What are the opportunities for cultural industries to tap into Internet capital

In the past year, investment in the cultural industry has been booming, and people have focused on the cultural industry. Coupled with the promotion of national policies, capital has also paid more and more attention to the cultural industry. In the process of combining capital and cultural industries, how does capital choose cultural industries? How can the cultural industry embrace capital?

In the past year, investment in the cultural industry has been booming, and people have focused on the cultural industry. Coupled with the promotion of national policies, capital has also paid more and more attention to the cultural industry. In the process of combining capital and cultural industries, how does capital choose cultural industries? How can the cultural industry embrace capital? Recently, the reporter invited several investors, including Ma Jun, chief operating officer of China Investment Capital, Liu Zehui, managing director of Junlian Capital, Qian Yi, director of Huaying Capital, and Wu Xin, president of Superstar Long Investment, to discuss this.

Where are the opportunities for cultural industries to tap into Internet capital

? Cultural industries that have self-generated on the Internet account for relatively few, and most of them are in traditional fields. At a time when the "Internet +" model is becoming increasingly obvious, whether it is VC or PE, how can we promote the transformation of traditional cultural industries?

Ma Jun: "Internet +" is more of a concept of entrepreneurship. The question is what "+" after the Internet is done. This is a challenge faced by capital now. For example, O2O (online to offline), some online things did well in the first half of the year, but then offline things became weaker and weaker. This may be related to the genes of many entrepreneurs. We have found that many entrepreneurial teams have strong Internet genes, but their ability to implement practical operations is weak. It is relatively easy for this type of company to make Series A financing. When it comes to Series B, the valuation is higher. Especially when it comes to Series C, investors look at financial data and execution capabilities. At this time, they find that your execution is not strong enough, or business data cannot support your valuation, which is challenging.

In turn,"+ Internet" is a rigid demand. In traditional industries, a large number of enterprises in China need to use the Internet to solve their growth bottlenecks, whether they are asset-heavy or asset-light. Therefore, many industrial capitals are paying more and more attention to profitable companies and formed companies.

We are now doing "Internet +" and do a lot of M & A business every year. We will find that the most powerful driving force for Internet companies is the traditional industry. For example, it used to be an advertising agency company, but later acquired three companies, so it has become an industry."Traditional Industry + Internet" is a trend.

Qian Yi: For many traditional industries, it is relatively difficult to transform the Internet, while the cultural industry is relatively easy, because the cultural industry is the lighter industry among the industries we can currently see. For example, an important feature of the cultural industry is that it is content-oriented, and it shifts rapidly from traditional media such as newspapers, radio and television to new media such as the Internet. However, it is very important to use the new platform's way of thinking, thinking, or behavioral methods to do it during the transformation process. The so-called "Internet +" means that the content you produce must be suitable for the rules of being spread, shared, and commented on on the Internet. Only then can the effect of "Internet +" be truly achieved.

Liu Zehui: Culture and entertainment include film and television, sports, tourism, education, as well as many products from the second dimension. In the Internet era, the art form of entertainment has not changed, but the form of presentation has changed greatly. There are two aspects that are important: First, the Internet. The rapid development of the Internet has provided many forms of expression that are more popular among the people. The second is technology. The Internet can be decentralized and diversified.

Investors must have a small whip in their hands

. What is the most important thing to do in the cultural industry? What role does the current capital market have on the development of the cultural industry?

Ma Jun: The most important thing in doing a cultural industry is that IP (intellectual property rights) must be valuable and create IP that the people like to see. Entrepreneurs in the United States do it for interests, hobbies, and dreams. Our young people also have dreams. They can open their minds and make better works. But if you have more interests and hobbies, you will tend to the other extreme and be less wolf. This requires us to invest as investors and have bloody capital. If we can synthesize it, we will not only have cultural feelings, but also think about how to make money reasonably.

From the perspective of the current capital market, for IP, China's current capital environment is very good. The high and low valuations of listed companies in China's cultural market will greatly promote the industrial appreciation of IP. If a movie can earn 1.1 billion yuan in box office, the capital market will perform very well. This will encourage many companies to dare and be willing to do IP, so that people in the primary market can see that there is still hope in doing IP.

Liu Zehui: On the supply side, IP is valuable, and the government needs to protect it, so more capital and more people can participate. The market has gotten better, and we should better embrace the cultural and entertainment industry.

The

entertainment industry is an important part of the cultural industry. How can the cultural and entertainment industry make profits on the Internet?

