Nearly a year after the implementation of the "Big Reading" strategy, the foundation of the IP ecological chain has gradually stabilized

Product | Heterogeneous Finance

Author | Night fork snow

Recently, affected by the international situation and other factors, the stock prices of Chinese stocks are like riding a "roller coaster", implicating the volatility of the Hong Kong stock market. In the complex macro environment, it is more difficult to accurately judge the value of a company, but it is certain that analyzing whether a company is on the right track and doing the right thing is the core point to measure whether the company can achieve long-term growth.

On March 22, Reading Group (0772. HK) released its 2021 financial report, in 2021, reading group's total revenue was 8.67 billion yuan, and in terms of profit, the net profit attributable to the mother reached 1.85 billion yuan; the non-IFRS attributable net profit reached 1.23 billion yuan, an increase of 34.1% year-on-year. In fact, this financial report is the report card of nearly a year after the landing of the "Big Reading" strategy, and we can get a glimpse of the current development and future trend of the Reading Group.

Several blockbusters such as "The World of Man" have emerged, and the ip ecological chain infrastructure has been completed

In June last year, Reading Group released the "Big Reading" strategy, which clearly stated that it should take online literature as the cornerstone and IP development as the driving force, and openly build an IP ecological business matrix with partners in the whole industry. According to the financial report data, in 2021, the copyright operation and other business revenue of Reading Group reached 3.36 billion yuan, and the gross profit margin increased by 15.5% year-on-year to 59%, while the gross profit margin of Disney's media and entertainment distribution in 2019 before the epidemic was 60.3%, and the gross profit level of Reading was basically the same, which also means that under the guidance of the "Big Reading" strategy, the overall profitability and anti-risk ability of the Reading Copyright business were further enhanced.

In China's cultural industry, IP development is not a new thing, this piece has been explored for many years. But in the past, there were a lot of shoddy cases, waste or waste of IP. In the final analysis, the entire industrial chain lacks the strategic vision of long-term layout, the level of content industrialization is low, and the upstream and downstream links have not formed an effective synergy. Short-sightedness and the mentality of taking a vote and leaving have led to a large number of low-quality works.

Compared with the United States and Japan, two major countries with mature IP development and operation experience, the IP industry needs to have two core points to build an industrialization system:

First, we must have "quality."

The mature content industrial production system can accurately develop IP by integrating superior resources, greatly improving the quality of individual works, and it is easier to produce high-quality products and explosive models.

Some time ago, the very popular "Human World" is the result of the development of IP boutiques. Initiated by Tencent Pictures and co-produced by the main controller, Yuwen Film and Television and Xinli Media, this TV series set a new high in the ratings of a set of golden files on CCTV in nearly 8 years, ranking first in the list of the whole network and receiving wide acclaim. The original work of this TV series is Liang Xiaosheng's novel of the same name that won the Mao Dun Literature Award, the director and chief producer have directed "The Name of the People", the actors are Lei Jiayin, Ding Yongdai and a number of mesozoic, old drama bones, from the script to the shooting to the acting skills have a high-quality guarantee, and finally achieved great success in ratings.

Second, there must be "quantity".

A mature content industrial production system needs to achieve stable output and sustainable development through standardized process management.

In 2021, the biggest dark horse in the Spring Festival file is "Hello, Li Huanying", with a box office of 5.4 billion yuan, ranking first in the Spring Festival file. In 2022, "This Killer Is Not Too Calm" successfully broke through in the fiercely competitive schedule, with a box office of 2.6 billion yuan, ranking second in the Box Office of the Spring Festival in 2022. Behind these two high-quality films are the figure of reading group.

In addition, 2021's "Son-in-law", "Douluo Continent" and "Rebel" are all film and television works with double word-of-mouth ratings. Time to pull back to 2020, the TV series "Qing Yu Nian" adapted by the Reading IP has created a wave of collective improvement for the whole people. The stable output explosion reflects the stable and solid industrialization foundation of the Reading IP ecological chain.

In addition to the film and television works mentioned above, in 2021, in the fields of comics and animation, Reading Group has also achieved multi-point flowering and frequent production of high-quality products.

For example, once the comic strip "Da Bong Da Ren" was launched, it set a good record of more than 100,000 collections in 44 hours. This also realizes the systematic and efficient completion of visual transformation of literary IP, establishes a character image, and lays a solid foundation for the subsequent animation, film and television and licensing business.

