The joys and sorrows of human beings are not connected.
In North America, 15 years ago, Hollywood screenwriters went on strike for pay, and now 15 years later, more than 10,000 screenwriters have once again taken to the streets, only this time in addition to demanding better treatment, but also hoping that the film side will restrict the use of artificial intelligence, such as not allowing the screenwriter's original works to be used as "materials" for AI systems for training.
Hollywood creators have sensed the menacing and possible destruction of AI, but the country is still in a state of warmly welcoming AI, which can be described as a double heaven of ice and fire. After all, the company will not refuse capital, and the "Party A" media companies of domestic creators are relying on the identity of "AIGC concept stocks" to change from years of falling to today's fragrant food.
Since the end of last year, the media sector, which had been at the bottom, has gradually warmed up. TF Securities pointed out that in 2023, the media industry will take the bottom reversal as the core trend, and the report level has been significantly improved in the first quarter, and the repair trend of film and television, publishing, digital media, radio and television in Q1 2023 is relatively ahead of games, advertising and marketing.
This can catch film and television companies that have fallen for six or seven years a little off guard. Tangde Film and Television, which is famous for its backlog of "The Biography of Baqing", has a cumulative deviation of 108.16% in the closing price of the company's stock trading price for nine consecutive trading days from April 19, 2023 to May 4, 2023, which is a serious abnormal fluctuation.
Source: Oriental Fortune Network
The company specially issued an announcement that the company does not directly own the relevant AIGC technology, and the relevant technology has not been applied to the company's drama and film production and other content creation on a large scale.
Even if the popularity of AIGC concept stocks is not rubbed, the financial data of the drama company is gradually picking up. Reflected in the financial data of the listed companies of the series, it is that profit has become the norm for the series company. But for the market, film and television companies no longer have the imagination of capital, so they need hot concepts such as AI to ignite market passion.
A researcher related to the securities market told Poison Eye that the hype of Hong Kong stocks is generally more about performance, but the hype of A-shares is more often storytelling, which is one of the reasons why the A-share media sector has been so greatly affected by the concept of AIGC this year. "The fundamental reason for the high popularity of film and television companies this year is because it has fallen for too long, falling for almost seven or eight years, and A-share funds will have the desire to buy such a sector, even if his fundamentals are not good, but as long as he can tell a little story, then everyone may buy it."
That is to say, the current popularity of the drama company has nothing to do with the drama product.
Companies that are still betting on copyrighted dramas
Mainland drama listed companies with revenue of more than 1 billion yuan and net profit of more than 400 million yuan are Huace Film and Television and Xinli Media. What these two companies have in common is that they have more copyrights in their hands, so they have more room to rely on copyright to create compound interest.
Huace once said in response to investors' questions that most of the company is a copyright custom drama, and the permanent copyright remains in the company. The record of its investor relations activities disclosed on May 9 also shows that the Huace drama business adopts two modes: customization and copyright, and the proportion of copyright dramas is relatively higher, and the film and television dramas are scheduled quickly.
In fact, after the rise of the platform, there was a division between the two models between drama production companies. Custom dramas are the drama company as a simple producer of the platform, collecting money for production, without having to bear too much risk in the subsequent broadcast and distribution process, copyright dramas are equivalent to the company bearing the IP purchase costs and production fees, and the platform as the investor and broadcaster.
Huace's right to speak on its own copyrighted dramas comes from its confidence in "the first stock of China's TV listing" and the productivity brought by the huge studio scale. As a drama production company wholly-owned by China Literature Group, Xinli not only retains the company's original production capabilities, but also gets the first month for the big IP of China Literature Group.
In the past few years, Sunli Media has often formed a "troika" in the production process of dramas together with Tencent Video and China Literature Group. Popular online dramas such as "Douluo Continent", "Qing Yu Nian" and "Sister-in-law" are all promoted with such a cooperative relationship. Although there is no explanation of the proportion of Xinli's custom dramas or copyright dramas in the financial report, according to its relationship with the parent company, its copyright content should account for a relatively large proportion.
Sunli Media has not failed to live up to the supply of this powerful IP, and it can be seen from the data of Yunhe in 2022 that Sunli Media has done a beautiful job.
In the TOP10 of Yunhe Data's 2022 network series that effectively broadcast the screen list, Xinli produced three dramas, namely "The World" ranked first, "Qing Qing Daily Life" ranked third, and ranked eighth, and even the drama "Knife in the Snow" broadcast in 2021.