Liu Zehui: The realization and profitability of Internet companies are eternal problems and issues, and cultural and entertainment companies are even more difficult. In culture and entertainment, consumption is a very important part. There was no way to monetize it in the past, but now the value of IP has been recognized by society. From the perspective of developed countries, IP is paid. In the past, my country had many pirated and free products. Now, through the constraints of national policies, there are very few pirated videos and music, and the piracy of literature and animation is slowly decreasing. This is very good. China's policy environment has undergone great changes, and such changes have prompted many outstanding creators to join.

In addition, IP itself is cross-media or cross-screen, text and comics are the source of IP, and film and television are the largest IP. Now we can do anime, musicals, and movies. 70% of many American films come from the global market, and there are 1.3 billion people in China. We can first make a good market for these 1.3 billion people.

Qian Yi: With the development of the mobile Internet, conditions in all aspects are becoming more and more mature. It should be said that there are more and more ways to realize cash. I used to talk about how to implement the cultural industry, but now I have seen that whether it is advertising or diversion to games, e-commerce can generate good income. I think this industry is still full of development opportunities and investment opportunities.

A cultural project depends on how many users and fans it has in the A round, but when it develops into the C round, or even later, investors focus on how to make profits and how much room for development. Huaying Capital has extensive investments in the cultural industry, such as 9158, e-commerce, publishing, games, etc. We divide the realization of "cultural industry + Internet" into two categories: one is direct realization, whether it is in traditional media or new media, or other new forms, advertising is a big direction of realization; the other is indirect realization, many of which are through diversion. For example, e-commerce, games, entertainment, etc., entertainment may sometimes be directly realized, and 9158 is directly realized. We believe that finance is also a good way to monetize money.

Wu Xin: Everyone thinks that the Internet is free. How can entertainment make money? In fact, it's very simple. First, invest in music copyright companies. Now it's basically digital copyright, and we can get a lot of copyright fees. Currently, one of the projects we are investing in used to be a bar. Everyone can put the live video there. Many video websites hand over the live broadcast to me, and I will give you a share. Their profit point is flowers, houses, and virtual currency.

Second, we have been studying the fan economy, including companies we are very optimistic about. When we invest in them, we first see if they have ideas. What do you do when everyone is doing entertainment "Internet +"?

The monetization model affects capital investment

in cultural industries in the Internet, especially in the era of mobile Internet. How will capital choose investment projects?

Qian Yi: When we invest in cultural industries, we usually look at what content and direction the project is doing, and where this direction is suitable for realizing it. If it is realized directly, how big is the scale effect? It turns out that a newspaper or a TV station with only a few million users can support hundreds of millions or hundreds of millions of revenue a year. But on the Internet, there may be only a few million users, the advertising value is very low, and the price will be seriously reduced. At this time, it depends on the growth space, that is, the number of users and fans, whether it can reach tens of millions, or whether it is active. Users can reach the order of 5 million or more, which determines that they will have good liquidity in the future.

Second, whether the process from users entering our products or content, or on our platform, and ultimately transforming it into revenue is short enough, whether it is direct income or indirect income. In this conversion process, whether the conversion rate is seriously reduced or whether the conversion rate is maintained at a stable level will ultimately affect the final income.

The same is true for entrepreneurs. What kind of low-cost method we use to attract many users when doing projects? At the same time, what kind of high efficiency can be transformed into what kind of income. In terms of income, the requirements for the team's operational capabilities are very high. In fact, for Internet projects, it is not only necessary to do a good job in content, but also to do a good job in operations. These two aspects are also important directions for us to focus on inspecting the team.

Ma Jun: As an entrepreneur, we should also think about the monetization model and start with divergent thinking. For example, if we used to do a maternal and infant community, there is content. The first thing that comes to mind in the monetization model is advertising. Although the gross profit is high, the ceiling is there. Then you may start doing e-commerce. If you have strong core content, make users more attentive, and you can also do early education later. These are all extensions around your own core content. This kind of enterprise is favored by everyone and has a larger imagination.

Wu Xin: The concept of our judgment is to see whether he is exposed to new things. The biggest characteristic of China people is copying. Whether they can copy well and whether they can copy well. If his theory, thoughts, and practices can be in line with the current international entertainment industry, we will invest. Because he connects with the world,"Internet +" will definitely be created. If he only said I wanted money and what I wanted to do, then we might not vote.

Editor: vian