Chapter 705: Advance Settlement

For Hong Kong films to enter Neidi, they must co-produce with a Neidi film company; otherwise, it's very hard to get in—that's their restriction.

Now half the industry is controlled by the Principal; it's hard to avoid being affected, and Lao Yang can't do anything—it's not like the old days anymore.

Everyone wants to make money; without money, you can't survive.

After Fang Hong met and greeted them all, he walked up the steps to the stage and took his position.

The stage backdrop displayed a dynamic red, and Fang Hong faced the audience below, scanning the crowd and saying: "You all know why I called you here, so I won't restate it."

They certainly knew—it was all about taking on Wanda Cinema Line, isolating Wanda Cinema Line.

But to achieve this goal, it depends on what the Principal says and what benefits he offers them; otherwise, they won't do such a thing.

Working with the Principal against Wanda also brings losses.

"I won't waste time on empty words—starting today, Tu Piao Piao will compress the original two-to-three-month box office payout cycle down to 15 days, meaning any film with Tu Piao Piao's distribution will receive its full box office revenue within 15 days after its one-month release."

"Even if the film hasn't left theaters and is still screening, they'll receive the previous month's box office revenue within 15 days, and subsequent amounts will be settled within ten days."

When Fang Hong spoke these words, the people present changed expression, clearly astonished.

Murmurs broke out in the room; some exchanged glances, looking skeptical—such a short cycle of 15 days was unimaginable to them.

That means they'd receive box office revenue within 15 days after a film's one-month release, with subsequent payments arriving gradually, the entire cycle not exceeding one month.

That would save them a lot of interest, since many film companies fund movies with bank or financial institution loans, all of which accrue interest.

Some even have Betting Agreements involved.

Moreover, investment cycles will accelerate—once a film releases and its initial box office shows promise, they can immediately invest in a second film, eliminating the waiting period.

This multiplies capital utilization several times over, enabling multiple investments and reducing their reliance on financing.

Previously, with long payout cycles, if they wanted to invest in a second film, they had to seek financing before their money returned—or wait for the payout.

Now the Principal's plan shortens the cycle: as soon as there's intent, they can get started.

Another advantage is that it helps them rapidly secure premium resources; with sufficient capital, they can quickly lock in top directors, actors, and IP Movies, with unlimited flexibility.

Because they now have money, their cash flow is much healthier.

"Principal, are you serious or joking?" Ning Hao looked up at the stage and couldn't help asking.

He owns over a dozen film companies, the most famous being Bad Monkey, and his financial pressure is immense.

"Of course it's serious. You can question my character, but not my words—I never joke, understand?" Fang Hong spoke with grave seriousness.

Ning Hao smiled awkwardly and said nothing.

Indeed, although the Principal fights with this faction and that, everything he says and does is genuine—he always delivers.

"Box office payouts aren't decided by just your distribution company—this is the theater side," someone said, leaving it unfinished—there were theater representatives present.

Everyone glanced at the General Managers from Dadi.

Previously, theater box office reporting took half a month, accounting and revenue sharing took another half a month, and fund transfers took a full month—the total cycle was extremely long.

If the theater side held back funds, Tu Piao Piao would struggle to pay back producers—that's the point.

"Don't worry—we have a real-time data feedback system that uses Big Data to synchronize box office accounting, compressing fund settlement to the shortest possible time and greatly reducing cinema box office reporting time."

"That means this part no longer requires manual calculation by cinemas—Big Data calculates it all, reducing errors. How much you'll receive is already calculated by Big Data, transparently and openly—you can monitor every cinema's box office data in real time."

"If a cinema refuses to settle with you, Tu Piao Piao will still advance the box office revenue to the producer—no fraud, no lies," Fang Hong said.

"Clap, clap, clap!" Applause erupted in the room!

The Principal truly has a generous heart—such generosity is unprecedented, but it's also a display of strength, and will completely overhaul the industry's box office settlement system.

If implemented, the Principal will shatter the entire box office payout system.

Previously, with old settlement methods, not only was the cycle long, but errors were huge—millions or even billions could be casually lost due to rampant box office fraud.

Who knew when a cinema secretly pocketed box office revenue? Now, with the internet and Big Data, such behavior is eliminated—it's a good thing.

But they knew the Principal must have an agenda, because he said distribution must happen under the Jade Rabbit system.

Of course, that's not so important—who distributes doesn't matter; having one more advantage is fine, losing one doesn't matter.

Actually, they were overthinking—some cinema box office revenue also flows through Tu Piao Piao, since tickets are bought on Tu Piao Piao, and cinemas must settle those payments with Tu Piao Piao.

