[II]A Guide on How to Make 200 Million Dollars Out of 5 Million - Part II: The Primary Connectors

Reviewed your Brand Marketing 101?

If you were absent, click the link below:

A Guide on How to Make 200 Million Dollars Out of 5 Million - Part I: Miracle Overview & Brand Marketing 101: The Tipping Point.

You Can also scroll down to the end of this blog to read the quiz that helps you get the general idea of the Tipping Theory I apply for analysis.

From the Finding Your First Telecommunication Job Blog

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Before continue, I would again recommend you to read the previous blog to learn what was going on around the film Lost in Thailand in the past 2 months.

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Sell Film like A FMCG?!

With our rich background knowledge, we can finally start analyzing this milestone Chinese film. It is no doubt a winner from integration marketing and the way it markets exactly conforms to Gladwell’s “Law of the Few” – covering all three key characters throughout the marketing process. In an article on The Bund – one of the most influential periodicals, Haipeng Li, the representative of Enlight’s marketing team, tells the journalists: through research they realized that “film moves even faster than the FMCG (fast moving consumer goods e.g. milk)” (Li, "Tai Jiong: Sell Movie as a FMCG").

According to Li, films on the market (on screen, in theaters) normally have a consumption period of one week, some of them can lengthen the period to three weeks, but Lost in Thailand made it to five weeks. How did they make the audiences – the target market – to accept them in such a short period? Li said that they adopted the marketing strategy of selling FMCG: “if there is something we started out right, it is to sell film like FMCG” (Li, "Tai Jiong: Sell Movie as a FMCG"). The so-called FMCG marketing system, what they did, was exactly utilizing the connectors and mavens. While other film marketing team normally has ten distributors, the Lost in Thailand marketing team used eighty. These eighty people were the very first and key connectors of this epidemic.

The Primary Connectors: Creating the Best Ad Content and Manipulate the Media

Enlight’s distributors are set up in the major cities like Beijing, Shanghai, and they are in duty of both the city and the radiant provinces/areas close by. These 80 distributors covered the top 100 cities with the highest box office. More importantly, they are set up in their cities and are extremely well-connected with local marketing channels on different platforms. Therefore the plans these distributors come up with were splendid because they are normally anti-intuitive. One example is that a distributor in Zhengzhou, He Nan Province, proposed that a local “Minsheng” (meaning people’s lives) program – a form of informal local news which does not exist in the U.S. broadcast program genre – has ridiculously high ratings “even though it just talks about Zhang’s cat died, or the Lis divorced”, why don’t they do a product placement in that program? The whole team was shocked by the unprecedented placement, and after research they ended up placing Lost in Thailand in similar Minsheng programs in more than 120 broadcast networks throughout China (Yin, "Tai Jiong's Marketing Strategy: More Than Enough Marketing Materials Plus Word of Mouth").

Brand Resonance Mode

From Kevin Lane Keller's Brand Resonance Model
from Strategic Brand Management (1998 & 2002, Prentice Hall)

Manipulate the Best Media

The Enlight Media Group – the investor, production studio, and distribution studio of Lost in Thailand – has established probably the most mature and complicated movie distribution network throughout 120 cities in China for the past 15 years, and it possesses an incomparable integration marketing advantage because of their cultivated multi-platforms in TV networks and programs, off-line event cooperation, theatrical release channels, and internet marketing. This time for Lost in Thailand, they explored and exploited every single corner on these platforms. These eighty distributors are the explorer, the exploiters, and the connectors. These connectors connected both tradition media and new media on hundreds of TV networks, over 1,200 TV channels, on subway trains, buses, airports, pharmacies, hospitals, college campuses, trains, and airplanes (Li, "Tai Jiong: Sell Movie as a FMCG"). What are these media ports that the connectors connected? They are exactly the mavens where people go for information. In my next blog, I will look into how these primary mavens contribute to the box office miracle, and more importantly how traditional media and new (social) media differentiate from and cooperate with each other to produce the optimal effect.

                                       Production and Distribution Process of Indie Game

http://www.indiegamethemovie.com/news/2012/11/1/indie-game-case-study-tech-audience.html

*** References ***

Li, Hui. "Tai Jiong: Sell Movie as a FMCG." Trans. Jie Luo. The Bund 05 Feb. 2013: n. pag. The Bund. Feb. 2013. Web. 14 Feb. 2013. <http://www.bundpic.com/2013/02/20891.shtml>.

Yu, Yin. "Tai Jiong's Marketing Strategy: More Than Enough Marketing Materials Plus Word of Mouth." Trans. Jie Luo. Evening Times [Shanghai] 04 Jan. 2013, A2 sec.: A2-02. Evening Times. Web. 13 Feb. 2013. <http://newspaper.jfdaily.com/xwwb/html/2013-01/04/content_950598.htm>.

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Great! Now all of you are ready for the quiz.

Q1: Name the Three Rules of Epidemic.

Q2: Explain who are the three roles in the Law of the Few and how do they function.

