Chapter 274: The Weakness of Shadow

The summer holiday season is a common period across global markets, while the Spring Festival season is unique to Chinese-speaking regions. Therefore, for companies like Hong Kong’s four giants that operate on a global scale, the summer season is absolutely a must-competitive period.

It is no exaggeration to say that since 1991, the annual global box office champion among Hong Kong films has always emerged during the summer season. Today, even the lowest-ranked films in Hong Kong’s annual top ten gross over 30 million Hong Kong dollars, with 40 million being quite common.

When it comes to Hong Kong films in the global top ten, last year’s lowest gross still reached 800 million Hong Kong dollars, while the highest, “Jurassic Park,” reached 7 billion Hong Kong dollars. Typically, films that make it into Hong Kong’s annual global top ten gross over a billion Hong Kong dollars, and at least 80% of them emerge during the summer season.

No wonder the four major companies regard the summer season as a strategically vital period, releasing their most important films during this time. Xiao Ran also releases “Shadow Force” every year at this time, with the marketing, planning, and distribution departments, along with various subsidiaries, working together to create a blockbuster event.

However, one should not underestimate the competitive strength of the other three major companies. Although their current market values are not as high as Shadow’s, that’s because they are not as diversified as Shadow, a Fortune 500 multinational corporation. When it comes to competitiveness in film production, they are indeed formidable. Two years ago, Shadow nearly lost its seven-year streak as the annual box office champion due to the poor performance of one of its major films. After all, in the film industry, having a large company doesn’t guarantee good box office results—sometimes, nothing is predictable.

This time, the four major companies have joined forces to target China Film Group’s two major films and “Desperate Journey.” If mainland films want to compete without relying on Hong Kong, they must face this challenge. If they can’t even handle such competition, then they really shouldn’t try anything else.

Tai Hing first released Cheng Long’s “Super Cop.” Cheng Long is independent and can choose which company to work for. However, when Shadow acquired Carrefour Pictures, it took over the film library, leaving none for Lei Kaitai. As Shadow has no immediate plans to produce this film, Lei Kaitai had to negotiate with Shadow to obtain the rights to produce it through a partnership. According to the agreement, the rights will fully belong to Shadow in two years.

Since Shadow intends to target China Film Group and Hollywood, it will naturally release its flagship films, “Spy Change 3” and “Legend of the Racing God 2,” during this summer season. Currently, only Shadow has the capability to release two major films during the summer season; other companies clearly cannot do so.

Speaking of the “Spy Change” and “Legend of the Racing God” series, although only three films have been released in total, their combined global box office earnings have nearly reached 10 billion Hong Kong dollars. Just the sales of merchandise after Sea Four acquired the rights amounted to 3 billion Hong Kong dollars, not to mention the fees from licensing character usage.

It’s no exaggeration to say that these two series, which can reach a global audience directly, have become Phantom’s crown jewels and money-making assets. Especially for “Espionage,” the planning department has decided to continue producing this series. The approach is similar to that of 007, but the protagonist dies, and a new agent takes over the codename to continue the series. “Espionage 3” will conclude the story of the protagonist from the first three films, with the key lying in the fourth installment. If it is well-received, it can definitely be produced for as long as 007 has been. Unlike 007, the “Espionage” series adopts a realistic approach. As for “Legend of the Racing God,” Xiao Ran isn’t very familiar with the rest, but he knows that the planning department is already working on the script for the fifth installment. In fact, these films have all been adapted into scripts and novels sold worldwide. Speaking of novels, one cannot overlook “Harry Potter,” which was successfully published by British publishers, and its rights have been acquired by Phantom Company. Phantom has already secured the adaptation rights to many novels, comics, and video games, though they haven’t all been filmed yet. The “Gambling God” series is now beyond three films; even though the third installment hasn’t started production, the planning department is already preparing for the fourth. They aim to turn Gao Jin into a legendary figure, mainly for profit. As for “Gambling Sage” and “Gambling Hero,” those series are basically finished and will not be made again. In addition, there are the increasingly popular “Three Heroes of the East” series abroad, as well as the “Jurassic Park” series, along with several other series of B-grade production quality. If we were to describe Xiao Ran and Wei Dongling as incompetent, Phantom would still make huge profits by producing just a few sequels each year. Unfortunately, Xiao Ran really hopes that Phantom can control over ten A-grade and five B-grade series. The planning department also has a series he created in the urban fantasy genre, a Taoism-themed series, and a monster-themed series. Xiao Ran originally wanted to direct the urban fantasy series himself, but since he didn’t have time, Xu Ke took over, and filming has just begun. Often, sequels determine the difference between big and small companies—just like the seven major Hollywood studios, which control many sequel movie rights. MGM is barely surviving thanks to the 007 series, while Phantom is now undoubtedly a global film company in terms of qualifications, reputation, and strength. In this summer’s competition, China Film Group has already lost even before it starts. Last year, the total box office in mainland China was 3.8 billion yuan, with at least three films earning over 100 million yuan each year, and Phantom accounted for at least two of them. China Film Group chose the wrong director, Wei Changqing, before even starting the battle—what do they have to compete with?

So, we can easily arrive at an answer: rather than targeting China Film Group, the four major companies are actually targeting “Desperado”. To defend their territory, they must show strength and force the others to back off. The united four major companies use this approach, launching a series of blockbusters to challenge both Hollywood films and local films. Hollywood’s market in Asia has already shrunk significantly; shrinking any further would mean its complete disappearance. If they can succeed in targeting “Desperado”, it would mean thwarting Hollywood’s first step into the Chinese market. This is actually quite conceivable. If domestic films are good enough, people will choose to watch them—this is an undeniable fact.

