A century-old wealthy family that rose from Shanghai

Chapter 204 Investing in Movies
A week later, Chen Guangliang came to the Oriental Newspaper.

Feng Zhiming, editor-in-chief of Capital magazine, immediately came to his office with a document.

At this time, Capital magazine had become a 'weekly' and a must-have for business people. It sold 28000 copies per issue and was not only a bestseller nationwide, but also sold to Hong Kong and Southeast Asia.

Although its sales volume was not as high as the 4 copies of "Good Friend", the profit of "Capital" magazine was higher. Advertisers understood one thing - the readers of "Capital" magazine had greater purchasing power.

The magazine itself is "printed at a loss" and "edited at a loss", and the only real profit comes from advertising fees.

Because of this, neither Oriental Daily News nor Capital currently pursues sales figures. Their success is considered to be a profit of 15000 per month for either publication.

"Boss, this is the information about cinemas and film production companies you want. It has been sorted out for you!" Feng Zhiming placed the information on Chen Guangliang's desk and said respectfully.

"Okay, I'll take a closer look later. How about Capital magazine?"

Feng Zhiming stood at his desk and immediately began reporting, "In the business field, our content has become increasingly comprehensive and mature, and has now become a benchmark for China Business Magazine. Next, we will continue to delve into the 'Food, Drink, and Entertainment' section and continue to enrich the magazine's content."

There was a similar business magazine on the market called "Business Magazine (Shanghai 1926)", whose contributors included Yu Qiaqing, Fang Jiaobo, Ma Yinchu, Feng Ziming, Zhang Zhenyuan, Jiang Mengyun, Zhu Jingyi, Shen Tingkai, Huang Qiliu, Shen Weiting, Tu Guangjun and others.

But with the birth of Capital magazine, this magazine completely ceased publication at the end of last year.

First, "Commercial Magazine (Shanghai 1926)" is not as authoritative in business as "Capital", and its original contributors have all turned to "Capital".

Second, Capital enriched its content. Commercial Magazine (Shanghai 1926) primarily published articles and translations on commercial economics, research articles on international business trends, domestic economic policies, and business organizations. It also published business monographs, business statistics, domestic and international business surveys, business news, business tips, and biographies of prominent business figures. It also featured discussions on specific topics such as business management methods and the relationship between shop owners and employees, and introduced prominent entrepreneurs from both China and abroad, as well as Shanghai, and their successful experiences. Capital not only included these topics but also introduced the business of "eating, drinking, and having fun," which naturally made it even more appealing.

Business people are more interested in "eating, drinking and having fun". They are also interested in the characteristics of a dance hall, the new chef at a restaurant, etc.

Chen Guangliang then said, "We could create a list of companies based on assets and sales: the top ten state-owned enterprises, the top ten private enterprises, the top ten shipping companies, the top ten real estate companies, but just don't rank the richest people."

If a rich list were really made, I wonder how many people would cause trouble for the newspaper.

Feng Zhiming immediately understood the appeal of this and said, "This list is a little more difficult to research, but I'm sure everyone will be interested."

Chen Guangliang said, "For simple statistics, for example, for the China Merchants Group, we would find a few people who are familiar with the market and count the number of ships and properties owned, and use this data to infer their assets. It doesn't really need to be that accurate, as long as it's convincing. When it comes to private enterprises, we'd mainly focus on joint-stock companies; we'd ignore sole proprietorships."

"clear"

Why aren't sole proprietorships counted? Isn't it simply because Chen Guangliang doesn't want his businesses to be exposed? Besides, a "sole proprietorship" simply represents one person's wealth, making it suitable for statistics.

But in fact, almost all companies are joint-stock companies, it’s just a matter of how much equity the major shareholders hold!

After communicating with Feng Zhiming, he left the office. From his expression, it could be seen that he had learned something new.

Although Chen Guangliang was no longer the general manager of Oriental Newspaper at this time, he was the soul of the newspaper. From editors and reporters to management, all were his "disciples".

Even the general manager Huang Chunsun absolutely sided with Chen Guangliang and alienated shareholders such as Hong Yanbin and Du Yuesheng.

Afterwards, Chen Guangliang began to look through the documents.

The "business section" of Oriental News is actually Chen Guangliang's "business advisory group."

Information about Shanghai's cinemas and film productions can be quickly compiled into a document for him to read and think about.

Cinema:
Today, Shanghai has a total of 32 cinemas, accounting for about 25% of the country's total.

