Without Feng Xiaogang, Huayi felt "the world is hot and cold"

The former film and television giant Huayi Brothers seems to be "thinning the west mountain".

A few days ago, Huayi Brothers disclosed the semi-annual report, the half-year operating income was 212 million yuan, down 63.4% year-on-year; the loss was 192 million yuan, down 281.82% year-on-year, compared with a profit of 106 million yuan in the same period last year. Huayi Brothers explained that the decline in revenue was mainly due to the change in the scope of the merger during the reporting period compared with the same period of the previous year, as well as the decrease in the film's release revenue and box office.

Affected by the epidemic, the film industry as a whole is relatively tight. Wang Zhonglei, co-founder and CEO of Huayi Brothers, once said at the opening forum of the 12th Beijing International Film Festival, "Due to the three-year epidemic in the film market, the decline of capital and policy adjustments, the situation of filmmakers in the past three years is indeed very difficult. According to Tuopu data, less than 40 films have been released and fixed in the summer of 2022, down more than 60% from 2021.

But on the other hand, the film industry has begun to recover. Lighthouse Professional Edition shows that as of now, the box office data of the summer slot in 2022 is 9.017 billion, far more than last year's 7.381 billion yuan. This year's summer program includes high-grossing films such as "Life Events" by Chinese films, "Lonely Moon" by Happy Twist, and "New God List: Yang Jian" by Light Media, as well as high-discussion films such as "Hidden in the Dust and Smoke". Chen Jin, an analyst at The Lighthouse Professional Edition, told the media that "the operating rate of most cities has basically recovered to last year's level, and the overall recovery is currently good." ”

Huayi Brothers not only disappeared in this summer file, but also missed this year's Spring Festival file.

Previously, the secretary of huayi brothers revealed in response to investors in May that the Hollywood science fiction disaster blockbuster "Moonfall" directed by Roland Emmerich had been released in March, and Guo Fan's "The Wandering Earth 2", Lu Chuan's "749 Bureau" and Zhou Xingchi's "Mermaid 2" had entered the post-production stage. "Moonfall" was co-produced by Huayi and received only 5 points of evaluation on Douban.

In addition to "no film to go on", Huayi's own development is also in trouble.

On the one hand, Huayi is being abandoned by capital. From August 2 to 4, Tencent, a shareholder of the Company, changed its shareholding ratio by more than 1% through block trading and participation in the lending of securities through transfer financing, and the shareholding ratio decreased from 7.94% to 4.99%. If the shareholding ratio is less than 5%, Tencent's subsequent reduction will be unrestricted. In the eyes of the outside world, this is a signal for Tencent to leave the market.

On the other hand, Huayi Brothers Chairman Wang Zhongjun, Executive President Wang Zhonglei and Huayi Brothers have been punished for repeated violations. In July 2022, Beijing Huayi Brothers Times Culture Brokerage Co., Ltd. was included in the list of abnormal operations by the Beijing Chaoyang District Market Supervision and Administration Bureau because it could not be contacted through its registered residence or business premises. A few days before that, Huayi Brothers announced that Wang Zhongjun Wang Zhonglei's total shares of nearly 9 million were judicially frozen.

At the beginning of June 2022, the Wang Zhongjun brothers were issued a warning letter by the Zhejiang Securities Regulatory Commission for their long-term illegal reduction of holdings, and were recorded in the integrity file of the securities and futures market. At the end of June, Huayi Brothers revised the 2021 annual performance from a profit of 22.5209-33.7139 million yuan to a loss of 250 million to 246 million yuan, resulting in the company and Wang Zhongjun, Wang Zhonglei and other relevant responsible persons being issued a warning letter again.

In addition, on May 7, 2022, The brothers Wang Zhongjun and Wang Zhonglei were listed as executors by the Beijing No. 2 Intermediate People's Court. This is the second time in a year that the two Brothers of Wang Zhongjun have been jointly listed as executors, and it is also the third time that Wang Zhongjun has been listed as executors in a year.