With the help of these blockbuster works, Sunli Media completed the performance gamble in the third year, and will also receive a total of about 3.02 million shares and 204 million yuan in cash issued by Yuwen. At present, in addition to the existing big IP "Qing Yu Nian", "Breaking the Sky" and "Sister-in-law" series, Sunli Media will continue to maintain its production scale, producing six to eight dramas per year, and the much-watched male frequency big IP "Da Fong Da Ren" is also about to start.
There are also a large number of copyright dramas on hand, as well as Ningmeng Film and Television. By the end of 2022, Ningmeng Film and Television had produced and released a total of 19 high-quality dramas. Among them, 17 are copyright dramas for which Ningmeng is the lead, exclusive investor and executive producer. The revenue brought by its copyright drama broadcasting rights in 2022 was 888.7 million yuan, accounting for 93% of the company's total operating income.
However, as a company that was only listed on the Hong Kong Stock Exchange last year, Ningmeng Film and Television's operating performance has declined after listing.
In 2022, the company's operating income will be 951 million yuan, and the adjusted net profit will be 142 million yuan, both indicators will decrease compared with 2021, and its net profit will decrease by 49.3%. The annual report shows that the delay in the production and broadcast progress of "Love Only" under the influence of the epidemic has become the main factor in the decline in revenue. As of press time, the total market value of Ningmeng Film and Television is HK$4.527 billion, a decrease of 53% from its market value on the day of listing.
If it is judged by the quality of its works, the cold reception of Ningmeng Film and Television in the secondary market is somewhat surprising. After all, Tangde Film and Television, which has been in dire straits since "The Biography of Ba Qing", can be favored by investors under the AIGC concept stock boom.
There are also investors on Xueqiu who sighed: this company produces a fairly high proportion of boutique dramas, the annual net profit is stable at more than 100 million, the sunrise industry with high gross profit and high profit, the industry is good and good tickets, almost no one buys.
In the case of declining revenue, Ningmeng Film and Television still worked hard to refine the company's highlights in the 2022 annual report.
For example, Ningmeng is one of the few companies that writes short plays in large volumes in annual reports. According to the annual report, the company produced and broadcast 8 short dramas during the year, of which 5 reached the platform traffic sharing standard, and 2 were played more than 100 million times. The short drama "29" broadcast in early 2023 has a total of more than 800 million views, ranking first in the short drama list for four consecutive weeks. Short dramas also have a more direct business model (brand customization, traffic sharing, etc.) and a faster payment cycle, which is also the content form that major drama companies and streaming media platforms are exploring.
In addition, Ningmeng has also entered into a framework agreement for the purchase of literary copyrights with Jinjiang, the largest female frequency IP platform in China, and from September 2, 2022 to August 31, 2024, Jinjiang will grant Ningmeng all or part of the right to adapt specific literary works for the production, promotion and distribution of film and television dramas and other commercial works.
Although it seems that these stories did not impress Hong Kong stock investors too much.
Copyright is second, let's talk about service first
Straw Bear Film and Television, like Ningmeng, is also in Hong Kong stocks, and the same major shareholder is a streaming media platform (Straw Bear is iQiyi, Ningmeng is Tencent Video), but it takes two completely different paths.
Unlike Ningmeng, which mainly focuses on copyrighted drama-related income, Straw Bear's revenue in 2022 will be dominated by customized drama production. In 2022, Straw Bear Film and Television delivered three customized dramas, "Big Exam", "Please Jun" and "Moon Song Xing", which are consistent with 2021. The revenue generated by the Group's customized drama production business also remained relatively stable compared to 2021, reaching RMB490 million as of December 31, 2022, which was not much different from last year, and the proportion of revenue soared from 31.7% last year to 50.6%.
At the same time, between Straw Bear and iQIYI, there is not only a framework agreement on the copyright authorization of dramas, that is, the licensing of the company's self-made dramas to iQIYI, but also a subdivided script development framework agreement and a distribution revenue sharing framework agreement.
Script development framework agreement, that is, the company adapts creative works such as novels into scripts, and licenses the adaptation rights and shooting rights related to them to iQIYI in exchange for script development fees. Distribution revenue sharing framework agreement, whereby the Company shares with iQIYI the revenue generated by the distribution of customized dramas produced by the Group for iQIYI. "In accordance with this business model, the Group introduced online video platforms as co-investors or copyright holders at an early stage, producing dramas for them and distributing the series to TV stations."
Last year was also a challenging year for Straw Bear. In 2022, the revenue of straw bear will be 981 million, a year-on-year decrease of 42.4%, and the net profit will be 50 million, a year-on-year decrease of 69.91%, and the growth will slow down.
