Per reporter: Du Wei
■Company: Yuwen Group (0772. HK）
■ Market Capitalization: HK$65.5 billion (as of close on October 23)
■ Core competitiveness: the vanguard of the online reading industry, the pioneer of China's online literature payment model, occupying half of the online literature, rich product matrix, and firmly controlling the source of IP
■ The company in the eyes of the institution: the leading digital reading platform in China and the absolute leader of literary IP
Draft: Dong Xingsheng
"This is not a simple three-way conference, nor is it just done for the isolation of the film and television field, but the ecosystem built by the entire IP." On October 19, Cheng Wu, vice president of Tencent Group, CEO of Reading Group, CEO of Tencent Pictures and chairman of Tencent Animation, announced to the outside world that Tencent Pictures, Xinli Media and Yuwen Film and Television, three enterprises under Tencent and Reading, will deeply integrate and complement each other's advantages to build Tencent's new cultural and creative ecosystem.
Image source: Photo by reporter Du Wei
On the same day, the "Tencent Pictures, Xinli Media, Yuwen Film and Television 2020 Annual Conference" gathered stars and announced the film list of 56 projects, attracting the attention of all parties. Since the senior reshuffle of Reading Group (hereinafter referred to as Yuwen) on April 27 this year, Tencent's senior management represented by Cheng Wu has entered the core management of Reading, and the outside world is full of expectations for the future development strategy of Reading. From April 28 to October 23, in the past six months, Reading's performance in the secondary market also confirmed the expectations of capital: 122 trading days rose by 101.88%, the stock price hit a two-year high, as of the close of October 23, the market value of HK$65.5 billion.
In the past six months, Cheng Wu has not stopped, proposing to start the organizational reform of reading and comprehensively upgrade the development strategy of reading. The integration of tencent's "troika" is a drastic reform after Cheng Wu took over reading, and it is also an important step for reading to go out of strategic upgrading.
What kind of Internet innovation thinking will Tencent implement with what kind of Internet innovation thinking and understanding of the new cultural and creative ecology? The "Daily Economic News" reporter had an in-depth dialogue with Cheng Wu and listened to Cheng Wu interpret his big chess game under the Tencent film and television map.
The degree of coupling between industries is not high
New infrastructure with IP as the core layout of content ecology
Two years ago, under the leadership of Cheng Wu, Tencent upgraded the "pan-entertainment" concept of version 1.0 to the "new cultural creation" of 2.0. "The core should consider the needs of users, in addition to the needs of social networking and watching news, there is also a huge demand for online text, animation and online film and television business."
The mobile Internet and intelligent terminals can quickly connect and link user needs. However, there are very few companies that can completely open up this industrial chain. In Cheng Wu's view, even in the mature and talented film and television industry such as Hollywood, there is still a "721" phenomenon, that is, 7 of the 10 movies are losing money, 2 are tied, and only 1 is profitable. It is worth mentioning that 35% to 40% of Hollywood's films rely on box office profits, and others rely on DVDs, derivatives, licensing industries, etc. In China, this problem is particularly pronounced. "China's film and television industry profitable films are less than 10%, because our industrial chain has not been done, and the return on investment depends on box office revenue."
Image source: Courtesy of Yuwen Group
Therefore, once a large-scale film loses money, it will cause a film and television company to suffer a heavy blow. "The cultural industry is creativity in the end, and the biggest feature of the creative industry is high risk, because the core of the creative industry is to innovate, and the biggest problem of innovation is that the failure rate is very high and the success rate is very low." Cheng Wu pointed out to the point that the coverage of film and television is the widest and the expression is the most vivid, but the risk of innovation leads to a higher failure rate in the industry.
"A film cycle may be as long as 10 years, the investment is often very large, the social division of labor is very strong, and the shooting process also has to experience various complex factors such as weather, and it has to look at the schedule after the shooting is completed, so its systemic risk is the strongest." Cheng Wu believes that in order to reduce risks, it is necessary to "do a good job in the industrial ecology through the mutual assistance and combination of the contents of different cultural industrial chains, so as to bring greater opportunities to different industrial chains."
Nine years ago, when Cheng Wugang set foot in pan-entertainment, he found that he must not do film and television in isolation, and the single industry is more vulnerable when it encounters twists and turns. At present, the degree of coupling between industries is not high enough, "each industry can not overcome its own shortcomings and difficulties, but also has its own ceiling."
From the perspective of IP adaptation, the text imagination is rich, but the form of expression is single; animation is in the middle, but it is relatively vertically niche; the investment cycle of film and television is very long, and the success rate of games is lower than that of film and television. "They have their own advantages and challenges, and we want to lay out all kinds of fields in order to meet the different needs of users around the content." We cannot fight each other' battles, but integrate and learn from each other's strengths. ”
Film and television companies cannot reduce systemic risks in the vertical field, so they need to plan and judge from the source and from the earliest IP links: which have long-term development value, which are suitable for different industrial links to do, and then combine and linkage to better develop IP works and realize the coupling of the content industry chain.
