novelraw Chapter 13 Negotiation
Chapter 13 Negotiation
At the appointed time, Lin Yi, accompanied by his assistant and a lawyer specializing in the cultural and entertainment field, went to Tencent's headquarters for negotiations.
Penguin's headquarters are located in Penguin Coastal Building, Penguin City, Shenzhen.
Guangzhou is adjacent to Shenzhen. It takes about two hours to drive from Guangzhou University Town to Tencent's headquarters.
This arduous task naturally fell to the assistant.
Here's a brief introduction: Lin Yi's assistant is named Fu Mingyang.
He was shorter and thinner than Lin Yi, and quite handsome, a bit like Du Xiaoshuai.
Upon arriving at the Penguin Coastal Building, after briefly explaining their purpose to the receptionist and registering, Lin Yi and his group were quickly led to a conference room.
Inside the meeting room, four people from Tencent Video were already waiting.
After a brief introduction, Lin Yi learned the other person's identity:
The group consisted of Zhuo Yuanhang, director of the film and television department; Zhuo Yue, director; a business manager; and a legal professional.
Lin Yi was somewhat surprised.
According to industry practice, such project negotiations are usually conducted by the producer, and it is rare for the department director to participate personally.
Moreover, the director is usually not involved in this stage.
However, when Lin Yi thought about how Director Zhuo had personally added him on QQ to chat, he felt relieved.
However, Director Zhuo, Director Zhuo...
One was in his fifties, and the other was around thirty.
Lin Yi's gaze swept almost imperceptibly over the two of them, and he had some guesses in his mind.
Under the screenwriter-centric system, Earth Studios, which holds the scripts, has the right to decide which director to work with.
Director Zhuo's personal involvement this time is probably not just for the project itself, but more likely to be to endorse Director Zhuo and encourage Lin Yi to choose to cooperate with him.
Lin Yi does not reject such a deal.
As long as this outstanding director isn't the kind of person who's all talk and no action, stubborn and unwilling to listen to advice, then agreeing to let him direct would be more beneficial than harmful.
Let's talk about the drawbacks first.
Exceptional ability is not enough.
Then we should hire an excellent assistant director to fill the gap.
Let's talk about the benefits.
To pave the way for this client with connections, Director Zhuo will definitely allocate more resources to "Detective X".
They might even make some concessions that harm the penguins' interests during negotiations.
While Lin Yi was sizing up Director Zhuo and Zhuo Yue, they were also observing Lin Yi's side.
In the past few days, in addition to holding meetings to evaluate the script, Director Zhuo also had someone investigate Earth Studio.
In terms of scale, this is a small screenwriting studio.
However, judging from the monthly social security and housing provident fund contributions, Lin Yi paid the screenwriters a considerable monthly salary, all of which were over five figures.
This means that Lin Yi is not the kind of person who is short of money, and it is not easy to buy the license at a low price to appease him.
Of course, even if Lin Yi were, Director Zhuo wouldn't do that.
This approach is beneficial in the short term, as it can save you some money.
But once "Detective X" becomes a hit, public opinion will backfire.
At that time, the channel for public submissions will be completely abolished.
Compared to short-term gains, Tencent Video needs a case study of investing heavily to attract more screenwriters to submit their work.
This will improve Tencent's current entertainment ecosystem.
After a brief exchange of pleasantries, the negotiations quickly got down to business.
The two sides engaged in heated discussions regarding the collaboration model for the "Detective X" project.
With both sides having a strong desire to cooperate, they quickly reached some consensus.
Earth Studio provided the script, a writing team (at a 20% discount), and 540 million in cash.
Tencent Video will provide a director team, production support (at a 10% discount), promotional resources, and 720 million yuan in cash.
The total production cost was 1800 million.
But this includes not only the production cost of the series, but also the cost of variety shows.
Lin Yi proposed a bold idea: a synergy between dramas and variety shows.
"While filming the TV series 'Detective X,' we were simultaneously recording a variety show called 'Detective Challenge.'"
The program invites ordinary people/internet celebrities to challenge cases from "Detective X".
There are three advantages.
Simultaneous development: Reusing scenes and characters (supporting roles) can greatly reduce production costs.
Two-way traffic generation: The two can drive traffic to each other, attracting audiences from different circles and making it easier to create viral content.
Complementary content: TV series are responsible for telling the story, while variety shows are responsible for guiding the audience to understand more details behind the story.
The above are the reasons Lin Yi gave when he persuaded Director Zhuo.
There's something hidden that he didn't mention.
The synergy between TV dramas and variety shows can greatly expand the boundaries of an IP.
IP is the key.
Closer to home.
Judging from the investment ratio, it seems that the two parties split the investment 50/50, but that is not actually the case.
Through Lin Yi's efforts, the profit-sharing ratio between the two parties was dynamically adjusted according to ROI (Return on Investment).
When ROI is less than 1, profits are split according to the proportion of injected capital, prioritizing the recovery of principal for both parties. (3:4)
When ROI is greater than 1 but less than 3, the profits are split 50/50.
When ROI is greater than 3 but less than 5, the proportion of the script increases, and the revenue is split 60/40.
When ROI is greater than 5, the script's share increases further, resulting in a 70/30 revenue split.
In addition, based on the broadcast performance of dramas and variety shows, there are two other types of rewards: "Hit Show" and "Phenomenon Show".
For blockbuster hits, the revenue sharing coefficient is multiplied by 1.2; for phenomenal hits, it's 1.5.
Attentive readers might ask:
If the ROI of "Detective X" is greater than 5, it will be considered a phenomenon.
Then Lin Yi's share of the profits would reach 105%, and Tencent Video would be losing a fortune.
Yes, that's right.
If every drama series were like this, Tencent Video would become the richest company in terms of losses.
A hit drama series typically brings a platform indirect revenue that is 3 to 5 times its direct revenue.
If it's phenomenal, it will only go higher.
Both sides reached some consensus, but also had some disagreements.
Early development of "Detective X" merchandise.
Lin Yi insisted on designing and producing a batch of limited-edition merchandise at the beginning of the series' production.
Such as clothing and accessories that strongly reflect the protagonist's personal style.
"If the series is successful after it airs, these related products can immediately leverage the popularity to further penetrate the market."
"When viewers wear or carry 'Detective X' merchandise, they become walking, talking GGs (fans of the series), which can attract more people to pay attention to 'Detective X'." This was Lin Yi's reasoning.
"But if the series doesn't do well, these merchandise items could become unsaleable, resulting in huge losses." This is the view of Tencent Video's business department.
For risk control reasons, he wanted to start conservatively.
"Price," Lin Yi pointed out a core issue.
"A major reason for the sluggish sales in the surrounding area is the excessive brand premium. If we price our products affordably and reasonably while ensuring quality..."
Even if the series doesn't do well, the merchandise can be sold through other channels to mitigate losses.
The negotiations have stalled on this issue.
Tencent Video can easily concede on the tiered revenue sharing scheme because it's a matter of how much money they make.
If "Detective X" becomes a hit, they can earn far more than the revenue sharing.
However, producing merchandise in advance could result in significant losses.
Why not wait until "Detective X" becomes a hit before starting production of merchandise?
No one in the meeting room made this suggestion.