However, in the first quarter, the production of straw bears increased significantly. In the past year, the number of straw bear dramas dropped from 15 the year before to 4, namely "Chasing Love Family", "Futuyuan", "Wind Blowing Half Summer" and "Counting Merry Characters". But in Q1 of this year, the company broadcast four works "Summer Flower", "Come on Today", "Wishful Wishes" and "Hello, My Boyfriend Across from Me", the same number as last year.
Straw Bear refines its service function. In addition to the service provided to the platform, in addition to drama content production, script development and post-platform drama distribution, and Ciwen, Tangde, Huanrui, the three drama production companies that rely on several popular costume IP dramas listed in the era of IP boom, are also differentiating their own subdivided service categories, although they are not as thoughtful as straw bear service, but they have also found a card position in the current environment.
When listing the 2022 drama works, Ciwen said that he "insists on showing and transmitting positive social energy as the first responsibility", and one of his works is the documentary "Red Bank: The Soviet National Bank". There are also the revolutionary war-themed online drama "Bloody Battle Songmaoling" and the Beijing Winter Olympics tribute drama "Ice Hockey Boy".
Among the dramas to be broadcast by Ciwen in 2023, there are also many positive energy dramas, such as the emergency rescue drama "Retrograde", the aerospace drama "Winning the Crown", and the contemporary prosecution-themed drama "Public Prosecution Rose". There is only one "Flower Thousand Bones 2", and there is an afterimage of the "costume IP drama" of that year. Ciwen's drama style is obviously de-"Ciwen" and approaching the theme of "positive energy".
This is at the same frequency as the change in the board. Du Yunbo, Ye Biyun and other old Ciwen announced their departure this year, and now the board of directors is basically held by Jiangxi Publishing Group Company, Huazhang Investment Group and other relevant people, and since 2019, Ciwen Media's controlling shareholder is Huazhang Investment, a wholly-owned subsidiary of Jiangxi Publishing Group Company, and the actual controller is the Jiangxi Provincial People's Government.
The change of controlling shareholders is not only reflected in the type and theme of the series, but also in the positioning of the company in the market. In 2022, Ciwen Media moved its headquarters to the Nanchang Economic Development Zone, and the official report said that "it is bound to play a positive role in the development of the cultural industry, the creation of cultural brands, and the attraction of new business formats in the region." Ciwen Media also has a non-operating income of 320 million yuan in 2022, accounting for 44% of the total profit, mainly due to the government subsidies obtained from the Nanchang Economic Development Zone.
With the Legend of Wu Meiniang, Tangde Film and Television listed on the market, there are no less similar works of Ciwen Media in the film list today.
According to its 2022 annual report, the company's operating income and operating gross profit mainly come from the distribution income and gross profit of projects such as the TV series "Infernal", "Our Day", "Xiangshan Yezhenghong", "Honey, Long Time No See" and "Miss Match and Mr. Delicious", of which "Xiangshan Yezhenghong" is a major revolutionary historical TV series, while "Infernal" is an era spy war.
Only Huanrui also continues the "glory of the ancestors", focusing on making ancient costume fairy IP, and is supported by Alibaba and iQiyi.
The two large contracts of about 1.158 billion signed in 2021 respectively made it breathe a big breath and breathe to this day. As of the release of the annual report, there is still about 720 million outstanding amounts. The costume fairy drama "Agarwood Like Crumbs", which will be broadcast in 2022, is the first execution project of Alibaba's contract.
In 2022, Huanrui Century's total revenue will be 596 million yuan and net profit will be 18 million, achieving a double increase in revenue and net profit, of which the sales revenue of film and television dramas increased by 69.73% over the previous year. However, Huanrui's cost reduction is also continuing, and a total of 12 film and television projects including "Xianxian I", "The Legend of the Son of Heaven" and "The Heart Eclipser" were stopped in 2022.
Looking at the overall financial report, 2022 is the year of "cost reduction" for the drama company. The broadcast projects of major companies are decreasing, and most of the company's sales expenses and management expenses are declining, and their notes are often "mainly the reduction of labor costs".
But in 2023, with the liberalization of the general environment and the boom of AIGC, in 2023, companies will have to find ways to prove their "efficiency" in this boom, either in practice or on paper.
The above-mentioned securities market-related researchers also told Poison Eye that the popular metaverse concept in previous years was still a bit ethereal, "just a concept, a market hype that lasted less than a year." But the impact of AIGC is more far-reaching, "equivalent to the mobile Internet era ten years ago, which will change the division of labor in all industries in this society, is a long-term cycle, and is the market theme throughout the year this year." ”
However, for the general audience, the "efficiency increase" of the drama company is better if it is reflected in the quality of the series.