Wanda Films (002739) is finally back on fire.
On January 29, Wanda Film disclosed that the extraordinary general meeting of shareholders held in the afternoon deliberated and approved Ms. Chen Xi (stage name Chen Zhixi) and Mr. Gong Qiao to become non-independent directors of the company, and elected Ms. Chen Xi as the chairman and president of Wanda Film.
In December last year, Shanghai Ruyi Investment Management Co., Ltd. (hereinafter referred to as "Ruyi Investment"), a subsidiary of Ruyi, acquired the remaining 51% stake in Wanda Investment, thereby becoming the controlling shareholder of Wanda Film. With Chen Zhixi and Gong Qiao joining the board of directors, the Confucian Department officially took over Wanda Film, and Wanda Film will also enter a new stage of development.
△ After Chen Zhixi took up his new post, he posted a blog to thank Ke Liming and his colleagues in Confucianism
In fact, as the deal continues to advance, Wanda Films, which has changed hands, has begun to show ambitions to return to the center stage of Chinese cinema. According to the data, following "Detective Chinatown 3", Wanda's Wuzhou Distribution focuses on the promotion and distribution of imported films, and this Spring Festival, Wuzhou Distribution returned to the main publicity and distribution, and is the co-distributor of Zhang Yimou's new film "Article 20".
In recent years, with popular models such as "Hello, Li Huanying" and "Send You a Little Red Flower", the Confucian Department has become an unstoppable new force in the film and television industry. Now, it has also transmitted this sharpness to Wanda Films.
Through the actual control of China Ruyi, a Hong Kong-listed company, and Wanda Film, an A-share listed company, Ke Liming, chairman of China Ruyi, has been at the helm of a film and television aircraft carrier with a market value of nearly 50 billion. Under the leadership of Ke Liming and Chen Zhixi, two post-80s film and television people, this aircraft carrier has broken into a path of its own, and has become the "new four" in the film industry together with Guangguang, Maoyan and Ali.
With the official entry into Wanda and the in-depth linkage between Confucianism and Wanda, Neo-Confucianism has not only brought changes to the industry, but also new paths and models for the film industry. So, how did this "catfish" that drove the film and television industry to run to more possibilities come about? What kind of enlightenment did it bring to the film and television industry, which is deeply troubled by high risks and low returns?
1. "Two-way foil"
How did Confucianism become a new force in China's film and television? To trace the roots of Confucianism, we must first find out who Ke Liming is.
Looking at his resume, Ke Liming is a typical intellectual elite, graduated from Griffith University in Australia with a bachelor's degree in risk management and a master's degree in money and banking, and after graduation, he joined a hedge fund management company in Hong Kong as a senior analyst.
A global crisis has taken a turn for the worse. In 2009, a financial crisis swept the world, and Hong Kong was no exception.
This time, he chose to return to his roots, a mathematical genius who has been a fan of Bruce Lee since he was a child, loves literature and movies. This year, "Beijing Ruyi Xinxin Film Investment Company" was established, and Ke Liming officially began to explore in the film and television industry.
"Be an ordinary little person, you will have a lot of happiness, but ordinary people can only live for a lifetime, movies can make you live for many lifetimes, you can see many different stories and different characters." Nine years later, in an exclusive interview with a business weekly, Collimin talked about the charm of the movie.
But his favorite movies were not friendly to this "newcomer" at first, and he was busy inviting people to dinner all day long, but after a year, the money was not spent, and no movie was made.
At that time, Chinese films had just entered the era of 10 billion, Huayi Brothers, Guangguang Pictures, etc. accounted for half of the country, and Huayi accounted for three of the top five domestic films at the annual box office in 2010 ("Tangshan Earthquake", "Di Renjie's Tongtian Empire", "If You Are Honest Do Not Disturb 2"). These head film and television companies are bound to big directors and big stars, and it is difficult for small companies to break through.
However, this reality did not defeat Ke Liming, and this "newcomer" who insisted on movies decided to start with TV series and upstream online copyrights in a different way.
At that time, the film scripts in the domestic market mainly came from two aspects, one was the original script of the screenwriter, and the other was the existing IP, but the traditional Chinese works (four masterpieces, folklore, etc.) and the works of modern and contemporary literary giants (Zhang Ailing, Jin Yong, Lu Xun, Cao Yu, Mo Yan, Su Tong, Wang Anyi, Yu Hua, etc.) were the mainstay.
After using financial methods to analyze the history of Asian films, American films, and Hollywood studios, he found that many classic works in the United States are adapted from popular novels and comics, such as Marvel's "Spider-Man", "Iron Man", "X-Men" and so on.