Episode "Tu Shan Little Red Lady"
"In the past IP development cooperation, it was a single transaction based on the logic of buying and selling, and the zero-sum game based on ip expendable adaptation was the mainstay. In animation, film and television, game adaptation and other links, Yuwen lacks ecological partners who are jointly committed to ip influence and centripetal force construction. Cheng Wu said.
Therefore, after practicing the 1.0 and 2.0 models, Cheng Wu believes that Tencent Pictures, Xinli Media, and Yuwen Film and Television all have a new infrastructure layout with IP as the core of the content ecology. However, the basic capabilities of each module are far from enough. "So this year we want to really integrate them." It is necessary to do a good job in the vertical field, but also to do a good job in the overall IP three-dimensional long-term planning. This is the initial stage of our third phase, and we need to constantly adjust in the process of practice and running. ”
Betting is short-term finances
Xinli's strategic value to Reading is not a monetization tool
In Cheng Wu's new cultural and creative ecology, film and television as IP "amplifiers" have core value, therefore, IP film and television is an indispensable link, but it is also the most difficult part of ecological construction, and the uncertainty of creativity increases potential risks, so "integration" has become an inevitable step.
After "Celebrating the Rest of the Year", "Son-in-law" is a major drama jointly launched by three brother companies, which was released on October 6
Of the three companies, the fate of Xinli Media has attracted the most attention. In 2018, Yuwen bought Xinli Media for 15.5 billion yuan, when the capital of the film and television industry was cold, and the valuation of 15.5 billion yuan was not cheap. Since then, in 2018 and 2019, Xinli Media has not completed the performance bet for two consecutive years. At the end of 2019, Xinli Media mainly participated in the production of "Qing Yu Nian" to burst the screen, but because of the impact of the epidemic on the film and television industry, it cannot be ignored. In the first half of 2020, The revenue and operating performance of Xinli Media still did not meet expectations, which dragged down the loss of Yuwen Shou, and the impairment of goodwill and trademark rights related to the acquisition of Xinli Media was as high as 4.41 billion yuan.
"Even after Yuwen acquired Xinli, the two have not yet achieved true linkage and integration, so Yuwen lacks the creative ability to transform excellent online works into systematic Xinli." Cheng Wu does not deny that after Xinli Media was acquired by Yuwen, the fusion of the two has not yet produced a perfect chemical effect.
However, Cheng Wu expressed long-term optimism about Xinli Media, which should also be the ultimate purpose of Yuwen's acquisition. "Betting is a short-term finance, and the strategic value of Xinli Media to Reading is not a tool for monetization, but should become the most capable team and unit in the process of transforming reading excellent IP film and television, which can transform more excellent works into film and television and expand its influence."
"The first season of 'Celebrating The Rest of the Year' was a success, and we hope to turn these few practical projects into batch, large-scale and long-term through systematic integration." Cheng Wu hopes to make a large number of high-quality IP of Yuwen into more "Celebrating Yu Nian".
In the past 10 years, Cheng Wu has witnessed Tencent's development in the field of social networking and how Tencent Games has grown into the world's largest and most influential platform, and has deeply participated in and promoted the content sector based on social networks and game businesses. For the positioning of the "troika", Cheng Wu has a clear plan: "In the film and television link of IP conversion, there are few overlapping areas of the three companies, but there will be a lot of linkage and mutual synergy. ”
Mao Dun Literature Award's work "The World of Man" will be jointly created by Tencent Pictures and Xinli Media
"Xinli Media is more based on TV dramas, supplemented by movies, producing head boutiques, and has 6 to 10 outputs a year." Whether it is the adaptation of the reading IP or the creation of realistic themes, it can maintain excellent continuous output. But at the same time, Cheng Wu also pointed out that the bandwidth of one company is relatively limited, and it needs two other companies to link up and consolidate.
Cheng Wu further said: "Tencent Pictures takes the main investment control and self-control, attaches equal importance to TV series and movies, and takes the lead in creating good works together with the industry's outstanding creative team. However, xinli media and Tencent pictures have a limited number of self-made and main control main investments that can be adapted each year, so reading film and television will rely on reading IP relatively speaking, and more are mainly based on part-time repair and investment, supplemented by the customization of some platforms. ”
At the same time, Cheng Wu stressed: "The 'three brothers' will each come up with the best blocks, open collaboration with partners, live up to every good work, and constantly open up the value space of each IP." ”
The scene of the press conference
Clear positioning will allow the three companies to achieve resource borrowing and complementary advantages, but the three companies also have overlapping business parts, specific to each IP, how to allocate resources reasonably?
"We will set up a film and television committee, and Lao Cao (Cao Huayi, chairman of Xinli Media) and I will coordinate the film and television reform of all IP, including standard setting, judgment and grasping." There will also be different teams set up below, such as responsible for IP creation, which IP is suitable for which company to lead, and how to collaborate. Cheng Wu laughed and said that the film and television committee has borrowed from the Disney model, the Japanese ACG copyright committee model, etc., but at this stage, it is still a new practice of crossing the river by feeling the stones, and it needs to be continuously iterated to do better.
