Chapter 657 The unsellable advertisements
Countdown to broadcast: 20 days to the broadcast of The Voice of China.
In the early morning, upon reaching his office, Zhang Ye did some calculations regarding the production timeline and felt that they were ahead of time, since all aspects of their preparation were already underway. In the coming days, they could officially start the program's recording. Except for an equipment order that had been delayed for a week or so, generally not much time was wasted and everything went according to plan. The construction of the stage was almost complete, the auditions held in other provinces were also wrapping up, while the contestants were busy rehearsing their performances and the coaches rehearsed their songs. The staff were also learning how to operate the new equipment. Everything was going smoothly. The only part with slow progress would probably be the case with the advertisers.
There was a knock on his door.
"Come in." Zhang Ye looked up.
Little Wang pushed the door open and entered. "Director Zhang, they're here."
Zhang Ye acknowledged her and then stood up to welcome them.
Four people stepped in from outside. There were men and women in the group, ranging from their thirties to forties and dressed in suits and business attire. They were all advertisers' representatives or executives, and had come to discuss the advertising rights fee. Because a consensus could not be reached previously, Zhang Ye made an appointment with them to discuss it again.
"Teacher Zhang, we meet again."
"Secretary Li, please come in."
"Hello, Teacher Zhang."
"Director Xu, have a seat."
Zhang Ye invited the four of them to take seats and had Little Wang pour them some water. Then, he said to them, "We're already counting down to the airing of the program. It's only 20 days away. Since the recording will certainly be done several days in advance, we don't have much time anymore. I urge every one of you to please reconsider."
A woman from Plum Soy Milk Company said, "Your asking price is too high."
Zhang Ye shook his head. "To be honest, it's not an excessive asking price at all. An advertising rights fee of 3 million RMB is totally incomparable to the 100 million title sponsorship from the Brain Gold company. If we went by the usual ratio of the advertising rights fee to the title sponsorship fees, even if we asked for a 5 million RMB advertising rights fee, it would not be too much. But based on the market situation, we deliberately took a step back and lowered it by almost half of the original asking price. Moreover, our program allocates very good placement for our advertisers and will even repeatedly mention them immediately after we advertise for the title sponsors. For example, we promote our advertising partners in the host's speech, after every advertisement break and also at the ending credits of the program, all of these are extremely good placements."
The middle-aged man from Red & Blue Pharmaceuticals said, "Actually, a 100 million RMB title sponsorship fee is not reasonable at all as it is way beyond the industry standards, and is likely going to be a bubble. Let me say this, Teacher Zhang. For other similar singing talent shows in the industry, the title sponsorship for a program is only around 10 to 20 million, while the highest advertising rights fee is only around 1 million. Some programs would even settle for 700,000 to 800,000, yet here you are, asking for an excess of 3 million and that the price is non-negotiable. We will not accept such a price. My best offer stands at 1.5 million."
Zhang Ye looked at him and said, "If you want to compare us with the other programs, fine. We were able to invite Grandma Zhang Xia to join us, can the other programs do the same? We have the Chen Guang couple joining us as well, are the other programs able to do that? We even have the Heavenly Queen Zhang Yuanqi on board, what about the other programs? I'm not saying all this just for showing off. What I'm trying to say is we have spent a lot of money to invite four big shot coaches to join us, so we also have pressure on our expenditure. The four coaches are able to bring in a great deal of publicity and viewership ratings, so the advertising effects will be much greater. That is why our asking price for the advertising fee is also higher compared to the other programs."
Another executive, this time from Heehee Dairy Industry, said, "It's exactly because of this reason that we were willing to increase our offer. Teacher Zhang, let me tell you this, no matter how much the other companies offer, the highest Heehee Dairy Industry is willing to offer stands at 1.8 million RMB. I have already drawn up the contract, so if you feel it's fine, we can sign the contract immediately."
Zhang Ye waved it off. "No way."
The women from Plum Soy Milk Company said, "Teacher Zhang, I heard that your program only managed to secure one advertiser to commit to the advertising rights. If you still insist on 3 million RMB and not lower it, it will be very difficult to sell the rights. In the end, it will just be a waste of resources and you will incur the losses."
The executive for Heehee Dairy Industry followed up, "If you insist on 3 million RMB, we certainly won't buy it. There isn't any other company that has the resources or desire to buy the first-tier advertising rights from you anyway. At most, they can only afford the second or third tier of ads. Thus, if some of the slots for the first tier ads are left empty, won't that be a waste? If it can be lowered to 2 million RMB or less, your program will immediately get a large amount of advertising fees injected, but if you insist on adhering to such an unreasonable price of 3 million, it will be difficult for us to continue the discussion. In the end, your program will miss out on nearly 10 million RMB of first-tier advertising rights fees for nothing. Is that worth it?"
