Chapter 355: Overseas Theater Expansion and the Film Studio
"Alright, I understand," Yang Wendong nodded.
There's a huge psychological gap between six-figure and seven-figure numbers, even if the actual difference isn't that big. It's like car sales in his past life—if you hit 2.9 million, you might as well push for 3 million just for the headlines.
Zou Wenhuai continued, "Next, I'm preparing to sell distribution rights overseas. With these numbers, we should be able to sell for at least HKD 700,000 to 800,000. And our total production cost was only HKD 300,000.
Even after giving half the box office to the theaters and deducting another hundred-something thousand for advertising, we'll still net around HKD 1 million."
"Not bad," Yang Wendong said with a smile. "But it's still far behind Calabash Brothers."
HKD 1 million in net profit wasn't huge for the Changxing Group, but it certainly wasn't small either.
Zou Wenhuai nodded. "Right, Calabash Brothers brought in a lot through stickers, toys, even avatar licensing. But our film—well, we barely have any merch. I wanted to explore that market too, but there's just not much we can do."
"You don't need to force it," Yang Wendong said. "Live-action films really don't lend themselves to merchandising. In the West, you can sell or rent videotapes, but we don't have that infrastructure here. Maybe when TV ownership increases in a few years, we can try. But even then, it won't amount to much."
Even during Hong Kong cinema's golden age decades later, merchandise sales never became a pillar of revenue. That was likely one reason the local film industry declined—low returns. Unlike Hollywood, where box office is just the start and merchandise makes the real money.
Zou Wenhuai said, "Yang Sheng, I've studied the American film industry, and I think there's another non-box office revenue stream we could pursue."
"What is it?" Yang Wendong asked.
"Actors," Zou replied. "American film stars make a lot of money through endorsements. The companies that train them also take a cut of those fees."
"That's true," Yang Wendong nodded. "So you want to groom movie stars and then have them do brand endorsements?"
"Yes," Zou Wenhuai explained. "Right now in Hong Kong, most brands don't use celebrity endorsements. Their ads are just text in the newspaper, or maybe a voiceover on Rediffusion TV, sometimes with a few photos.
It was the same in early U.S. advertising, but eventually, they moved to celebrity endorsements, and now it's the norm. Film studios, music labels, and TV stations make a lot just by managing their stars."
"That's a great idea," Yang Wendong said with a smile. "Start selecting promising talents and train them well. Especially since we're selling our films overseas. If our stars get popular in Southeast Asia or even Japan, the market potential grows exponentially."
Celebrities, in essence, are walking cultural exports. When people in one country idolize celebrities from another, it signals a loss in cultural influence.
Just look at the Korean Wave in his past life—people went crazy for K-pop idols. And before that, it was the Hong Kong Wave. During its peak, even the Japanese adored acts like Beyond, Joey Wong, Vivian Chow, Andy Lau, and others.
In this life, Yang Wendong's presence would likely alter the path of those specific stars. But the overall trend of cultural expansion was inevitable.
"That would be perfect," Zou Wenhuai smiled. "Then I'll put more effort into foreign distribution—not just price, but promotional appeal too."
Yang Wendong thought for a moment. "Once some movies have exhausted their box office runs, sell them at deep discounts to Southeast Asian cinemas. Even for free, that's fine. Hollywood does this all the time.
The condition is that the actors in those films must still be popular—it has to be worth the exposure."
"Got it," Zou nodded. "I understand."
Yang Wendong added, "Regarding overseas cinemas, I'm planning to buy land in Taiwan and build a few theaters. It's part of our real estate strategy there. But since it involves your department, talk to Zheng Zhijie about it."
Even if he was investing in Taiwan real estate, he needed a commercial justification. Buying land without developing it would draw criticism or even be blocked. He wasn't Li Ka-shing.
Building supermarkets and theaters was a good early investment—helpful to his other ventures, not too capital-intensive, and perfect for acquiring valuable land.
Plus, these plots were in prime locations. You couldn't just ask for central Taipei land to build factories—they'd laugh at you.
Zou Wenhuai asked, "Yang Sheng, I've heard that the theater business in Taiwan has some ties to organized crime. Wouldn't that be risky for us? And aren't there legal restrictions too?"
"I know. That's why everything will be done under the name of my local partner. He's quite influential in Taiwan," Yang Wendong said calmly.
"Then that's reassuring," Zou Wenhuai nodded. "Cathay's films were never as good as Shaw Brothers', but because they had excellent theater networks in Taiwan, they still performed well."
"Exactly. When the time comes, I plan to expand into other Southeast Asian countries too," Yang Wendong said.
Southeast Asia's economies would rise significantly in the coming decades. Investing in cinema chains there would pay off in multiple ways. And if Yang Wendong wanted to promote Hong Kong culture, he had to control those channels. Otherwise, one Jurassic Park and his whole slate would be wiped out.
"That would be amazing," Zou Wenhuai said. Then he added, "Yang Sheng, about the Tseung Kwan O film studio—we've finalized negotiations with the Hong Kong government. They've agreed to give us 120,000 square feet, but only as industrial land, not commercial."
"No problem. Industrial land is cheaper anyway," Yang Wendong said. "But is the size enough? We still have to consider the TV station later."
Of course, the Hong Kong government wasn't stupid. They had to manage land supply carefully—otherwise, why would anyone bid in their auctions? Most purpose-specific land wasn't zoned as commercial.
"It's enough," Zou reassured him. "I know you were hoping for more, but the government's auditors will compare us to Shaw's studios and overseas benchmarks. If we ask for too much, they'll reject the application."
"Alright. Let's follow the rules," Yang Wendong nodded. "What's the price per square foot?"
"In Tseung Kwan O, industrial land is only HKD 3 per square foot. So the land costs us HKD 360,000. With construction and staff housing, the total project will be about HKD 1 million," Zou said.
"Well, then the profits from Condor Heroes should cover it," Yang Wendong said with a grin. "What are you planning to shoot next? Another Jin Yong adaptation?"
"Yes," Zou replied. "We're doing Return of the Condor Heroes. Now that the first film is a hit, releasing the sequel will definitely draw crowds.
But since we have more funding and staff now, I'm also planning to shoot two additional martial arts films—more in the Shaw Brothers style."
"Alright, you run with it," Yang Wendong said. "Just be careful not to infringe on Shaw's copyrights. We're aiming for long-term growth, so we need to start developing original stories.
Scout for great screenwriters across Hong Kong. Offer higher pay to attract the best talent."
In cultural industries, originality was everything. Copying others—even if done carefully to avoid lawsuits—would never lead to major success.
And truth be told, Yang Wendong didn't think much of Shaw Brothers' work anyway.
"Understood," Zou Wenhuai nodded.
A few days later — July 9
Zou Wenhuai brought a large blueprint to Yang Wendong's office at Changxing Tower.
"Yang Sheng, we've secured the Tseung Kwan O film studio land," he reported. "Here are the plans for the construction."
"Let me see," Yang Wendong said with interest as he took the blueprint.
Zou explained, "The studio will be divided into 12 zones: ancient city sets, modern urban areas, 1920s-style streets, prop warehouses, and housing for cast and crew.
This will cover all our current filming needs. Once it's built, we won't have to worry about set construction for every new film."
"Good," Yang Wendong nodded. "Does it stay within budget?"
"Yes," Zou said. "The budget is HKD 710,000—slightly higher because we added dormitories. It'll save us time and reduce travel risk when shooting night scenes."
"Alright, let's go with this," Yang Wendong agreed. "Once the studio's finished, I'll come take a look."
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