimou, Liu Zhou informed Zhang Zhao about his investment in "Curse of the Golden Flower".

The subsequent specific investment shares and other related matters will be left to him.

Liu Zhou spent a day arranging the affairs of various companies and then flew to Los Angeles.

Liu Zhou went there this time to discuss his new movie in Hollywood.

Now that Sina has completely eliminated the hidden danger of Duan Yongji and the company's development is on the right track, Liu Zhou feels that he can continue his directorial career.

Ever since Source Code was released in North America with a box office of over 100 million U.S. dollars, Liu Zhou has been receiving cooperation invitations from major Hollywood production companies.

However, Liu Zhou refused because he was busy with domestic affairs.

Now that Liu Zhou's companies have stabilized, he can free up his hands to continue consolidating his position in Hollywood.

After more than ten hours of flight, the plane finally landed at Los Angeles International Airport.

In the United States, Liu Zhou can finally stop hiding himself, as no one here knows him at all.

As soon as I walked out of the exit, I saw a familiar figure.

This time it's not Anne Hathaway. Her new film "The Devil Wears Prada", which she has high hopes for, will be released at the end of June, and she has been following the crew to promote it.

The person who came to pick up Liu Zhou this time was also an old acquaintance, the director of distribution of Lionsgate Films, Anthony Edwards, who is now also the vice president of Lionsgate.

"Hey, Liu, here!"

When Liu Zhou came closer, before he could speak, Edwards opened his arms and wanted to give Liu Zhou a hug.

"Welcome to the City of Angels!"

Liu Zhou and Jian Dan hugged each other, then said with a smile:

"Why do I feel like you have more free time after becoming the vice president?"

Edwards said as he led Liu Zhou to the parking lot:
"That's because you haven't seen me busy. But you are the most distinguished guest of Lion Gate now. No matter how busy I am, I have to come and greet you in person."

"Well, even though I know you're not telling the truth, it still makes me feel comfortable listening to you."

"Liu, how could you think of me like this? We are not only partners, but also friends. I never lie to my friends."

"Anthony, I think you should be a stand-up comedian."

“Haha, a lot of people say that.”

Although Edwards is a white man, he speaks as eloquently as a black man, never stopping, and does not make people feel disgusted.

So on the way to the hotel, Liu Zhou didn't feel bored at all.

After sending Liu Zhou to the hotel, Edwards left.

Liu Zhou adjusted to the jet lag and went directly to the Lionsgate Entertainment headquarters the next day.

I'm not here today to discuss cooperation, but to share the money.

"Source Code" officially ended its overseas screenings in April.

However, the overseas box office was not as good as the North American box office, with a total of only 87 million US dollars.

Including the North American box office of $1.9 million, "Source Code"'s global box office is exactly $ million.

Liu Zhou also invested 25% in this movie. Now that the box office revenue has been settled, it's time to divide the money.

The person who received Liu Zhou this time was Anthony Edwards, who was originally in charge of the publicity and promotion business of Lionsgate Films.

Compared with yesterday, Edwards is dressed in a suit and looks much more serious today, giving people the feeling that he is a completely different person.

Liu Zhou also appreciated his attitude. Public is public and private is private. This way, when they talk about money later, there won't be any interference factors.

"Liu, have you rested well?"

"I've had my rest. You looked like you've been waiting for me to come over."

"Because I believe no one can resist the temptation of Franklin," Edwards said with a smile.

"Well, I couldn't help it either. I also wanted to see how much money I could get, haha!"

At this time, Edwards put away his smile and said seriously:

"Come on, take a look at this document first. It's about the box office."

Liu Zhou was not polite at all. He took the document and started reading it carefully.

The box office sharing in the United States is very different from that in China.

Domestic cinema chains are relatively powerful and charge a fixed share of the profits. In the past, they directly took 55%.

Later, Zhang Weiping opened a loophole, and theaters only took 50% of the profits from films directed by big directors.

In Hollywood, distribution companies are more powerful, and box office shares are calculated on a weekly basis, which is different every week.

If the issuing company is strong, it can split the profits with the department 91% in the first week, then 82% the next week, and so on, decreasing in sequence until it reaches 50%-50.

For some blockbusters, the distributor can get 70% of the total box office after the entire movie is screened.

But it is not a loss for theater companies. Even if they only take 30% of the profits from blockbusters, it is still much more than the 50% of small productions.

"Source Code" is not one of those commercial blockbusters that has a box office hit in the first one or two weeks. Overall, the distributor can get 63% of the total North American box office.

That means Lionsgate can get about 65 million.

This amount of money had to be deducted from the $8 million Lionsgate paid for publicity and the 12% distribution fee, leaving $49 million. Liu Zhou had a quarter of the share, which was about $12 million.