After researching the domestic book market, he found that few people bought the copyrights of bestsellers, and a large number of potential popular works were not fully explored. In 2011, Ke Liming established a Confucian book company and acquired the copyrights of a number of best-selling online books, including "To Our Dying Youth", "The Year in a Hurry", "Step by Step", "Langya Bang" and so on.
The experience of being an analyst in a luxury office building in Central, Hong Kong, allowed Ke Liming to see the Confucian film road from these book copyrights. This "newcomer" who crossed over from the investment bank decided to wave the "two-way foil" of data analysis to the film and television industry, and responded to the irrationality of movies with the rationality of numbers.
There is a "betting horse effect" in mathematics, as long as you pay attention to a horse, you will wonder whether the horse will lose or win, and you will think about buying it under all things being equal. For the audience, the bestsellers such as "To Our Dying Youth" are the "horses" that have gained attention, and they have their own attention and love in the film market.
With a good horse in hand, Ke Liming's remaining job is to find a good "rider". As a "newcomer" to the film, he is also willing to find a more passionate and energetic "newcomer" director. In the end, the new and new cooperation brought him a surprise, and in April 2013, "To Youth" was released, and finally collected 719 million, which not only created a precedent for domestic youth films, but also led the upsurge of IP adaptation of online texts.
Online text IP + film and television, Ke Liming's film road has finally been run through. At this time, it has been four years since he entered the film industry, and this intellectual elite has completed the transformation to a composite filmmaker (investment banking + film and television production), looking at IP from the perspective of investment and doing film and television with a professional attitude.
In 2014, Ke Liming led the planning, investment and production of "Old Boy: The Raptors Across the River" was released. The sentence in the film, "As long as you have a strong desire for something, the whole universe will help you achieve it; if you haven't succeeded, it's that the desire is not strong enough" may be his personal feeling.
Second, ten thousand swords return to the sect
In 2015, Ke Liming and Ruyi, who completed the transformation of "newcomers", raised their eyes to a higher place.
The higher up is a smooth road. This year, the total box office of Chinese films miraculously reached 44.069 billion yuan, an increase of 48.7% over 2014, and the box office of Chinese films was 27.136 billion yuan, accounting for 61.58% of the total box office.
The higher places are also full of swamps. Wanda Films, which has just landed in the capital market, is one of the many film and television companies that are expanding aggressively at home and abroad, and the seeds of a twist of fate are planted in the filming and production of "The Great Wall" with Legendary Pictures.
Ke Liming, who was born in an investment bank, also used his strengths to grow step by step in the capital market at this time. In 2015, the cultural and creative fund under Tianshen Entertainment (later renamed Tianyu Digital) planned to acquire 49% of the shares of Ruyi Pictures at a consideration of 1.323 billion yuan, and the valuation of Ruyi rose from 1.5 billion yuan in the previous year to 2.7 billion yuan.
At the same time as the operation of first-hand capital, Ruyi's film production is also developing in the direction of specialization. This year, because of the "Tang Detective" project, Ke Liming got acquainted with Chen Zhixi, a producer who is already well-known in the industry, and invited him to join Ruyi, at the end of 2015, Chen Zhixi officially joined Ruyi Pictures as the general manager.
For Ke Liming, who raised his eyes and looked higher, Chen Zhixi's addition was very timely. In an interview with Securities Daily in 2014, he said: "This industry traditionally requires you to spend a lot of time maintaining interpersonal relationships, but what I am better at is calmly reading the script in the house and making investment analysis reports, and then leaving the rest to professional producers." ”
Hollywood ace producer Jerry Bruckheimer has produced "Top Gun", "Pearl Harbor", "Death Island", "Pirates of the Caribbean" and other hits, these films share the characteristics of fast-paced, strong vision, strong personal style, has become a template for Hollywood's contemporary commercial blockbusters, affecting the world.
At that time, China was mainly a director-centered system and an actor-centered system, and professional producers were scarce. Unprofessional producers not only fail to assemble the right team, but also find it difficult to effectively control the expenses during filming, and often waste money where it should not be spent. From the perspective of the market, a good movie must also be a good business, and it will not be profitable if it cannot be throttled.
And a good producer can not only form a good team and make a good film, but also spend 50 million to make a movie with a cost of 100 million, and a movie with a cost of 300 million or even 400 million with a cost of 200 million. Chen Zhixi is such a person, in order to save money, she once rubbed a friend's wedding venue and decoration......