In 2015, the market value of Huayi Brothers reached 80 billion. Wang Zhongjun said the following year that he could develop himself from a Chinese-level producer to a world-class producer in the next 3-5 years around IP. Since the beginning of 2018, Huayi Brothers has accumulated losses of 6.4 billion yuan in four years, and the stock price has fallen from more than 90 yuan in the peak period to 2.5 yuan today.

Wang Zhonglei once said at the opening forum of the 12th Beijing International Film Festival, "Some people say that movies have entered the era of 'lying flat', we are all here for more than 20 years of enterprises, we will not lie flat. "But the lack of money is still a problem that Huayi is difficult to solve for a while." Wang Zhongjun has repeatedly said that Ma Yun, Cao Guowei, Shi Yuzhu, Liu Chuanzhi and others have lent him money, but he also confessed to Yu Minhong in "Discretionary View" that when he encountered a bank at a critical moment to force debts, he often had a feeling of coldness in the world.

Vanishing Huayi

Huayi loses its popularity in almost all popular slots.

Huayi once created the "Lunar New Year file" in the mainland and once defined the Chinese film market. As early as 2007, Wang Zhongjun proudly said: "Last year, our film performance was relatively good, and there were 3 in the top 5. In the top 10 movies this year, we have two. We've always kept the number of movies at three or five a year, and a little more next year, about six or seven. ”

According to Tuopu data, none of the top ten box office in the history of Chinese films today is from Huayi. Looking back on recent years, Huayi Brothers has rarely had high-grossing works except "Fanghua" and "Eight Hundred". In 2019, Huayi launched Feng Xiaogang's "Only Yun Knows" in the Lunar New Year file, but the box office was dismal, and it only received a 6.3 rating on Douban. In 2021, Huayi's "Samurai Shodown" was at the bottom of the Chinese New Year schedule.

Ding Daoshi, an observer of the Internet industry, believes that "it is very difficult for the film to be laid out in each slot, so it is better to choose a schedule that is more favorable to yourself and put good things on the blade." But some insiders believe that the repeated absence of popular files essentially reflects Huayi's current predicament.

According to the research report data of Tianfeng Securities, huayi brothers' market share in 2021 is less than 12%, far lower than that of film and television companies such as Wanda Film, Light Media, and Bona Brothers. The share of Huayi Film distribution has fallen to 2% in recent years.

Li Wen, former vice president of iQIYI and executive of Huace Film and Television, once said, "In my opinion, Huayi is now more involved in investment, and there are very few film and television projects in which he has the right to speak." Companies like Bona and Guangguang have their own heavyweight master projects, while Huayi's own film projects are relatively weak, and they can only follow others to do some small proportion of shares. ”

Even if you participate in the investment, it is difficult for Huayi to really make profits. Although Huayi's "Hello, Li Huanying" unexpectedly earned more than 5.3 billion yuan at the box office, Huayi only got about 10 million from it. Huayi's other two films, "Midsummer Future" and "Sunshine Robber", performed mediocre at the box office.

Behind the dismal box office is the consecutive years of losses in Huayi's performance.

In June 2015, Huayi Brothers' market capitalization peaked, and then its stock price fell all the way down. Overall, Huayi Brothers' overall profitability from 2006 to 2017 has performed well, but it is not its box office and copyright business that supports Huayi Brothers' performance, but its investment sector.

From 2018 to 2021, Huayi Brothers lost 1.169 billion yuan, 3.978 billion yuan, 1.048 billion yuan and 246 million yuan respectively, with a total loss of more than 6.4 billion yuan. Despite the continuous narrowing of losses, this year's first quarterly report shows that Huayi Brothers' performance has not shown signs of improvement. In the first quarter of 2022, the company achieved revenue of 132 million yuan, down 66.69% year-on-year; net profit attributable to the mother was -132 million yuan. In this case, Huayi fell into the dilemma of borrowing money with one hand and repaying with the other.

