Negotiating the Price

Chen Qi took some time to meet with the Yuen Brothers. Yuen Woo-ping offered his congratulations on Tai Chi's box-office success and expressed his hope that Chen Qi could pen another screenplay for the Yuen Clan Stunt Team. Chen Qi readily agreed, though when he would actually write it remained up in the air; he was a busy man. In history, the company founded by the Yuen Clan had had its ups and downs, surviving through over a decade of ebbs and flows before shutting down in the mid-1990s. The action choreography in their films was beyond reproach, but their genres were far too one-dimensional—they only made kung fu films. Kung fu films were never consistently popular in Hong Kong; they would be a hit for a few years, go cold for a few years, and then heat up again. Yuen Woo-ping did not know how to direct anything else, lacked innovation, and could not compete with other studios. Moreover, they had no marquee stars to anchor their productions; their pack of brothers looked odd and eccentric, hardly suitable for the limelight. In the final analysis, their outfit was simply too small, and the ceiling for a small company was too low. After meeting with the Yuen Brothers, Chen Qi shared a meal with Li Han-hsiang, all arranged in secret. Li Han-hsiang was preparing An Amorous Woman of Tang Dynasty. He had naturally modified the script, but he played by the rules and promised to give Chen Qi credit under that pen name—what was it again? "Blade in the Rainy Night Without an Umbrella." Filming An Amorous Woman of Tang Dynasty at this juncture meant Pat Ha might not necessarily star in it; she was currently just a model and had not yet entered the film industry. Chen Qi did not mind either way. He only wanted to collect his script fee and build a good relationship with Li Han-hsiang. The compensation was fifteen thousand Hong Kong dollars, exchanged off the books. This money could not be taken back to the mainland and could only be spent locally. Routing it through Great Wall's account and using Great Wall's name, Chen Qi bought a set of new clothes each for Li Wenhua, Li Lianjie, and Gong Xue. They were not expensive, but at least they looked respectable—in a few days, they were heading to Berlin, and only four spots had been allocated for the trip. With part of the remainder, he bought small souvenirs for everyone on the team so they would have something to boast about once they returned, ensuring their trip to Hong Kong had not been in vain. Out of some inexplicable impulse, Chen Qi used the last bit of money to sneakily buy a few boxes of condoms—extra-large, of course... When the others realized he had paid out of his own pocket, they were deeply touched. The power of money proved its worth once again. He had always been generous; if you wanted underlings to serve you faithfully without offering any perks, who would be stupid enough to stick with you? *** Tsim Sha Tsui, Nathan Road. In later years, Nathan Road would be packed with luxury boutiques, pharmacies, and skincare shops, but at this time, the area was rather cluttered, with vendors selling a bit of everything. Taking time out of their packed schedules, Chen Qi and Fu Chi came over and tracked down an electronics store that sold various home appliances. Above all, a sign was posted by the entrance: "Golden Lion Video Rental!" The two stepped inside. A small, crude counter had been partitioned off in a corner of the electronics shop. The most eye-catching feature was row upon row of wooden shelves lining the walls, stacked high with cassette boxes. A short, thin middle-aged man greeted them warmly. "Boss, looking to rent tapes?" "Do you have a full selection?" "With so many movies out there, it's impossible to have everything. But in Hong Kong, I dare say nobody has a more complete collection than mine. I'm the first in all of Hong Kong to do this!" Chen Qi pulled out a few boxes at random, finding both Hong Kong and Western films. "How much per day?" "Fifteen dollars!" "That expensive?" "Buying a cassette costs two hundred dollars! Renting is practically a steal. Boss, since you're here browsing tapes, you must have a VCR at home, so you're not going to pinch pennies over this." Chen Qi picked out a few tapes at random, and Fu Chi paid. The man's smile widened even further. "Boss, interested in joining our club? We're all film buffs. Whenever someone gets a new tape, we often swap them among ourselves." "Oh? You seem quite seasoned at this. Have you been doing it for long?" "Not that long. I used to live in Taiwan..." The man was quite chatty and rambled through an introduction of himself. His name was Luo Mankai. Born in the United States, he had worked in Taiwan, where he and his friends had set up a club to trade video cassettes for fun. Later, he moved to Hong Kong, saw great potential in the business, and opened this little shop. "Do you get many renters?" Chen Qi asked. "A lot, and not a lot. Home VCRs have just started catching on, so the numbers are small. But anyone who buys a machine will inevitably come to my shop to rent tapes. Once they come the first time, they always come back for a second. They're all