Turning over her resume, this is a producer with frequent "hits", and like Ke Liming, she favors new directors, and has participated in the production of Xu Zheng's Virgo "Thai Embarrassment" (2012, 1.267 billion), Deng Chao Virgo "Breakup Master" (2014, 665 million), Dapeng Virgo "Pancake Man" (2015, 1.159 billion yuan), etc., known for her accurate vision.
△ After Chen Zhixi took up his new position, Dapeng posted a blog to congratulate and add pictures
As soon as she joined, she brought a "hit" to Ruyi. At the end of that year (December 31, 2015), "Detective Chinatown", produced by Chen Zhixi as the producer and Ruyi Pictures participated in the production, was released, which not only won 823 million box office under the siege of "Old Paoer" and "Dragon Hunting", but also created the most successful film series in Chinese mainland at present.
Ke Liming and Chen Zhixi, the combination of investors and producers, allowed Ruyi to enter the mainstream film industry and paved the way for it to become a hit.
There is a saying about investment in the film industry: the probability of positive returns from film investment is 10%-20%, and the return on investment of positive returns may be more than 100% or less than 10%.
Since 2016, Ruyi has produced "Three Lives, Three Worlds, Ten Miles of Peach Blossoms", "Sewing Machine Band", "Animal World", "Send You a Little Red Flower", "Hello, Li Huanying", "Walking on the Moon Alone", "Keep You Safe", "Warm", "She Who Disappeared" and so on. Not only has the frequency increased, the main control has increased, and there have been few misses, and since 2021, there have been continuous explosions.
From the first movie "To Youth" in 2013 to 2023, in ten years, the "newcomer" has finally become the "upstart", and Ke Liming and Ruyi finally stand on a higher place. With his left hand wielding the "two-way foil" of data analysis, and his right hand casting the producer-centered system, the secret book of returning to the ancestors, Confucianism began his journey of "good story".
3. A good story that starts from people
This ascent is actually a coincidence.
The story begins in 2015. In that year, the box office of director Chen Kaige's big production "Taoist Priest Descending the Mountain" was only 400 million yuan, while Dapeng's "Pancake Man" had a box office of 1.15 billion, and Happy Twist's "Charlotte Troubles" had a box office of 1.44 billion.
Some people tried to defend the "nobility" of the film, and lashed out at the latter two films, believing that they were a combination of jokes and sketches. But there are also people who see the opportunity to fight big with small things, such as latecomers like Tianjin Entertainment: "It's not just big directors, big producers, and big companies that can win the world." Young directors, producers, film and television companies, if they have new ideas, they can also do it. ”
For a long time, the film industry has formed its own "28 rule": 20% of blockbusters contribute 80% of the box office. The success of "Pancake Man" and "Charlotte's Troubles" in 2015 broke this law. Especially since 2018, the investment in the film and television industry has decreased, and the impact of the epidemic has increased, except for a few large-scale productions, among the top ten films at the annual box office, there has been an increase in small and medium-cost films.
Taking last year's summer file as an example, "All or Nothing" (3.847 billion), "Disappearing Her" (3.523 billion), "In the Octagonal Cage" (2.207 billion), "Warm" (912 million), and "Dad" (617 million) are all small and medium-sized costs. In contrast, the big production "Fengshen", which was once claimed to have a total investment of 3 billion yuan, had a box office of 2.634 billion yuan, and the return on investment was much lower than that of other films.
There is also a change in subject matter. In the era of blockbusters, there are many themes such as ancient costumes, wars, and fantasy, but now, the industry has gradually broken the superstition of big directors, big stars, big investments, and big perspectives, and has begun to return to the story itself, starting from small people and small perspectives, paying attention to the current people and things, and resonating with mainstream moviegoers.
It was this opportunity that Ruyi seized. Among the popular products in the past three years, the mother's deep love for her daughter in "Hello, Li Huanying", the warm story that happened in two cancer-fighting families in "Send You a Little Red Flower", "Disappearing Her" caters to hot topics such as feminism, phoenix man, and Thai wife killing, and "Warm" focuses on the growth of ordinary little people......
The focus of "Qiaobo" is never in "Bo", but on "Qiao". When talking about film and television projects, Ke Liming always mentions the word "creativity", which refers to artistic creativity and also represents the creation of content that better serves users. In his opinion, good content not only needs to be of good quality, but also needs to meet the needs and preferences of users, and this needs to be controlled by a producer with a strong voice in power.
In other words, producer + audience + director is the basic triangle that constitutes a "smart film", and the producer is the core.
