Per reporter: Ding Zhouyang Zhu Peng Per reporter: Yang Xia
At the early morning topic selection meeting, in front of a group of young editors, Lu Jinbo read an excerpt from a work by a certain "internet god". Wordy, pale, full of holes, I can't read 800 words.
"It turns out that bad words don't stand up to reading aloud." Lu Jinbo spent another hour educating employees on value, "Never do this kind of insult to Chinese, no matter how much money it can make, we can't touch it." ”
Interestingly, as the founder and chairman of Guomai Culture (301052, SZ), Lu Jinbo himself was also an online writer. As early as 1997, when the number of Chinese netizens was only a few hundred thousand, Lu Jinbo used the pen name "Li Xunhuan" to break into the Internet Wenjiang lake.
In those short and hot years of literature, "Under the Banyan Tree" was a website that literary enthusiasts would log on to as soon as they started up, and sprout magazine and the New Concept Essay Contest occupied the youth literature experience of the post-80s. Han Han, Cai Jun, Baby Annie... These writers who came out from under the banyan tree still have a place in the Chinese literary scene.
This short five-year experience of "the first generation of Internet celebrity writers" also laid the career trajectory of Lu Jinbo. When the number of Chinese netizens grew exponentially and talented and imaginative online writers appeared intensively, Lu Jinbo realized that his writing level was not enough to continue on the path of writers. In 2002, he transformed himself into a publisher and became the driving force behind the author, another twenty years.
In 2021, the private book company Guomai Culture A-share listing, Han Han, Yi Zhongtian, Feng Tang and other writers who deeply cooperated with Lu Jinbo shared the listing dividends of Guomai Culture as shareholders of the company. On April 7 this year, Guomai Culture released an indicative announcement on the loss of investment in Han Han's film "Four Seas", which was also the first time that it lost money in Han Han's film.
"The influence of famous authors is a 'double-edged sword.'" At the end of April, on the occasion of the disclosure of The First Quarterly Report of Guomai Culture in 2022, Lu Jinbo was interviewed by the "Daily Economic News" reporter (hereinafter referred to as NBD) WeChat video interview, and for the first time publicly responded to various questions about the benefits of stars, the capital wrapped in online IP, and whether the publishing industry is declining.
On the fourth day of the dialogue with Lu Jinbo, Guomai Culture disclosed the first quarterly report of 2022. After calculation, "Four Seas" eventually lost 8.2 million yuan, which is also an important reason why its profit in the first quarter of this year fell by 43.2% compared with the same period last year. The uncertainty associated with diversified business is striking. After the announcement, the share price of Guomai Culture fell continuously until April 17, and then the shock rose. As of the close of trading on May 12, the share price of Guomai Culture was 35.96 yuan, an increase of 0.36% on the day.
Lu Jinbo, founder and chairman of Guomai Culture, provided by the interviewee
Publishing is a good business And the earnings period after each product comes out is extremely long
The times create heroes, and opportunities take care of "stupid children". Lu Jinbo was the lucky one to get the fast lane number plate under the rolling current of that big era. In 2021, when the film and television listed companies were almost frozen, the fruit and wheat culture, which was established for only 9 years, successfully knocked on the door of A-shares. The publishing industry, which seems to be "sunset and not making money", silently rewards those long-distance runners.
NBD: You were a first-generation influencer writer, why did you suddenly drop the writing transition at the peak of publishing behind the scenes?
Lu Jinbo: If there is any merit in me as a person, there is a word called "self-knowledge." I saw very calmly the fact that my talent was not enough to go down the path of writing.
It happened that in 2002, the banyan tree website of which I was the editor-in-chief Chinese was acquired by a media publishing giant, which gave me a chance to do publishing. In addition, I studied economics in college and was also interested in business, so at the age of 27, I happily published a "stop writing" "Ink and Ink Thanks", and I never had any nostalgia since then, and I was at ease to become a publisher.
NBD: In the ten years from the transition to publisher to the founding of Fruit Wheat, what do you most want to share with us?
