Text | Source Media Collection, Author | Zhou Lin, Editor-in-Chief | Su Huai
Starting from 2023, listed film and television and cinema companies will inevitably answer a question on the investor Q&A platform: Does the company have a layout of short drama business?
The fire of micro-short dramas is getting more and more prosperous, and it is clear that it is a sinking exclusive "nipple music", but it can't stand the income myth of "tens of millions a day" and frequently stirs the sensitive nerves of the market, and the "old guns" in the three worlds of film, drama and literature are all pulled to the arena, as long as its business is a little involved, it can't escape the soul torture of investors.
But the excellent record in long dramas and movies may not be able to carry over to the field of short dramas. Judging from the current pattern of the short drama industry, there are few players who can be called the head in the "regular army", and the market is mostly occupied by some MCN institutions, live broadcast platforms and new companies that have just been established.
Source Media Hui studied the layout and development of the current head film and television companies and online text platforms in the field of short dramas, and generally speaking, the "regular army" is still relatively cautious about this battle. In particular, listed companies are basically at the level of "prepared", and there are not many projects that have been implemented. At present, the more eye-catching performance is Ningmeng Film and Television (09858. HK)) and Huace Film and Television (300133. SZ）。
The online text platform is relatively positive. For example Chinese Online (300364.SZ) and China Literature Group (0772.HK) have given detailed explanations on the implementation and future planning of the short drama business, and even Zhihu (02390.HK) has become the source of scripts for major short drama producers because of its "love of writing novels", thus unexpectedly cutting into the short drama track.
In addition to the head companies in the film, drama, and literature worlds, the four major streaming media - Tencent (00700.HK), iQiyi (NASDAQ: IQ), Youku, Mango, and the two major short video platforms - Douyin, Kuaishou (01024. HK) has long been in the arms of skits.
Multi-party scuffles, gods fight, and seeing that the era of strong supervision of short dramas is coming, who can "get shorter" first has also become a new gamble in the literary and artistic circles.
01 Who earned the "first pot of gold" of the skit first?
In November 2023, Huace Film and Television announced a record of investor research activities, and nearly 100 institutional investors from funds, insurance, and securities firms participated in the conference call. The announcement recorded 5 questions they asked, all of which were about the company's micro-skit business.
From the difficulty of entering the short drama business to the company's market share target, to the team building and capacity building cycle of micro-short dramas, institutions have great enthusiasm for short dramas as a hot spot in the capital market.
Huace Film and Television said in this Q&A that the company will begin to pay attention to and study the micro-short drama market in 2022, and will gradually cut into it from June 2023, and has established five production teams and one streaming team, and five micro-short dramas will be launched in November, and the total number of team members is expected to be one or two hundred before the Spring Festival. And has established extensive cooperation with various leading companies of micro-short dramas.
In the Spring Festival file in 2024, the number of films under the main investment and control of Huace Film and Television is zero, but it has contributed two short dramas: "Looking for Song" and "My Way Home is Windy". The latter is a derivative work of the popular TV series "To a Windy Place" produced by Great Aim and released during the Spring Festival in 2021, and "Assassination of a Novelist", which was controlled by Great Aim in 2021, has also been "re-generated", and a side short drama "Assassination of a Novelist: The Girl Strikes Back" has not yet been released.
Screenshot source: Huace Film and Television's official Weibo
Compared with other paid short dramas with 70 or 80 episodes on Douyin, the two short dramas that have been broadcast by Huace Film and Television are about 20 episodes, and users do not need to pay. As the first work to test the waters, "Xun Song" and "My Way Home" have 22 million and 190 million views respectively, and the latter's results are related to the original IP traffic. Huace focuses on the copyright value to cut into the short drama track, or points out a clear way for all film and television companies with a large number of popular IPs.
Further than Huace Film and Television, there is also Ningmeng Film and Television. In the current fierce competition for short dramas, Ningmeng Film and Television can be said to be the only film and television regular army that makes money from short dramas the fastest.
According to the 2023 financial report recently released by Ningmeng Film and Television, the company achieved revenue of 1.22 billion yuan and adjusted net profit of 227 million yuan, an increase of 28.4% and 60.4% year-on-year respectively.
Screenshot source: Lemon Film and Television Financial Report
Source Media Exchange checked the financial data of Ningmeng Film and Television in recent years and found that from 2019 to 2022, the company's revenue declined all the way, from 1.794 billion yuan to 951 million yuan, and the adjusted net profit increased from 150 million yuan in 2019 to 280 million yuan in 2021, but it fell to 140 million yuan in 2022.
The performance explosion in 2023 has injected new impetus into Ningmeng Film and Television, which made it clear in its positive profit forecast that "the rapid expansion of the short drama business has brought considerable revenue and profit contribution".
It is worth mentioning that Ningmeng Film and Television is also the only film and television company that has disclosed the contribution of short drama revenue - "the cumulative contribution income of short drama-related business is 32.23 million yuan, a year-on-year increase of more than 12 times".
In 2021, Ningmeng Film and Television established the short drama label "Good Skills". Up to now, Haoyoujian has launched 10 short dramas on Douyin, 6 of which have more than 100 million views. Except for the two episodes of the ending of the most popular short drama "Twenty-Nine", which requires payment, the rest can be watched for free.
Screenshot source: Lemon Film and Television official website
is different from the current monetization logic of short dramas "recharge", most of the short dramas of Ningmeng Film and Television are customized for the brand and paid by the brand. Source Media Hui found sponsorship information of brands such as Osman, OLAY, and Marubeni. The customized form of "beauty + short drama" is also one of the directions that companies with high-quality film and television production capabilities can consider.
