A small company, which has provoked public anger many times, is still alive and well. How exactly is such a company run? This makes people curious.
For the majority of media, especially self-media, Visual China is a special name. It is also because of its "unique" profit model, which has been on the hot search of public opinion many times.
I often walk by the river where there are not wet shoes, and recently, this company has overturned again.
The author checked the Baidu index, and the attention of visual distance China skyrocketed, and its information index increased by 1944% year-on-year and 2588% month-on-month.
Public opinion is not insignificant, and the infringement of photographers' photos in recent days is also directly reflected in its share price.
The general story of the incident is: On the evening of August 15, photographer Dai Jianfeng (Jeff) posted on Weibo that he received a call from Visual China, and the other party claimed that his pictures were infringing and claimed more than 80,000 yuan. Paradoxically, these images of allegedly infringing Visual China were all taken by Jeff himself.
What is the experience of "I infringe on myself"?
Imagine such a scene, Jay Chou just finished a concert and sang 10 songs written by himself. Not long after, a company appeared out of nowhere, calling and saying that the copyright of the songs he sang at the concert belonged to his own company, and Jay Chou had infringed, and each song had to pay 100,000 yuan. That's probably how it feels.
Of course, this matter itself has been discussed by many people, so we will not repeat it. Now, let's change the angle, don't forget that Visual China is a listed company, how they make money, how much money they make, the financial report has been clearly written. So why don't we look through the earnings reports and see what kind of business model this company is?
Suppressed by the "black hole picture incident" for a while, it has begun to "do" again in the past two years
According to the 2023 first half performance forecast released by Visual China (the official 2023 Interim Report needs to be released on August 18), its net profit attributable to shareholders of listed companies is 89 million yuan – 103.5 million yuan, an increase of 62.18% – 88.60% over the same period of the previous year, which can be said to be quite "excellent".
Looking at Visual China's financial performance in recent years, it can be found that before 2018, revenue and net profit maintained a rapid growth trend.
However, this momentum was broken in 2019, what happened in 2019? After the "black hole picture incident" in 2019 (Visual China "took the first black hole photo in human history painstakingly produced by a group of scientists as its own", included it in its own gallery and marked its copyright). This incident and the many black materials that were subsequently picked up have dealt a big blow to the image and commercialization of Visual China.
However, two years after the "black hole picture incident", from 2021, Visual China seems to have "eased up" again, its revenue began to return to growth from 2021, and net profit, although it fell in 2022, achieved a substantial increase in 2023.
The essence is an image copyright broker
Next, we'll go a little deeper and take a look at Visual China's business model and how it makes money. Since the 2023 half-year report has not yet been officially released, we will use its 2022 annual report to analyze the business structure. Generally speaking, a company's business structure and business model are relatively stable, so even the 2022 annual report can basically reflect the core business situation of Visual China.
Let's first look at Visual China's business model, in essence, Visual China is a picture copyright intermediary, buying copyright from real creators, and then selling them through various channels, and the income is shared with the creators.
Its digital content comes from three sources, professional suppliers, individuals and company-owned copyrights. According to Visual China's 2022 annual report, it currently has 500,000 signed creators, which is an important source of content. According to its 2022 financial report, Visual China currently has 400 million images, 30 million videos and 350,000 music.
At the sales level, Visual China has 24,000 direct contract customers, of which more than 80% have annual sales of more than 100,000 yuan. In addition, the company has more than 2.2 million long-tail users. Visual China's current core business is images, and its sales share of visual content in 2022 is 100%.
It should be noted that its audio and video sales increased by 119% year-on-year in 2022. That is to say, when you receive a call from Visual China in the future, they may not only ask you for money for pictures, but also money for voice and video.
In terms of industries, Visual China's customers mainly have four categories, and in 2022, the revenue of the four types of customers of party and government media, advertising marketing and services, brand enterprises, and Internet platforms accounted for 36%, 21%, 31%, and 12% respectively. Media + advertising marketing accounts for more than 50%, what this means, the media, especially the majority of self-media practitioners, should "deeply experience".
As mentioned above, Visual China is actually a picture copyright broker, he does not create copyrighted works, but is only a copyright "porter". Therefore, on the one hand, he collects copyright fees, and on the other hand, he must also pay copyright fees to real creators, that is, shares.
