Chapter 375 Cinema Expansion Plan
This subtle slap in the face also made Qin Hong realize how wise it was when Star Media made the decision to solely invest in establishing Star Media International Cinema.

At the beginning, Qin Hong didn’t think too much about it. Since he had already cooperated with China Film on a cinema chain, there was no need to set up another one.

But later, as the domestic film market continued to grow rapidly, Qin Hong became a little envious and wanted to have a bigger piece of the cake.

Later, China Film, as the stronger party, gradually took control of China Film Star Media.

This made Qin Hong feel a sense of crisis and he felt that he couldn't hang himself on a tree.

Combining the two, Qin Hongcai decided to build Star Media's own cinema chain.

Now it seems that this step was obviously the right one.

Moreover, in the past two years, the cinema market has become increasingly turbulent, and the restrictions on operations have been extremely tight. It is no longer so easy to obtain a cinema license.

Xingmei obtained a license in time and no longer had to worry about entry. The only thing it had to worry about was money.

The investment in cinemas is getting bigger and bigger now. Without sufficient capital, ordinary companies simply can’t afford it.

As of the end of April 2009, there were just over 4 cinemas in China, with nearly 1300 screens.

Among them, China Film Star Cinema Chain now has 65 cinemas and nearly 500 screens. At the end of last year, it competed with Shanghai Film Group for the first place, but in the end, China Film Star Cinema won slightly.

In addition to China Film Star Media and Shanghai United, ranked third is Wanda Cinema Line, which has developed rapidly in recent years.

As one of the earliest private cinema chains, Wanda Cinema Line has developed very rapidly in recent years, especially since 2009, when it invested in the construction of more than ten cinemas in just three months.

Wanda now has 50 cinemas with more than 400 screens, making it one of the top three in the industry.

If Wanda continues to develop according to the above trend, with hundreds of screens a year, or even more, I am afraid that within one or two years, China Film Star Media and Shanghai United will be overtaken.

But there is no way, because Wanda Cinema Line is backed by Wanda Group. Wanda Cinema Line relies on Wanda Plaza and has its own brand and traffic effect.

China Film Star Cinema, Shanghai United, and even Golden Harvest Cinema Line, mostly have simple cinemas with single functions. They have to slowly build up their reputation in the local area, and it takes an average of 1 to 2 years for them to get on the right track.

The film studios under Golden Harvest Cinema Line are better. Golden Harvest is very famous and has a good brand image, so they don’t have to build up fame and reputation from scratch.

However, despite this, Golden Harvest Cinemas still has a big shortcoming compared to Wanda.

That is, even if no one goes to the cinema, Wanda will not lose money as long as the plaza is not unpopular. However, if the cinemas under Golden Harvest fail to open up, then Wanda will suffer real losses.

Although Golden Harvest Cinemas has not expanded yet, the expansion plan has been prepared long ago.

However, Gao Jun's plan is also to proceed step by step, striving to revitalize each new cinema.

Of course, Gao Jun also wanted to advance rapidly like Wanda, but unfortunately, Golden Harvest could not learn from it at all.

Wanda has no worries about opening a cinema. Just leave the other cinemas open for now and then slowly adjust and sort things out afterwards. If things really don’t work out, just close the local cinema and switch to other shopping mall projects.

Under such circumstances, Wanda has a unique advantage. Unless Liu Zhou also builds a Jiahe Plaza, he will not be able to compete with Wanda.

But recently Gao Jun also adjusted the cinema chain's expansion plan and no longer requires everyone to buy land and build their own cinemas.

Of the four luxury cinemas currently owned by Golden Harvest Group, except for the one in Beijing, the other three were built independently after purchasing the land.

Then, Gao Jun spent a sum of money to buy all the properties and land of the ten cinemas that he acquired.

It was fine to buy land and build it yourself in this way in the past few years, but now with the rapid increase in land prices, especially in first-tier cities, if you continue to do so, it will require too much capital.

Moreover, the efficiency of doing so is relatively slow. When other companies are developing rapidly, you will fall behind if you develop slowly.

By the time you finish building your cinema, other cinema chains will have already started scrambling to grab market share, so it will be all in vain.

Therefore, Gao Jun also made relatively major changes to the expansion plan of Golden Harvest Cinemas, and obtained Liu Zhou's consent.

The new expansion plan is for Golden Harvest Cinemas to walk on two legs. In first- and second-tier cities, it will continue to build theaters independently and still follow the route of boutique cinemas. In third- and fourth-tier cities or even in developed towns, it will cooperate with local or certain chain shopping malls.

First- and second-tier cities are the present, third- and fourth-tier cities are the future.

The potential of the cinema chain's sinking market in the future cannot be ignored. The box office contribution of third- and fourth-tier cities is no less than that of first- and second-tier cities.

Now Golden Harvest Cinemas is just waiting for the group to go public and raise funds and then disburse the money.

Although it still costs a lot of money to build them in first- and second-tier cities, there is no need to build too many. One or two in each city is enough, and building four or so in the four first-tier cities is about the same.

At present, Liu Zhou has arranged for Gao Jun to select a place first, and buy the land when the money arrives. As for the cinema, it can be built at a slower pace.

Land will be the most expensive in the future. If you buy it now, you can save a lot of money later.