For example, in May 2021, Wang Zhongjun and Wang Zhonglei were listed as executors because they and Minsheng Bank had extended a loan of 700 million yuan for many times. In January 2019, Huayi Brothers applied to Minsheng Bank for a comprehensive credit facility of RMB 700 million, with a loan term from January 25, 2019 to January 25, 2020. Subsequently, after huayi brothers repaid 200 million, they were unable to continue to repay. Finally, through the signing of three extension agreements, the two-year extension was paid off.

In addition, in December 2017, Huayi Brothers applied to the Bank of Tianjin for a three-year credit of 300 million yuan. Then Huayi Brothers applied for an extension in December 2020 and May 2022 respectively, and has not paid it off so far.

At the time of Huayi's scenery, Wang Zhongjun was famous for his sky-high art collection. In 2016, Wang Zhongjun spent 207 million yuan to win Zeng Gong's only authentic "Bureau Post". In addition, he bought Chen Yifei's "Juanjuan", Picasso's "Sitting Portrait of a Woman with a Bun" and Van Gogh's "Daisies and Poppies" for 4.18 million, 201 million and 377 million, respectively.

But now in order to pay off the debt, the Wang Zhongjun brothers have sold everything they can sell. It is reported that in 2021, Wang Zhongjun has negotiated with antique agents Cheng Shoukang and Li Jianchen, preparing to privately find buyers and sell the 377 million yuan Van Gogh oil painting "Still Life, Vase Full of Daisies and Poppies". Wang Xueqiang, an art market observer on the China Art Market Information Network, said: "Wang Zhongjun is famous for his love of paintings, and he will not sell Van Gogh's oil painting "Still Life, Vase Full of Daisies and Poppies" unless he has to. ”

This was followed by a direct drop of HK$68 million, and nearly HK$220 million sold more than 3,700 square feet of Hong Kong mansions. In 2019, he said at the summer summit of the Yabuli China Entrepreneur Forum, "For the safety of the company, I can sell anything, and there is nothing to be ashamed of."

In 2021, Huayi Brothers sold a number of equity shares, including Huayi Tencent Entertainment, Henan Jianye Huayi Brothers Cultural Tourism, Huayi Brothers (Tianjin) Live Entertainment, Hero Interactive Entertainment, tianjin Binhai Huayi Qiming Oriental Warm Culture, including 5 companies, and finally returned 610 million yuan.

Compared with other film and television companies, Huayi's greater hidden danger is that no one is available.

People who can't stay

"Entertainment companies have almost no fixed assets, the only core asset is the artist, and the fate of the excellent artist directly determines the fate of the company." Wang Weicheng, deputy general manager of Huayi Brothers Performing Arts Company, once said.

For Huayi, Feng Xiaogang determines the fate of the company to a certain extent. In February 2012, Feng Xiaogang posted a "shouting tired" Weibo in the middle of the night, which attracted attention and caused Huayi's stock price to fall sharply the next day. Feng Xiaogang's film works are also considered to be the "barometer" that affects Huayi's stock price - his films have sold well, and Huayi's stock price has soared; His works are not good at the box office, and Huayi's stock price will most likely fall.

Wang Zhonglei once said that half of Huayi's world was fought by Feng Xiaogang. When Hua Yi first entered the film industry, he shot Chen Kaige's "Jing Ke Thorn Qin King" and Jiang Wen's "The Devil Is Coming", but neither of them made any money. It wasn't until Feng Xiaogang appeared that the situation changed. Feng Xiaogang laid a foundation for Huayi with movies such as "Mobile Phone", "No Thief in the World", "Assembling Number" and "Do Not Disturb".