Lu Jinbo: My first 10 years in publishing were "apprenticeships", I experienced two failures, and from 2002 to 2008, I worked for the established company Bertelsmann, which did not do well. From 2008 to 2012, I participated in the establishment of Wanrong Books, and the dismal performance hit me very hard, I buried myself in the book, read hundreds of books a year, and re-found a sense of faith in the publishing industry.
In the third year of life, Matrix Partners and PwC Capital invested 20 million yuan, and I led a team of 40 people to create a fruit and wheat culture with a little resource and a set of methodologies. On the surface, it seems that a 36-year-old who has found some money has started a business, but in fact, he is a person who has sorted out the chaotic past and then re-embarked on the road.
I think that to work deep in an industry, you have to be an apprentice for at least 10 years. Of course, geniuses like Musk don't need it, but for those of us with an IQ of about 100, ten thousand hours of learning the rules is very necessary.
NBD: Guomai Culture received giant financing in the 5 years of its establishment and went public in 2021. Why is the road to capital so smooth?
Lu Jinbo: In 2017, Guomai was already a very healthy small company, and the capital market environment was relatively good at that time, so "big money" like IDG felt that it was possible to try the cultural track.
As for Boehner, I think we invested in a "risk hedging model" in mind. Film and publishing are completely opposite, the cost of film projects is often hundreds of millions of yuan, and in the end it is possible to make a big profit or lose a bottom. The investment scale of each project in the publishing industry is very small, millions or even hundreds of thousands of yuan, but the income period after each product comes out is extremely long. For example, in 2012, we produced "The Little Prince" and Mr. Yi Zhongtian's book, and by 2021, its sales will be exactly the same as when it was first published. So I've always thought that publishing is a good business, it has a low level of risk and a long cumulative earnings period.
In the long run, the social image of the publishing industry has always been very good, and it is a particularly correct and even glorious thing to persuade others to read at any time and earn seven or eight yuan. I am also very optimistic about China's publishing industry, cultural consumption is a priority in the middle-income stage, and the publishing market will accelerate as the material living standards of the masses improve. In 2021, the listing of state-owned enterprises such as Dragon Edition Media, Zhejiang Edition Media, and private enterprise Reader Culture, Guomai Culture and other publishing companies is a testament to this.
Source: Company Announcement Liu Hongmei Mapping
Investing in Han Han's film is the first loss Stock cannot bind star authors
In the 2021 financial report, the annual revenue of Guomai Culture was 461 million yuan, an increase of 30% over the previous year, and the net profit increased by 40% year-on-year. However, in the first quarter of 2022, the profit of Guomai Culture fell by 43.2% from the same period last year, one of the reasons was the loss of investment in Han Han's film "Four Seas". Han Han's mother is the eighth largest shareholder of Guomai Culture, and Han Han is also a partner of Lu Jinbo himself and a businessman and friend for nearly 20 years, and various factors are superimposed, and once the announcement of the loss of Guomai Culture's investment in movies was issued, the stock price fell in response. In the capital market, star shareholders have always been a "double-edged sword".
NBD: The first three films led by Han Han, "After Forever", "Riding the Wind and Waves", and "Flying Life", Guomai Culture have all participated in the investment, and they have also made money for the company before, what do you think of the loss of this investment in "Four Seas"?
Lu Jinbo: The cost of "Four Seas" is 260 million yuan, so its box office should reach at least three times the cost, that is, about 800 million yuan, so with its box office of less than 550 million yuan, all of our investors should lose about 50%. Guomai invested 13 million yuan and lost 8.2 million yuan.
This is the first loss of Han Han's film. For Guomai, we have never regarded investing in movies as the main business of the company, and we have no plans to continue to invest in movies in the short term, so I don't think there is any real impact other than this one-time non-recurring profit and loss.
For Han Han, I think he is a very strong learning ability, he has not experienced commercial failure before, which is unscientific, so from a personal point of view, I am still very much looking forward to his experience through this experience, but also look forward to his new works in the future.
