34 Appreciation

"Is that all? Are we leaving now?" Walking on the road, René was still a bit confused.

Lyman nodded, "Yes, let's wait for news."

"Not optimistic, huh?" Thomas, who was walking silently, spoke up.

Lyman nodded again, "There are concerns." Then he reassured his friends, "It's okay. If this project doesn't work out, we have another option. We can wait until later when we have more convincing achievements to start it. Maybe by then, we'll have enough funds of our own for production." Saying this, all three of them seemed to become more optimistic. But there were still some slight differences after all. What was it? The feeling of not being well-regarded seemed to bring them back to those days of frantic pursuit for distribution.

The appearance of their visit was really impressive. Turning back, Lyman looked at the headquarters of EuropaCorp. The modern and towering commercial building, over a hundred meters tall, stood like a muscular giant in the city center.

Arriving at the street corner, the three of them silently waited until René waved his hand and stopped a taxi before they returned to the guesthouse hotel where they were staying. Meanwhile, the meeting about the investment project was still ongoing.

...

Luc Besson looked at the detailed budget report and shooting plan, and the series of data on it made him amazed. Clearly, a lot of thought had been put into it.

"Boss, are you sure about canceling the project? The risks are indeed quite high," the head of the production department spoke up.

Luc Besson put down the report in his hand and didn't directly make a decision. Instead, he asked an unrelated question, "How is the distribution of "Buried" going?"

"The global box office has accumulated to..."

By the sixth week of its release, "Buried" had already left the French market, and the global box office had accumulated to €14.67M. Undoubtedly, this film had brought profits to EuropaCorp.

With only €2M paid for copyright distribution fees and nearly €2M spent on promotion and advertising costs, they had received around €8.26M in pre-tax revenue, resulting in a total profit of approximately €3.89M after deducting expenses. Currently, "Buried" was still being shown in only a few overseas regions, with a daily box office of over €200,000, but the profit-sharing ratio had dropped to 40/60.

One might ask, how is the box office revenue divided between theaters and distribution companies? It mainly depends on the specific film's revenue-generating situation. Generally, the customary profit-sharing ratio follows a formula called "90/10 - multiplied by a coefficient of 70%."

The algorithm for this profit-sharing is as follows: on a weekly basis, the total box office earnings of a film in a particular theater are reduced by the predetermined fixed expenses agreed upon between the theater and the distributor, such as cleaning fees, electricity bills, routine maintenance and repairs, etc. The result is then multiplied by 90% to obtain the distributor's share.

However, this is just one of the options. Another condition needs to be added, which is to directly multiply the total box office revenue by 70% (this ratio generally falls between 60% and 70%). The specific ratio depends on how the distributor negotiates with the theaters. In any case, the better the prospects of the film upon release, the more advantageous the negotiation position of the distributor. Conversely, the theaters are in a stronger position. The resulting number is the distributor's share for that theater.

Of course, the theaters don't work for free either. Such a high profit-sharing ratio is only for the first three weeks of the film's release. From the fourth week onwards, it would decrease to 60/40, and by the sixth week, it would become 50/50, and by the seventh week, it would reach 40/60... In short, the longer the film is shown, the higher the theater's profit-sharing ratio becomes. However, not all films can sustain such long screening periods. Generally, it requires a blockbuster or a film with high word-of-mouth to achieve this.

Theaters prioritize profitability. If the daily output doesn't meet market demand or falls short of expectations, even if it's a new film, they will cut it and replace it with others.

Follow the money, that's the way to go.

In other words, from the agreed release date of a film to its final screening, the box office revenue is usually split between the distributor and the theaters, with the distributor taking a slight advantage, but it's roughly a 55/45 split, half and half.

"The script is quite interesting." The boss spoke, using words that the head of the production department couldn't understand. Weren't they just discussing the profitability of "Buried"? How did they start talking about the script now? Does the director's train of thought change so quickly? The head of the production department fell into deep contemplation.

"What do you think? How's the script?"

"The subject matter is good, very innovative." The head of the production department nodded slightly.

"It's rare to have a director who doesn't focus on trivial family ethics. It's interesting, isn't it?"