In addition to Ningmeng Film and Television and Huace Film and Television, Bona Film (001330. SZ), Wanda Films (002739. SZ), Light Pictures (300251. SZ), Huayi Brothers (300027. SZ), Tangde Film and Television (300426. SZ), Ciwen Media (002343. SZ) and Huanrui Century (000892.SZ) all said that they are "preparing and actively expanding" the short drama business. However, whether it is the number of reserve projects or the broadcast results of short dramas that have been launched, the relevant companies have no more exciting performance for the time being.
Among the film and television companies that are actively entering the new track, on the contrary, Chinese films (600977.SH) are more "alternative" and more calm about the concept of short dramas. At the beginning of this year, when the concept of short dramas became popular in the capital market, China Film clearly replied to investors, saying that the company did not have a short drama business line.
02 The online literature industry is following suit
In fact, in addition to mainstream film and drama production companies, there is also the online literature industry that has been pulled into the track of short dramas. Among them, many listed companies are gearing up.
For example, Chinese Online, the company has a number of original platforms, in addition to the digital content business, the IP derivative development business contributes greatly to the revenue, of which short dramas are IP derivative development products.
Chinese Online's 2023 annual report shows that its revenue from digital content licensing and other related products is 713 million yuan, accounting for 50.58% of revenue, a decrease of 12.19% compared with 2022; The revenue of IP-derived development products was 664 million yuan, accounting for 47.11% of revenue, an increase of 94.41% compared with 2022.
Chinese Online has devoted a lot of pen and ink to describing the importance of short dramas to the company's business in the above-mentioned annual report, and in a letter to shareholders titled "Embracing the 'AI Moment' of the Content Industry", the company mentioned that "short dramas even surpassed AI at one time and became a bigger label for Chinese Online".
Screenshot source: Chinese online official website
At present, Chinese Online's business in short dramas is divided into platform short dramas and mini program short dramas, the former is broadcast in cooperation with major streaming media platforms, and the platform buys out payment or shares at one time; the latter incubates the "Wild Elephant Theater", the company advertises on WeChat, Douyin and other platforms to obtain users, and users watch and pay on the company's mini programs and other clients. In addition, CMS, an overseas company in which Chinese Online holds shares, has a live-action short drama platform ReelShort.
Another online literature giant, China Literature Group, also officially announced its entry into the boutique short drama market in its 2023 financial report. At the end of 2023, it released the "Short Drama Galaxy Incubation Plan". Although the specific financial data was not disclosed, China Literature revealed in its annual report that the company has several short dramas with a turnover of more than 10 million yuan.
In fact, Xinli Media, a film and television platform under China Literature Group, is one of the leading film and television production companies in China, but it has never tried to produce short dramas. Backed by China Literature, a major IP player, Xinli Media's actions are half a beat slower than the industry. China Literature also mentioned in its 2023 annual report that the total number of film and television dramas launched by Xinli Media in 2023 will decrease, resulting in a simultaneous decrease in its revenue.
There is also a contestant who "loves to write novels", which is expected to win a pot of gold from the field of short dramas - Zhihu's paid membership business has risen strongly, and its revenue will increase by 48.4% year-on-year to 1.827 billion yuan in 2023. And the great contribution to this is its "Yanyan Story" APP, which will be launched in May 2023 and enjoyed by subscribers.
In January this year, Fan Junmei, vice president of Zhihu and head of paid reading, publicly stated that Yanyan Story is about to increase investment in the film and television of short story IP, and will launch the first batch of self-made short dramas within this year. In March, Zhihu also announced that Yanyan Story had reached a cooperation with Kuaishou, and related projects included the development of short dramas and the opening of the copyright library of story IP.
In addition to these "futuristic" layouts, Zhihu's story IP has just undergone a market test. In March this year, Tencent Video launched the short drama "Writing" adapted from the novel of the same name created by Lin Yannian, the author of Zhihu Yanxuan, which refreshed the popularity record of Tencent Video on the first day, and the box office exceeded 10 million yuan.
Screenshot source: Tencent's official Weibo
03 Under strict supervision, the elements of cool dramas may fail
According to the "2023-2024 China Micro Short Drama Market Research Report" released by iiMedia Consulting, the market size of China's online short drama market in 2023 will be 37.39 billion yuan, a year-on-year increase of 267.65%. In horizontal comparison, the total box office of Chinese films in 2023 will be 54.915 billion yuan, and the scale of the micro-short drama market is approaching that of movies, and its rapid development has also attracted government agencies, state-owned enterprises, publishing groups, radio and television media and other "regular army" to enter, and the trend of high-quality products is becoming more and more obvious.
In order to standardize the development of the industry, recently, all provinces and cities across the country have updated guidance on the filing of micro-short dramas. According to the latest notice, all platforms should report the relevant information of micro-short dramas that are currently broadcast online without filing to the provincial-level radio and television departments to which they belong before May 31 this year for the record. From June 1 this year, micro-short dramas that have not been reviewed and filed are not allowed to be disseminated online.
Not long ago, Douyin and Kuaishou respectively announced announcements on cracking down on illegal micro-short dramas, and removed micro-short dramas that promote unhealthy and non-mainstream views on family, marriage and love, and deliberately amplify and exaggerate the conflicts between husband and wife, mother-in-law and daughter-in-law.
The new trends in the industry show that the era of strict supervision of micro-short dramas is coming. This also means that the eye-catching "cool drama" elements that have grown savagely before will be limited to a certain extent.
And this may be a good opportunity for the regular army who have long been familiar with audit and supervision.