NBD: Han Han is not the only star author who is closely associated with guoma. Star authors such as Yi Zhongtian, Feng Tang, and Zhang Haochen all directly or indirectly hold shares in Guomai. What is your response to this form of equity partnership with well-known creators that has previously been controversial?
Lu Jinbo: In Guomai Culture, the equity cooperation of creators and the business cooperation of the company are two independent worlds. That said, we never tried to deepen the binding by giving them great returns through equity cooperation. In the C round of financing of Guomai Culture, they all accepted the equity of Guomai Culture at the same market price as IDG, Zhejiang Media and other institutional shareholders, without any discount. The only way we can maintain long-term relationships with writers is to provide better publishing services, not to give them stock.
NBD: So equity can't bind creators?
Lu Jinbo: If you are a star, I should buy you 10 million yuan of services, now I only give you 3 million yuan, the other part to give you company stock. Then in fact, the company has inflated the profit of 7 million yuan, the company's stock price has gone up, and the star has obtained income through the stock price, and I think this so-called "equity binding" is cheating. We are buying with the author at a 100% fair price, and the advance payment and royalties should be paid as they should be.
NBD: What is the impact of these star shareholders on the culture of fruit and wheat?
Lu Jinbo: In the listing stage of Guomai culture, we are very careful to avoid using the advantages of their influence to stand for the company. Logically speaking, they are like other natural person shareholders, on the one hand, the shareholding ratio is indeed very small, for example, Yi Zhongtian's shareholding ratio is only about two thousandths, which has no substantial impact on the company's operation and does not have any other rights. In the secondary market, their influence is also a "double-edged sword".
Bestseller Zero Royalty Making money is no longer dependent on "Easy Zhongtian"
More than ten years ago, Lu Jinbo was the "catfish" that stirred up the price war in the publishing industry, he signed Anne Baby's "Lotus" with a remuneration of 2 million yuan, and Wang Shuo's remuneration was as high as 3 US dollars / word, which was "sky-high price" at that time. When new books are on the shelves, they have the courage to reduce the unit price of new books and sell them for small profits. At a time when the copyright of famous writers and the IP of online texts are becoming more and more expensive, the best-selling book in Guomai Culture has only spent $3,000 to buy the copyright.
NBD: As mentioned earlier, Guomai Culture does not rely on equity, but on service and fair market price. So, when the writer's "value" soars, how should the company grasp the right to speak?
Lu Jinbo: We didn't do well in the past because of innovation, so everyone went to grab Liu Cixin, Yu Hua, and Keigo Higashino. You pay 5 million, I pay 10 million, he pays 20 million, until a publisher can't make money, take it just to expand market share.
But the few books that Guomai Culture has made the most money in the past few years are public books without copyright fees. In 2016, Guomai Culture launched "Reading Poems to Children" consisted of 100 poems by 100 Chinese and foreign poets, and most of the poetry copyrights included were public editions, and the most obvious expense was to find an illustrator to design and illustrate the book. We have sold 1.2 million copies of this book and made $20 million. If I invest 100,000 yuan and earn 20 million yuan, then why do I have to fight for the copyright of famous writers?
In addition, in 2020, we also planned to release the bestseller "Mr. Toad Goes to the Psychiatrist" in the publishing industry in 2021, and has sold 2.5 million copies by the end of 2021. We bought the Chinese rights to this Primer on Counselling at the National Level for $3,000. We are keenly aware of the rising demand for psychology, so now in the psychology category books, half of the top 10 best-seller lists are produced by Guomai Culture. The psychology books produced by Gomak Culture also include Adler's books, Karen Horney's "Neurotic Personality in Our Time", "Maybe You Should Find Someone to Talk To", "Hold the Stick Yourself", the cost is thousands of dollars, and the profits are more than one million yuan.
So when we have the ability to discover the market and make it bigger, we are not so dependent on Yi Zhongtian, Han Han and Feng Tang. The sales of their works in the fruit and wheat culture once accounted for more than 40%, but today it may add up to about 5%.
NBD: The price of online literature IP was once very high, has this bothered you?
