Film and television shooting
In its heyday, the Huanrui Century (000892. SZ) has Yang Mi, Yang Zi, Yang Yang, Li Yifeng, Jia Nailiang and He Shengming and other stars such as "big names", and has successively produced famous TV series such as "Qingyunzhi", "Gong Suo Xin Yu", "Ancient Sword Qitan" and "Glory of the Tang Dynasty", and once "dominated the screen" costume drama market, which is a veritable film and television empire.
Today, the imperial map of the Huanrui century is disintegrating. The company's "top" stars have left, and the revenue scale of the artist agency business has dropped sharply; The company has lost more than 1.6 billion yuan for three consecutive years, its film and television dramas have been withdrawn, qualified opinions have been issued in financial reports, financial fraud has been issued for three consecutive years, and cases have been filed and investigated, and recently it has been inquired by regulators again.
The ups and downs of the company's fate are not unrelated to industry changes and management decisions. From the perspective of the industry, since 2012, the trend of "limited ancient" has gradually emerged. Huanrui Century has stuck to the "comfort zone of costume dramas", resulting in a backlog of many ancient theme TV series such as "The World under Chang'an", "The Apocalypse of the Gods", "Mountains and Rivers Bright Moon" and so on, and even encountered "film withdrawal doors", etc., huge bad debt provisions, inventory price declines, etc. Followed, and the company's performance was lost again and again. On related issues such as when "The World Chang'an" will be broadcast, the Titanium Media APP sent an interview letter to Huanrui Century, but as of press time, it has not received a response.
Gao Xishun, a young director and screenwriter and online writer, told the Titanium Media APP that the current restriction trend on costume dramas still exists, including restrictions on the theme of fantasy costume dramas. From the perspective of industry trends, there are currently more film and television dramas that are biased towards realistic themes, such as Huace Film and Television (300133. SZ) and other film and television production companies currently have a trend of transformation and development towards "network short dramas".
The "divine drama" has not been broadcast for four years, and the huge receivables have been fully accrued
With a loss of 551 million yuan in 2019, a loss of 785 million yuan in 2020, and a loss of 334 million yuan in 2021, Huanrui Century has made huge losses for three consecutive years. Careful review, the company's annual losses are not unrelated to the provision for bad debts, the provision for inventory price decline, etc., and the deep logic behind it is closely related to the company's adherence to the "costume drama" market.
Recently, in the Inquiry Letter of the Shenzhen Stock Exchange on the annual report of Huanrui Century, it once again involved issues such as the accrual of receivables of "Chang'an under the Heavens". It is reported that the company's financial report in 2020 was issued a non-standard audit opinion, and the basis for the reservation opinion was that "Tianxia Chang'an" was delayed in broadcasting, resulting in the inability to judge the impact of the recoverability of accounts receivable of 506 million yuan, and it was impossible to determine whether it was necessary to adjust the impairment provision for the accounts receivable related to the show. However, in the 2021 annual report, the accounting firm said that the above-mentioned "relevant matters involved in the reservation have been eliminated", so it was questioned by the Shenzhen Stock Exchange.
It is reported that "Chang'an under heaven" is adapted from a novel, telling the story of the Li Tang Dynasty, which rose up in the struggle between the masses and the melee of the door valve, step by step to the prosperity of Zhenguan. Directed by Lian Yiming, written by Dong Zhe, and starring Zhang Hanyu, Qin Junjie, Li Xuejian, etc., the drama is a costume drama created by Huanrui Century with huge investment, and as of the end of 2020, the investment amount of the drama is as high as 360 million yuan.
The amount invested in "The World chang'an" comes from the company's announcement
As early as 2017, "Tianxia Chang'an" obtained a distribution license, and in 2017, the revenue of "Tianxia Chang'an" reached 567 million yuan, accounting for 36.18% of the main revenue of the current period, and the corresponding revenue was the sales revenue of the show to todayo Hi-Le Film, Tencent, iQiyi and Youku. Who ever expected that the "World Chang'an", which was originally scheduled for CCTV eight sets, was temporarily called to stop and withdraw. In the following years, a huge amount of accounts receivable was fully accrued.
