In 1997, Canadian banker Frank Gusta saw promise in the booming film industry, so he invested in Lionsgate Entertainment. With the funding, Lionsgate acquired some film production equipment and several small distributors, officially becoming the Lionsgate Film Company we know today.
This Canadian film company seemed to have set its development blueprint early on, favoring the distribution of alternative films, particularly those that were violent and gruesomely explicit horror films. Their keen eye for such content brought in good returns, though their work's madness also stirred continuous controversy. The infamous bloody horror film "Saw" was a Lionsgate release and was the debut work of Chinese director James Wan. Produced on a budget of 1.2 million US dollars, it ultimately grossed over 100 million worldwide, compelling one to admire Lionsgate's unique vision.
Back then, the now Lionsgate was just a small but well-known company located in the coastal city of Santa Monica.
Currently in the screening room of the Lionsgate Films headquarters situated in Santa Monica, Distribution Manager Jon Feltheimer, Acquisitions Manager Tom Ortenberg, and Production Manager Michael Paseornek were gathered together. These three heavyweight figures of Lionsgate all sat in their chairs, tensely watching the large screen in front; Wang Yang sat on their right, occasionally glancing out of the corner of his eye to gauge their reactions.
The day before yesterday, after arranging over the phone with Jon Feltheimer, Wang Yang arrived in Santa Monica today. Perhaps thanks to Teacher Rachel, Lionsgate considered him important, as all three managers came to review his film. And they were very serious from the start, the whole process quiet, only occasionally punctuated with exclamations, just like in a movie theater.
At this moment, the film on the screen had reached its end. The "tap, tap, tap" of footsteps arose, causing Jon and the other two managers to instantly focus with bated breath on the screen. The footsteps stopped and after a while, the male lead Kevin was suddenly thrown in, crashing with a bang onto the DV camera, eliciting a scream from Jon and the others, frightened by this completely unexpected technique; Michael Paseornek nearly toppled from his chair, his face ashen.
Watching the sweet smile of the female lead Mel on the screen, Jon Feltheimer widened his eyes, exclaiming repeatedly, "Oh, my God, oh…"
"This is truly shocking…," said Tom Ortenberg, his head damp with cold sweat as he looked at Wang Yang, his eyes filled with disbelief. He chuckled and led the applause, clapping his hands in admiration, "Wow! Young man, this is so surprising. How did you come up with this?"
Production Manager Michael Paseornek was also shocked, looking at Wang Yang in disbelief, "Wow! I dare say this is definitely an excellent horror film, that last shot nearly killed me!" He wiped his forehead, exclaiming, "Oh God! The entire film used psychological horror, then that sudden violent scene at the end, wow, wow! It's terrifying."
Wang Yang recognized this guy because, when he used to obsessively watch the horror films in his mind, he had seen some films where Michael Paseornek was the producer. Indeed, Michael Paseornek was the producer of "Paranormal Activity", and "Paranormal Activity"'s lead actress was Jessica Alba. The film was mediocre and it was after seeing this movie that he dismissed the idea of casting Jessica as the female lead in his own film.
"Thank you," said Wang Yang with a smile, naturally pleased with their praise but far from letting it get to his head. He had been commended before; some companies had showered him with praises after screening his movies, yet their ultimate decision was still a "NO," like the Artisan Company. The fuzzy picture quality made them feel that, even if the film had good word of mouth, it would be the kind that "doesn't sell," thus leading to low profits and not worth the risk.
Sure enough, even after being quite frightened, Jon Feltheimer still frowned and said, "But I'm not sure about the market." He spread his hands, speaking helplessly, "I agree that it's an excellent film, but when you go into a movie theater, you'll find there are too many choices. Between two excellent horror films, would you choose the one with clear images and steady shots on film; or would you choose a DV film with blurry images?"
Before Wang Yang could begin to sell himself, Michael Paseornek let out a "hey" with a look of certainty, "Jon, I think this movie definitely has a market! Trust me, although there are no bloody scenes, it is definitely insane and definitely frightening. The psychological horror is played brilliantly!" He described passionately, "When you watch it, it's like you're standing behind the DV camera, and that sense of oppression is unbeatable!"
