Chen Shaofeng: Investment in cultural industries is characterized by high risks

Chen Shaofeng, deputy dean of the Institute of Cultural Industry at Peking University, believes that a very big feature of the cultural industry is high risk, so in the future development, many features that were not present in the past will be found. For example, Jingdong is very valuable and Youku is very valuable. But they are all money-losing companies. This model is very different from the tradition, and polarization is the biggest feature.

On April 16, the 2016 Ningbo Cultural and Financial Cooperation and Development Forum, hosted by the Ningbo City People's Government and Economic Daily, was held in Ningbo, Zhejiang. In the theme discussion of "Opportunities and Challenges for the Development of Cultural and Financial Industries in Key Cities", Chen Shaofeng, vice president of the Institute of Cultural Industry of Peking University, discussed the business model of cultural industry investment from the perspective of enterprises. He believed that the cultural industry has a very big characteristic that is high risk, so in the future development, many characteristics that were not found in the past will be found. For example, Jingdong is very valuable and Youku is also very valuable, but they are all money-losing enterprises. This model is very different from the traditional one. Polarization is the biggest feature.

Chen Shaofeng, deputy dean of the Institute of Cultural Industry at Peking University,

compiled the following based on the speech:

Cultural finance includes two aspects: one is financing, and the other is investment. From the perspective of financing, I suggest that part of the special funds supported by the government's cultural industry be used as subsidies for bank risks, and government subsidies can be used to promote the amplification of bank quotas. This leverage will benefit all enterprises the most, compared to directly putting money out. It will work better.

As for investment, I think that a very big feature of the cultural industry is high risk, so in its future development, it will find many characteristics that were not present in the past. For example, Jingdong is very valuable and Youku is also very valuable, but they are all companies that lose money. This model is very different from the traditional model. The other model is polarization, which is our biggest feature.

Overall, the Internet cultural industry accounts for about 70% of the market value, with the cultural industry accounting for 15%, and the sports industry accounting for about 6%. Among them, the one that is most optimistic and worth investing is cultural e-commerce. Ten years later, the scale of China's e-commerce may reach 20 trillion yuan. If 1/4-1/5 of it is cultural e-commerce, then my country's cultural industry will have huge room for growth in the future. In addition, the transformation of real estate is also an area worth investing. Real estate is divided into two parts in the transformation process, one part is heavy on assets and the other part is light on assets. Many real estate developers in China have stripped off heavy assets and left part to do cultural industries. This is also what we are promoting. For example, commercial districts have become platforms for cultural industry operations, which is also one of the future development directions.

One of the problems facing the cultural industry now is equity investment. He advises people not to invest in projects because the risks are very high, so it is best to invest in enterprises and make equity investment, especially long-term equity investment.

For funds, if there are only three to five years, he recommends that all fund companies consider the second fund when making the first fund, that is, sell it to the second fund when the first fund ends. This can achieve a relatively large value-added for the enterprise.

The most promising thing is the entrepreneurial base. If everyone competes for limited equity mergers and acquisitions of several companies, the price will be very expensive, so we especially need to make a venture capital. At the same time, venture capital is not the current incubation, nor is it a space for mass innovation. It includes venture capital and entrepreneurship guidance. Only in this way will the probability of success be relatively high. We are now studying that each company's business on its platform is unique. Integrating the equity of several companies can become a listed company. This is the best direction for future development.

In addition, through corporate mergers and acquisitions, we can carry out strategic transformation of the industries of all listed companies, including newspaper groups, games, etc. However, the mainstream method of capital operation in the future will be industry + capital operation + investment.

Editor: vian