Huaying Capital Ji Wei: Six positive trends promote the development of content industry

The reporter recently interviewed Ji Wei, managing partner of Huaying Capital, and discussed topics such as current investment trends in the cultural field, opportunities in the cultural industry, and the current situation of the capital market. Ji Wei believes that ① cultural fields represented by Internet celebrities, IP, and live broadcasts may become a gateway;② Investment hotspots will switch faster and faster.

The reporter recently interviewed Ji Wei, managing partner of Huaying Capital, and discussed topics such as current investment trends in the cultural field, opportunities in the cultural industry, and current trends in the capital market. The following is the interview content edited and compiled by the reporter. The key points are as follows:

1. There was no outlet in the first half of this year. If we must talk about outlet, it would be the cultural industry including live broadcast, IP, and Internet celebrities.

2. The development of VR in China is still in its early stages and has not yet ushered in a real explosion.

3. Driven by per capita GDP growth and the development of mobile Internet, the consumption upgrading sector will continue to be optimistic.

4. The cultural industry is ushering in six positive trends.

5. Digital marketing is Huaying's long-term focus, and video advertising is ushering in its golden period.

6. There has always been a lot of funds in the domestic capital market.

Huaying Capital in the cultural fields represented by Internet celebrities, IP, and live broadcasts

has been making RMB funds since 2009. Ji Wei explained that there were two reasons at that time: First, China's capital market will become more and more perfect, and it will be an engine of the future new economy. The direction is right to use RMB to lay out; Second, the US dollar is relatively slow to invest, and Huaying mainly invested in Series A. In the TMT field, the speed requirement is very high. Therefore, RMB layout was taken as a main strategic direction at that time. Huaying Capital established its first cultural industry fund in 2010. Unlike cultural investment in the narrow sense, Huaying looks at the entire cultural industry more from the development of information technology to promote content dissemination.

Ji Wei believes that from the current perspective of the entire market, the domestic capital market will not be completely liberalized at once, regardless of the pace or number of listings. In recent years, the country has advocated economic structural transformation and supply-side reform. Therefore, the direction of new economic types and industries that can continue to improve in the future will be of interest to investment institutions. Those related to the Internet and cultural media have erupted very quickly in recent years. "Everyone says that the first half of this year is a year without wind. No industry is particularly windy, and everyone can fly. But I think if we want to talk about popularity, it means those cultural companies, whether Internet celebrities, IP, or live broadcasts." Ji Wei said.

As for VR, which is popular this year, Ji Wei believes that the entire industry is still in its early stages in China and cannot be said to be a big fan this year. Judging from whether it has formed widespread use and large-scale income, VR has not yet experienced a real industrial explosion. Huaying has made some tentative arrangements in the VR field. The field of cultural consumption has developed rapidly in recent years. Huaying is currently more helping cultural and new media that have been invested in in the early stage to carry out subsequent industrial integration and capital operations.

The switching of investment hotspots will become faster and faster. Following Huaying's investment context, we can see several waves of switching of hot spots in recent years, and Ji Wei tells us that this switching may become faster and faster. In 2009, after Huaying established the Cultural Industry Fund, it invested in many companies in the pan-cultural field, including games, music, film and television, performing arts, and digital marketing and other projects that can promote cultural promotion; from 2011 to 2014, with the rise of the mobile Internet, Huaying sorted out and segmented different companies according to the types of traffic entrances, monetization channels, etc., and screened projects based on this dimension; In 2014, O2O emerged, but Huaying had reservations about its investment in this field; Then there is Internet +, where +C is consumption upgrade and +B is enterprise service. At present, Huaying pays much attention to cultural new media, digital entertainment, consumption upgrades, corporate services and other fields.

In the future, Huaying will continue to pay attention to the consumption upgrade category, namely the "+C" category. There are two reasons: First, the increase in per capita GDP will drive the increase in consumer demand and population segmentation, which will further drive the emergence of new brands on the Internet; Moreover, the development of mobile Internet has made consumption more situational and fragmented, and consumers 'needs have become personalized and situational. Therefore, in each segment, companies are given more opportunities to serve the segments in depth, and companies can seize consumption upgrades to do differentiated things.

Huaying also has extensive deployments in "+B" corporate service projects, such as China's largest WeChat third-party development service provider, Weimeng, a leader in mobile social business forms, and Jinyou.com, an online human resources service platform. Ji Wei believes that with the increase in domestic labor costs, many things that could previously be done through manpower have begun to be done through purchasing third-party services; Secondly, in the past, only large companies paid, but now small and medium-sized enterprises and freelancers are also willing to pay for these third-party services. Huaying currently mainly measures the to B project from several dimensions: market size, efficiency improvement, and cost reduction.

