In 2020, the black swan of the epidemic has cast a layer of frost on the entire film and television industry, which is already in the middle of winter. According to the National Film Administration, the Chinese film market achieved a box office of 20.417 billion in 2020, down two-thirds from the box office in 2019.
Because of this, among the film and television companies that have released their annual reports, the losers account for the majority, including the head film and television companies Wanda Film, Huayi Brothers and Beijing Culture. A small number of profitable companies, such as Huace Film and Television and Mango Super Media, mainly rely on tv drama business to leverage the market, and the impact of the epidemic on them is relatively small.
The basic financial data of some listed companies in 2020
According to the 2020 annual financial report released by Guangguang Media on April 19, last year, the operating income of Guangguang Media was 1.16 billion yuan, down 59.4% year-on-year; the non-net profit attributable to listed companies fell by 72.93%, but still reached 230 million yuan, becoming a rare profitee among film and television companies with film as the core business.
Titanium Media inquired about the specific revenue structure of Light Media and found that in the past two years, Light Media's film and derivatives business accounted for more than 80% of all revenue. Revenue in 2020 was 940 million, down 62% compared to 2019. However, the gross profit margin of the film and derivatives business in 2020 was 59.87%, an increase of 14 percentage points compared with 45.53% in 2019, which can be described as a substantial increase year-on-year.
Revenue share of different businesses
From the perspective of the film business alone, compared with the financial situation in the four quarters of the financial report, under the recovery of the epidemic, the revenue of Light Media in the fourth quarter increased by about 200% month-on-month.
However, judging from the correlation between revenue and non-net profit in each quarter, the film business has a limited impact on this year's profit performance.
Revenue and profit in the four quarters
On the one hand, in 2020, although among the films controlled or invested by Light Media, "Eight Hundred" and "Jiang Ziya" have achieved relatively good results in the same period last year, the control of attendance rate has made the final box office of these two films frozen at 3.1 billion and 1.6 billion, and there is obviously a gap between the box office of 5 billion and 2.2 billion yuan for the films "Nezha's Devil Boy Descending" and "Crazy Alien" controlled by The previous year.
On the other hand, the high investment cost of "Eight Hundred" and the participation of Light Media as a participant have limited its benefits.
Inference from this, the strong profit performance of Light Media last year was obviously driven by the derivatives business. The financial report also mentioned that during the reporting period, the company's film derivative income and profit increased significantly compared with the same period last year, while the gross profit margin of the film business increased simultaneously, and the film derivative business also became a strong supplement to the company's revenue and profit.
From the specific content of the derivatives business, the report mentioned that in the "mythical universe" that Light Media is committed to creating, in addition to achieving a box office performance of 1.6 billion yuan, the company's main investment and main control of the film "Jiang Ziya" has carried out copyright licensing cooperation with high-quality companies that produce shoes and clothing, handmade, toys, publications and other categories, providing consumers with a large number of choices.
The web animation film "Star Trek - Storm Famira 2" was broadcast on iQiyi in March 2020, and Ray Media launched a comic APP to incubate 32 original comic IP, covering mythology, science fiction, suspense, comedy and other genres; Light also developed and launched the derivative worldview comic "Ao Bing Biography" of the movie "Nezha's Devil Boy Descending", and the prequel comic "Mr. Miao's Other Shore Flower" of the movie "Mr. Miao"; and cooperated with 64 comic artists in visual and storytelling.
For a typical film company, the development of films has been delayed due to the impact of the epidemic, but the development of derivative IP, including comics, animated series, and handmade, is relatively less affected by the epidemic, providing sufficient supply for consumers at the production end.
On the consumer side, the risk-conservative film consumer group may not be able to enter the theater in the second half of 2020, but online IP consumption, whether it is watching comics or buying IP products, will not be affected by the epidemic, and will even become better because of the epidemic's home dividend.
The reason why Light Media can lead other film and television companies in the FIELD of IP is, on the one hand, because it is deeply rooted in the field of animation compared to other head film and television companies. Throughout the country and abroad, the large-scale IP that can be made in the field of derivatives in the film and television industry is basically concentrated in animation and tide play. Because of the close correlation between animated films and derivatives such as comics, dolls, and throw pillows, it has a natural advantage over ordinary film and television works when developing IP products.
On the other hand, what is more important comes from the investment of Light Media in the film and television IP industry chain for many years. Guangguang Caitiaowu, a subsidiary of Guangguang Media, has invested in a number of companies in the comic content and derivatives business for many years, including a number of comic companies such as Shanghai Qingkong Paint, which invested as early as 2012, Beijing Manyan Starry Sky, which invested in 2015, as well as a number of derivative companies including Quanqing Entertainment and Last Craftsman Culture.
While "The Return of the Great Sage of Journey to the West", "Jiang Ziya" and "The Devil Boy of Nezha" gradually brought the animation film brand of Light Media out of the circle, the long-term layout of Light Media in the field of film industry chain has also shown results under the effect of film radiation.
In 2021, the animated film "Deep Sea" directed by Tian Xiaopeng, if the reputation is good, may push the animation IP influence of light to a new height. Light Media also mentioned in the financial report that the development of IP will be further pre-positioned in the future, which will be a new goal of Light Media in the IP field in 2021.
The mature development of the derivatives business can not only enrich the source of income for film and television companies, but also extend the popularity of movies, and help predict whether there is enough market for the next series of IP, and can also maintain the gap period of film popularity that is easy to cool between the two works.
From a global perspective, a mature film and television company often has derivatives accounting for more than 30% of its revenue. Taking Disney's 2019 financial report as an example, the business revenue of its theme park, experience and derivative entertainment segment accounted for 37% of all revenue (2020 is affected by the epidemic factor and is not typical). From dolls to animation and theme parks, the development of derivatives has a long way, with broad expansion space and development prospects, of course, it is indispensable to deepen the cultivation in the industrial chain all year round.
Therefore, for a large number of domestic film and television companies with a single income structure and greater risks, it is bound to be of great benefit to the development of film IP and the diversification of income without rushing to do more upstream and downstream layouts of the industrial chain. (This article was first published on titanium media App)