In 2023, Wang Changtian, chairman of Guangguang Media, made an overly forward-looking prediction in a class in the film and television finance class of Beijing Film Academy: "My greater expectation is to pin my hopes on next year and 2024 to see if it is possible to drive China's film box office into the era of 7 billion." I hope that the name of this landmark film will be "Nezha 2 - The Demon Boy in the Sea"[1]. ”
There are not many people who can understand him, including Douban, which is a per capita fan, and the highest comment on this matter at that time was "He's okay".
Image source: Douban.com
For the film industry at that time, the impact of the three-year epidemic, coupled with the short video attack of Xiaoshuai Xiaomei's three-minute performance of the whole film, film consumption fell into weakness, and Internet capital giants such as Alibaba Pictures and Tencent Pictures gradually tightened their expenses, even the animated film industry, which was considered less affected by the epidemic, also showed a decline after the box office of "Nezha: The Demon Boy Descended" reached 5 billion yuan, and the average box office of animated films from 2020 to 2022 was only 3.647 billion yuan.
Before the Spring Festival this year, the box office champion predicted by most movie podcast managers was Tang Detective 1900, and the positioning of "Nezha 2" was more of a dark horse candidate. However, in just over 20 days, the cumulative box office of "Nezha: The Demon Boy in the Sea" exceeded 12 billion yuan, surpassing "Mind Agent Team 2" and topping the global animated film box office list. Wang Changtian was still wrong, but the reason for the mistake became: too conservative.
is still the same Douban post, and the recent style of painting in the comment area has changed to "Pick up Wang Changtian's career luck and fortune (no side effects)".
Image source: Douban.com
There is no doubt that Guangguang Media has left a very strong mark in the history of Chinese animated films. But in the face of such a record, Wang Changtian himself only posted when the box office exceeded 10 billion yuan: "There are still many steps ahead." ”
For Wang Changtian and even Guangguang Media, the success of "Nezha: The Demon Boy in the Sea" may have a certain degree of chance, but the continuous progress of domestic animation has its inevitability. Whether it is "Nezha's Demon Boy in the Sea" or the entire mythical universe built on this basis, tracing back to the roots, their success all points to the same direction: the color stripe house.
Disney China
In 2015, the success of "The Return of the Great Sage" detonated the entire film and television industry. The box office of 956 million yuan not only created the history of domestic animated films at that time, but also made it gradually get rid of the label of "low infantilization". Only three days after the release of "The Return of the Great Sage", its main creative team Tian Xiaopeng, Liang Hui, Lin Zhonglun and others announced the establishment of October Culture Company. The one who invested in them was the light media that had just established the color bar house.
The direction of Color Bar House is very clear, that is, the animated film industry. Because it is almost one of the few tracks in film and television content that can also make a little "my life is up to me".
The essence of film and television is the content industry, and a significant feature is that the company's performance is extremely dependent on popular products. But the hit is not an assembly line operation, and the top popular students, expensive special effects production, and intensive publicity roadshows cannot be used as an argument for "the work will definitely be popular". The audience's incomprehensible tastes and the erratic mood of the market have made "continuous explosions" a sword hanging over the heads of film and television companies.
After all, the flip side of opening for ten years is often not opening for ten years.
However, animated films have their own particularities, its life cycle is longer, and its income is more diverse, especially the IP derivatives in it, which is the key to "diversifying risks". In other words, once an animated film makes a hit with good content, it will sell both a temporary box office and a long-term peripheral.
In an investor survey response, Enlight Media said that the derivative income of the box office of a $1 live-action movie in the United States is $3-5, while the derivative income of an anime movie can reach $10 [2]. This means that once the IP with animated films as the carrier is loved by the audience, then the surrounding products derived from it can bring a steady stream of cash flow to the company.
The most typical case is Disney. In 2015, Disney executives publicly stated that "Frozen" could generate $1 billion in derivative revenue per year[3]. This means that Disney doesn't need to make a movie like Frozen every year, as long as it has the ability to make a Frozen, it can continue to generate profits for it every year.
Color Bar House also tasted the sweetness of IP for the first time in "Big Fish and Begonia". In 2016, only two weeks after the launch of the derivatives related to the first animated film "Big Fish and Begonia" of Color Bar House, the sales reached 50 million yuan, exceeding the production cost of the film [2].
