Wen 丨 Zhijin Finance, author 丨 Dazhao
To say who is the hottest at the beginning of the Year of the Tiger is undoubtedly the Winter Olympic mascot "Ice Pier".
But before the "Ice Pier" fire, there was another IP that was popular on the whole network, that is, Lina Bell released by Shanghai Disney on September 29, 2021.
According to media reports, at 3:00 a.m. on December 29, 2021, more than 5,000 people had lined up at the entrance of the Shanghai Disney resort, and by 5:00 a.m., the queue next to Wishing Star Lake had circled 2 times.
Due to the excessive popularity, Ling Na Belle has been out of stock for a long time, and a medium-sized doll of 219 yuan is still difficult to find when the value is "fried" to 10 times.
In fact, the business of IP character derivatives has always been an important source of revenue for Disney.
According to a report by Caijing In 2017, the secondary consumption income of Shanghai Disneyland is almost the same as that of ticket revenue, of which the expenditure of tourists on the purchase of souvenirs in Disneyland accounts for the second place in the overall expenditure.
Disney's theme parks around the world have basically reopened, and with the vaccination, the number of visitors to the park is also recovering, according to the company, the income level of each visitor has risen significantly compared with before the epidemic.
Disney's fiscal first quarter of 2022 shows that Disney theme parks generated $7.2 billion in revenue, more than double the same period last year, with operating profits of nearly $2.5 billion, compared to a loss of $100 million in the same period last year.
Disney-style "one-stop service"
From Snow White to superheroes, Disney has built a huge IP ecosystem through independent development, mining classics and epitaxial mergers and acquisitions. Disney animation studios in the 20th century created classic IP images such as Mickey, Donald Duck, and The Lion King, and Walt Disney won a total of 26 Academy Awards between 1901 and 1966.
In addition to its own original IP, Disney has also developed IP such as "Snow White", "Three Little Pigs" and "Pinocchio" from "Grimm's Fairy Tales", and excavated and developed the "Mulan" IP from traditional Chinese stories.
Since the 21st century, Disney has rapidly expanded the IP matrix by acquiring high-quality assets and establishing the right to speak in the industry.
In 2006, Disney acquired Pixar Animation Studios for $7.4 billion, obtained the IP of "Toy Story", and subsequently cooperated in the development of classic works such as "Flying House" and "Finding Nemo".
In 2009 and 2012, Disney acquired the famous American comic company "Marvel" and Lucasfilm for 4.24 billion yuan and 4.05 billion US dollars respectively, and obtained the two major IPs of "Marvel Universe" and "Star Wars".
Holding IP, Disney tries to create greater influence on them, and movies are an important means for Disney to create IP and cultivate users' minds. Disney's film and television entertainment has a strong global influence.
According to Box Office Mojo data, as of February 3, 2022, Disney accounted for 51% of the top 50 films in the world box office in history, compared with 14% of Universal Pictures and Warner Bros. 13%.
Mature IP operations have brought huge derivative effects to Disney. At present, Disney's IP licensed products cover clothing, games, toys and other categories.
By 2021, there are 6 global IP with cumulative economic revenue of more than $50 billion, and Disney accounts for 50%;
There are 19 IP with cumulative economic revenue of more than 20 billion US dollars in the world, and Disney accounts for 42.1%.
These IPs, which are extremely appealing around the world, have laid the foundation for the development of Disney Parks.
From this, Disney formed a "four-round revenue model":
The first round of revenue comes from the film and television box office, streaming media platform member subscriptions, etc.;
The second round of revenue comes from various types of IP-related consumer goods;
The third round of revenue came from theme parks and resorts;
The fourth round of revenue is based on discs, DVDs, soundtrack albums, etc.
Source: Shenwan Hongyuan
A well-established profit model has helped Disney become a century-old entertainment empire and maintain a good growth trend.
Thinking of the hot scene after the opening of Shanghai Disneyland and the attention brought by "Chuansha Daji", it is foreseeable that the Disney-style "one-stop" industrial chain model still has room for imagination in the future.
Foreign "monks" would chant
In addition to Disney, there are many giants targeting the Chinese theme park market, universal studios, Lego, DreamWorks, etc. have landed in China. On November 17 last year, the Legoland Resort Shanghai project also held a groundbreaking ceremony, which is expected to open in 2024.
Attracting global investment is the growing demand for vacations and urban leisure in the domestic market.
According to the "China Holiday Travel White Paper" released by Caissa Travel in 2021, the fragmented time of contemporary social life has promoted the formation of the "micro-vacation" market, and the average travel time of consumer groups in the current domestic tourism market is 1 to 3 days, accounting for 50% of the total travel demand, and the time is mainly based on regular weekends or small long holidays; the average travel time is 4 to 6 days, accounting for 25% of the total demand; the travel time is more than 6 days, accounting for 25% of the total demand.
The longer travel time lays the foundation for in-depth understanding and experience, and also provides room for the development of large-scale theme parks that take more time.
Image source: Guosheng Securities Research Institute
According to the "2021 China Theme Park Competitiveness Evaluation Report", Shanghai Disneyland still dominates the evaluation of China's theme park competitiveness, followed by Zhuhai Chimelong Ocean Kingdom, shenzhen window of the world, Shenzhen Splendid Chinese Folk Village, and Shenzhen Happy Valley ranked third, fourth and fifth respectively. Chimelong Paradise, Beijing Happy Valley, Shanghai Haichang Ocean Theme Park, and Changzhou China Dinosaur Park are still among the top ten this year.
With the opening of Universal Studios Beijing, it has caused a certain diversion to Shanghai Disneyland.
According to the data, universal studios Beijing has nearly 600,000 visitors in one month after its opening, and the annual reception is expected to reach 12 million to 15 million. Some relevant people also predict that for a long time in the future, the domestic theme park competition pattern will maintain the trend of "South Di North Ring".