Transformation is not a matter of time to upgrade to the "ecology of literary content."
Landing on the impact on the reading of listed companies, which is also a special concern for investors and the capital market, what kind of development opportunities will be obtained after the integration of reading into Tencent? This time, Cheng Wu boldly launched the integration of the "troika", which is actually Tencent's transformation and upgrading of the reading business capabilities, whether it is the systematic transformation of IP or the role positioning of Xinli Media.
From the perspective of company value, what investors value most is whether the company can continue to grow and continuously create value. For Yuwen, it is the IP operation ability, if the IP ecology to be created by Tencent is realized, then to a certain extent, the risk brought by the attributes of the film and television creativity itself can be reduced, and in layman's terms, it is the uninterrupted output of "Qingyu Nian", which may be film and television, or it may be animation, games, etc.
Cheng Wu admitted that after taking over the reading, he made continuous adjustments, hoping to create a 2.0 version of the reading, and promote it from "the largest industry genuine digital reading and literary IP cultivation platform" to a "stronger literary content ecology", "not only strategic and business adjustments, but also organizational and cultural upgrading and transformation".
Before the tencent executives represented by Cheng Wu entered Yuwen, The stock price of Yuwen once hovered at a low level from March to April this year, and the lowest touched HK$25.95. However, since the high-level change of blood on April 27, Reading's stock price has climbed all the way, and as of the close of trading on October 23, Reading has doubled its share of HK$64.50 per share, with a market value of HK$65.5 billion.
After Cheng Wu took over Reading, Reading's stock price rose by 101.88% in 122 trading days, a new high in two years (Source: Wind)
However, it is not easy to maintain the bright performance in the capital market, when talking about the thinking of reading market value management, Cheng Wu specifically told every reporter that reading is the core component of Tencent's new cultural and creative strategy and ecology, and market value is one of the external manifestations of the company's value.
"As a public company, you must be responsible to shareholders, but a good capital market needs to be long-term and sustainable. After I took over the reading, the management team hopes to be able to do every step of the work solidly under the guidance of the new strategic direction, do a good job in upgrading the organization and talents, and at the same time make up for the actual capabilities of each sector and make them stronger. Only by focusing on the main business can we use good performance to enhance the confidence of investors and the market. ”
The second season of "Celebrating the Rest of the Year" was officially announced at the press conference on October 19
Cheng Wu added that in the next year, resources will be invested to enhance IP incubation capabilities. "Content and IP are the core assets of Yuwen, the foundation of our business value and the biggest competitive advantage. Secondly, the platform will be improved, not only the content distribution center, but also the link between writers and users, and at the same time, a strong connection will be established between Yuwen and Tencent's product matrix, using Tencent's traffic advantages to achieve wider user coverage and enhance the platform's connectivity. Cheng Wu further said that it will also strengthen the IP-centric ecosystem and fully release the growth space of IP.
Cheng Wu expects that to create a "group army of cultural content entertainment industry", we must adhere to long-termism, respect the long-term content layout of IP value, and lay a better foundation for the long-term performance of the capital market through good business performance and actual performance. "Tencent's transformation of reading articles this time has been in Japan for a long time, and it will not be a day."
Reporter's Note| Internet companies' participation and reshaping of China's film and television industry has entered a new stage
In November this year, Cheng Wu will celebrate his 11th anniversary at Tencent.
Since joining Tencent in 2009, Cheng Wu has spanned many sectors, from social networking and game business to film and television business, and then to this year's helm of Reading Group, the first share of China Netwen. He has been immersed in the field of cultural creation for many years, and has put forward the concepts of "IP", "pan-entertainment" and "new cultural creation" in a forward-looking manner.
This chengwu integration of the "troika" is of great significance to the industry - it is considered to be a sign that "the participation and reshaping of Internet companies in China's film and television industry has entered a new stage", and it is also a heavy move that can be "recorded in the history of China's film and television industry development".
Cheng Wu is well aware of the importance of reading the online literature ecology to Tencent's IP strategy, because there are not many works that have been successfully adapted from literary IP, and it is far from forming an industrial system. Therefore, it is necessary to accelerate the integration of several major content business sectors under it, form a "1+1+1>3" content industry chain coupling, and build a broader content industry ecology.
In the dialogue of more than 1 hour, the reporter deeply felt that under the leadership of Cheng Wu, the "troika" will help Tencent New Cultural Creation to enter the 3.0 era at full speed through internal linkage and external alliance, and the next "Qing Yu Nian" is ready to go. As Cheng Wu said: "Good ideas have always been scarce, need to drip water and hide the sea, only by building a broad content industry ecology, can good content continue to grow." ”
Only in this way can we promote the in-depth and high-quality development of China's digital content industry. It is believed that under the impetus of Cheng Wu, Tencent will build a strong matrix of literature, animation, film and television, e-sports, etc., and Tencent's "new cultural creation" ecology is also expected to become a Symbol of Chinese Culture.
Reporter: Du Wei
Editor: Dong Xingsheng
Vision: Liu Yang
Typesetting: Dong Xingsheng Chen Yanxi