Cinemas are divided into "first-run," "second-run," "third-run," and "fourth-run" theaters. Newly released films are first shown in first-run theaters, and then in descending order, with prices correspondingly lower. This distribution rule applies to both imported and domestic films. The implementation of this film distribution and screening cycle system adheres to the market principles of priority, quality, and price, while also meeting the leisure consumption needs of a large number of middle- and low-income groups for watching movies.

The ratio for first-run theaters is generally 5:5, while for other runs it can vary from 4:6 to 3:7. Foreign films are also distributed in China using two methods: one is to set a rental fee for each film and then rent it to theaters; the other is to split the profit % with the theaters that open the film.

Currently, the largest cinemas in Shanghai are: Grandview Cinema, Nanjing Grand Theatre, Xinguang Grand Theatre; there is also a Cathay Cinema under construction. These four cinemas are the "Four Major Cinemas" in the 1930s. Only one is Chinese-funded - the Cathay Cinema under construction. Grandview Cinema has Chinese investment, but the land belongs entirely to foreigners.

Each of the four major cinemas can accommodate 1500 to 2000 people. Generally, there are three shows a day, and additional shows will be held in special circumstances.

Investing in a "one-run cinema" requires at least 60 yuan, and investing in a small three- or four-run ordinary cinema requires about 3 to 4 yuan; and the Grandview, known as the "No. Cinema in the Far East", was built with a huge investment of one million yuan, becoming a milestone in the development of Shanghai's entertainment industry.

For example, the Rongjin Theater, which was a cinema invested by Huang Jinrong, was just a three-wheeled cinema, but it was mainly a theater (for performing operas), so the investment was quite large.

Cinema ticket prices generally fall into two categories. More luxurious cinemas, for example, had relatively high prices. The Victoria Theatre, which opened in 1909, had a maximum price of $1.2 and a minimum of $0.7. Its exorbitant prices were shocking at the time, primarily catering to foreign expatriates and business people. In 1926, the Audien Cinema's highest ticket price was $1.5, while the Grand Cinema's top price was a whopping $2.

Of course, cinemas located in Caojiadu or Zhabei areas have always offered low prices. You can watch a movie for one or two dimes, which is roughly the same as watching a play. They mainly serve low-income local residents.

The film market has a very precise grasp of the distinction between high and low. If you don't have money, you can go to a third- or fourth-run theater and see a film for a dime or two; if you have money, you can spend a dollar and see a first-run film.

Reasonable, very reasonable!

Seeing this, Chen Guangliang suddenly thought: "Why do we have to put 1500 to 2000 people in one hall? Wouldn't it be better to design two halls, with 800 to 1000 people in each hall?"

In fact, he also understood one thing: large cinemas of this era all have two-story viewing platforms; so if multi-screen cinemas were implemented, it might actually be affected by building conditions and equipment.

But Chen Guangliang came up with a solution: if the two theaters couldn't overlap, why not design them side by side? The advantage of having two theaters is that operating costs can be adjusted based on attendance.

Currently, only cinemas with an attendance rate of 53% can break even. Therefore, the concept of a "two-hall cinema" still holds great promise.

Of course, investors of this era might think – if we want to build two side-by-side halls, why not build two cinemas?

It seems to make some sense!
But in Chen Guangliang's opinion, it can be set up as a model with one main hall and one sub-hall; the main hall can be a hall with a capacity of 1500 people (two floors), and a small hall with a capacity of 500 people can be set up on the third floor.

This model can resolve the problem of "attendance rate".

But if he were to invest in a cinema, would he consider investing one million to build one of the 'top five cinemas'?
After all, people sometimes hope to leave their names in history.

If you want to invest, you can choose to go public. After all, with its influence, there must be many people willing to invest.

Production

Around 1925, Shanghai boasted 141 film companies of various types, representing over 80% of the nation's total. However, this prosperity was short-lived. Due to factors such as funding, technology, personnel, and market conditions, many film production organizations suffered losses, leading to a sharp decline in the number of film companies. By 1927, only 27 remained in Shanghai. In recent years, there has been a slight increase, with the three largest film companies, Mingxing, Tianyi, and Lianhua, now dominating the market, accounting for approximately 60-70% of the market.

Chen Guangliang was not interested in leftist films and planned to make some "kung fu films" that combined "national sentiments", such as the series of Fang Shiyu, Hong Xiguan, Huang Feihong, Huo Yuanjia, and Wang Wu the Great Sword, or Huangmei Opera films.

Of course, you can't make a purely commercial martial arts film, otherwise you will be criticized to death in this era, and that would be a sign of unpatriotism.

But if Kung Fu is integrated into patriotic sentiments (resisting the Qing Dynasty and foreign powers), then naturally no one can say there is a problem.