Lu Jinbo: I have set off many rounds of price wars around 2005, raising the author's copyright fee from hundreds of thousands of yuan to millions of yuan, and when I am millions of yuan, I will consider how to avoid risks, calculate the input-output ratio and stop loss line. The fruit wheat culture has indeed increased the remuneration of translators and illustrators, because it was too low before.
But the matter of buying and reselling online literary IP, Guomai culture has never participated. There must be a lot of hot money outside, there must be someone who has made money, lost money, and even a lengthy network article that does not work through can sell tens of millions of yuan when it changes hands, which is completely caused by the short-term price fluctuations caused by the capital bubble, which has disappeared today.
So I think that as long as you insist on doing valuable things, the probability of making money is still quite high. You can't navigate the part above the waves, and we still look at the real trends in the sea.
Never thought about retirement, never thought about changing careers
In ancient and modern China and abroad, the relationship between culture and capital has always attracted much attention. Lu Jinbo, a "cultural businessman" who has gone through the road of entrepreneurship, financing and listing, believes in the market economy, and although he often can't help but denounce some of the so-called "biographies of big names" and "big gods of online literature" as insults to the Chinese language, he still believes that a healthy publishing ecology should give space for the development of various categories, including "online texts" that he does not like.
NBD: What guomai culture does, we say that it is a content business, a cultural business, what do you think about the relationship between culture and capital?
Lu Jinbo: I think for a cultural company, money is supervision, so there should be 7 cents of money, but not 10 cents of money. Suppose you need 500 million yuan, you take 350 million yuan from investors, which is 7 cents of money, and if you take this money, you really have to give people an annualized return of more than 10%. Many companies have too much money and their brains burn out.
NBD: People are worried that the Internet and short videos will reduce book sales, but how should Guomai Culture claim to be a publishing company driven by Internet innovation?
Lu Jinbo: The last time I met a big financier in the United States, I told him that the biggest distributor of books we sell now is no longer a wholesaler, nor an e-commerce platform, but ourselves. He said you have two or three hundred employees, how to sell? I said we have more than 70 Internet product accounts, there are 69 million Internet users, we sent a 60-second short video on a social media account of Guomai Culture to hang a shopping cart, can sell 75,000 books, he felt that I was not good at English, because it is impossible to say so much, I confirmed to him again that it is 75,000 copies, screenshots to him, is really so much, 75,000 copies, not 750 books. Most of the time we do well Internet accounts can sell 5,000 copies of a link, while in the Chinese publishing industry, 5,000 copies is actually a breakeven point.
He said, then don't you have to make money on your own traffic for any book, I said yes, he was very shocked, and asked me to call for another hour. The core strategy of Guomai Culture now is internet-driven new publishing, and we have at least 52 Internet accounts with more than 100,000 followers. The 69 million Internet users are private domain traffic, which has contributed 14% of our sales.
China's publishing industry is still very fragmented, the market share of fruit and wheat is just over 1%, the share of New Classic and CITIC is also about 2%, and the share of our public publishing listed companies adds up to about 10%. The industry itself is growing, the concentration is increasing, and coupled with the innovation of business models, I am still very optimistic about the future of the publishing industry.
NBD: At present, book distribution and publishing account for more than 90% of the company's main business, what will be the future business composition?
Lu Jinbo: In the long run, it will be diversified, but it must not be considered in three years. We are now in the stage of developing from a small content-focused company to a medium-sized company with "publishing + Internet new business model". First of all, take the clear path and take it steadily. There are ideal ambitions for the future, but there is no rush.
NBD: Next year is your fourth life year, and you personally have no financial pressure, have you ever thought about your future work or life arrangements?
Lu Jinbo: This goes back to the first question at the beginning of our interview, my self-knowledge, I know that I can't do anything else. I like to read, I've been doing it for 20 years, and I'm going to do it for another 18 years, when I was 65 years old and could take a back seat.
I now exercise 6 days a week, including running by the river, plus gym, Pilates, football, table tennis, and feel more physical than I was when I was 24. So I think the story is just beginning, never thought about retirement, never thought about changing careers.
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