die-hard customers." "Well, you are the first in Hong Kong!" "Ha, exactly!" After chatting for a while, the two stepped outside. Chen Qi immediately said, "Uncle Fu, do you want to open one?" "You think this business will take off?" "It's obvious! Opening one won't cost much, and it opens up a new distribution channel. Take Wrong Turn and Tai Chi, for instance—once their theatrical runs end, people will still want to see them, so they'll come rent the tapes. "Besides, you can create gimmicks: the uncut version of Wrong Turn, the director's cut, and so on. Some people really eat that up. "If this market grows big, all the better. If it doesn't, we won't lose much. What's not to like?" "You always have these whimsical ideas, but we'll need to do some on-the-ground investigation. I'll give it serious thought," Fu Chi said with a laugh. The home video rental business had emerged in the late 1970s. As home VCRs became commonplace, it grew into an intensely coveted market by the mid-1980s, expanding even further in the 1990s until VCDs and DVDs arrived. They were the same in essence, all belonging to the very same distribution channel. Right now, it was 1981, and the video cassette market was merely drawing growing interest; it had not yet reached explosive popularity. Yet Chen Qi knew just how formidable it would become. It would turn into an indispensable pillar of the film industry, to the point where Hollywood would produce many films directly for home video without even a theatrical release, still pulling in a neat profit. *** When the two returned to their hotel, film distributors were already waiting. The Berlin International Film Festival was set to open on the 13th, and they had to depart Hong Kong on the 11th. Today was already the 10th. Tai Chi had premiered on the 3rd, maintaining an intake of around one million Hong Kong dollars per day, and its total box office had reached eight million! Security Unlimited had opened four days earlier and had been running for twelve days. Audience fervor had begun to cool, and its daily gross had fallen to around six hundred thousand. Its total box office had already surpassed ten million, making it only the second film after The Young Master to cross the ten-million mark. Yet the tides were shifting! Filmmakers throughout Hong Kong were watching and waiting to see when Tai Chi would overtake Security Unlimited. Once it did, the final outcome would essentially be settled. Under these circumstances, distributors from Japan, South Korea, and Southeast Asia naturally came knocking. "Mr. Chen, thirty thousand US dollars is already a very sincere offer! No matter how much you push, you won't get much higher. That is standard practice." "Standard practice exists solely to be broken. Thirty thousand is far too low. Tai Chi is a work that can revive failing cinemas from the brink. We have no intention of letting it go for peanuts." Seeing that the Southeast Asian distributor opposite him wanted to keep arguing, Chen Qi pressed his hand down. "The Berlin International Film Festival is about to open. Will you be attending?" "Yes, we are!" "Then we might as well discuss it further in Berlin. If you are truly sincere, you can wait a few more days." "Very well!" Helpless, the Southeast Asian distributor shook his hand and took his leave first. Chen Qi let out a sigh and asked, "Uncle Fu, are overseas distribution rights always this cheap?" "That's how it is. A place like Japan, with its strong economy and huge market size, will pay more. But smaller countries are poor and backward, and with the US dollar being so strong, thirty thousand is genuinely decent. Some places will buy a film for ten thousand, or even just a few thousand US dollars." "Then... then..." "You make it up in volume—sell to more countries. A few tens of thousands of dollars here, a few tens of thousands there, and it adds up. Actually, Japan's bid of three hundred and fifty thousand US dollars is fairly sincere. Don't be too greedy." "You can't calculate it like that. A film's true value could... Never mind, let's talk about it once we reach Berlin." Selling rights overseas at this time usually meant a flat buyout without profit sharing. Who would offer you profit sharing? Chen Qi had no interest in profit sharing anyway. For one, the payment cycle was too long, and for another, there were far too many uncertain variables—like Hollywood's slick accounting tricks, which could make blockbusters like Harry Potter and The Lord of the Rings look unprofitable on paper. Doing business behind China Film's back, he wanted to cut the Gordian knot: secure the cash upfront and worry about the rest later. The overseas rights to The Shaolin Temple had fetched a total of three to four million US dollars. That was his benchmark; Tai Chi had to match it at the very least. One could not compare this era to later generations. Did anyone know what the country's foreign exchange reserves were last year? Negative 1.296 billion US dollars! Yes, in the negatives. A few million US dollars might look modest, but it was more foreign exchange revenue than entire provinces generated in a year. And this was just from a single movie.