However, the IP economy cannot exist independently of content, it only extends the life cycle of high-quality content, and does not mean that the animated film industry no longer needs high-quality content. It can even be said that because of the leverage of IP, polishing content is the key to success or failure.
After all, although the hit is difficult to predict, the lower limit of a hexagonal warrior is always not bad, and the only problem is: time.
The long production cycle and low concentration of good content are objective defects for this business model. For example, in the production process of "The Return of the Great Sage", the 8-year production cycle is a great test for the viability of the team and even the entire industrial chain. Therefore, when Color Bar House was established, it made a clear positioning: to invest in excellent companies in the animation film industry and quickly enter the animation film industry.
Through the "investment + incubation" model, Color Bar House plays the role of "content venture capital" in the animation film industry, and takes the initiative to invest in some potential animation studios, allowing them to devote themselves to creation without the pressure of survival. In 2015 alone, Color Bar House invested in more than 20 animation industry chain companies, and at that time, an exaggerated claim in the market was that "half of China's start-up animation companies survived on the money of light"[4].
At the same time, the color bar house is also laying out the industrial chain. For example, in the post-production of "Nezha's Demon Boy in the Sea", the only 3-second shot of "Chaos Nebula" took Shanghai Red Carp more than a year to produce, and the latter is also one of the companies controlled by Color Bar House.
While being a gold digger, he sells shovelers, which can be said to think very clearly about the alpha of the work and the beta of the industry.
Chaos Nebula, Douban
However, in the territory of Guangguang Media, what is really closely related to the basic disk of the industry is mainly another layout - Maoyan.
Lay out the Internet
As early as 2014, Guangguang Media made an attempt on the channel side.
At that time, when Internet capital was entering the media industry in a big way, Guangguang Media also took advantage of the situation to jointly invest with Qihoo 360 and founded Xiankan.com. In Wang Changtian's eyes, the positioning of Xiankanwang is a "Chinese version of Netflix", and the main business model is to make profits through the membership payment model, and in order to be able to develop Xiankanwang, Guangguang Media once planned to watch "tailor-made online dramas" for Xiankan.
It is not difficult to understand that Guangguang Media itself is a high-quality content provider, and once the model of Kanwang can be run through, it means that it not only has a channel that can output its own content, but also continuously obtains cash flow through user payment.
This time, Wang Changtian is still too forward-looking. At that time, several mainstream video websites in the market were still in the stage of competing for traffic with free video resources, and it was obvious that there would not be much market for member payment. This made Xiankan.com fail to get enough traffic in the early stage, and then missed the opportunity in the subsequent member competition, and finally gradually faded out of people's field of vision.
Recalling this period of the past, Wang Changtian said: "The previous development delayed too much time and missed the opportunity. If we don't develop it ourselves, but take over a paid website with a foundation, there is a chance [5]. ”
With the advent of the Internet era, online channels have begun to exert force. According to the "2017 Q3 China Movie Ticket Market Industry Research Report", only 21.1% of the audience purchased tickets at the theater's counter and purchased them using the theater's own online platform, while 78.9% of the audience used a third party to purchase tickets online.
In 2016, through its wholly-owned subsidiary, Guangguang Pictures, acquired a 57.4% stake in Maoyan Film with 2.383 billion yuan in cash and 2.399 billion yuan worth of shares in Guangguang Media, thus becoming its controlling shareholder, and Maoyan Film became an opportunity for him to cut into the Internet channel.
After the acquisition of Maoyan Films, Guangguang Media has greatly made up for the shortcomings of the channel, enabling it to have greater confidence in the face of the squeeze of the theater. In Wang Changtian's own words, "Cinemas are not completely irreplaceable, even if tickets are sold, the ticketing platform sells 80% of the tickets, and if a theater loses the support of the ticketing platform, it is equivalent to losing 80% of the market share[6]. ”
More importantly, its arrival also adds a certainty to Light Media. Due to multiple traffic entrances such as Tencent, Meituan, and Guevara, Maoyan Movies has become a necessary channel for most film distributions. For example, in 2017, Maoyan produced and released the first film "Iron Fist of Shame" with more than 2 billion yuan; In 2022, it will further delve into publicity and marketing and become the promoter of "This Killer is Not Calm"; In 2023, it will be the producer, distributor and promoter of the annual box office champion "Man Jianghong".