At this time, at Warner Bros.’ headquarters in Hollywood, Turner, feeling both pleased and worried, was talking with Tie Long. Tie Long appeared quite confused, which was evident on his face: “Mr. Turner, I don’t understand. Why would you lower the price and give the first-release rights to China Film Group?”

Turner smiled slyly, invited Tie Long to sit down, and then said, “Why not lower the price? I really want to be like Xiao Ran, striving for artistic exchange between Eastern and Western films!”

Bullshit artistic exchange! Tie Long cursed inwardly. He might not have realized this before, but now that he was a screenwriter, he understood clearly. Westerners are like vampires, eager to suck in every bit of profit for themselves—there’s no way they would deliberately lower the selling price.

However, he was well aware of his position. Until the two major companies decided to confront Xiao Ran, he was just a minor screenwriter. Only when the top executives saw an opportunity to deal with Xiao Ran would he be qualified to speak arrogantly from a position of cooperation, because he knew Xiao Ran—this was his advantage.

For Tie Long, this was a sad situation. If a person has to rely on the existence of their rival to gain recognition, then the meaning of their life is diminished. So he told himself he must seize this time to strive for what he wanted.

Since he wasn’t in that position anymore, he had to speak from another angle: “Mr. Turner, I think you have no reason to give up profits you could have obtained! Right?”

Tie Long stared intently into Turner’s eyes, trying to find some useful information in those expressionless eyes. But he was disappointed—how could Turner, that old fox, let him easily see his true thoughts?

“Why not? Profit is just money. Do you think I don’t have enough?” Turner replied with a smile. Even an idiot could see he was up to no good.

Tie Long knew there was no need to ask further; it was a waste of effort. The question was, what exactly did Turner want? Not only with “Desperado”, but Disney and Warner were also adopting similar tactics with the films they were negotiating with China Film Group.

The fatal weakness of Xiao Ran, as pointed out by Turner and the elder, lay in the mainland market! Having spent considerable effort studying Xiao Ran’s path to success as a model for his own success, Tie Long discovered something extremely strange during his research.

That is, since Xiao Ran officially took control of the Film Association, his strategy has always been to focus on the mainland market. In recent years, many of Magic Shadow’s films have been shot on the mainland, while Magic Shadow only has one rented movie theater in Hong Kong but has invested in two major movie theaters in the mainland.

Moreover, Xiao Ran’s entanglement with the censorship system is something well-known among many industry insiders. With Xiao Ran’s status and position, along with Magic Shadow’s global presence, developing in Hollywood would definitely not be a problem. So why does Xiao Ran still get so entangled with the mainland’s censorship system?

Considering various strategies, including those related to exchange students, Tie Long concluded a couple of years ago that Xiao Ran intended to shift the focus of his film business to the mainland, using Hong Kong as a base with the mainland as its support. What kind of blow would it be if Magic Shadow lost the mainland market? He didn’t even need to imagine it.

However, this wasn’t the biggest weakness he mentioned; his most fatal weakness was elsewhere. Once that person was gone, the Magic Shadow empire would surely fall into chaos. But he didn’t say it, because that was his last trump card. Yet, since last year when news spread that Magic Shadow had been reorganized into seven flagship companies, he sensed that this weakness might no longer be one—hence why he didn’t mention it.

Tie Long didn’t understand, but that didn’t mean Xiao Ran didn’t. When Xiao Ran received this information, he pondered hard—why lower prices? Businesspeople seek profits, which seemed contrary to what was happening.

This confirmed that there must be much greater benefits in the Chinese market than those minor losses. What exactly were those benefits? That was the question Xiao Ran needed to figure out. The mainland market was clearly worth exploring. Perhaps Turner and others wanted to use this method to attract China Film Group and establish a market foundation for themselves.

If it were Xiao Ran, he would do the same, just as he had initially asked Sihai to smuggle videotapes. But Xiao Ran clearly sensed a hint of conspiracy here. As an expert in strategy, he was naturally extremely sensitive to such things.

Gaining control of the mainland market meant huge profits, but what else lay hidden behind it? In that moment, Xiao Ran had an epiphany—what? What? He searched quickly—there it was!

Xiao Ran understood why, but his brows furrowed deeply. If he wasn’t mistaken, Warner and Disney’s move was aimed at dominating the Chinese market just as Hong Kong films dominated the Asian market, gradually driving Magic Shadow and even Hong Kong films out of the market.

What consequences would that bring to Magic Shadow? Xiao Ran racked his brains. If governments around the world simultaneously introduced policies to protect their own films, the market for Hong Kong films would surely suffer a severe hit and shrink drastically.

Of course, this wouldn’t cause too much loss for Hong Kong films overseas, but if it happened simultaneously and Hong Kong films couldn’t be controlled, coupled with the loss of the mainland market, they might face a crisis of collapse.

It must be admitted that this strategy is extremely cunning and well-hidden. If Xiao Ran’s ability to use tactics and strategies were any weaker, he would definitely not have noticed it. Moreover, after breaking into a cold sweat, Xiao Ran felt extremely lucky—had Turner and the others not lowered the price, he might not have seen through it at all.
Turner’s reason for lowering the price was simple: he wanted to offer China Film as many benefits as possible, hoping that China Film would, driven by huge profits, ask the Chinese government to allow the import of ten or twenty more films. With two big movies hitting the market every month on average, it would be absolute nonsense to claim there was no market.