Seeing that both Jon Feltheimer and Tom Ortenberg looked somewhat persuaded, Wang Yang quickly seized the opportunity to pitch with more vigor. Gratefully looking at Michael Paseornek, he said, "Yes, I call this a first-person film…" He then turned confidently to Jon, "Mr. Feltheimer, to answer your earlier question, I would choose a DV film because this is my first time seeing a DV horror movie in a cinema. It's a novel experience, isn't it?"
"There's some truth to that." Jon nodded, "People are curious about new things."
"I think your company is concerned primarily with two things, one is finances, and the other is reputation." Wang Yang continued, after dozens of failures, he had a clear understanding of the mindset of film companies and knew exactly what to say to them.
Jon and the other two exchanged glances and nodded, with Jon saying, "Yes, those are our main considerations."
Wang Yang thought for a moment, organized his argument, and then looked at them seriously and said, "What I want to say is, why has Lionsgate achieved its current success? In my view, a spirit of adventure is very important, and words like 'alternative', 'controversial', 'unique' are all part of Lionsgate's signature." The three managers did not object, so he continued, "So in terms of reputation, Lionsgate doesn't have to worry too much. Regardless of whether this movie is good or not, once it enters the cinema, it will be the first DV film to hit the big screen, and Lionsgate released it! This title will not harm your reputation, but rather, it will add a unique touch to it."
"Hmm, you're right," Jon Feltheimer had to nod, and Tom Ortenberg, Michael Paseornek also expressed agreement.
Wang Yang let out a slight breath and then said, "And in terms of finances, you don't have much to worry about there either. Without the need for a lot of advertising expenses, I think a mere hundred thousand would be completely sufficient; then start with a limited release and see how it goes in a few dozen theaters, then look at the box office to decide whether to go wide. If the movie doesn't sell, your loss is minimal; but who can guarantee that this movie won't be a hit?"
His eyes fixed intently on the three managers across from him, he said with an excited tone, "Gentlemen, this is an opportunity!"
Jon and the others each pondered Wang Yang's words and then exchanged opinions in low voices. Suddenly, Jon Feltheimer asked, "Yang, I want to know, if the marketing budget is only ten thousand, what do you think we can do?"
The marketing budget for a movie is generally 50% of the film's production cost. Of course, there are no hard and fast rules here; it mainly depends on the distributor's wishes.
If Lionsgate decides to distribute "Paranormal Activity", spending ten thousand on the marketing budget is ten times the cost of the film's production, which seems terrifying. But what can ten thousand dollars do? Forget about buying advertising spots on TV channels or in the news media; don't even think about buying trailer ad time in movie theaters; and forget about putting posters in subway stations or other high-traffic areas—ten thousand dollars isn't enough to cover even the city of Los Angeles. It's as though there's nothing that can be done.
"The internet!" Wang Yang blurted out the answer without hesitation and shared his idea, "First, we build an official website for the movie, making it seem mysterious without advertising the director, actors, and such. We're promoting Kevin, Mel, making it seem as if 'this movie is a true story'. Then spread the word online, across all major websites, communities, forums, telling everyone so that word-of-mouth spreads far and wide."
He smiled excitedly and said, "That's what viral marketing is all about!"
Jon Feltheimer's eyes gleamed with surprise and curiosity. As the head of distribution, he understood Wang Yang's meaning all too well. This method of promotion was indeed very cost-effective, and when people believe that the DV film is a real documentary, their curiosity will drive them to the cinemas... The idea was really good, but then he suddenly thought of a problem and asked,"So, is this some kind of hoax? What if we get sued by the audience for fraud? That could severely damage our company's reputation."
Wang Yang shrugged his shoulders and confidently replied, "This is not a hoax, it's just presenting things in a mystifying way. We don't need to insist 'this movie is real', we just need not to say 'this movie is fake'. Then, we leave the rest to their imagination. And at the end of the movie, we add a note saying 'This story is entirely fictitious'. Fraud? We don't have any legal responsibility."
