Author| Mia
Edit| Put blue
On April 21, Mango Super Media released its 2022 full-year financial report. The performance report shows that the company achieved revenue of 13.704 billion yuan in 2022, down 10.76% year-on-year, and net profit of 1.825 billion yuan, down 13.68% year-on-year. On the same day, Mango Super Media also disclosed the first quarterly report of 2023, during the reporting period, the company achieved revenue of 3.056 billion yuan, down 2.16% year-on-year, and net profit of 545 million yuan, a year-on-year increase of 7.39%.
Since the first three quarters of the performance report and the performance forecast released in January, the outside world has certain expectations for this not too optimistic 2022 full-year financial report and 2023 Q1 financial report. Pressure on performance led to personnel changes, and in February, the company issued an announcement that it had elected Cai Huaijun as chairman of the company's fourth board of directors and would no longer serve as the company's general manager.
But the financial report is not without highlights, for example, driven by last year's explosive content, the number of members reached 59.16 million as of the end of the year, the annual membership business income was 3.915 billion yuan, a year-on-year increase of 6.15%, and the net profit growth in the first quarter, several major variety shows with considerable investment performance.
On the one hand, the financial report reflects the trend changes of the entire long-form video industry, and at the same time, it also has the characteristics of Mango Super Media's "heavy variety show light drama", so advertising investment is more affected. Can Mango Supermedia, which "has seen its net profit decline for the first time since 2018", turn over with a series of head IPs such as "Riding the Wind 2023", which has frequently appeared in the hot search stage of the list?
From both revenue and profit to Q1 recovery: the "king of variety shows" has risen to prominence by micro-dramas
Before iQiyi announced its profit for the whole year last year, since its backdoor listing in 2018, for a long time, relying on the exclusive content copyright and lower cost advantages brought by the major shareholder Hunan Radio and Television, and the integration of traditional media and new media, Mango TV has been the only "profiteer" in the long-form video industry.
To some extent, the changes in Mango Supermedia's performance report are a microcosm of the industry environment, including the overall advertising investment environment last year was not optimistic, and the slight recovery in the first quarter of this year.
The revenue of its core business Internet video business was 10.418 billion yuan, accounting for 76.02% of the revenue, down 7.49% year-on-year. This part is divided into three parts: advertising, membership and operator business, of which the advertising business revenue was 3.994 billion yuan, a year-on-year decrease of 26.77%; The revenue of the membership business of the Mango TV platform reached 3.915 billion yuan, a year-on-year increase of 6.15%, which is also related to the two consecutive increases in membership prices in 2022; The operator's business achieved revenue of 2.509 billion yuan, a year-on-year increase of 18.36%, and the in-depth cooperation with China Mobile, the second largest shareholder, improved the efficiency and reach rate of content distribution.
Cost control, cost reduction and efficiency improvement have been the main themes of all long-form video platforms in the past year, and Mango TV is no exception. The annual investment in film and television copyright was 5.3 billion yuan (intangible assets), a year-on-year decrease of 1%. In terms of copyright and production costs, the cost decreased by 46.28% year-on-year, the cost of Internet video business decreased by 2.67%, the cost of operator business decreased by 13.42%, its operating cost decreased by 8.46% year-on-year, and sales and management expenses decreased by 11.7% and 10.3% respectively.
Judging from the content layout of the past year, the advantages of "King of Variety Shows" are still significant. The company launched 77 programs in 2022, and 11 works such as Mango TV's "This Decade", "This Decade - Light Chaser", "This Decade - Towards the Future" and "Endless Sound - Hong Kong Music Season" were selected as the outstanding online audiovisual works of the State Administration of Radio and Television in 2022. Last year, 4 comprehensive N-generation programs such as "Riding the Wind and Waves Season 3", "Detective Season 7", "Escape Room Season 4" and "Breaking Through Thorns Season 2" were selected into the top 10 effective broadcasts of Yunhe Data's online variety shows in 2022.
Compared with variety shows, its drama performance is still relatively weak, with a total of 163 film and television dramas such as key film and television dramas and "Da Mang Project" mini-dramas launched last year, and 5 Taiwan online dramas and 4 online dramas launched by Monsoon. Among the top 20 effective broadcast of all network series in Yunhe in 2022, Mango TV has no solo dramas on the list, and only one "Bottom Line" that is broadcast with iQiyi is on the list. Monsoon Theater still lacks circle-breaking hits, and "The World is Long" and "Twenty Not Confused 2" have good reputation but lack popularity.
It is worth noting that in the new track of micro-short dramas, which integrates long and short videos, Mango has made gains. Since 2022, Mango super media "Niannian Wuming" and "False Face" have become hits, with a cumulative playback of more than 600 million and a Douban score of more than 7 points, and "False Beauty" has won the daily crown on the Maoyan Professional Edition short drama popularity list for 31 consecutive days. If we continue to expand and continue this advantage and form a brand, we may be able to emerge in the era of fragmented communication and attract incremental markets.
It is not difficult to see that although key data such as revenue and net profit have collectively declined, the core advantages of Mango Super Media's "low content cost" and "strong variety show production capabilities" have not changed. According to CTR data, the year-on-year decline in advertising market spending in January this year narrowed to the lowest level in nearly a year, up 4.5% month-on-month. Under the premise of the recovery of the macroeconomic environment in 2023, its advertising investment performance has also ushered in a certain recovery, and has led to the recovery of Q1 financial reports.
