Is the ceiling of the movie market still far away? Besides box office income, how can the value of movie content find an incremental market?
Reading entertainment | yiqiduyu
Wen | Zero One
The 4th China Film and Television Capital Summit held on June 11th looks a bit "mixed". Combining "finance and economics+film and television+cross-border+integration", the summit also held two special round-table dialogues, among which the round-table dialogue with the theme of "New Consumption, New Cross-border Scenes of China Films" brought together a group of "cross-border people" who are far or near to the film.
Participants in this round-table dialogue include Wang Jianer, Party Secretary and Chairman of Shanghai Film Group; Sun Zheyi, President of Sunac Culture Group and Executive Director of Sunac China; Chen Sicheng, a famous director, screenwriter and actor; Zhang Yu, investment partner of sequoia capital china; Wang Ran, founder and CEO of Yikai Capital; Zhang lei, CEO of Yuanjing Technology Group; Executive Director of POP MART; Chief Operating Officer of the Group; Side, President of China District, etc. They are from various fields, including film and television, investment, environmental protection and new consumption.
This is the first time that Sunac Culture participated in the China Film and Television Capital Summit. As a film "new force" established just over two years ago, Sunac Culture has successively participated in the joint production of mainstream blockbusters such as My People，My Country and A Writer’s Odyssey, and at the same time, it has actively deployed and launched works such as Luo Xiaohei’s War and Wish Dragon in the animation field. At the strategic conference held last month, Sunac Culture showed the panoramic layout of the Group’s business to the outside world for the first time, and launched two major content brands, namely "Sunac Film and Television" and "Sunac Animation", and at the same time revealed a new positioning centered on "IP+ Content+New Consumption Scenes", and its strategic objectives are in line with the theme of this forum.
Since the outbreak, the film industry has experienced a period of ups and downs. From shutdown to recovery, the international market has not yet returned to normal. Although the film market in China has recovered rapidly, the market income source is still relatively single, and the industry is still exploring more stable business models. The topic involved in this "new consumption, new cross-border scenes of China movies" is more related to the future of the film industry, or the development node it faces-Is the ceiling of the movie market still far away? Besides box office income, how can the value of movie content find an incremental market?
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The future of the film industry lies in "more than box office"
In the keynote speeches and forums of this film and television capital summit, many guests mentioned the same phenomenon:There is a huge difference between the income composition of China film market and the international market.
Yan Yan, the founding managing partner of Safran Asia Investment Fund, pointed out in his keynote speech that the box office revenue in China film market accounts for almost more than 90%, but the box office revenue in the US film market only accounts for 30% of the total, and two-thirds of the revenue comes from the "back market", such as DVD, pay TV, derivatives, etc. "For example, the famous movie Titanic has a box office of more than 2 billion US dollars, but its back income has reached nearly two billion US dollars.
Director Chen Sicheng mentioned that the film industry is now "empty and influential", and nearly 100 million viewers in Detective Chinatown 3 bought tickets to go to the cinema during the Spring Festival. "But now we.Except for the consumption behavior of watching movies and the consumption scene of cinemas, everything else is almost zero.. Chen Sicheng also mentioned that all domestic cultural film companies together have a market value of less than 16% of Disney’s. In this regard, Chen Sicheng believes: "Disney is not just a logic of selling movie tickets. It sells its own movie tickets around the world, sells its own ideology, and sells its own goods around the world."
Sun Zheyi, president of Sunac Culture Group and executive director of Sunac China, also mentioned the great energy of Disney model and the value of its original IP. "We look at Disney, which is the IP of Star Wars. Their $10 billion box office has a revenue of $40 billion. This piece is the value of real IP. And if this piece pulls the value of global derivatives, the top 50 does not have an IP of China. "
The box office revenue of China film market is absolutely mainstream, but this should not be the "final form" of the film industry.This may also be the reason why new entrants such as Sunac Culture and state-owned film giants such as Shangying attach importance to "IP operation"-Sunac Culture just released a new strategic positioning of "IP+ content+new consumption new scene" last month; Wang Jianer, Party Secretary and Chairman of Shanghai Film Group, also said in the forum that "big IP development" is one of the company’s three core strategies: "From the beginning of creative theme, we should establish the concept of big IP and consider how to combine the investment and new consumption of this film. At the extension end, we should consider the whole chain operation mode and cross-border content operation mode."