"Oh, heavens! I think I understand what a pseudo-documentary is now," Jon exclaimed, after glancing at Tom and the others, he nodded with a smile and said, "This certainly can keep promotional costs down to ten thousand, and the idea sounds great; it seems worth a try."
"Ha!" Michael Paseornek immediately laughed and gave Wang Yang a thumbs up, saying, "Wow, kid, looks like you've got a shot."
Wang Yang became nervous. Michael Paseornek had been supportive from the start, and Jon Feltheimer had just been persuaded by him; now only Tom Ortenberg, the acquisitions manager, was left.
Tom Ortenberg, one hand on his chin, thought calmly. After a while, he seemed to have an idea and looked at Wang Yang, asking, "If our company were to distribute this movie, how much would it cost?"
How much? Wang Yang's heart rate suddenly increased, the thumping so loud that he could hear it himself. With Tom's question, it could almost be said they had entered the preliminary stage of price negotiation—this was the first movie company to do so with him! He tried to stay calm, thinking about how to respond to Tom's question.
Now when a movie company wanted to distribute an independent film, the usual practice was a one-off purchase; they pay you a lump sum, and then the film is theirs. What happened next had nothing to do with you.
But Wang Yang was not willing to do this. If he sold "Paranormal Activity" off to Lionsgate, he could only get a few hundred thousand at most, or even just tens of thousands. Others might have been satisfied since, compared to the film's production cost of ten thousand, even selling for a hundred thousand would be a tenfold return—a very substantial reward. But, Wang Yang knew the global box office of the first DV movie "The Blair Witch," which was over two hundred million; he couldn't agree to a one-off purchase.
Thinking it over, Wang Yang then said with a smile, "No, Mr. Ortenberg, there is no buyout fee for my movie." Seeing the puzzled look on Tom Ortenberg's face, Wang Yang explained, "If your company is willing to distribute my film, I hope my compensation will be a share of the total income."
"Oh, a share?" Tom Ortenberg frowned slightly. Wang Yang nodded, saying, "Yes, your company doesn't need to pay me any upfront fee."
Tom Ortenberg thought with a furrowed brow, exchanging opinions with Jon Feltheimer. The absence of a buyout fee was attractive—it meant that Lionsgate's total investment for a limited release wouldn't exceed two hundred thousand; but choosing a revenue-sharing deal also had its downside, dependent on the final box office of the movie and the share percentage. After pondering, Tom asked, "What kind of share percentage are you thinking of, young man?"
Wang Yang knew that for a blockbuster, the distributor often only got 30%, and sometimes even just 10% to compete for the distribution rights; but his film wasn't a blockbuster, it was a DV movie that almost everyone had no faith in. Lionsgate certainly didn't covet it, so he couldn't make excessive demands. After thinking it over, he decided to counter, shaking his head, "I don't know; that depends on your company's wishes."
Tom Ortenberg shrugged and said, "Too much wouldn't do; we have no obligation to assume the risk for you." He looked at Wang Yang, sharing his thoughts, "15% then; or an advance fee, plus a 5% share."
15%? Wang Yang couldn't help but frown; no, that was too little! He thought hard and suddenly had a good idea, proposing, "How about this, if the film's pre-tax box office profit is below one million, I'll take a 10% share; if it's over five million, then 20%; over ten million, 30%; over fifty million, 40%; and if it surpasses one hundred million, I'll take 50%. DVD and other profits can be negotiated separately; what do you think?"
Jon Feltheimer, Michael Paseornek, and Tom Ortenberg were all stunned, and then simultaneously burst into laughter, pre-tax box office profit over one hundred million!? Was this young man joking with them?
Michael Paseornek, looking astonished, with his hands clasping his head, laughed, "Wow, young director, you seem to have a lot of confidence in your movie!" Wang Yang smiled and said, "Yes."
