Recently, Huanrui Century (000892. SZ) has become the focus of attention of investors because of the income of artist agency. Today, let's talk about artist agencies in listed companies. These include Huace Film & Television (300133. SZ), Tangde Film and Television (300426. SZ), Ciwen Media (002342.SZ), Huanrui Century (000892. SZ), Contemporary Style (600136. SH), Light Media (300251. SZ), Beijing Culture (000802. SZ) and others as targets for analysis.
According to public information, whether in 2018 or 2019, the gross profit margin of Huanrui Century's artist agency business belongs to the industry-leading position. Among them, the gross profit margin of Huanrui Century's artist agency business in 2018 and 2019 was 96.39% and 94.42% respectively.
According to statistics, the average gross profit margin of the above 7 companies in 2019 is at the level of 60%, and Huanrui Century is definitely the leader in operating artist brokerage business.
Judging from the situation of Huanrui Century artists at that time, it had many stars such as Yang Zi, Ren Jialun, Qin Junjie, Cheng Yi, Liu Xueyi, and Ying'er.
Among them, actor Yang Zi's foreign drama "Dear, Dear" performed in 2019 received good ratings. The producer of the play, Huace Film and Television, said in the 2019 performance preview that "'Dear, Loved' is based on the current, the ratings are hot, and it has been rated as the "Drama King of the Year" by social media agencies and has become the 2019 phenomenon-level boutique drama" .
In second place is Beijing Culture, with a gross profit margin of 77.27% in 2019, compared to 81.96% in the previous year. Artists of Beijing culture include Li Nian, Qi Xi, Li Chuan, Wen Sheng and others.
Ranked third in contemporary style, the gross profit margin of artist agency in 2019 was 76.35%.
The fourth is Ciwen Media, with signed artists including Guo Pinchao, Guo Jiahao, Miao Chi, Chen Youwei, Deng Zeming and others. The fifth is Huace Film and Television, which has artists such as Hu Dayi and Wu Qian; Guangguang Media, which ranks sixth, has a gross profit margin of 45% in 2019. Its artists include Ren Min, Zhang Ruonan, Ding Yuxi, Sun Qian and others. In seventh place is Tangde Film and Television, with signed artists including Cui Yi, Jiang Kai, Wang Yilong and others.
What is Artist Agency?
The artist agency business mainly covers the whole chain business model of the artist industry such as artist brokerage, commercial advertising, and artist training.
So, what are the major reasons that affect the company's artist agency business?
The first is the impact on the policy aspects of the overall industry, the adjustment of regulatory policies in the film and television industry, the filing of film and television dramas and the number of boots, etc., are all factors that determine the macro aspect of the income of artists. Secondly, the impact of policy changes for artists, such as salary restrictions and strict requirements for artists who have lost morality, have greatly reduced the remuneration of actors, and also significantly reduced the business volume of some actors, resulting in a significant reduction in the business income of film and television companies. Finally, the actor's contract expires without renewal, the actor terminates the contract for any reason, etc., causing the loss of the company's head artist or waist artist, thus affecting the company's artist agency income.
However, from the perspective of the above 6 listed companies, if you look at the scale of business alone, most of the company's main business income, film and television revenue still accounts for the majority, and the artist agency business is only the icing on the cake. If you want to look at the gross profit margin standard, of course, the artist agent is the most profitable.
So, how do listed companies make money from artist agencies?
First, let's look at the sources of operating income. Artist agency mainly includes artist agency service income and corporate customer artist service income and two categories.
Artist agency service income is well understood, that is, the company's signed artists engage in acting, advertising, business activities, etc. agreed in the brokerage contract and obtain income, then according to the contract fixed to share, to confirm revenue.
The income from the service of the corporate customer artist is slightly more complicated: that is, it is recognized when the service has been provided, the amount of revenue can be reliably measured and the related, incurred or to be incurred costs can be reliably measured, and the related economic benefits are likely to flow into the company.
Of course, the above income is measurable, but the invisible income brought by some artist agency industries is immeasurable. For example, the resources and business cooperation brought by the artist brokerage business to the company; for example, engaged in artist brokerage, for their own film and television drama projects, artists can participate, the more artists they have, the more actor candidates they have in their own projects, and professionally, it is "to provide a larger selection of actor reserves for the company's film and television drama projects."
Therefore, it is often seen that Yang Mi has to star in Jia Xing's TV series, which is the reason. Of course, before the "Agarwood Like Crumbs", Huanrui Century also pulled Yang Zilai, a signed artist at that time, as the heroine, and it is estimated that there are also these considerations.
Finally, what do you think about Huanrui Century? Why is his family the most profitable brokerage business? What do investors think of Huanrui Century?