According to the data, among the top ten films at the box office from 2017 to 2024, Maoyan Films has produced, distributed or promoted (excluding co-production or co-distribution) a total of 24 films, accounting for 30%. This means that once there is a hit work in the market, Maoyan Movies will be able to participate in the final box office sharing.
In the final analysis, everyone knows that as a film and television company, Guangguang Media has content ideals and industry vision, but as a stock code, content is not an industry that will be welcomed in A-shares. What Guangguang Media does is to make itself less risky and capture more opportunities.
Anyway, in the end, it is all about the business of "popular content", and Guangguang Media has cut into the animated film vertical category of "one fish can eat several times" through the color bar house, and has broadened the scope of "popular content" from its own home to all friends through Maoyan on the other hand, which is equivalent to a car factory that has made the whole industry understand the car emperor.
It is precisely under this narrative logic that institutions began to flock to it. Since the third quarter of 2017, fund managers have begun to deploy Guangguang Media, including star fund managers such as Xie Zhiyu, Yang Hao and Tan Li, and many stars have gathered for a while.
But for the film and television industry, the falsification of logic is far easier than confirmation: a cold winter in the industry, a miss in the financial report, and even a movie box office failure can become a reason to be abandoned.
Success that is difficult to replicate
In 2016, Wang Changtian said in an interview, "By 2019, we may reach a new peak in history." If making animated films is really very competitive, I think 2019 will be the most anticipated year. ”
But when the agency that holds Enlight Media arrives in 2019, what it sees is a dismal annual report. According to the 2018 annual report released by Guangguang Media, its net profit that year was 1.373 billion yuan, an increase of 68.47% year-on-year, but most of the income was brought by the sale of 27.64% equity of Xinli Media for 3.3 billion yuan in the first quarter of 2018.
If this part of the income is put aside, the non-net profit deducted by Guangguang Media for the year was -285 million yuan, which was the first loss in the company's main business since its listing seven years ago. This also indicates that in the film and television winter caused by Fan Bingbing in 2018, even Guangguang Media, which wants to work hard to make the company's α, cannot be alone.
Especially in 2018, the animated film "Yesterday's Blue Sky" produced by Color Bar House, the dismal word-of-mouth and box office added a layer of haze to the future of Guangguang Media in animated films. Under the double pressure of performance and logic, institutions have also begun to scatter. According to the data, in the fourth quarter of 2018, a total of 20 funds held heavy positions in Guangguang Media, and only 8 remained in the first quarter of 2019.
But the reversal of the film and television industry is also very simple, only one hit movie is needed.
In the third quarter of 2019, "Nezha: The Demon Boy Descends to the World" was born, and while achieving a global box office result of nearly 5 billion yuan, it became the box office champion of the year in one fell swoop. The success of the film has also injected a boost into the market, which not only verifies that Color Bar House has the ability to create explosive models in animated films, but also begins to gradually enter people's field of vision based on the universe of the gods.
"From 2018 to 2019, we organized a team of dozens of people to secretly research and develop, reorganize the mythological system in China's history, and establish our own mythological universe worldview." Wang Changtian said in an interview, "I hope it becomes Chinese's own Marvel, but our Marvel is composed of animated movies." ”
The narrative of the Fengshen universe and the success of "Nezha's Demon Boy Descends to the World" made institutions pay for it again. According to the data, in 2019, the proportion of Guangguang Media's heavy position in the interim report fund was only 1.63% of the total share capital, and this proportion further increased to 2.89% in the third quarter.
Even in 2020, which was affected by the epidemic, institutions did not stop pursuing Guangguang Media.
On the one hand, as a leading enterprise in the industry, the epidemic can accelerate the optimization of the industry's competition pattern. On the other hand, with the experience of "Nezha's Demon Boy Descends to the World", the market has extremely high expectations for Jiang Ziya, another IP in the Fengshen universe. This led to a further increase in the proportion of institutional holdings in Guangguang Media's total share capital in 2020, reaching a peak of 6.37% at one point.
But the excessively high expectations eventually fell short with the box office of "Jiang Ziya" of 1.602 billion yuan.