In the field of animation, in 2021, Reading Text launched two new works of "Breaking the Sky", including "The Fourth Season of The Breaking of the Sky" and the special article "Three Years Of Covenant", which have achieved more than 4 billion views. Up to now, the total number of broadcasts of the "Breaking the Sky" series of animations has exceeded the 10 billion mark. In addition, many high-quality animations such as "Star Change", "The King Spares His Life", and "The Re-Marriage of the Cute Wife Eater" also have outstanding performances. In 2021, among the top 10 new animations in Tencent Video, 5 are adapted from the IP of Reading Text.

It can be seen that Yuwen Group has stronger EXPERIENCE in IP boutique development and finished products in various fields. In the process of implementing the "Big Reading" strategy, Reading Group has gone deep into the industrial chain, controlled the quality of IP development and operation, consolidated the foundation of the IP industry chain, and promoted the gradual maturity of the IP development industrialization system, so that the "IP ecological chain" is no longer an empty and illusory word, but a practical strategy that takes root in a down-to-earth manner.

Paid free collaborative development, IP creation is constantly living water

According to the financial report, in 2021, the online business of Reading Text showed a good growth trend, and the overall revenue reached 5.31 billion yuan, an increase of 9.6% year-on-year.

Among the many content platforms, the uniqueness of reading is that it covers a sufficiently rich readership and the platform is highly inclusive of content. This creates a virtuous circle between authors and readers, forming an endless content ecosystem of online literature: niche themes can get the attention of readers who prefer the theme through the mining and support of the platform, and obtain rich returns through payment or copyright operation; in turn, rich and diverse themes and high-quality content attract more readers to stay on the platform and improve the ceiling of platform content payment.

For example, science fiction themes are niche in online literature and are difficult to develop on most content platforms. However, according to the "2021 Science Fiction Network New Trend Report", the science fiction category has been regarded as a super category of the reading platform, and it has steadily occupied the TOP5. In addition, the science fiction novel "We Live in Nanjing", which was read at the beginning of reading, won the Galaxy Award, the authoritative award for science fiction.

At present, the online literature theme of Reading Group covers more than 200 content categories, based on the diversified supply and fine operation of content themes, the development of online business has realized the two-wheel drive of free and paid reading, which further expands reading users and enriches the income of writers. In 2021, the average monthly paid users of the reading platform reached 8.7 million, and the average monthly revenue per paying user increased by 14.4% year-on-year to 39.7 yuan, and the willingness of users to pay for high-quality content was further strengthened. In December 2021, the DAU of free content also reached about 15 million people, an increase of 50% year-on-year.

In addition, in 2021, 700,000 new writers and 1.2 million works were added to the reading group platform, and the number of new words in the whole year exceeded 36 billion. The data shows that among the new writers who read in 2021, the post-95 generation accounts for up to 80%; in the list of "Twelve Heavenly Kings" of online literature newcomer writers in 2021, the post-95s occupy half of the country; the number of middle-waist writers who read articles has increased by more than 30%. At the same time, the content incubation mechanism, community operation strategy and recommendation efficiency have been continuously optimized, and the online reading MAU reached 250 million in 2021, an increase of 8.6% year-on-year, and a net increase of 19.7 million, reaching a record high.

The steady growth of online business has provided a steady stream of content living water for the development of the "Big Reading" IP ecological chain, and IP can form a feedback effect on the original novel when it reaches a wider group, further consolidating the foundation of the online literature business, and the two form a virtuous circle.

This year, reading for the whole people was written into the government work report for the ninth time, and especially proposed to prosper the development of news and publication, radio, film and television, literature and art, and expand the supply of high-quality cultural products and services. From the perspective of financial figures, Yuwen has seen significant commercial returns in the first step of building the IP ecosystem, and the next step undoubtedly requires more patience and long-term investment in high-quality IP.

China's film box office has grown into a huge market of the same size (more than 10 billion US dollars) as the North American box office market, and only a huge market can brew an IP series with big investment and big returns. With the improvement of the epidemic situation and the steady development of the economy, the proportion of cultural industries (including online literature, animation, film and television, games, etc.) in China's industrial economy will be more enhanced in the future. Yuwen Group has a complete IP industry chain and rich experience in IP development and operation, and will benefit the most from market growth.

Looking further ahead, As the world's second largest economic entity, China should have a matching cultural industry in the future and exert its cultural influence in the world. It is also worth imagining whether the Reading Group, which is in the layout of overseas markets, can carry the banner of China's cultural industry in the future.