Wang Zhongjun once said frankly in a column: "If Xiao Gang had not made several successful movies in a row, I probably wouldn't have cared so much about this industry." A former executive of Huayi Brothers once told Prism: "At a certain stage, the dominant talent has a strong right to speak and represents the flow, which is of course a barrier. But from the brain drain and hot spot conversion, for film and television companies, this barrier can be maintained for a very short time. ”

Huayi admitted in his prospectus that he "has a certain dependence on Feng Xiaogang's team." Huayi also realized that it was not enough to just have Feng Xiaogang. Therefore, Huayi Brothers has gone to great lengths to expand the lineup of its personnel. But how to keep these people has become a problem for Huayi Brothers.

In 2000, Wang Jinghua, the "first agent in the mainland", joined Huayi Brothers with all his artists, bringing stars such as Li Bingbing, Fan Bingbing, Ren Quan, Hu Jun, and Tong Dawei. In the following years, Wang Jinghua lobbied Liu Jialing, Yang Ziqiong, Wu Junru, Yuen Wing-yi, Guan Zhilin and many other Hong Kong actors to join Huayi and handle mainland brokerage contracts for them. At that time, it was rumored that if Mei Yanfang was alive, she would also become a member of Huayi.

But the good times were not long, in 2005, Wang Jinghua left Huayi and brought many artists to Orange Sky Entertainment. Xia Yu, Mei Ting, Chen Hao and Liang Jiahui and others switched to other brokerage companies, while Hu Jun left the brokerage firm due to the expiration of his contract. Xia Yu once said, "Most of the artists in the company have signed (contracts) with Sister Wang, she has a lot of status and prestige in everyone's mind, what she says has a lot of weight, and we are willing to follow her!" ”

Huayi, Orange Sky Entertainment, Wang Jinghua and many others said that Wang Jinghua's departure had little impact on Huayi. Wang Zhongjun explained, "In fact, Wang Jinghua's resignation may cause some actors to think about it, which is also a normal phenomenon, but there can be no 'collective big jump', and the impact on Huayi Brothers will not be great." However, due to the importance of Wang Jinghua, this matter is known as the "Huayi Personnel Earthquake".

In 2007, Huayi used stock options to let Huang Xiaoming move in to Huayi Brothers on the eve of listing. Huang Xiaoming subscribed for 1.43% of Huayi's shares at a price of 3 yuan per share for a total price of 5.4 million yuan. Despite this, Huayi Brothers still can't stop the brain drain. In 2010, Huang Xiaoming left Huayi due to the breakdown of negotiations with Huayi for a contract extension and set up a private studio. After leaving Huayi, Huang Xiaoming successively sold the Huayi stock in his hand. At this time, the yield of these stocks has reached 19 times, and it is worth hundreds of millions of dollars. At that time, huang Xiaoming left Huayi at the same time as Li Bingbing and Zhou Xun and other stars. In addition, a number of high-quality producers such as Wu Yi, Li Bo and Zhang Ji have also left Huayi one after another. This year became the most embarrassing period in huayi history.

Huayi also began to be known to the outside world as the "Iron Strike Camp Pan Flowing Water Soldier". The reason for this situation, in addition to the relatively low barriers in the film and television industry, there were insiders who said after Wang Jinghua left: "A high-level decision-maker of Huayi Brothers is a person without opinion, and there are a bunch of villains around him, following the pat on the back, the company in some specific matters for a while east and west, so these people who want to do things have to leave." Huayi Brothers already has a big problem inside, now the appearance is a layer of gloss, the inside is all rotten, as long as an accident will collapse completely. ”

How did it come to this?

For Huayi, these years have also become capital and defeated capital. In 2008, Wang Zhongjun said in an interview with Southern People Weekly, "We were the first to carry out capital operations. ”

In 2005, Huayou Century and TOM Company took a stake in Huayi. In 2007, Huayi Brothers attracted yahoo China, Jiangnanchun and Alibaba companies to invest in shares, of which Jiang Nanchun invested $20 million. The addition of capital has strengthened the advantages of Huayi brand, Wang Zhongjun once said: "In fact, when everyone thinks of them, they will think that they are shareholders of Huayi, which is also a great help to Huayi." ”

In order to retain more stars, Huayi began to adopt the capital game of holding high and playing high.