The "World Chang'an", which was scheduled to be broadcast in 2018, has not been broadcast so far, and the reasons behind it have been speculated by the outside world. "The general film and television company drama backlog has not been broadcast for many years, there are many reasons, may not have been reviewed, may not have found a good platform or the price between the platform has not been negotiated, the current distribution strategy of TV series is mostly 'Taiwan network linkage' broadcast, first choose satellite TV, and then with Tencent, Youku and iQiyi and other network video platforms, may also be exclusive network broadcast, but often satellite TV is not well negotiated, network platform is also difficult to talk about." In addition, the cast, content problems, etc. may also be the reason for the delay in broadcasting. Gao Xishun told the titanium media APP.
As for the reasons for the delay in broadcasting, the company only said that "the factor of the launch schedule". Zhao Yucheng, who was the company's president at the time, responded at the 2018 annual shareholders' meeting that the reason for the withdrawal was "not because of the content, but because of the technical arrangement".
"Dramas" such as the backlog of plays and the withdrawal of films have been staged one after another, and the decision-making level cannot escape responsibility
The above-mentioned "Tianxia Chang'an" has not been broadcast for four years, and the market has also speculated that it is related to the "ancient restriction order". Titanium media learned from the above-mentioned industry insiders that since 2012, the trend of restricting costume dramas has gradually emerged, until the strongest "ancient restriction order" was released in 2019, and many costume dramas had to be postponed, and even problems such as not being able to pass the review appeared. At the same time, the person said that the above restrictions are mainly restrictions on the subject matter, including themes such as palace fighting dramas, in addition, the highly repetitive themes such as the Tang Dynasty have also been restricted to a certain extent.
In the above context, the management of Huanrui Century still spends a lot of money to create a costume drama, and the loss caused by the delay in broadcasting "The World Chang'an" is difficult to say that it has nothing to do with the company's decision-making strategy. For the issue of when "Tianxia Chang'an" will be broadcast, the titanium media APP contact company has not yet received a response, but the company's executive Zhao Yucheng has publicly stated that the unaired "Tianxia Chang'an" has nothing to do with the plot.
In fact, not only "The World Under Chang'an", the company's other costume drama "The Apocalypse of the Fengshen Gods", which cost a huge amount of 119 million yuan to create, was also prepared for a huge amount of bad debts, which was created by Huanrui and Shanghai New Culture Media. The company once admitted in the reply to the 2020 annual report inquiry letter: "The TV series "The Apocalypse of the Gods" cannot be broadcast due to policy reasons, and bad debts of 214 million yuan are calculated according to the probability of withdrawal and broadcast. ”
The amount of inventory decline in "Mountains and Rivers Bright Moon" comes from the company's announcement
The house leak is partial to the overnight rain, and the "Mountains and Rivers Bright Moon" starring the company's executive producer and Feng Shaofeng has also recently had problems, and the price reduction reserve exceeds 200 million yuan, resulting in a huge loss of 334 million yuan in 2021. Titanium media APP learned that "Mountains and Rivers Bright Moon" was invested in 2017, started in March 2018, and finished in August of the same year, with a total cost of up to 397 million yuan, and it took nearly four years after the killing to finally obtain a distribution license on April 2, 2022, due to changes in the broadcast environment and other factors, the actual sales price of the show deviated from the previous quotation. The company estimates that the issue price of "Shan He Mingyue" is about 400,000 yuan / set, and it is expected that the total sales revenue of all channels will be only 163 million yuan, and the difference with the cost will be as high as 233 million yuan.