Tu Piao Piao can withhold funds!

Short-term box office settlement is easy to operate: just discount the accounts receivable at 98% or 97% and sell them to financial institutions or banks, who then advance the funds.

Then you can pay the producers—this single turnover revives the entire system.

Honestly, finance really is a wonderful thing—it greatly increases efficiency.

In the future, if Chang'e has money, Tu Piao Piao can sell the discounted receivables to Chang'e—left hand to right hand.

Or delay payment to Jade Rabbit and pay it interest—then the profit stays within the family.

The amount given to producers is only about 30%—for a 1 billion yuan box office, only about 300 million yuan needs to be paid out to producers.

The rest is split between theaters and distributors—that's Tu Piao Piao and the theaters' business, none of the producer's concern.

This way, Tu Piao Piao earns less distribution fee, banks earn some, producers get more money—everyone benefits; Tu Piao Piao's gain is expanded market share and increased distribution demand.

Producers, eager to get paid quickly, will all choose Tu Piao Piao as a distributor, giving Tu Piao Piao greater control over upstream content creation and leverage over downstream theaters.

"Principal, you're not this generous, are you? Any conditions? Will you charge service fees?" someone asked.

They feared the ticketing platform would charge service fees, cutting into their profits.

"No service fees for now; whether we charge later is uncertain. Besides, today I'm just here to do good," Fang Hong said matter-of-factly.

This drew a round of "hehe" laughter from the crowd—the Principal sometimes has a sense of humor, but his words carried undeniable confidence.

No service fees for now, but they'll definitely charge later—that's inevitable, waiting only for the ticketing market to determine a winner.

Without service fees, Tu Piao Piao can't sustain operations—it's still operating at a loss.

"Alright, that's settled. If you have questions about details, someone will answer them offline." Fang Hong skipped the issue—questions can be asked privately.

He didn't invent this—technology would have achieved rapid settlement anyway; he's just brought forward what the era would produce.

The people in the room fell silent, waiting for the Principal's next policy announcement.

And just now, the Principal said some already decided to follow—these were all small film production companies, and many low-investment films couldn't even make it to Wanda.

Wanda favors blockbuster films, but for low-investment films that look like they won't earn much, they generally show little interest, ignoring them.

This is determined by their commercial positioning.

So whether these films get screened at Wanda or not makes no difference—like Clockwork City, The Ghost Bride Meets the Ghost Matchmaker, Gutian Conference.

A market can't be all blockbusters; small films are the majority, the foundation.

"Another issue is revenue sharing: Yutu's Shuijing Cinema Line, along with other Dadi Cinema Lines, we've agreed to adopt a tiered revenue-sharing model."

"For box office over 500 million, the share drops from 55% to 52%; over 1 billion, from 52% to 50%; beyond 2 billion, it drops to 48%."

Before Fang Hong finished speaking, murmurs had already spread among the audience.

This plan benefits blockbusters and dark horse films—such films can earn more percentage points with high box office.

Don't underestimate these percentage points: for a 1-billion-yuan box office, it means the producer earns an extra 40 to 50 million—already a massive sum for film companies.

A few years ago, cinema chains and distributors fought tooth and nail over just two percentage points; even China Film Group stepping in didn't help, and even top authorities intervened to mediate, yet nothing was resolved.

Now the Principal has struck a balance: the higher your box office, the lower your revenue share.

But this plan offers little benefit to low-budget films—their films are lucky to break 100 million, let alone 500 million or 1 billion.

It also benefits top-tier producers, especially Huayi, Bona, and Guangxian—they have many blockbusters.

And those internet capital firms entering the industry, their films usually have resources and promotional channels to secure high box office.

Even famous directors like Guo Fan, Chen Sicheng, and Happy Mahua will have some bargaining power.

It's like the cinema chain is giving up part of its profit—shouldn't you give me a bigger share?

The cinema chain has no objections either—Fang Hong already negotiated it with them, because as long as there's a blockbuster, it drives foot traffic, and other revenues like advertising, snacks, and drinks can be earned in abundance.

So cinemas especially love blockbusters; films that don't bring foot traffic are not liked at all.

Even if your film is excellent, they still won't like it.

Later, ultra-high-grossing films like The Battle at Lake Changjin, The Wandering Earth 2, Hi, Mom all enjoyed having their share reduced to 48%.

Because such films can be screened long-term—up to two months, like Nezha 2, which screened for half a year.

Fang Hong secured them mainly by controlling the recommendation slots—the cinema recommendation slots.

Some cinemas are placed first, others last; those placed first naturally attract more foot traffic and are more visible.

Later, Tao Piao Piao often did this!

(End of Chapter)