In the fourth quarter, the second animated film of the mythical universe "Jiang Ziya" was released as scheduled, although the box office of 1.602 billion yuan is not low among domestic animated films, but it is still a little stretched compared with the box office of 5 billion yuan of "Nezha's Demon Boy".
When the successful experience of a hit is difficult to replicate in the next work, the market also begins to question its ability to continue to create hits, let alone build a mythical universe that can benchmark the Marvel Universe.
Under such circumstances, a large number of institutions once again fled from Light Media. In the fourth quarter of 2020, the fund's heavy holdings in Enlight Media as a proportion of the total equity plummeted to 2.11%, compared with 5.66% in the previous quarter.
Between the two in and two out of the light media, the market's stereotype of the media industry is also deepening: the explosive power of the stock price comes from the occasional explosive profit. Even Light Media, which is trying its best to establish its own unique α in the industry, cannot resist the β attributes of the entire industry, whether it is "Big Fish and Begonia" in 2016, "Nezha's Demon Boy Descends" in 2019 and "Nezha's Demon Boy in the Sea" in 2025.
Compared with Guangguang Media's industrialization ability in animated films, stable publicity channels and the creation of a narrative of mythological universe, investors are more willing to bet on whether its next film will become a hit. This characteristic also makes Guangguang Media rarely hold institutions for a long time in the process of being invested.
Of course, there are not no institutions that have been held for a long time, but what awaits them is an even harsher reality.
End
The data shows that from the eve of the release of "Nezha's Demon Boy" to "Nezha's Demon Boy in the Sea", the stock price of Guangguang Media has increased by only 14.09% in more than four years, and after the release of the magic boy at sea, the stock price has increased by 264.43% in just 8 trading days.
From "Nezha's Demon Boy Descends" to "Nezha's Demon Boy in the Sea", it took more than 5 years between the two popular animated movies, and those fund managers who have held Guangguang Media for a long time finally failed to wait for the arrival of the Demon Boy in the sea.
For example, Wu Chuanyan of Hongde Fund bought Guangguang Media into the top 10 heavy stocks of Hongde Vision Return for the first time in the first quarter of 2019, and has held the company for the next four years. In 2019, it commented in the annual report of Hongde Vision Return Fund: The high-end content of the media mainly refers to books, movies, cartoons, etc., which have a role in improving people's spiritual realm and can attract people to read or watch for a long time, which is becoming a rigid demand of more and more domestic people.
Unfortunately, at the beginning of 2023, Wu Chuanyan left Hongde Fund. After Qin Yi took over Hongde Foresight Returns, although Guangguang Media also appeared intermittently in the list of the top 10 heavy stocks, it finally bid farewell to the top 10 heavy stocks of the fund at the end of 2023.
It is worth mentioning that Dong Shanqing of Taixin Fund has been holding a heavy position in Guangguang Media since the second quarter of 2017, but after he stepped down from related products in the first quarter of 2024, the number of shares held in Guangguang Media has also dropped sharply for three consecutive quarters.
There is a kind of difficulty, it is Nezha who finally waited for its box office, and it is that neither Dumpling nor Wang Changtian gave up or was abandoned. And this kind of investment in time and trust costs may only be more difficult to find in the investment industry.
No, after pulling out a four-fold increase in two weeks, it only took a few trading days for Guangguang Media to come down from its high point and close to halving.
Resources:
[1] Mr. Wang Changtian: Adhere to the bottom line and be alone. Movies are the tip of the pyramid of high-end content! BFF, Film and Television Finance Class, Beijing Film Academy
[2] The animation film track is stuck, and the industrialization opens a long-term growth channel after the explosion, Wanlian Securities
[3] "Frozen 2" set a global box office record for the first week, earning $350.2 million, but the reputation was mixed, International Finance News
[4] Nezha's Northeast tycoons who took the flight have new troubles, and the financial world is WEEKLY
[5] Light King Changtian: For "Look at the Internet First", this year has been reflecting on the original decision-making, entertainment capital
[6] Talk to Wang Changtian, looking for the secret of light prediction of popular models, the teacher in the circle
Author: Wu Wentao
Editor: Zhang Jieyu
Visual Design: Shu Rui Responsible Editor: Zhang Jieyu