Bonus #1: The total box office revenue for the Chinese comedy Lost in Thailand already reached 20 times its production cost. True or False?

Bonus #2: It is the first time Xu Zheng (the director, screenwriter, and main actor for Lost in Thailand (a.k.a Tai Jiong, 泰囧)) ever direct a film. True or false?

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I hope you all enjoyed your quiz. And feel free to check answers right away:

Q1: Name the Three Rules of Epidemic.

1. the Law of the Few; 2. the Stickiness Factor; 3. the Power of Context. 

Q2: Explain who are the three roles in the Law of the Few and how do they function.

1. Connectors; 2. Mavens; 3. Salesmen. Connectors are those people who are the centers of social gravity, who are connected to many people. They can easily get a large proportion of people to know about what's going on. Mavens are the information sources. They are people whom others go to for information and details. They are enthusiastic to share what they know and the only thing a maven does not do is to persuade - which makes one a salesman. A salesman not necessarily persuades people all the time, but what he or she say and how he/she act results to be persuasive and causes actions.

Bonus #1: The total box office revenue for the Chinese comedy Lost in Thailand already reached 20 times its production cost. True or False?

FALSE. Total box office flipped 40 times its investment (production cost).

Bonus #2: It is the first time Xu Zheng (the director, screenwriter, and main actor for Lost in Thailand (a.k.a Tai Jiong, 泰囧)) ever direct a film. True or false.

TRUE.

[I]A Guide on How to Make 200 Million Dollars Out of 5 Million - Part I: Miracle Overview & Brand Marketing 101: The Tipping Point.

Lost in Thailand - The Most Money-Making Film in Chinese Film History

"Surprise" for the Audience:
The Most Famous Female Celebrity in China Fan Bingbing Starring as herself at the End

The Box Office Miracle - Lost in Thailand (a.k.a Tai Jiong 泰囧)

A perfect tipping (a marketing concept which I will later elaborate on) case of a small thing exploding like a supernova just happened in China in the past 3 months. The comedy film Lost in Thailand (also referred as Tai Jiong in short form) directed by its main actor Xu Zheng – for his first time – had its box office grossing over 190 million dollars in the 27^th day of its release, and surpassed 200 million dollars on January the 12^th, 2013, one month from its opening date ("Grossing Over 200 Million Dollars, Tai Jiong Becomes A Chinese Film Milestone"). This film sank Titanic and became the movie of the year in 2012. It broke more than ten records in the Chinese film history, including the highest Chinese film box office gross record of 120 million dollars, approaching the highest box office gross record in China held by Avatar which is 228 million dollars (Yao, "Tai Jiong Refreshes At Least Ten Records in the Chinese Film History”).

What appalled and shocked all of the Chinese film industry and the investment industry is that it is produced at a total cost of less than five million dollars (at early stages it was reported as two million, but later they claimed the cost to be “between four and five millions”) (Ma, “Wang Changtian Responds: It’s Just A Normal Film”). Yes, it flipped its investors at least 40 times of their money solely by its box office revenue and according to Google Stock Quote, it levered a 633 million dollars increase in the market value of the Enlight Media Group - its major investor - in thirty days. Is this miracle reproducible? Malcolm Gladwell’s tipping theory does not give all the answer, but it perfectly explains Lost in Thailand’s success.

The Tipping Point - A Special Way to Look at Marketing

So before we get into our analysis, let's talk about our methodology a little bit. Few days ago, I was reading Malcolm Gladwell's renowned The Tipping Point (http://www.gladwell.com/tippingpoint/) which is one of the readings required by my professor John Verret who is an incredibly intelligent and amazing marketing expert. He was the Vice Chair, President & CEO and Executive Vice President & COO for Arnold Communications - one of the biggest Ad agencies, as well as a partner and co-owner. He was named the Best Executive of the Year as early as in 1990 - six years before he founded his own company. I found this book he recommended enchanting and very practical. For marketing minds and brand strategists who have not read this book, I definitely would forward his recommendation.

Tipping, as referred by Gladwell (2002), is the action and the mechanism of how a specific small chain of action and reactions triggers a social phenomenon, a word of mouth epidemic. Gladwell theorized the tipping mechanism into three rules: 1. the Law of the Few; 2. the Stickiness Factor; 3. the Power of Context. These are the Three Rules of Epidemic and they apply to any product in any category, which of course includes film.


The Law of the Few suggests three kinds of people are key in order to reach a Tipping Point. "The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts," and Gladwell categorizes people who possess such social gifts into three groups: 1. Connectors; 2. Mavens; 3. Salesmen. Connectors are those people who are the centers of social gravity, who are connected to many people. They can easily get a large proportion of people to know about what's going on. Mavens are the information sources. They are people whom others go to for information and details. They are enthusiastic to share what they know and the only thing a maven does not do is to persuade - which makes one a salesman. A salesman not necessarily persuades people all the time, but what he or she say and how he/she act results to be persuasive and causes actions(purchase).