Let's take a look at the cost structure of Visual China:
It can be found that the biggest cost of Visual China is the operating cost, which is mainly the fee paid to the creator. Taking 2022 as an example, its operating costs accounted for 46% of revenue, and its gross profit margin in 2022 was 56.58%, combining these two data, we can calculate that Visual China's share of creators is 40%-50%.
Interestingly, Visual China's gross profit margin was still rising before 2018, and its gross profit margin in 2017 was 65.86%, which means that the share of the creator that year would not exceed 35%. After 2019, its gross profit margin began to show a downward trend, and it is currently stable at about 55%, which means that the share of creators in recent years is about 45%, I don't know if this change is affected by the "black hole picture incident" in 2019.
According to the data of Flush, in the digital media industry, 15 digital media companies such as Visual China, Mango Super Media, Xinhuanet, People's Network, Excellent Information, and 365.com were selected for comparison. In the indicator of net profit margin in the first quarter of 2023, Visual China ranked first with a "good score" of 43.13% and was the "first fault". In contrast, the industry median is 6.01%, while Xinhuanet and People's Daily are only 7.95% and 6.01% respectively.
This figure is an achievement for Visual China, but it is not necessarily a good thing for the entire digital media industry.
Behind such "good results" may be many ironic oolongs such as taking black hole photos for themselves in 2019 and recently letting photographers pay copyright fees for their photos.
There is a famous "Hayne's Law", any serious accident is a sign, behind each accident there are often about 300 signs of accidents, and thousands of hidden dangers. It is conceivable that Visual China can make such a funny oolong, and its copyright abuse must be more than a few times. Otherwise, assuming that Visual China is usually a "law-abiding citizen", and the only two violations are caught, and the whole network is known and everyone shouts and beats, then it is too bad luck.
Visual China must solve three problems
Whether it is the black hole picture incident in 2019 or the recent photographer infringement incident, it is actually ringing the alarm for Visual China - it is no longer possible to continue the previous practice, and sooner or later something will happen. The author believes that in order to achieve sustainable development, Visual China needs to make significant changes in the following three aspects.
First, the source of content copyright must be legal and compliant, and do not take things that do not belong to you as your own.
If there is really an original copyright, and the fee is reasonable, it is appropriate to pay a certain copyright fee, which also helps to protect the original. However, this presupposes that you actually own the copyright, not claim it.
Visual China has twice seriously "overturned", and the root cause of the problem is to claim copyright to pictures that it does not have copyright and charge everywhere. Taking the black hole in 2019 as an example, the European Southern Observatory ESO released the first black hole photo in human history, the copyright belongs to the Event Horizon Telescope Cooperation Project, and ESO made it clear that they firmly deny the copyright claims of Visual China, and ESO has never transferred the copyright of the picture to any individual or organization, nor has it contacted Visual China. Visual China has never contacted the real copyright owner, where did you get the copyright, and still claim the copyright of the first black hole photo, which is a common wealth of mankind, which is too blatant.
Taking the recent photographer's infringement as an example, if Visual China really has the authorization of that photographer, then no problem. But the reality is that there is no such thing, and even people don't know that there is such a thing.
Later, Visual China responded that photographer Jeff licensed the images to Stocktrek Images, and then tocktrek Images licensed to Getty Images, and Visual China is a partner of Getty Images, so it owns the rights to sell Jeff's images. It's a bit roundabout, but if it's true, it's reasonable.
Jeff asked Visual China's Stocktrek Images, and people made it clear that there was no such thing. That's more embarrassing.
Obviously, Visual China does not really own the copyright of Jeff's photographic images, they are likely to find a bunch of pictures directly on the Internet, put them in their own gallery, claim to have the copyright of the pictures, and then collect money everywhere. It's just that accidentally, this time it kicked to the "iron plate", and the money had to go to the real author. Before Visual China approached Jeff to ask for 80,000 yuan in copyright fees, they had probably asked many other companies or individuals for money, because Jeff's photographic pictures should not only be available on his own public account, but also used by other media or institutions.
Of course, if Jeff's photographic images were only posted on his own account and not anywhere else on the Internet, it would be even more funny. It's like I posted an original article on my public account, and then other accounts reprinted it, and that account actually came to sue me for infringement and asked me to lose money.