The total investment of "Source Code" was only 20 million, and Liu Zhou only invested 5 million at the beginning. The cost was recovered from the North American box office alone, and the profit was more than doubled.

Next is the overseas box office. Lionsgate's overseas distribution capabilities are still relatively weak, which is why the overseas box office is lower than the North American box office.

"Source Code" grossed $87 million overseas, but Lionsgate only got an average of 30% of the share, or $26 million.

After deducting Lionsgate's 15% distribution fee, only 13 million was left.

In other words, the producers can only get 15 percent of the overseas box office revenue.

This is the case when the issuing company does not play any tricks. If they do, the issuing company can directly turn the profits into negative numbers.

And this situation is very common in Hollywood.

The Hollywood Big Seven often use this method to defraud overseas investors and Wall Street capital.

There is a saying in the United States that the only place that can make money from Wall Street is Hollywood.

However, after being cheated for a while, Wall Street capital became smarter and no longer invested directly in movies, but instead invested directly in film companies.

Before Liu Zhou was reborn, the Big Six in Hollywood, no, the Big Five in Hollywood, had already been infiltrated by Wall Street capital.

Lionsgate didn't do anything fancy because it still wanted to continue working with Liu Zhou, but the distribution fees for overseas releases were not low.

Not every company has the ability to distribute overseas. Currently, only the seven major Hollywood studios have complete global distribution capabilities.

Before Lionsgate, the most famous independent production company was DreamWorks, which was jointly founded by three Hollywood moguls.

In the first few years, DreamWorks not only produced many hit live-action films, but its performance in animated films was second only to Pixar.

At that time, everyone thought DreamWorks had the greatest hope of becoming the eighth largest studio in Hollywood.

However, they have a fatal shortcoming that they have not been able to solve, and that is their overseas distribution capabilities.

For overseas distribution of films produced by DreamWorks, they have to rely on the Big Seven Hollywood studios.

As the threat from DreamWorks grew, they were attacked jointly by the seven major Hollywood studios, which directly put a stranglehold on DreamWorks in overseas distribution.

Finally, DreamWorks, which had been glorious for ten years, fell apart the year before last, and its live-action film and animation departments were both taken over by the Big Seven in Hollywood.

If Lionsgate Entertainment did not have the support of the Maple Leaf Country's banking group, they would not have the strength to establish their own overseas distribution channels.

This is also why a few years later, Lionsgate's revenue was once ranked among the top three among all Hollywood film companies, because Lionsgate would not be strangled.

Except for not having a seat in the MPAA, Lionsgate is in no way inferior to any of the Big Seven Hollywood studios in terms of strength.

MPAA is the organization that rates Hollywood movies, and this organization is controlled by the Big Seven in Hollywood.

They are both athletes and referees.

In the United States, film ratings are strictly enforced, and different ratings have very different audience groups.

"Liu, is there any problem with the share of the box office?"

"No, it seems that Lionsgate is very rigorous in its work."

Edwards understood Liu Zhou's meaning and said with a smile:

"You are our most important partner at Lionsgate. I can't cheat you even if I want to cheat anyone else."

Liu Zhou smiled and said nothing. He did make some money following Liongate this time, and he was too lazy to expose him.

The overseas box office revenue was 13 million, and 25% is 3.25 million.

Including the box office revenue in North America, Liu Zhou was able to get a total of more than 15 million, with a net profit of 10 million.

At this time, Edwards took out the second document, handed it to Liu Zhou and said:

"This is the other copyright income of Source Code. Take a look."

Liu Zhou knew that in Hollywood, the revenue from other copyrights was the biggest source of revenue.

First of all, there are the copyrights of videotapes, DVDs and VCDs, which amount to eight million, and the TV station broadcasting rights, which amount to five million US dollars.

Together with various other copyrights and authorizations, the total amount is as high as 35 million US dollars.

And this is not a one-time payment, it is just the copyright fee for five years. After five years, if you still want to use the movie "Source Code", you have to renew the fee.

Although the price will not be as high as it is now, the important thing is to make steady progress.

The Big Seven Hollywood studios have huge copyright libraries, and their annual revenue from copyright libraries alone exceeds 100 million US dollars.

Liu Zhou can also get a quarter of the 35 million, which is 8.75 million.

In other words, Liu Zhou's total income from "Source Code" was 24 million, with a net profit of 19 million.

It’s better to make money by making movies in the United States. The copyright protection here is so perfect.

Liu Zhou only accounted for a quarter of the investment, but the profit exceeded 100 million yuan. No wonder domestic companies are thinking about making dollars every day.

"Liu, is there any problem with this part of the profit sharing?"

"no problem."

"If that's all right, can we talk about the new movie?"

(End of this chapter)