From 2010, the box office just broke 10 billion, and the number of national screens just broke 6,200, to 2019, the box office income of 64.266 billion yuan and 69,000 screens. The box office income of the film market has developed rapidly in recent years and slowed down in the past two years, but this does not mean that the ceiling of the film industry has arrived.The diversified business model of high-quality IP still has great potential. The potential beyond box office income-consumption, tourism and technology, the next peak of the development of China film industry needs China film content to try more cross-border forms and create greater value in the vast world of derivative markets.
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There are n ways to realize the cross-border integration of movies.
How can the industry do better?
Among the cross-border objects of China film market, "new consumption" is perhaps the most important one. In Mr. Reading Entertainment’s view, this is determined by the background of the great economic development era. In 2020, the National Development and Reform Commission said that China will soon surpass the United States and become the largest consumer market in the world. With the outbreak of strong market scale and active consumption power, a large number of "new consumption" subdivisions have experienced explosive growth: for example, POP MART, with a market value of over 100 billion due to the "blind box economy", the rapidly rising Hanfu market, offline script killing, werewolf killing and other new forms of entertainment consumption.
The mushrooming "new consumption" not only reflects consumers’ enthusiasm for emerging consumer goods, but also reflects the vitality and scale effect of the whole China consumer market.
In this summit forum, Wang Ran, founder and CEO of Yikai Capital, thinks that“The consumer market has created opportunities for the film industry. ": "Because of the uniqueness of China’s consumer market, its volume and growth have led to so many new consumer brands in China, and new consumer companies like Bubble Matt can break ground and have a large number of them.Capital comes together. Therefore, the capital’s enthusiasm for the consumer industry will indirectly provide a positive for the film and television industry, and integrate with them to grow together with them.Wang Ran believes that in this sense, some unfavorable factors will just force the industry to make a faster breakthrough in the model.
At present, some companies in the industry have actually considered and practiced the possibility of film cross-border integration in many aspects.
Using the existing resources of cinemas combined with new consumption, Wang Ran thinks it is a very important topic, especially for the projection industry. In the cinema space, it can be combined with new brands, new retail, new entertainment and new catering. Reading Entertainment Jun also believes that many of the existing cinema income models actually come from selling goods and advertisements, and the future development may be in the direction of greater integration with commercial real estate and more subdivided new consumption combination.
The derivatives market is a very wide field. Among them, some manufacturers combine IP to produce new consumer products, such as POP MART and Marvel Comics, Harry Potter, Mickey’s co-branded gift box, etc. The tide play based on IP production is a proven and mature mode in IP development mode, and the new upsurge is driven by new gameplay such as IP itself and blind box. In addition to hand-playing, co-branded makeup, co-branded skin of games, and co-branded beverage packaging have all become the gameplay of movie IP derivatives, realizing the influence of movie IP in a large number of consumption scenarios.
There have also been many attempts at the real-life entertainment mode of the movie IP+ Wenlv. In this field, there are both Huayi Brothers’ film town business with light asset model and Sunac culture, a new film force with great advantages in the real estate industry.
It is not difficult to find that there are many ways to realize the cross-border integration of movie IP and new consumption scenes.So, how does the China film industry need to strengthen the cross-border prospect at this stage? Reading Entertainment Jun synthesized some opinions of this forum.：
First, most forum guests emphasized the value of head IP. Indeed, whether it is Disney or the Japanese animation market, the cornerstone of cross-border is that the content itself is most widely recognized and thus forms a strong IP influence, so that the subsequent cross-border integration and industrial chain can be opened.
Second, we should jump out of self-limiting thinking. Zhang Yu, a sequoia capital china investment partner from the fashion industry to the investment circle, believes that the change of concept is very important: "Film is a very important link in the overall business planning, just like what we call traditional media, but it is not the only one."