Ensuring the centrality of the producer may be one of the reasons for Ruyi's preference for working with new directors. According to Confucian insiders, this is actually a two-way choice. When training new directors, they will match different projects according to the characteristics of the directors and what they are good at. On the basis of a clear positioning of the director's strengths and weaknesses, match the corresponding producers who can make up for their shortcomings.
Under the control of "good production", a good director + a good story is infinitely close to a good movie - as Confucianism gradually gains a foothold in the industry, its ambition is no longer limited to "smart films", but "good films" with a bumper harvest at the box office and word of mouth. Some media have sorted out the 13 movies invested by the main producers of Ruyi in the past 5 years, and 10 of them have a Douban score of more than 7.0, and the yield rate is close to 80%.
This balance between artistry and commerciality relies on producers like Chen Zhixi. On the one hand, on the premise of not losing money, the director is allowed to create as freely as possible, and it is reported that Ruyi's internal planning meetings often quarrel, and Chen Zhixi even slapped the table because of the planners' timidity in choosing the topic; on the other hand, from the perspective of investors and audiences, he seeks a balance between business and art.
In fact, the balance between business and art runs through the whole process of Confucian film creation, and it has formed its own methodology about what makes a good story and how to understand the audience's preferences.
On "Good Stories", Ke Liming has a set of formulas to standardize ✖ user data for content production. In the stage of novel, screenwriter selection and script creation, Ruyi will disassemble and refine each project according to the relationship between the characters, the number of characters, the necessary emotional relationships, the setting of conflict and rhythm in each link, etc.
The quantitative content production standard relies on user data, and a good story can only be truly formed by understanding what stories the prospective audience likes, what rhythm, what conflicts, what character relationships, and so on. In 2011, he set up a book company to do IP, and in 2015, he founded Pumpkin Movie as an entrance, Ke Liming understands the value of users and data very well.
The model of producer center + good story + user data makes Ruyi a typical and not so typical film and television company.
Typical, it's professional enough in content. The lack of professionalism is one of the reasons that hinder the development of the film and television industry, taking Wanda Film as an example, there have been no less than 8 general managers in 12 years, although there are hits like "Detective Chinatown", but because they don't understand the content, they lead to lack of follow-up, forming a vicious circle of poor performance-dare not invest-performance decline, internal turmoil, and the low level of the industry is also declining.
Speaking of atypical, Ke Liming's conception of Confucianism is not just a traditional film and television company. The "film empire" he conceived has two foundations, one is user data, the other is IP copyright, and on top of this is the film and television production under the producer-centered system, content payment subscription, etc., trying to promote the internal restructuring of the film and television industry, as well as industrialization and process.
Of course, his ambitions don't stop there.
Fourth, the truth of Neo-Confucianism
Since Ruyi began to take over Wanda Films last year, there have been many interpretations from the outside world, and whether Ruyi's surname is Ke (Ruyi) or Ma (Tencent) has become the focus of discussion. In fact, the relationship between the two is very simple, but Tencent, which is keen to cast a wide net, is optimistic about this new force, and Confucianism, which started with IP, sees the possibility of film and television + games.
The story of Ruyi and Tencent began in 2020. At that time, Evergrande and Tencent's HengTen Network wholly acquired Ruyi Xinxin (Ruyi Pictures + Pumpkin Films) founded by Ke Liming for HK$7.2 billion. Later, Evergrande withdrew, Tencent and Ke Liming increased their holdings, and Ke Liming officially became the chairman and executive director of HengTen Network. In 2022, HengTen Network changed its name to China Ruyi.
At present, although Tencent is the largest shareholder of China Ruyi, it rarely interferes in the company's operations, except for the dispatch of non-executive directors to China Ruyi, and it is Ke Liming who really manages China Ruyi. Judging from the name change and a series of subsequent actions of China Ruyi, China Ruyi is the separation of equity and management rights.
For example, in terms of film and television, Maoyan Professional Edition shows that the film projects of Ruyi Pictures mainly cooperate with Maoyan, Ali, China Film, Hengdian, etc., such as "Hello, Li Huanying" is a cooperation with Beiwen, Maoyan, Hengdian Pictures, Ali Pictures, etc., "Warm" is a cooperation with China Film, Hengdian Pictures, Maoyan, etc., and "Keep You Safe" is a cooperation with Maoyan, Hengdian, China Film, etc.
In terms of games, although China Ruyi and Tencent cooperate closely, it is still dominated by Ruyi. Last year, the cooperation between the two sides expanded, and China Ruyi issued an announcement showing that the total amount of actual receivables from Tencent by the end of 2023 will exceed the original upper limit of 700 million yuan, so it will be raised to 1.2 billion yuan.