In the French film industry, more than half of the directors survive on the support funds provided by the government for the film industry. They make films that are labeled as artistic but are actually on the borderline of eroticism. As for whether they make money or whether the audience likes them, they don't care at all. With the support of the government, they don't have to worry about not being able to make films. They are content with the fact that the market is dominated by Hollywood films because they have the support of the government.

Isn't it ironic? France, as the birthplace of cinema, was one of the first regions to embrace what is known as the seventh art, but they can't even hold onto their own territory. When you look at the film rankings in their own region, it's all dominated by American blockbusters. It's quite interesting. But Luc Besson was anxious. He didn't like this situation. He made purely commercial films but still couldn't stop the French people from supporting American blockbusters. This made him realize that he alone couldn't save the situation. He needed to cultivate a large number of local talents in the film industry to defend their territory.

Coincidentally, he felt that Lyman was worth supporting. After a moment of contemplation, Luc Besson asked again, "Will we make €6M in profit from "Buried"?"

"We will, but it will take time," the head of the production department immediately replied. The box office revenue alone was definitely not enough, but the offline distribution hadn't started yet. If one were to estimate the market potential of the film, this kind of thriller would always be favored in the rental market. As long as it was given some time, not too much, just two to three months, it could surpass €6M in terms of revenue.

"Do you have Lyman's contact information?"

"Well... yes," the head of the production department hesitated for a moment and said.

"Tell him that we have decided to invest."

"Huh? Okay..."

This was a decision made by the boss. Although he was the head of the production department responsible for the internal film projects of the company, since the decision had been made, there was nothing more to discuss.

"I'll do it right away."

...

After the official approval of the film project "3 Idiots" within the company, Pierre-Ange Le Pogam, one of the senior executives of the company, also became aware of this. He was present at the meeting and knew some of the details. However, after Lyman and the others left and it seemed like nothing was happening, most people returned to their workstations, leaving the head of the production department to handle the aftermath. Little did they know that another film project had been approved.

Not understanding the situation, he went to his good friend Luc Besson's office to find out more. He knocked on the door and walked in, "Hey, what's your thinking on this?"

Luc Besson was dealing with company matters. Upon hearing the question, he put down his pen and asked, "Is the company's development going smoothly?"

"Our film business is already the second largest market share in France, just slightly behind the established Pathé," Pierre said with a hint of pride. The company they established had achieved such results in just two years, and he couldn't deny his contribution to it.

"Just slightly behind?" Luc Besson sighed, "They surpass us every year just by distributing Hollywood films. The gap is not small."

"We can also try that business. I've recently made contact with 20th Century Fox, and it's highly likely that we'll be able to take on their film distribution in France," Pierre sincerely said. He also felt that distributing Hollywood films as an agent was easier in terms of the returns, compared to the hard work and risks involved in producing their own films.

"But how much will this help us in the domestic film market? Competing with Pathé, the only ones benefiting will be the American film companies," Luc Besson lamented, "In terms of strength, film quality, and distribution channels, we can't match the performance of those major Hollywood studios internationally, not even the second-tier ones. Do you remember our original aspiration when we established this company?"

"To unite European film forces to counter Hollywood," Pierre said weakly.

"But we can't even unite France. Look at the annual box office rankings, the difference is just too big."

"So you want to support Lyman?" Pierre guessed.

"In his first film, he made profits more than ten times the production cost. How many new directors can achieve that? I'm certainly not one of them. And based on his filmmaking philosophy, although the next film's genre may be risky, I think it's worth investing in."

Talent needs to be nurtured. He didn't say this sentence, but he believed that his good friend would understand. After all, they had come a long way together, and they had also experienced failures. Moreover, the film hadn't even been released yet. It seemed premature to say these things, even if they were considering the death penalty, they should have solid evidence. It was irresponsible to just say that the market prospects were uncertain.

He was a director, and he knew that the brilliance of a film varied in the hands of each person. So why not give Lyman a chance? He had high hopes for this young man, and even if the prediction of losses came true, it wouldn't have a substantial impact on EuropaCorp. They were a big company, they weren't afraid.

"If you've decided, then go ahead."