Only the first rule - the Law of the Few - alone explains well enough how China's newest and biggest box office miracle Lost in Thailand. Here is a simple map for the three major roles in the Law of the Few and how they work and I will start with analyzing the primary connector in my next blog. Stay tuned. ;p

Picture by Dave Pollard (http://howtosavetheworld.ca/2003/05/16/)

*** References ***

Gladwell, Malcolm. The Tipping Point: How Little Things Can Make a Big Difference. Boston: Back Bay Books, 2002. Print.

"Grossing Over 200 Million Dollars, Tai Jiong Becomes A Chinese Film Milestone." Trans. Jie Luo. Shenzhen Evening News [Shenzhen] 13 Jan. 2013: n. pag. MTime.com. MTime, 13 Jan. 2013. Web. 11 Feb. 2013. <http://news.mtime.com/2013/01/12/1504881.html>.

Ma, Yu. "Wang Changtian Responds: It's Just A Normal Film." Trans. Jie Luo. Yangtse Evening News 08 Jan. 2013: n. pag. Xinhua. Xinhua, 08 Jan. 2013. Web. 11 Feb. 2013. <http://news.xinhuanet.com/ent/2013-01/08/c_124200706.htm>.

Yao, Xia. "Tai Jiong Refreshes At Least Ten Records in the Chinese Film History." Trans. Jie Luo. Changchun Evening News [Changchun] 04 Jan. 2013: n. pag. Chinanews.com. China News Service, 04 Jan. 2013. Web. 13 Feb. 2013. <http://www.chinanews.com/yl/2013/01-04/4454714.shtml>.

The Chinese Film Market – Slowing Down, Or Maybe Not.

China's Growth in the Film Industry

Both China Daily ("China's movie sector becomes 2nd-largest") and The Economist ("The filmindustry-Themonkey and the mouse") reported that China surpassed Japan and became the world's second largest film market after U.S. about a year ago – in the first quarter of 2012.

As of year 2011, China's box-office rose 33.3% to 13.15 billion RMB ($2.08 billion) and the industry's market value reached 17.25 billion RMB ($2.7 billion). This increase according to MPAA - The Motion Picture Association of America is 35%; both suggests China to be the fastest-growing market for film in 2011.

Cinema screens increased from 4,753 in 2006 to 10,700 in 2011: an average of eight screens per day. “No nation in the world grew at that fast pace", as referred by Mike Ellis the Asia-Pacific president of the Motion Picture Association of America.

Economist's Point Of View

The speed of growing dropped down for the year of 2012, but not the growth. It is still much far from slowing down from an economist’s point of view.

U.S., the oldest biggest film market contributes stably 0.4% of total national GDP almost every year from the past 13 years. Even though this industry has a name of – and is indeed of – high risk and unpredictable outcome, the fluctuation of the value added by the film industry as a percentage of GDP has been very small – 0.1% up or down, making its contribution to the biggest economy of the world between 0.3% to 0.5%.

What about China's GDP?

Since the National Bureau of Statistics of China’s GDP data is not accessible (due to its website technology failure), I had to look for corresponding statistics from others sources, and please bear with me for the dated data: According to an article from China Economic Herald, the Chinese motion picture industry weighs only 0.075% in the tertiary sector, and contributes only 0.032% to the overall GDP of China(Original quote “2009年我国电影产值占第三产业比重仅为0.075%，对GDP的贡献率仅为0.032%，对GDP的拉动率为0.0028%，是第三产业中一个并不太重要的行业。”).

As we learned in the first paragraph that there had been a 35% increase in the Chinese box-office, so before the 35% increase, the contribution to overall GDP was 12.5 times less than what motion picture industry averagely contributes to U.S.

Now, let’s do some simple math.  

As more than half (58%) of the overall film revenue in China generates from the box office gross. Let’s first assume the overall revenue for the motion picture industry is exactly 35%, and not even considering China’s overall 8.8% of GDP growth. Then after the change, the overall contribution to GDP becomes (1+35%)*0.032%=0.043%. Great, so the gap between U.S. and China is less than 10 times.

Composition of Film Revenue in China (2009)

Film Industry Revenue of China (2008-2009)

Even with a 20% increase or decrease in other aspects of the film industry revenue, which means the number will change to (1+55%)*0.032%= 0.0496% or (1+15%)$0.032%=0.0368, the Chinese film industry is still far from contributing.

What is the logic behind this comparison? The potential. The future. The should-be scale of the Chinese film market.

Merging of the International Market

As China already became the second biggest market for box office, there is still ten times of space without exploring other aspects. Why should not Hollywood be excited? But the reasons that are driving DreamWorks, Disney, Warner Brothers into this land are much stronger than just a simple rationing based on the healthy category. I will get into the different details in my future pieces, so keep an eye on it if you find it interesting, but before that, I will insert an exciting analysis on how to market a $3 million small-budget film to make $200 million box office revenue in China next time.