Third, we should attach importance to localization. China people have the cultural soil of China, so we should combine it with contemporary cultural scenes. This can be seen from the top movie themes in the box office of Chinese movies in recent years. Movies related to local cultural context often occupy the mainstream, and the China market needs localized IP cross-border forms.
Fourth, we must make long-term preparations, and both content creation and cross-border integration need to build long-term value. To form a plan, all kinds of derivative development of IP should be advanced to the content creation stage or even before. In this regard, Sun Zheyi said in the forum, "Whether it is a derivative team or a real-life team, we will focus on content development, including the choice of our theme. We like animated film products and science fiction products, because this kind of product is the easiest to be derived and made real."
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Taking the IP "integration" route, Sunac culture is well prepared.
At the brand strategy conference held by Sunac Culture in May this year, Sun Zheyi said that IP building will be the core starting point of Sunac Culture:"IP is the foundation, content is the amplifier, and new consumption and new scenes are the expansion paths of commercial value."
The strategic direction of Sunac Culture coincides with the overall views of the guests in this round-table dialogue. Then, for the cross-border integration of movies, what "big name" does Sunac Culture, which focuses on the strategic positioning of "IP+ content+new consumption and new scenes", hold?
Head concentration is a major trend in China film market, and in the context of cross-border integration, head IP is also the basis of everything. Sun Zheyi also mentioned in the round-table dialogue: "Only the head IP can get through this model, and the waist IP can’t adapt to an industrial chain."
Therefore, after more than two years of hard work, Sunac Culture has established an advantageous IP content layout in both the present and the future. At present, Sunac Culture has mastered the well-known secondary IP such as Ali and Luo Xiaohei, and the films A Writer’s Odyssey and Wish Dragon have also been successful in various schedules.
What’s more worth mentioning is that the influence of these IPS is also very impressive in overseas broadcasting. The first animated work "The Battle of Luo Xiaohei", the IP "Luo Xiaohei" of Sunac Culture, landed in the Japanese market last November, creating a box office record for domestic animated films in Japan; Wish Dragon, the first animated film originally developed, produced and jointly produced by Animation, an animation studio under Sunac Culture, was launched on Netflix on June 11th. On the first weekend of its launch, it won the first place in Netflix’s North American animated film hit list, the second place in the global IP content hit list, and the first place in more than 19 countries such as the United States, Canada and France. Overseas media, including Variety The New York Times, published positive comments, and also gained 77% freshness of rotten tomatoes and 83% audience praise of popcorn index. The recently released Top10 list of Netflix movies in the 24th week of 2021, Wish Dragon once again swept the world to the top with a super high score of 5,118, and the domestic animated films made gratifying achievements in going to sea.
Not only that, Sunac Culture has reached in-depth strategic cooperation with well-known directors and producers such as Frant Gwo, Rao Xiaozhi and Chen Guohui, and at the same time, seven animation studios have been set up in the animation field. A number of animation directors, including Legend of Deification directors Cheng Teng and Li Xia, have formed a "dream team" of Sunac Animation, focusing on the development of "animation+science fiction", two fields that are most suitable for IP cross-border integration.
In addition to content layout, the long-chain operation mode of Sunac culture is bound to become another weapon to boost IP value amplification.
Based on Sunac Group’s dominant position in the real estate industry, Sunac Culture has a large number of cultural tourism hotel resources, cultural tourism cities, theme parks, Qingdao Cinema Film and Television Comprehensive Base, etc. These rich offline resources give Sunac Culture enough foundation to operate movie IP and connect fans to create a large number of new consumption scenes. According to Sun Zhe’s introduction, Sunac Culture has also increased its weight in the field of live e-commerce, locking in the characteristic track of IP live e-commerce. With Sunac Culture’s patient advance layout and long-term strategy blessing, these superior resources can provide diversified power sources for the future cross-border integration and development of movies.
Generally speaking, Sunac Culture has defined itself as an IP commercial operation company from the very beginning, and has taken the lead in the general trend. For the whole film industry, it has become a top priority to find the value amplification of film IP in the vast consumer market outside the box office revenue. In this process, Sunac culture is not only an intruder in the new film market, but also a pioneer in exploring the future of the industry.
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