In 2013, Huayi Brothers paid a premium of 36 times to acquire Zhejiang Changsheng Film and Television Production Co., Ltd., which is controlled by Zhang Guoli, for 252 million yuan. In 2015, Zhejiang Dongyang Haohan Film and Television Entertainment Co., Ltd. was acquired by Huayi for 756 million yuan for 756 million yuan just one day after its establishment. It is worth mentioning that Li Chen, Zheng Kai and Chen He are all shareholders of the company. In the same year, Huayi Brothers spent 1.05 billion yuan to acquire Feng Xiaogang's Dongyang Meila Media Co., Ltd. (hereinafter referred to as Dongyang Meila).

This series of high-premium acquisitions has boosted the goodwill of Huayi Brothers. Huayi Brothers acquired Dongyang Meila, Dongyang Haohan and Zhejiang Changsheng to form a goodwill of 1.047 billion yuan, 749 million yuan and 245 million yuan respectively. By the end of 2015, the goodwill of Huayi Brothers reached 3.57 billion yuan. While Huayi raises its own goodwill, it also has to bear the consequences for the performance of the acquired company that does not meet expectations.

In the view of Gong Tao, chairman of Shenzhen Zhongjin Huachuang Fund, among all the losses of Huayi Brothers in the past four years, the impairment of goodwill is the most important reason. According to the 2018 financial report, Huayi Brothers lost 1.169 billion yuan, of which the impairment of goodwill accounted for 975 million yuan.

In addition to the premium acquisition of star companies, Huayi also signed a five-year VAM agreement with Feng Xiaogang after acquiring Dongyang Meila. According to the content of the agreement, Huayi injected more than 1 billion yuan into Dongyang Merah. Dongyang Merah promised that from 2016 to 2020, the annual net profit after tax would not be less than 100 million yuan, and the annual growth rate would be 15%, if the target could not be achieved, Feng Xiaogang would make up the difference with cash.

In the few years of betting, Feng Xiaogang only created a high-grossing movie called "Fanghua". "I Am Not Pan Jinlian" was once caught in the controversy of the ghost box office. A senior publisher who has cooperated with Feng Xiaogang many times once told reporters: "20 years ago, he often cooperated with Feng Xiaogang, and his films were easy to sell, but he rarely found his films in recent years. ”

In addition to smashing heavy money into the stars, Huayi Brothers also hopes to use the "de-cinematization" method to open up the upstream and downstream industrial chains of films to consolidate their own position.

Huayi first invested 2 billion yuan to participate in Hero Interactive Entertainment, and then used 700 million yuan to acquire Yinhan Technology, thus completely transforming into a company integrating film and television, live-action and Internet entertainment.

At the same time, Huayi began to build a live entertainment project. Huayi Brothers Real Scene Mainly includes three parts: Huayi Brothers Tianjin Company, Hainan Mission Hills Huayi Feng Xiaogang Cultural Tourism Industry Co., Ltd. and Huayi Cinema (Suzhou) Co., Ltd.

In 2011, Huayi Brothers established Huayi Brothers Tianjin Real Scene Entertainment Co., Ltd. According to public information, the company has invested in a total of 17 companies, including Nanjing Film Town and Changsha Film Culture City. Subsequently, Huayi opened Hainan Mission Hills Huayi Feng Xiaogang Cultural Tourism Industrial Co., Ltd. and Huayi Cinema (Suzhou) Co., Ltd., the former including Haikou Feng Xiaogang Film Commune, and the latter including Huayi Suzhou Film World.