Putting down the information, Chen Guangliang calculated that if he wanted to set up a one-stop enterprise of "production, distribution, and cinema", he would need at least 100 million yuan in funding.

This is naturally an astronomical figure for others, but it is not a big number for Chen Guangliang.

What's more, Chen Guangliang is also preparing to raise half of the shares!
Dry!
The next day, Chen Guangliang came to Jing'an Temple Road (Nanjing West Road), accompanied by Guo Deming and others from Changjiang Real Estate.

Nanjing West Road is approximately 3.8 kilometers long, and the westernmost section is already very expensive. For example, the land of the "Paramount Ballroom" was purchased this year at a price of 7 yuan per acre, and this piece of land is only a few hundred meters away from the westernmost section, on the west side of Jing'an Temple.

Going further east from the Paramount Ballroom land, the first place you will see is Jing'an Temple, and then you will reach the "headquarters" of the Cheng Linsheng family; the Cheng Linsheng family owns nearly 100 acres of land in this place, and of course a lot of the land can only be developed from Nanjing West Road to the north and south.

Taking the mansion of Cheng Linsheng's family as an example, the lowest price is probably 8 to 10 oceans. The former residence of Eileen Chang in later generations is an apartment built on the land of Cheng Linsheng's family. Of course, at that time it had already become the asset of a foreign company.

If you walk a little further east from the land of Cheng Linsheng's family, you will reach the original site of the Dahua Hotel purchased by Chen Guangliang, which is now the Shangri-La Hotel and New City Garden.

Therefore, in just over a year, the 400 mu of land purchased by Chen Guangliang may be worth up to million yuan (because some of the land area is developed outward, so it needs to be slightly averaged).
Going further east from the Shangri-La Hotel and New Town Garden, you will see some high-end apartments being built by foreign companies, such as Taixing Building and Dahua Apartment, and of course there are also some new-style alleys.

The most luxurious cinema in Shanghai was undoubtedly the Grandview Cinema, located in a bustling area near Nanjing East Road. Covering over 10 mu (not all of which was used for the theater), the original investment in 1926, including the building itself, was over two million yuan.

"Boss, if a cinema doesn't care about facing south, then the southern end of Jing'an Temple Road (Nanjing West Road) has more options. If you still want south-facing, and you're also considering cost, then the land west of the Paramount (across a small road) is also a good option, but it's only less than three mu. After all, land on Yuyuan Road, not to mention Nanjing West Road, is extremely expensive these days, and most of it's already owned, so the owners are very cautious."

Chen Guangliang agreed with this statement and immediately said, "Of course, the cinema is considering renting land, so the selection is relatively large. In addition, three acres of land is also acceptable, but if you are willing to sell it, we can also buy it."

Three acres of land is about 1900 square meters.

Although it is not as big as the Grandview Cinema, it is about the same size as the Cathay Cinema under construction.

Cathay Cinema is located on Xiafei Road (later Huaihai Middle Road). If Chen Guangliang does not develop the land there into residential areas, he does not have to worry about the land issue.

"Then it's the land next to the Paramount. Its owner is the Dehe Trading Company. There's a high possibility that it's leased. If you buy it, you might get ripped off." Guo Deming said immediately.

Now, land in Shanghai is a hot asset, not to mention the land on Nanjing West Road.

However, these foreign companies hold so much land, but it is impossible for them to develop all of it into high-end apartments immediately, so leasing is also very ideal.

承租的价格，一般是当前地价的1/8至1/10，也就是八至十年回本（不考虑升值）的情况下。好比现在陈光良看中的这幅3亩地皮，年租金在3万大洋差不多。

Chen Guangliang thought for a moment and said, "Go ask about this piece of land. If you can buy it, buy it. If you can rent it, rent it!"

"it is good"

When Chen Guangliang invested in a cinema, he naturally had to consider the cost issue.

If you lease it, then one year's rent plus a one-year deposit would only be 60,000 yuan. Unlike apartments or office buildings, cinemas don't cost a lot to build, so there's no need to worry about the landowner raising the price after the lease expires.

Take the Grandview Cinema for example. In another year, the owner will be replaced and the building will be demolished and a new one will be built.

As a real estate developer, Chen Guangliang will naturally control the cost of the cinema. The construction fund of 30 is enough, and the remaining soft furnishings and equipment also need 30. A cinema with an investment of 60 (excluding land for the time being) can be almost the same as Cathay Cinema.

Investing in a cinema next to the Paramount Ballroom seems to attract a lot of people, which is of course mutually beneficial.

(End of this chapter)