Moreover, although it costs more in the early stages to build a cinema in first- and second-tier cities, it will be much easier later on as you don't have to worry about the landlord asking you to raise the rent after the cinema becomes well run.

The reason why Wanda Cinemas’ profits are so high in later generations is that they don’t have to worry about rent issues.

For other cinema companies, rent is the biggest expense.

However, despite this, subsequent expansion to become one of the top cinema companies in the country will still require a lot of capital.

Therefore, Liu Zhou, Gao Jun and some senior executives are also thinking that if it doesn't work, they can find a large real estate company to cooperate with and jointly operate the cinema chain. For example, Poly Group is a very good partner. Poly Group is a large company. After separating from Bona, its media company also completely shut down its production business and focused on the development of cinema chains.

If the cinema chains under Golden Harvest and Poly merge, they will be able to jump into the top three.

Moreover, the two companies can also achieve good complementarity. With the Golden Harvest brand, Poly's cinemas can be well developed and attract traffic for their real estate projects.

With the support of Poly Real Estate, Jiahe can also expand rapidly like Wanda.

However, although the idea is beautiful, it is not that easy to cooperate, and this is just Liu Zhou's idea.

As for whether to cooperate or not, it depends on the subsequent development of Golden Harvest Cinemas.

In addition, Liu Zhou also considered separating the Golden Harvest Cinema Chain and then listing it on the stock market to raise money to expand the chain.

All this will depend on the future, for now this is just a possible plan.

Back to Star Media, after studying Golden Harvest, Qin Hong became more aware of the importance of production.

Moreover, seeing that the box office of movies produced by Golden Harvest were all in the hundreds of millions, he realized that the mainland film market was no longer as small as it used to be.

So last year, Star Media officially prepared to enter the film production field.

To be in the film and television industry, you need talented people. Boss Qin does not have the Beijing circle advantage of Huayi, nor does he have the keen vision and Midas touch like Liu Zhou.

So he used a stupid method and looked for famous directors or artists to work with.

The first one he found was Lu Chuan, the scumbag.

In fact, although "Jinling Jinling" was very controversial in history, it at least achieved a box office of 1.6 million.

Although the cost was not fully recovered, at least the results were good and Qin Hong was quite satisfied.

So later on, he invested money in Lu Chuan to shoot that terrible movie "The Banquet", which finally woke Qin Hong up and he stopped cooperating with Lu Chuan.

However, Lu Chuan used his connections to return to China Film Group, and this time made an even bigger bad movie, "Nine-story Demon Tower".

Especially when compared with "Mojin: The Lost Tomb", "Nine-story Demon Tower" looks even worse.

This incident also exhausted the last bit of goodwill behind Lu Chuan, and he will never have the opportunity to direct a movie again.

Qin Hong then set his sights on Chen Kexin and spent a huge amount of money to recruit him.

In fact, it can’t be considered as poaching. Chen Kexin had previously cooperated with Bona and Shanghai Film Group. It’s just that this time Chen Kexin’s new project was snatched away.

And this project is "Wuxia", which made Chen Kexin bid for a villa with tears in her eyes.

Only someone like Qin Hong, who was eager to make a breakthrough and had money and the willfulness to spare, would tolerate straw hats that cost thousands of dollars each and actually bought dozens of them.

In the end, the box office of "Wuxia" did not meet expectations, and Qin Hong finally realized that his own people were more reliable, so he tried his best to poach Chen Shishi and collaborate on "The Orphan of Zhao".

But after being let go, Chen Kexin may have realized that if she continued to do this, she might be cut off from the mainland, so she came to her senses and started making movies honestly, and then collaborated with China Film Group on a movie called "Chinese Partners".

It can be said that Star Media has really encountered many setbacks along the way in the field of film production and has wasted a lot of money.

But fortunately, Star Media has money and its other businesses are developing well.

So even though Star Media lost a lot of money in its production business, at least it gained momentum and fame.

Finally, Star Media was listed in Hong Kong, and Qin Hong also made a fortune.

However, now, Star Media’s first attempt in the field of film production has failed, which has made Qin Hong much more cautious.

After all, although Xingmei is rich, the company does not belong to him alone.

This time, "Jinling Jinling" is expected to lose tens of millions, which is not a small amount of money. Although he can still handle it, he still has to put in some effort.

At the very least, after other investors learn about their losses, it is inevitable that they will be invited to paradise to relax a few times.

Now that "Jinling Jinling" has become like this, Qin Hong has to think about what to do in the future.

There is nothing much to consider about the cinema chain. The focus must be on Star International Cinema. He doesn't want to be slapped in the face like this again.

As for production, he now realizes that fame does not necessarily mean ability.

He felt that instead of working with big-name directors, it would be safer to cooperate with China Film.

China Film Group is such a large group, with tens of thousands of employees, including retired ones, waiting to be fed. So in order to reduce financial pressure, it often cooperates with other companies in production.

Qin Hong already has a good relationship with China Film Group Corporation. At least he won't be cheated by cooperating with them. Even if he is cheated because of his lack of vision, he won't be cheated too much.

In addition, China Film Group and Golden Harvest have a close relationship and often cooperate with each other. We may even be able to cooperate with Golden Harvest.

(End of this chapter)