Jon and Tom exchanged glances and silently nodded to each other. Tom Ortenberg said, "If that's the case…" He was about to say something when his years of industry intuition made him stop; something didn't feel right. He then chuckled again; what are you worried about, that the movie will make over a hundred million? Besides, if the revenue did exceed one hundred million, even giving this young man a 50% share, the company would still make a profit.
Tom smiled slightly and nodded, "Sounds interesting. Give us some time for internal discussion, oh, and we need to report to the president." He stood up, looking at Wang Yang with a smile, "But those things are for the next phase." Jon Feltheimer also stood up, smiling at Wang Yang, "Congratulations, young man, you've convinced us."
Michael Paseornek stood up, spreading his arms in excitement, and said to Wang Yang with a smile, "Congratulations! You've passed our review."
Looking at the three of them, Wang Yang was dumbstruck. They had agreed? Agreed to distribute his movie? His nostrils tingled, and his eyes felt warm. He took a deep breath, fighting back tears of joy as he stood up, his body trembling slightly with excitement. He hugged Michael Paseornek and then Jon and Tom, repeatedly saying "Thank you, thank you!"
"Young man, you deserve it," Jon said as he hugged Wang Yang, patting him on the shoulder with a smile.
Trying to hold back his tears, Wang Yang looked at the three managers' kind smiles. He was at a loss for words. They had agreed; Lionsgate had agreed! They would distribute the movie, and it would be shown in cinemas!
He remembered the frustration of being expelled from school, the hardship of handing out flyers at noon on the street, the rejections from the previous fifty-four movie companies. The despair, the disappointment... But what were those compared to the happiness he felt right now? Now, he had succeeded, he had made it! He wasn't a loser; his dreams wouldn't die. He would continue on the path of filmmaking!
"Thank you!" Wang Yang said with a smile as he wiped away the tears from the corner of his eye, looking at Jon and the other two managers. "I think I will never forget this moment for the rest of my life."
Jon and the others laughed, saying, "The joy of success, huh? Remember it well."
Since Lionsgate had promised to come up with a concrete contract proposal the next day, Wang Yang, upon leaving Lionsgate, decided not to return to Los Angeles and instead stayed in a hotel in Santa Monica for the night.
Walking on the streets of Santa Monica, looking at the distant seascape, enjoying the sea breeze blowing in his face, Wang Yang was still so excited that he couldn't contain himself. He kept pumping his fist and laughing aloud now and then, looking at the beach and the blue sky. Damn it, why was the scenery here so beautiful!?
After walking for a bit, Wang Yang seemed to come to his senses, remembering something, and hurriedly took out his cellphone, eager to share the good news with his friends. He pulled out his cellphone and hesitated, wondering whom to tell first. After pressing around in his contacts list, Jessica, Rachel... He thought about it for a bit and then decided on Rachel, who had helped him get to Lionsgate, and pressed the call button.
The call was quickly connected, and Wang Yang sat down on a bench by the roadside, saying with a laugh, "Hey, Rachel! It's me, Yang." Rachel's pleasant voice came from the phone: "Hey Yang, do you have a result?" Wang Yang laughed, looking around at the scenery, and said, "Wow, Santa Monica's environment is so great—the beach, the breeze, the sun, the blue sky... Wow, it's so beautiful!"
Hearing his exuberance, Rachel couldn't help but feel joyful and immediately asked, "Yang, did you succeed!?"
"Yes, I succeeded!" Wang Yang laughed happily, and before he could finish, Rachel exclaimed, "Oh, my God... you did it!" Wang Yang nodded with a smile, "Yes, celebrate! Haha, I'm so happy." After laughing a few times, he continued gratefully, "Rachel, thank you, you helped end my record of interview failures at fifty-four! Oh, seriously, are you an 'Angel' sent by God to help me?"
Feeling sweet at Wang Yang's words, Rachel laughed, "Yeah, God said to me, 'Rachel, there's a young man in Los Angeles who wants to make a movie, you need to go there.' So I went to Los Angeles, made a movie, and next, I'll be watching myself on the big screen in the cinema!" She laughed, saying, "Wow, that's crazy!"
"Yeah!" Wang Yang exclaimed, "Crazy times."