Contrary to the impression of the outside world, Huayi Live Entertainment project adopts asset-light operation, Huayi only provides IP and operation, and most of the funds behind it are supported by other shareholders. Taking Huayi Brothers' Haikou and Suzhou projects as an example, the total assets of Huayi Brothers' Hainan and Suzhou projects in 2019 were 3.2 billion yuan and 3.3 billion yuan respectively, but Huayi's investment was only 90 million yuan and 270 million yuan, respectively. In the various companies invested by Tianjin Huayili, most of the shares held by Huayi are only about 10%.

All along, Wang Zhongjun has had great expectations for Huayi live-action entertainment projects. Wang Zhongjun once said at the opening ceremony of Huayi Suzhou Film World that after the construction of Film World, he ran to the construction site for three years and witnessed the place from a piece of paper to a product.

But Wang Zhongjun could not wait for the return he wanted. There have been a number of media to visit the Feng Xiaogang Film Commune, although under the brand of "Fanghua" and "1942" for marketing, but compared with the movie theme park, the place is more like a retro photo punch card style street. In addition, many other movie towns have imperfect infrastructure and few visitors.

According to the financial report, in 2019, Huayi Brothers Tianjin Company lost 60.75 million yuan in net profit, and Suzhou Company lost 160 million yuan. Of the three companies in the live-action entertainment sector, only Haikou is profitable. In 2021, Huayi's revenue in brand licensing and live entertainment will be 117 million yuan.

Li Wen pointed out that live entertainment is basically in a relatively weak state. On the one hand, although Huayi Brothers has always claimed to be China's Disney, its movie IP is far from being on the same level as Disney. Secondly, in the past, there were indeed developers who wanted to do some cultural tourism projects to obtain the authorization of Huayi. But now the developer's life is also very difficult. So the business model of earning licensing fees is not appropriate.

Gong Tao said, "I think the biggest problem of Huayi Brothers is the rapid expansion in 2015, which led to a tight cash flow and a sharp decline in the company's performance." In the case of cash shortage, some good projects can not be controlled, which seriously compresses the company's growth space. ”

In order to alleviate the problem of funds, Huayi sold Huayi Tencent Entertainment, Henan Jianye Huayi Brothers Cultural Tourism, Huayi Brothers (Tianjin) Live Entertainment, and Hero Interactive Entertainment in 2021, and returned 610 million yuan of funds. Although this funding looks like a drop in the bucket in the face of huge debts, it has made Huayi's financial report look better to a certain extent. In 2021, Huayi Brothers' net profit attributable to shareholders of listed companies increased by 76.50% year-on-year, and the loss narrowed.

Where is Huayi's way forward?

In 2019, when facing the institutional investigation, Wang Zhongjun frankly admitted a series of problems in Huayi's past, such as "making a big deal out of the scene", "a drama with a cost of several hundred million yuan was filmed in two sentences" and "when a play is good, everyone says that there is merit, but when it is bad, the mistake is not found at all". At the same time, Wang Zhongjun also said, "I want to officially return to the green light committee of the film company and have a veto right."

Huayi Brothers' strategy of "de-film singleness" not only failed to do a good job in peripheral business, but also lost the position of leader in the film and television industry. Therefore, Huayi has also repeatedly said that it will gradually divest assets with weak core business associations and focus on the main business. "Our most core film and television business is still in the recovery period, and we are gradually recovering the feeling of belonging to Huayi from production and quality." Wang Zhonglei said in an interview with the media in early 2022.

However, Shen Meng, executive director of Chanson Capital, told Phoenix WEEKLY Finance that for Huayi Brothers, the main business relies on film and television, so the risk volatility is very high, and the performance fluctuations are very large. Especially in recent years, the living environment pressure of film and television enterprises has become more and more difficult. Huayi's business now has to diversify risks, but it is too late, on the one hand, there are few projects to expand, and on the other hand, there are limited resources that can be invested. It may be necessary to accumulate strength through traditional film and television businesses first, and then seek to balance risks.