The other advertisers were also thinking the same. They were waiting for The Voice's program team to cave in first and lower the asking price themselves. Otherwise, without too many days left until the program started its broadcast, even if the team wanted to sell the rights then, they couldn't do so and would end up as the biggest losers.
However, Zhang Ye did not see it that way. These people were seemingly right, but were in fact just bullshitting. "I'll stick to what I've said. The minimum price I can accept is 3 million. Our production costs are clear for all of you to see as well."
The executive of Heehee Dairy Industry frowned. "Let's go back to the basic points and talk from there. The Voice has yet to start its broadcast, so no one knows how the viewership performance will be. Besides, from the evaluation of the public and media, it doesn't seem too optimistic. By purchasing the advertising rights, we are also taking a risk here with our expenditure."
"Teacher Zhang, I'll take another step back, how about 2 million?"
"Alright, the highest offer we can make is 2 million. I'll discuss with the company about this. They somewhat should be able to accept it."
At this moment, the two people who did not say much finally opened their mouths.
Actually, the few of them had already communicated beforehand and discussed how they would handle this meeting. Actually, what Zhang Ye said was right. The Voice was the first variety program with a production cost of more than 100 million RMB in the industry. With the inclusion of Zhang Yuanqi, Chen Guang, and other big-time coaches, it could said that this was a really unprecedented setup. Even if many people and industry insiders were not feeling optimistic about it, they were still willing to purchase The Voice's advertising rights. Because of this, they were able to accept double of the industry's average price of 1 million, offering the highest at 2 million RMB. However, they could not accept a price that was three times the industry average.
The four of them looked at Zhang Ye and waited for him to back down.
Zhang Ye also looked at them, then picked up the desk phone and spoke on the intercom to the outside office, "Hello, Little Wang, come to my office for a moment. Yes, right now."
Little Wang knocked on the door and entered his office. "Director Zhang."
Zhang Ye bluntly said, "Please help me escort our guests out."
The four of them were stunned. Escort us out?
Little Wang was taken aback, but then looked at the four of them and stated, "Everyone, this way, please."
One of them said, "I advise you to reconsider."
Another person said, "No one will buy it for three million RMB!"
Zhang Ye said, "Please leave. Our fees are all clearly priced. Even if no one purchases them, we will stick to this price."
"Then forget it."
When the four of them left, they felt a tinge of anger. How could you be so arrogant? For a lousy program like that, you might not even get 0.5% viewership ratings, so what makes you think that your advertising rights fee is worth 3 million RMB? Only an idiot would buy it! Just wait and perish together with the ads at your own hands! When that time comes, you will be the ones making a huge loss!
After they have left, Zhang Ye called Zhang Zuo and Ha Qiqi over. As the tasks they were responsible for were largely progressing well, they had managed to free up a lot of the time for themselves.
"Director Zhang, you were looking for us?" Zhang Zuo asked.
Ha Qiqi blinked. "I saw the advertisers leaving? Did we get more advertising fees already?"
Zhang Ye smiled and said, "No, we didn't manage to seal the deal. They couldn't accept the price of the first-tier advertising rights fee and are not interested in the second- and third-tier ads."
Ha Qiqi wondered, "We didn't lower our asking price? It's still three million?"
Zhang Ye retorted, "Why should we lower our price?"
Ha Qiqi: "..."
Zhang Ye said, "For any future advertising contracts, the two of you will assist me in handling and discussing with any advertisers coming to talk about the advertising rights fee. The price of the first-tier advertising fee will be 3 million yuan and not a yuan less. We'll discuss with this price in mind, so if they don't accept it, so be it." Right now, he was exasperated by these advertisers and could not be be bothered to talk with them any further. As such, he simply delegated this matter to Zhang Zuo and Ha Qiqi to handle.
Ha Qiqi said, "To my knowledge, if we don't lower the price, it could become extremely difficult to sell. After all, the industry average for advertising fees...If they remained unsold, then our losses will..."
Zhang Ye said, "It's not that I don't want to sell the rights or lower the prices, but rather that they simply can't be reduced at all. We have already sold one of the first-tier advertising rights before this, and there's also the 100 million title sponsorship fee from Brain Gold company. If we reduce the fees for the other companies, how will the company that purchased the advertising rights from us think? How will Brain Gold who had supported us in our most difficult times think of it? They had given us assistance when we were down but we are going to treat them like suckers?"
Zhang Zuo nodded. "That's very true."
Ha Qiqi sighed, "But, if the ads are left empty, the losses we will incur..."
Zhang Ye said, "We'll only lose two ads at most, so this is not a big deal at all. Moreover, I will tell you this. The ones who will suffer the loss is not us, it will be those four companies that'll regret later on. However, this is something that will only be revealed at a later time."