In Visual China's 2022 financial report, it clearly stated that it would improve the content security system, the original words were "to ensure that the content orientation is correct, the facts are accurate, the source is standardized, and the law is compliant; Strengthen the construction of content management teams, improve content security technical support capabilities, improve content security management systems, improve supplier contract management systems, and do a good job in reporting and accepting reports. "Obviously, the source of its content is standardized, legal and compliant, and it is not done well, otherwise it would not have made so many jokes."
Moreover, such a problem must not be the negligence of a few grassroots operators, but a problem at the company level. Taking the photographer Jeff's infringement incident as an example, if it is really someone else's negligence, then after the photographer points out the problem, it should be quickly found out that they do not have the copyright of those pictures, and they should compensate and apologize. But from the announcement given later by Visual China, they actually made up a seemingly complex copyright link such as "Jeff - Stocktrek Images - Getty Images - Visual China", which is obviously trying to muddle through.
This is not an option.
Lincoln said that you can deceive everyone for a while, or you can deceive some people forever, but you can't deceive everyone forever.
To ensure security and compliance, the most important thing Visual China should do is to really sort out its content copyrights and see how many of the 400 million images in the gallery are truly copyrighted. If it is not your own, do not pretend to be your own, and do not take these things to others to ask for money.
Second, the real creator's copyright fee should be paid in full.
Above we analyzed Visual China's business model, which is like Nongfu Spring, "just a porter of nature". The basis of its copyright is a large number of original creators, so it is necessary to ensure that the copyright fees you collect are given to the authors. However, whether Visual China has done this needs to be questioned.
Taking the black hole picture incident in 2019 as an example, since Visual China took this image to collect money, did it give ESO to the European Southern Observatory?
Taking photographer Jeff as an example, assuming that the share ratio is 50%, then Visual China will ask Jeff for 80,000 copyright fees, and should give another 40,000 to Jeff. In fact, since Visual China can find Jeff, it may have asked many other companies or individuals for money, assuming that these pictures bring 1 million copyright fees to Visual Range China, then it should give Jeff 500,000, deduct Jeff's 80,000 copyright fees for his own pictures, and finally Visual China should give Jeff 420,000 yuan.
Did this money visual China give? Definitely not given. In fact, before Visual China's sales approached Jeff, they probably never touched it, let alone paid a penny.
Visual China claims to have 500,000 signed authors, what percentage of them have actually received copyright fees from Visual China? How many people's works have been taken by Visual China for free, Visual China has earned money, but the original creator has not taken anything or even does not know about it? Visual China says that it is to protect copyright and protect originality, which is good, first of all, they need to do it themselves.
Third, charge reasonable fees and do not "fish for law enforcement".
Original works are subject to a certain royalty fee, which is rightly so. But the fee should be reasonable, not a lion's mouth, let alone "fishing for law enforcement".
Many content creators want to use image materials, most people have the habit of searching online, such as searching in Baidu images, and it is difficult for ordinary people to distinguish which are copyrighted and which can be used for free, let alone distinguish which pictures have the copyright of Visual China.
One of the things that Visual China is widely criticized for borrowing this copyright ambiguity to let you use it for free for a few years first, and then find the lions to open their mouths. Moreover, intellectual property rights, patents, etc. are time-limited, and the copyright of pictures should also have a time limit, such as setting a 3-year or 5-year copyright protection period, after which it is free.
Another thing is that Visual China seems to be moving into AIGC, which makes me a little at a loss. Now many media outlets are starting to use AIGC tools such as Midjourney, Wenxin Yige (Baidu), and Tongyi Vientiane (Alibaba) to create images, which is also a way for them to avoid being suddenly approached by institutions like Visual China to sue for infringement. Now, this "pure land" is also about to be encroached upon by Visual China, will one day the pictures we create with Wen Xin Yi or Universal Meaning will also be marked with the copyright of Visual China?
The author used Alibaba's Tongyi Vientiane to enter "Visual China" to create images, and interestingly, when I tried it for the first time, Tongyi Vientiane actually did not generate any content, and returned "Sorry, I didn't find a satisfactory inspiration, please try again with other inputs".
Why, are the current AIs so intelligent, are they also afraid of being accused of infringement by Visual China?
★ Follow the data ape public account, reply to "Visual China Financial Report" in the background to download the full version of Visual China's 2022 annual report.
Text: A Smoke Rain / Data Ape