At present, Huanrui Century has successively "planted his head" in costume dramas, which is really difficult to say prudent decision-making. An industry insider admitted to the titanium media APP that compared with the reality of the theme of the show, the cost of costume drama is quite high, generally over 100 million, so it requires film and television producers to make a full range of considerations before making decisions.
The themes involved in the company's cooperation with Ali are derived from the company's annual report
In the short and medium term, the broadcast of Huanrui's TV series may be difficult to say smooth. The above-mentioned industry insiders told the titanium media APP that the current trend of restricting costume dramas still exists, and there is no shortage of restrictions on themes such as fantasy costume dramas, and the titanium media APP notes that in the nearly 600 million yuan contract between Huanrui Century and Alibaba, there is no shortage of costume fairy dramas.
In May this year, the notice of the national filming and production of TV dramas for the record and publicity came from the State Administration of Radio, Film and Television
For the trend of film and television drama themes, Gao Xishun told the titanium media APP that the current general trend is still based on realistic themes. According to the latest data released by the State Administration of Radio, Film and Television on the Record of "National Filming and Production of TV Dramas", there were only 3 ancient themes and 110 episodes in May this year, accounting for 7.69% and 8.38% of the total number of public announcements, of which 2 ancient martial arts themes were 2 70 episodes, and 1 ancient other themes were 40 episodes; There are 24 contemporary themes and 777 episodes, accounting for 61.54% and 59.22% of the total number of public announcements, respectively. Overall, in the first 5 months of this year, the number of ancient theme TV dramas per month was below 3, accounting for single digits, and even in January this year, the value was 0. In contrast, the film and television dramas being created in Huanrui Century are still not in the minority of ancient themes.
The genre of film and television dramas created by the company is derived from the company's annual report
In contrast, unlike Huanrui Century, Huace Film and Television, Ciwen Media (002343. SZ) and other film and television companies focus on modern themes, and of the 7 TV series that will be launched in 2021 and are in post-production, 5 are modern and contemporary TV series, including Tan Songyun's "Toward the Wind"; Among the projects that Ciwen Media expects to obtain a distribution license, complete the production or start up tv drama in 2022, 4 of the 5 projects are modern or modern themes. Huanrui Century's obsession with costume dramas is also related to the fact that the IP resources owned by the company are mostly ancient themes.
It was fraudulent for four consecutive years, and the management was full of problems
In addition to the huge losses caused by improper control of film and television themes, the management of Huanrui Century is also full of problems in terms of financial control and information disclosure.
"Listing for three years and four consecutive years of fraud", this is a high summary of the market's amazing financial fraud for many years in a row. In July 2017, the notorious film and television company was investigated by the China Securities Regulatory Commission, and after a two-year investigation, the fact of financial fraud surfaced.
According to the announcement of Huanrui Century, from 2013 to 2016, Huanrui Film and Television, a wholly-owned subsidiary of the company, had "accounting errors" such as early recognition of operating income, delay in the provision for bad debts of receivables, over-provision for bad debts in receivables, reduction of payables, and increase of operating income.
Among them, in many film and television dramas such as "Ancient Sword Qitan", "Love in the Micro Era", and "Four Famous Arrests of Teenagers", problems such as early recognition of revenue and early effective time of the transfer of TV drama broadcast rights are not in line with accounting standards. As a result, there is a large discrepancy between the company's real results from 2013 to 2017 and the publicly disclosed results.
After the above-mentioned investigation results were announced, Chen Yuan, the company's then chairman and actual controller, and his wife Zhong Junyan were both punished by Dingge and warned, and Huanrui Century was also fined 600,000 yuan by Dingge, in addition to Zhao Yucheng, Zhang Rui, Wang Xianmin and other company executives, directors and supervisors, etc. were punished and fined high.
In the face of various problems, Huanrui Century is also trying to save itself. In September 2021, the actual controller of the company was changed from Chen Yuan and Zhong Junyan to Zhao Yucheng, and the chairman of the company was also changed to Zhao Yucheng. In this change, Chen Yuan and his wife cashed out a total of 1.08 billion yuan through equity transfer.