However, due to the impact of the epidemic, in 2020, China's theme parks have seen a significant decline in both the number of tourists and operating income, and the same comparison, the annual number of tourists dropped by 50.43%, and the operating income fell by 49.87%.
According to the "Analysis Report on the Development Model and Investment Strategic Planning of China's Theme Park Industry" released by the Earlier Prospective Industry Research Institute, 70% of domestic theme parks are in a state of loss, 20% are flat, only 10% are profitable, and about 150 billion yuan of funds are locked in theme park investment.
But even so, there are still many companies that want to become "China Disney".
Local theme park melee
In China, there are not a few companies that imitate the Disney model, and many theme parks have been opened, such as Huaqiang Fantawild, Songcheng Performing Arts and Haichang Ocean Park.
Among them, the most similar to Disney from IP to park model is Huaqiang Fantawild.
First of all, Huaqiang Fantawild is One of the top ten outstanding original animation enterprises in China, with representative works such as "Bear Haunting", "Zodiac Legend", "Chicken Is Not Easy to Mess With", "Bear Paradise" series and more than 20 other works. And in recent years, he has also put his works on the big screen, such as "Bear Haunted Treasure Bear Soldier", "Bear Haunted Snow Ridge Bear Wind", "Bear Haunted Bear Heart Return" and so on have achieved good box office results.
In addition, Huaqiang Fantawild has invested in the construction of eight theme park brands of "Fantawild Dream Kingdom", "Fantawild Happy World", "Fantawild Water Park", "Fantawild Oriental God Painting", "Fantawild ASEAN God Painting", "Fantawild Oriental Desire", "Fantawild Silk Road God Painting", "Fantawild National Color Spring and Autumn".
However, from the data point of view, in the operating income of Huaqiang Fantawild Park, ticketing accounts for about 75%, and the proportion of secondary consumption is relatively low, which is quite different from Disney's huge profits brought by derivatives.
Image source: NetEase Cultural Creation
In addition, Songcheng Performing Arts has also precipitated many users with "ancient feelings". Looking at the site selection of the ancient love project, Sanya, Zhangjiajie, Lijiang, Jiuzhai and other projects are adjacent to the core scenic spots with large potential passenger flow, and the effect of group tour diversion is obvious, and the location layout also forms a certain resource barrier.
Moreover, the early investment in the performing arts model is small, and the ability to replicate off-site is strong.
The data shows that the investment cost of a single project of Songcheng Performing Arts is only 3-1 billion yuan, which is far lower than the investment scale of 2-3 billion yuan such as Happy Valley and Fantawild Park. As of Q3 2021, the company has opened 11 projects and 4 projects to be opened. Moreover, the profitability of Songcheng Performing Arts is outstanding, the asset-liability ratio is low, and the asset-liability ratio in 2016-2020 is maintained at the level of 10%-16%.
Haichang Ocean Park is more like a "pure" theme park.
In 2002, the company's first theme park Dalian Laohutan Ocean Park Polar Pavilion was officially opened, followed by active expansion in the country, by 2021 the company in Dalian, Qingdao, Tianjin, Yantai and other places a total of 11 projects, covers an area of 2.4 million square meters, the total amount of water body more than 200,000 cubic meters, animal ownership of more than 140,000.
Image source: Network
Haichang Ocean Park also takes polar marine animals as the prototype, independently develops the "Seven Meng Tuan" image IP, and develops derivatives such as picture books, memes, stage plays, movies, theme catering, and animal IP theme hotels. In addition, the company also tries to cooperate with well-known IP at home and abroad, from brand implantation, theme projects, linkage marketing, cross-border creation and other different levels of mutual support.
However, the financial situation of Haichang Ocean Park is not as "generous" as the above two, and the company's interest-bearing liabilities have grown rapidly in the past few years, and the financial expense ratio has increased from 15.3% in 2018 to 49.5% in 2020, and the high financial expense ratio has put pressure on the company's performance.
In 2021, the Company entered into a strategic cooperation agreement with MBK Partners to sell 100% of its equity interests in Wuhan, Tianjin, Qingdao and Chengdu Ocean Park and 66% of its equity in Zhengzhou Ocean Park for a transaction consideration of RMB6.53 billion. It also plans to repay the financing loan and upgrade and expand the park with the cash received after the transaction is completed.
In addition, well-known companies related to theme parks include OCT, Chimelong Group, Sunac Cultural Tourism, Shanshui Cultural Park, etc.
However, from the current point of view, the above theme parks are still difficult to compete with Disney. The reason is that in addition to the certain disadvantages of some enterprises in IP development and operation, the lack of "immersion" is the core pain point.
At present, many of China's theme parks stay at the level of "amusement park", ferris wheels, pendulums, jumping machines have everything, but they ignore the linkage with IP and ignore the immersive scene creation. Disneyland has float tours, Universal Studios has Harry Potter and Wei Zhentian, and they can bring consumers directly into that fairytale world.
And Disney has also done a good job in marketing, "Must go to Disney with the people who love you" This slogan-like publicity brings the impression to the brain as "diamonds are forever and forever".
In the final analysis, how to maintain brand advantage in a white-hot competitive environment, "differentiation" is still the core point.
Resources:
"From Ling Na Belle to Disney's Century-old Business Approach - Theme Park Industry In-Depth Report", Shenwan Hongyuan
"Real Estate Industry Theme Park Industry In-Depth Report Series I: Universal Studios, From "Movie Carnival" to "World Class Family Entertainment Resort"," Great Wall Securities
Disclaimer: This article is for knowledge sharing only, just to pass on more information! This article does not constitute any investment advice, and any person making investment decisions accordingly is at your own risk.