At the same time, Ruyi is also seeking cooperation and development outside of Tencent. Jointly developed by Junmeng Games and Happy Interactive Entertainment, and published by China Ruyi Agency, "Ragnarok: Love is Like First Seen" has undergone a round of testing and is expected to be launched in 2024.
Speaking of Wanda Films, Ruyi Investment, which acquired 51% of Wanda Investment's shares, is 99% controlled by Ke Liming, plus 49% of the shares acquired by Shanghai Ruyi in July last year, Ke Liming himself has become the actual controller of Wanda Investment or Wanda Films, that is to say, whether it is the current Wanda Films, or New Confucianism, the surname is Ke.
In fact, extending the industrial chain around movies has always been Ke Liming's style. From book publishing in 2011, streaming media in 2015, to games in 2022, this filmmaker, who is more inclined to invest in his own positioning, has been exploring the film and industry chain, trying to build a "film empire" in his mind.
Wanda Films is undoubtedly an integral part of perfecting this "empire":
First, the film industry chain can be roughly divided into three links: production, distribution, and screening, and Wanda Film and its Wuzhou distribution are included in the bag, which will help Confucianism realize the integration of "production, distribution, and release";
Second, the cinemas and theaters in the terminal have an advantage in the box office account, according to the data of the Tuopu Research Institute in November last year, among the head cinemas, Wanda Cinemas has the highest box office share, 18.4%, and the single-seat income, single-theater output, and operational efficiency are the highest;
Third, Wanda Films has IP reserves such as "Detective Chinatown", "Manslaughter", "Folding City", and "Shenzhou".
In recent years, as real estate capital and Internet capital have piled up into the film and television industry, the idea of industrial synergy between the film and television industries has been mentioned many times, and no one in the market has really run through the entire film industry chain. Through the acquisition of Wanda Films, Ruyi has become a film and television "aircraft carrier" integrating production, distribution, cinemas, streaming media, derivatives, and games.
At present, this "aircraft carrier" is not small.
Among the 2024 Spring Festival films, "Article 20", "Flying Life 2", "Bear Infested: Reversing Time and Space", and "Hot and Hot" all have Confucian figures behind the four heads: "Article 20". Ruyi participated in the production and joint distribution of Wuzhou, "Flying Life" Ruyi is the producer, "Hot and Hot" Ruyi is co-produced, and "Bear Infested: Reversing Time and Space" Ruyi and Wanda have both invested.
At the same time, on January 11, Chasing Light announced that it would join hands with Ruyi to jointly produce the third part of the "White Snake" series, "White Snake: Floating Life", and handed over the main control of the publicity to Ruyi. At the same time, it also cooperated with 111 Wanda cinemas across the country to hold an activity of receiving gifts with movie ticket stubs to build momentum for the release of the movie in advance.
Internally, it has opened up the industrial chain of production, distribution, etc., and externally sought cooperation with other film companies with the service capabilities of the whole industry chain, "Ruyi + Wanda" initially showed its own energy - the light behind "Article 20" and the light-chasing animation behind "White Snake: Floating Life" have rarely sought external cooperation before, and the exception of cooperation with Confucianism is the service ability of the whole industry chain of New Ruyi.
In the view of "Yidian Finance", there is a huge space for industrial collaboration between Confucianism + Wanda Films, including cinemas and film and television production, digital cinemas and streaming media, IP and movies, streaming media, games, film and television production and games, etc. By bringing more film and television companies, more partners, and more users into its own "film empire", Ruyi tries to promote the film and television industry into a new era.
V. Conclusion
A few years ago, hot money poured into the film and television industry, and for a while, those who sold vegetables, opened restaurants, and raised pigs all squeezed into the film industry. Since 2018, with the strengthening of supervision and the increase of downward pressure on the economy, the film and television industry has ushered in a rational return, and these cross-border giants have withdrawn from the film and television industry one after another.
Wanda's retreat in the film industry is the retreat of the older generation of film and television companies, and the attack of Confucianism represents the rise of a new generation of film and television companies. Compared with those who come from the real estate and other industries, Ruyi understands film and television better, and compared with the older generation of film and television companies such as Huayi and Guangguang, Ruyi is a "newcomer" and a new model in the Internet era.
The upstarts of every era may be the giants of the next era. The audience is changing, the movie is changing, and of course the pattern must also change, Confucianism + Wanda is exploring the possibility of synergy of the whole industry chain and rewriting the industry pattern, while also showing another possibility for the current film and television industry - from zero-sum to coopetition and cooperation, and work together to promote the vigorous development of Chinese film and television.