It is worth mentioning that Huanrui Century started from Hengdian Film and Television City, which was named "Sanhe Film and Television" at that time, and was established in 2006. According to public information, from the beginning of its birth to the time of the share reform in 2011, the company has been 100% controlled by Chen Yuan and Zhong Junyan, and it was a veritable "mom-and-pop shop" at the beginning of its birth; From the 2011 stock reform to the successful backdoor listing of "Star America United" in 2016, according to incomplete statistics, Chen Yuan and his wife cashed out a total of more than 300 million yuan through equity transfer.
A number of senior executives of the company were punished, from the company's announcement
Now that the management has changed, after the new chairman and actual controller Zhao Yucheng takes office, will Huanrui Century usher in changes? The answer is hard to say for sure. According to the data, before Zhao Yucheng took office this time, he was also one of the executives of Huanrui Century, who served as the president and vice chairman of the company, and was also punished in the "financial fraud case"; At present, in addition to the position of chairman, there have been no major changes at the company's senior management level.
Top stars such as Yang Zi have left one after another, and the artist agency business has been hit hard
The departure of the company's "loyal" artists may also reflect the disapproval of the company's management. In November last year, shortly after the company's chairman Zhao Yucheng took office, Yang Ziguan announced that the 6-year contract with Huanrui Century expired, and the company's only "top" star also left.
Yang Zi's departure may cause a heavy blow to the company's artist management business. According to the company's semi-annual report, in the first half of 2021, the artist agent (artist one) achieved revenue of 20.3926 million yuan, accounting for 33.08% of the current revenue; In the first half of 2020, the revenue of artist agent (artist I) was 14.2971 million yuan, accounting for 56.42% of the main business in the current period; Since Yang Zi was the most popular star during the company's period, the industry generally believes that "Artist One" is Yang Zi.
Yang Zi's official announcement of the expiration of the contract with Huanrui comes from Yang Zi Weibo
In fact, before Yang Zi, many signed stars had already left. Among them, there are many head traffic stars such as Yang Mi, Liu Kaiwei, Li Yifeng, Jia Nailiang and He Shengming. As of the end of 2021, the company only has more than 20 signed artists such as Ren Jialun, Cheng Yi, Li Xiaoran, Zhang Yuxi, Ying'er, Hou Mengyao, Yuan Bingyan, Zhang Rui, Liu Xueyi, He Zhonghua, etc., which is a sharp decrease of 20 compared with more than 40 signed artists at the end of 2020.
The successive departures of artists have had a great impact on the company. In 2021, the company's artist agency business revenue was only 107 million yuan, compared with the peak of 2018 artist agency business revenue of 211 million yuan, almost halved. However, the company's relevant people still insisted in a previous interview: "The company's dependence on individual artists is already very low, so it will not affect the company's performance." ”
Overall, looking forward to the future development trend of the film and television drama industry, the field of television dramas is still optimistic. Zhang Zhuran, chief researcher of the Jane Fund, told the Titanium Media APP: "During the epidemic home isolation period, chasing dramas has become one of the necessary options for many people's daily lives, and the tv drama segmentation field is currently the best choice to avoid the physical space of the cinema industry, and all kinds of Internet movies have their own IP traffic, for specific groups, the future development prospects will be significantly better." ”
In terms of subdivision, Gao Xishun told the titanium media APP that Huace Film and Television is transforming into a "network short drama" direction. Titanium Media APP learned that Fu Binxing, president of Huace Film and Television, publicly stated at this year's performance meeting that the company's "short drama" project is underway and is expected to be put into production this year. In the 2021 annual report, Huace Film and Television also made it clear that with the strengthening of intellectual property protection, the development of short videos and film and television innovation, film and television copyright operations have gradually become a new highlight of the company's performance growth. (First published by Titanium Media, author| Zhang Haixia, editor| Cui Wenguan)