Where are the new opportunities for the cultural industry?

Regarding Huaying's focus on the cultural industry, Ji Wei told reporters that there are currently six positive trends in the industry:

First, relevant policies to combat piracy are conducive to content protection, and copyright protection is a prerequisite for the development of the content industry. If content is not protected, it means that the person who produces the content is not getting the remuneration he deserves, then fewer and fewer people will produce high-quality content, so consumers will not be able to see good content.

Second, the second prerequisite for the development of the content industry is that there are many and wide communication channels.

Third, content charging is slowly becoming a reality, so in addition to advertising revenue, companies can make money from the content itself.

Fourth, high-quality content itself is becoming a source of low-cost traffic to target audiences. The Internet's approach is to obtain traffic first and then fill in content; now investment institutions are also paying attention to projects that attract fans through the content itself, and these fans agree with the content very much and gradually form a fixed fan base. This is a typical example of the fan economy.

Fifth, content can already be directly transformed into transactions. Huaying Investment's initial crowdfunding is a case in this field.

Sixth, IP-based. In addition to content that can be sold for advertising and paid for, content can now be developed in multiple channels and can be made into games, online dramas, big movies, etc. The ways to monetize content have diversified, so its customer unit price is higher. The value generated by the same content is also greater. Internet celebrities are personalized IP. Content entrepreneurship faces a "ceiling" problem. Ji Wei explained that individual content is easy to encounter this problem, but now some content entrepreneurs think logically. They will integrate IPs with similar tones to their own and slowly change from a single content producer to a content combination or operation platform; another way is to start from the platform and go back upstream to find high-quality content to ensure the platform's own activity and Retention rate. Huaying is now investing in the entire industry chain in digital reading and pan-entertainment, and has invested in a series of channel, IP, and derivative operation projects, such as Book Chasing Artifact, Book Opening, Tongshi, Hengdun Media, Le Tong Music, Jucheng, Sister Bimbledon, etc. are based on this idea.

Digital marketing is a long-term focus, and video advertising is ushering in a golden period

. In addition to the cultural industry, Huaying's investment in the field of digital marketing is also relatively complete. Last year, investment and mergers and acquisitions in digital marketing such as search engine marketing and social marketing were very popular. Huaying invested in Aidsiqi, Pinzhong, WeMedia, etc. in this field. Ji Wei gave a set of data: the highest PC-side advertising forms planned by advertisers in 2016 are video advertising (77%) and search engine advertising (76%), which are significantly higher than other advertising forms. The most favored apps for mobile advertising are video (83%), news (60%) and social applications (59%). Including the recent popular live broadcasts, they all tell us that video advertising has ushered in its golden age. Ji Wei said that this is a change brought about by the changes in media, from PC to mobile Internet, as well as the promotion methods and promotion entrances of the mobile Internet itself.

There has been a lot of funds, no special "winter"

from the beginning of last year's stock market disaster, the entire capital chain is tight, from fundraising to investment is tending to be conservative, especially in the field of TMT, are saying "bubble burst","valuation decline", and even some people worry about whether there will be B round than A round valuation is lower. Ji Wei believes that since last year's stock market disaster, the capital is really less, accurately said that investors are more cautious, the most affected O2O enterprises, Huaying in this field basically did not involve. At this time, enterprises should quickly adapt to market changes, adjust expectations and play methods, and survive is the first priority, so they can adopt the rhythm of "small steps and fast running" in financing. In fact, we prefer to see enterprises with healthy cash flow and virtuous cycle of input and output, or enterprises that can realize large-scale profits in the future by obtaining leading position in the industry. Regarding this year's market, Ji Wei said that in fact, there has always been a lot of funds. Everyone is just looking for a more certain investment direction, making a more rational choice, and there is no particularly "cold winter".

Regarding lower valuations, Ji Wei believes that "Where there is a bubble, we must always allow the bubble to be squeezed out a little. This is not a bad thing for the development of the industry."

At

the end of the interview with entrepreneurs, Ji Wei gave this suggestion in her answer to entrepreneurship: "The probability of success in entrepreneurship cannot be determined by the more money you get and the more rounds you get. Entrepreneurship is very popular nowadays, but entrepreneurs should see more clearly the commercial nature of a project, market capacity, and how it can continue to develop in the future. Don't blindly pursue hot spots, because once something is generally considered a hot spot in the market, competition often also It is very intense and there may be no opportunity."

Editor: rainshine