To make matters worse, Huayi had lost Feng Xiaogang's advantage. After "Fanghua", Feng Xiaogang's works were not highly evaluated. In the past two years, Feng Xiaogang has directed and supervised three works, including "Only Yun Knows", "North and South" and "Heart House Hunter", but the response has been mediocre.

Talking about future planning, Wang Zhonglei said during this year's Beijing Film Festival: "At present, the company is mainly accumulating strength, striving to better polish the good film themes, and presenting them to the audience with better quality works in the future. ”

It is said that "Instantaneous Whole Universe", "Cosmic Exploration Editorial Department", "King Gesar's Tempering", "Love Is Delicious", "Kill that Magician" and other plans to be released in the third and fourth quarters. "Instantaneous Universe" is undoubtedly a glimmer of hope for Huayi, the film was released in the United States only one month, the box office exceeded $50 million, beating "Original Diamond" to become the highest-grossing film in North America in A24 history.

Film media person Yu Yu once told the "Times Weekly" that "in addition to the theater release and box office, Huayi can also sell the film to Chinese streaming media, such as iQiyi, Tencent Video, Youku, etc. A domestic niche film festival film can sell 200,000, this kind of film that has been in the theater line, coupled with a certain popularity, the price will definitely be higher." ”

However, some relevant people said that this is only one of the ways for Huayi Brothers to save themselves, and it is impossible to "turn over" themselves by relying on a film alone. Zhang Xiaorong, president of the DeepInn Science and Technology Research Institute, once told the media that Huayi Brothers was in a state of loss in the first five years of its listing, and in the last five years, due to blind diversification, it could not find the north. Before the epidemic struck, it suddenly fell into the abyss, and the company was on the verge of delisting. Even if you can continue to launch blockbuster movie products in the later stage, it is difficult to change the loss trend in the short term.

Some investors have questioned whether the company can achieve a performance turnaround in 2022. Huayi Brothers once said that the company will continue to concentrate high-quality resources to implement the asset-light business model of "film and television + real scene", comprehensively and actively adjust the business structure and asset structure, while further strengthening investment management and concentrating all resources to strengthen the core main business, so as to promote the company to accelerate the return to the fast lane of healthy development.

Industry commentator Zhang Shule once told The Times Weekly that Huayi Brothers over-bet on film and television-related physical attractions, and its future pressure is extremely high in the absence of blockbusters and physical attractions and does not achieve the imaginary revenue.

In addition, in May 2022, Huayi Brothers and Huasheng Tiancheng jointly announced their entry into the meta-universe. Wang Zhonglei said that based on the company's IP assets and content strength, Huayi has the opportunity to become the most leading content architect in the digital age, further rewriting the company's business model. Previously, Huayi Brothers also cooperated with the "Together NFT" App to release a "Predecessor 3: Goodbye Predecessor" digital collection.

Wang Zhongjun once said at the Beijing Film Festival that the meta-universe also has a huge commercial potential, that is, it can create virtual digital people to help the completion of the entire business system, and Huayi Brothers hopes to create virtual stars or virtual artists to help upgrade and change various industries. However, it is not easy to create a complete system of virtual people.

Take Lehua's A-SOUL as an example, although Lehua called it the main revenue force of the pan-entertainment business in the prospectus. However, Leroy is only responsible for A-SOUL's advertised operating costs. The cost of modeling and equipment is the responsibility of ByteDance's Sunrise Lightyear. The UBS report pointed out that the upfront investment cost of advanced virtual characters averaged $30 million. The production cost of A-SOUL's single is about 2 million yuan, and the cost of an offline concert is about 20 million yuan. Obviously, Lehua alone cannot afford such a cost, and many insiders told the Observer Network that Huayi cannot create a complete virtual digital person on its own.

Li Wen, former vice president of iQIYI and executive of Great Aim Film and Television, said: "The company's current sectors, film and television, live entertainment, IP derivatives, artist brokerage, etc., it seems that no business can 'ride a single savior' and play a decisive role in turning around losses." ”

This article originated from Guanwang Finance