Hou Kaiwen: Maintain originality and copyright in the derivatives market regardless of cost

Shiguang's derivatives business has increased fivefold since its launch in stores last year. "This indicates that the derivatives market is starting to heat up, and it has also driven some advertising and brand businesses, so it is a corresponding linkage reaction, and the impact is still relatively large."

Original title Interview with Hou Kaiwen, CEO of Shiguang. com: Why are you betting on the derivatives market "regardless of cost"?

This is indeed not a traditional Internet company's press conference. There is no PPT arranging data on the LED screen, nor is there a boring lecture from a technical expert. Instead, there are pictures of classic paintings and movie clips. Shiguang's derivatives themed press conference is more like a diverse art exhibition.

This company, which started as a movie sharing community, has been in the movie market for 10 years, from crowd-crowd tactics to the era of big data analysis, from community functions to e-commerce advancement.

The derivatives market is "exploding"

on the first floor of Qiaofangfang grassland. The booth specializing in movie IP derivatives not only has various cute objects from "Da Bai" and "Zootology", but also tough guys such as "Iron Man" and "Warcraft". Favorite, the dazzling shelves are the LOGO of Shiguang. In addition to fashion shopping malls, Shiguang's shelves can also be seen in major theaters such as Wanda Cinema across the country.

These movie products that used to be either purchased abroad or purchased overseas are now close to us. This is another step in Shiguang's strategy since it announced last year that it would start operating vertical e-commerce: offline layout.

At the same time, the derivatives currently developed by Shiguang are no longer limited to products such as handmade costumes and dolls. What you can see are a large number of daily life products such as clothing, hats, backpacks and accessories that incorporate fashion elements. Hou Kaiwen, CEO of Shiguang. com, told reporters that Shiguang's derivatives business has increased fivefold since its launch in the mall last year. "This indicates that the derivatives market is starting to heat up, and it has also driven some advertising and brand businesses, so it is a corresponding linkage reaction, and the impact is still relatively large."

In our 2016 annual forecast in the commercial technology field, we predicted that "the post-product market will surpass the box office." The development of Shiguang seems to be confirming our prediction. Data released by Shiguang. com shows that

since it started operating its derivatives business in the second half of 2014, Shiguang's derivatives sales revenue in 2015 has tripled year-on-year, and in the first quarter of this year, it has increased five-fold year-on-year; The number of independently designed products accounts for 30% of Shiguang's Mall products and 70% of sales revenue; the B2B e-commerce platform "Shiguang Pro" covers 90% of real-name theater manager users in five months after its launch; currently, the B-end accounts for 30%, and the C-end accounts for 70%; Online accounts for 80%, offline accounts for 20%.

Shiguang, which began to deploy the derivatives industry in 2014, is like being "bet on the right treasure" by the god of luck; but in Hou Kaiwen's view, behind the luck is the internal skills accumulated over the past ten years.

It is no exaggeration to say that Shiguang has witnessed and accompanied the development of China's film industry. The respect this platform has won is Hou Kaiwen's lack of utilitarian support for China films. Just like when talking about the diversified development of IP, he has repeatedly emphasized that "for the sake of originality and authenticity, at all costs," which also represents Hou Kaiwen's original intention to start a business.

In 2002, the box office revenue of China films was only 860 million yuan; by 2010, box office revenue exceeded 10 billion yuan; and in 2015, it directly exceeded 40 billion yuan. The total number of commercial screens in China reaches 30809, and there are 6210 urban cinemas. The surge in box office revenue has driven the development of the upstream and downstream of the film industry chain. Since last year, the diversified development of the film industry with "IP" as its core has shown a vigorous trend, and major film companies have quietly launched the layout of IP derivatives and surrounding areas.

At the beginning of its business, Shiguang relied on human-sea tactics to establish China's largest database and media; in 2008, it opened up movie theater information and screening time query functions; in 2009, it created movie promotion functions; and in 2013, it launched movie ticket sales business.