The advantage continued into Q1 and Q2. "Detective Season 8" has 430 million positive films and effective broadcasts, with a market share of 13.3%, and "Endless Sound Treasure Island Season" has won the popularity of Maoyan Network 34 times. According to Yunhe data, the total number of Mango TV variety shows broadcast in the first quarter of 2023 reached 1.9 billion, a year-on-year increase of 114%.
According to the February variety show report released by Grace Data, among the top 10 variety shows in the broadcast index, "Happy Departure 2" and "Time Concert 2" attracted 10 and 9 brands respectively; "Northeast Transfer Student - Old Iron We Are Coming", which has opened up the domestic drama comprehensive model, has also received 9 brand launches. The upcoming "Riding the Wind 2023" program investment promotion cost as high as 500 million, the largest in the series. The all-female drama-style immersive reasoning program "Women's Reasoning Society" has been launched, and the upcoming youth co-creation music competition variety show "Youth π Plan" has been launched.
In terms of dramas, "Go to a Windy Place" at the beginning of the year became the most prominent word-of-mouth popularity, and during the broadcast, according to media statistics, it was launched by as many as 46 brands. New dramas that will be launched this year include "Da Song Youth Chronicle 2", "Camp with Love", "My Human Fireworks", "When the Stars Shine", "Those Young Times That Can't Go Back" and so on.
It is also based on factors such as Mango Super Media "expected to return to the growth track, key variety shows are bright and reserved", in the past 90 days, a total of 21 institutions such as Soochow Securities and Zhongtai Securities have given "buy" ratings, and 2 securities firms have given "overweight" ratings.
Focus on AIGC and virtual reality: where is the next incremental market for mango?
"The operation thinking and underlying logic of the Internet long video industry have undergone fundamental changes, industry competition has entered a new stage of rational development, and major video platforms have further strengthened content self-production, improved operational efficiency, and enhanced profitability. Changes in the competitive landscape of the industry may adversely affect the company's market share and profitability. Mango Media described the possible risks in its earnings report.
In fact, we have previously analyzed that the pattern of long video has changed, from the era of sky-high IP competing for "quantity" to the era of competing for "quality", and further integrating and synergizing with short videos, the overall environment tends to be healthy and benign, and it tests the ability to originality. AIGC has become the biggest outlet of the year, which has also brought new challenges and development opportunities for long video, and platforms that can better use this technology can gain a head start in open source cost reduction and content competition.
Compared with iQIYI, because iQIYI is stronger in the field of dramas, it is more conducive to cultivating users' emotional stickiness and absorbing members, and Mango TV is stronger in the field of variety shows, which is more conducive to advertising and investment, but it is obviously affected by the economic cycle, so the revenue structure of the two is not the same, and the degree of macroeconomic environment is also different. Of iQiyi's total revenue of 29 billion yuan last year, membership revenue accounted for about 61%, while Mango Super Media membership revenue accounted for 29.1%. At the same time, Mango Super Media advertising revenue accounted for 29.1% of the total revenue, higher than iQiyi's advertising revenue accounted for 18%. For content platforms, the key to balancing anti-risk capabilities and optimizing revenue structure still lies in the better layout and development of each part of the content.
Focusing on the emerging business of Mango Super Media, Xiaomang e-commerce, secret room, AIGC and virtual and real combination may become the next key step.
The 2022 financial report shows that the revenue of content e-commerce business was 2.136 billion yuan, accounting for 15.59% of revenue, down 0.97% year-on-year. Among them, Xiaomang e-commerce has grown significantly, positioning itself as a "trendy domestic content e-commerce platform", and the GMV of the whole year of 2022 will reach 7 times that of the previous year, and the peak DAU will reach 2.06 million.
The in-depth ecological linkage between its own variety show content and Xiaomang e-commerce has driven a group of fans to consume, such as the unbroadcast clip of "Happy Departure", the airborne live broadcast room of "Brother" in "Breaking Through Thorns", the restart of "Less Flowers" and Xiaomang's e-commerce linkage to launch the same camping product, the launch of the e-commerce workplace variety show "100 Lights" and so on. Referring to Han Zong's development of IP-derived peripherals such as albums and figurines, combined with live streaming e-commerce, there may be a lot of room for growth.
The revenue of new media interactive entertainment content production business, including content production and operation, artist management, music copyright, IP derivative development and live entertainment, was 1.118 billion yuan, accounting for 8.16% of revenue, down 40.45% year-on-year. Including the MCITY Secret Room, which is derived from the two ace variety show IPs of "Escape Room" and "Detective", according to the official, the live-action script kill in November The full scene rate was as high as 100%.
Following the development of the content social platform "Mango Phantom City" last year and the overall situation of entering the meta-universe, Mango Super Media clearly stated in its financial report this year that it will use AIGC and virtual reality to interact with the combination of virtual and real, update the content production infrastructure with AIGC, improve productivity, and cover script creation, audio and video content production, new search recommendation and other links. The popular IP "All Staff Acceleration", which has returned after many years, will be recorded in conjunction with the metaverse to promote the application of key IPs in virtual humans, virtual interactions, virtual spaces and other fields.
It is understood that not only Mango, but also several major platforms have also applied AIGC technology to variety show production, film and television production, etc., as the focus of this year's work. "Match time" is coming, who will be the next vested dividend?