From the establishment of Shiguang Network to 2014, Shiguang Network has remained in a B2C business model. Until the launch of the mall in 2015, derivatives were not only open to the C-end, but also to the B-end. This allows Shiguang's profit model to usher in more possibilities in addition to ticketing, movie promotion and other businesses. Take the well-known derivative "Big White" as an example. After the release of "Super Marines", a Disney animated film that was not previously favored, it won the attention of a large number of female fans, which led to the sales of derivatives. Only Big White's phone case sales have exceeded 10,000.

Zeng

Maojun, general manager of Wanda Theater Line to resist "copycat" aggression, said in a statement that Wanda's cooperation with Shiguang "marks an important milestone in the China film market." Specifically, movie derivative products "have expanded from serving only specific user groups to the field of daily necessities."

"My business plan has only changed one in the past ten years." Hou Kaiwen said. He is not a technical person, but he is equally rational when talking about business development."Everything Shiguang does is to pave the way for the next step. From movie information, community, media, wireless, ticketing, and derivatives, we have completed it. A closed loop of user experience."

Shiguang. com is known as "slow-working" among new product developers. The development of derivatives alone took three years of preparation time. However, when the "Shadow Time" design brand owned by Shiguang Online was launched, it opened up warehousing, logistics, distribution, express delivery tracking and other services in one go, becoming a mature e-commerce platform that "is completed within 1-3 days from order to arrival."

Models are important, but it is the product itself that supports the development of the platform. The design and production of derivatives require professional teams. Shiguang spent three years building a design team, craft team, and production team, and then planned the entire IP based on the movie release time to open up all links.

This is also why Shiguang can obtain the joint authorization of Disney, Sony, Paramount, Warner Bros., Universal Pictures and the world's six top film studios. It is also a company that rarely sells genuine derivatives of Hollywood's top commercial blockbusters in China-the most important thing is that many theaters have to find Shiguang for purchase.

If you want to make derivatives, the authorization threshold is a realistic test."Overseas IP authorizations don't authorize you just based on your funds and the number of users. They need to see whether you are respecting intellectual property rights. Whether your platform is a target customer group, whether it has design capabilities, and whether there are channels, the other party will have a comprehensive consideration." Hou Kaiwen said.

American

film companies have long relied on movie-themed derivatives for diversified profits. Disney and Marvel's IP products have been enduring. In addition to box office, a successful IP also requires verification in the derivatives market. The crux of the delay in opening up the China market is that it has been difficult to break through the "quality barrier."

In China's film derivatives market, which is flooded with copycats, e-commerce platforms have no shortage of inferior replicas, especially raw materials such as toxic plastics, which pose great harm to children's health. Due to the high cost and limited profits of "originality", original derivatives have been ignored for many years. In order to ensure quality, originality accounts for more than 30% of the derivatives released by Shiguang. com; Hou Kaiwen even uses "regardless of cost" to describe the quality control of raw materials.

Like the first person to eat crabs, Shiguang has not yet formed a "successful model" to replicate, and most of its experience comes from its own practice. For example, during the cooperation, the team learned that a large movie often starts derivative development one year in advance, but more than 50% of movies only have three months to prepare, from authorization, design, review, to production, and online. The fastest case ever done by Shiguang took 45 days.

It has only been one year since the mall was launched, and the "Warcraft" film company has granted Shiguang the right to design all categories. From daily necessities to digital to toys and furniture, the design of the entire four major categories has been refined from more than a thousand designs to more than 300 products, from badges worth a few yuan to handpieces worth thousands of yuan, from small key chains to proportional character models, this should be the largest derivative development project after Marvel.

Hou Kaiwen said that the authorization party's trust comes from its affirmation of Shiguang's "originality and authenticity". "This time, Shiguang. com is also responsible for the design of the 'Warcraft' derivative demonstration, which means that our design will be given to other developers as a standard."

In 2015, after an appointment between Wang Jianlin and Hou Kaiwen, Wanda purchased a 20% stake in Shiguang. This move was once questioned by the industry, with some film companies saying that Wanda's money "may have been wasted." This year, when Huayi, LeTV, Alibaba, Tencent and other film companies entered the derivatives industry one after another, Wanda's intention to take a stake finally surfaced.

Editor: Nancy