Traffic first or incubating the route battle for the animation industry boosted by IP capital

Animation platforms use traffic circle users and then collect fees through users. This is a form of making quick money, but if there is no good content support, it will inevitably lead to user loss.

Original title: The animation industry encounters a route battle: The traffic-first strategy has been subject to valuation controversy

"I know very well that 99% of people in the world still disagree and don't believe us... One day you will see a 1% light, which turns out to be enough to light up the entire night sky."

Three years ago, on December 13, Chen Anni, who was only 22 years old at the time, published a cartoon "Sorry, I only live 1% of my life" on Weibo, which described her creative process and entrepreneurial experience. This Weibo post received as many as one million retweets. At the same time, Chen Anni's entrepreneurial project "Quick View Comics" instantly rushed to the top spot on the APPStore free list.

Since then,"Quick View Comics" has welcomed a series of dazzling financing: from US$3 million in Series A, to RMB 100 million in Series B, and then to RMB 250 million in Series C, the valuation of "Quick View Comics" has jumped to RMB 1 billion in just three years.

In those years, along with the popularity of the animation market in China, with the birth of hit anime such as "The Return of the Great Sage","Soul Street" and "One Hundred Thousand Jokes", domestic anime first tasted the sweetness of the market, and a large number of entrepreneurs and investors also began to follow suit, but the market also began to become complex.

Platforms such as Youqi, Netease Comics, and Tencent Animation that have grown up in recent years have all won great attention from the market. The rising financing record has ignited enthusiasm for the secondary market.

In the eyes of many investors, the growth of the secondary economy has a great relationship with the consumption habits of young people today. For giants interested in deploying a pan-entertainment ecosystem, although the liquidity of young users is not high, seizing the young people's market is equivalent to seizing the future. When these young users enter society, their consumption power will be greatly enhanced-lock in advance. Batch users are currently the best capital story on the animation platform.

For now, most of the financing for comic platforms has entered the B and C stages. According to the concentration of users, the echelon distribution has gradually become clear. The business model of comics platforms has also moved towards two routes. One is that platforms such as Tencent Animation and Youyao emphasize content and IP development capabilities, and the other is to watch comics, which emphasizes traffic first and allows content to serve traffic.

Driven by capital, comics began to enter the public eye from the subcultural field, but at the same time they also laid the foundation for a bubble. In order to obtain a new round of financing, many animation platforms such as Kuaikan comics are only oriented by click-through rate and number of users, rather than following the route of incubating high-quality content and digging deep into IP that has been verified by advanced countries in Japan and the United States. -Under the guidance of traffic thinking, comic platforms lack awareness of high-quality content and even use a large amount of three vulgar content to edge the ball. This short-sighted behavior will undoubtedly undermine the healthy development of the industry.

Amid the excitement, it seems that domestic comics are at their best, but compared with major comic countries such as Japan and the United States, China's "Naruto" and "Iron Man" are late. Internet analyst Yu Bin told a reporter from Times Weekly that animation platforms use traffic circles and then collect fees through users. This is a form of making quick money,"but if there is no good content support, it will inevitably lead to user loss."

Platform chaos

According to statistics, a total of 23 financings were completed in the domestic comics field in 2016, of which 15 were financings were completed by comics CP companies and 8 were financings were made by comics platform companies. Entering 2017, capital is still accelerating its entry into the market, showing a full bloom of flowers: in January, Kuaikan Comics announced that it had received 250 million yuan in Series C financing; in March, Kuang Sheng Animation completed 10 million yuan in Series A financing; in May, Saasa Animation announced that it had received 200 million yuan in financing. The valuations of these platforms are all more than 100 million yuan, the most eye-catching of which is Kuaikan Comics, which has a valuation of 1 billion yuan.

The rapid influx of capital not only accelerates content production, but also promotes the integration of comic content with the existing IP industry chain. In 2016, the production of comic content has improved significantly in both quantity and quality, further stimulating the rapid growth of the comic market. According to relevant research reports, the domestic paid comics market alone has reached a scale of 200 million yuan, and there are more platforms that rely on free comics to attract users to generate traffic. If you add in revenue from surrounding development and film and television, this market will reach the level of 100 billion yuan.

According to Analysys Qianfan monitoring data, the overall number of active people in China's mobile animation market reached 16.4467 million in the second quarter of 2016. Among the top 10 user penetration rates, Kuangan Comics and Tencent Animation have obvious advantages in user penetration rates, both exceeding 40%.

In this comic market full of giants, Kuaiyan Comics is one of the few startups that can rush to the first tier. In order to avoid head-on confrontation with large companies such as Tencent, Netease, and Aofei, it directly cuts into a place that does not attract much attention-making entertainment content. The reporter analyzed the types of comic works and found that the top categories are hilarious, delirious, plot, love, and campus. The more popular works such as "Cosmetic Games" and "Zero-Score Idol" are closely related to popular hot spots and entertainment gossip.

With a large number of Mary Sue, overbearing president or harem content that ends in less than 50 words, the daily active users of Kuankan comics are close to 10 million. However, some people question its prospects. Internet analyst Yu Bin analyzed to reporters that although the consumer group born in the 1990s and 2000s has grown up and represents the main consumer group, Kuaikan comics are overvalued. "It does have an audience, but this group has a poor ability to monetize and flow back. Advertising alone cannot achieve such a high valuation."

The reporter interviewed Chen Anni, founder of Kuaikan Comics, about this. Chen refused to comment on the above analysis on the grounds that "Kuaikan Comics Public Relations Department will respond." However, as of press time, Kuaikan Comics officials had not responded to the reporter's interview.

Yu Bin told reporters that the advantage of Kuaikan comics is that it can quickly gain users and form a word-of-mouth effect, but the disadvantage is that once more stringent relevant regulations are introduced, they may have a big impact on its traffic. "Young girls are considered to be a group with a large audience. There is very little room for growth in Kuaiyan comics to follow this route, but its style is relatively fixed, so its commercial realization is very difficult. Most of the users who watch comics are young girls. The consumption power of this group is relatively limited and is not as high as imagined."

Piercing foam?

Although the comics market seems to be hot, it still needs to find a suitable business model to achieve sustainable development. After the influx of large amounts of capital in the early stage, the comic industry is also facing profit pressure. If there are no corresponding monetization channels, these high-valuation comic bubbles will soon be pierced.

In fact, it is too early for the entire China comic industry to think about profitability. Regarding the issue of profitability, Tencent Mutual Entertainment responded to reporters that in the short term, revenue and profits are not the most important goals, but still need to be looked at in the long run. Tencent Animation actually has a lot of revenue output, including content payment and IP licensing. In 2016, the cooperation license with Caesar exceeded 100 million yuan.

Yu Bin believes that it is right to use heavy traffic models in the early development of animation platforms, but this model will lead to a decline in product quality. "Using traffic to earn users and then charging users is a form of making quick money, but if there is no good content support, it will inevitably lead to user loss. For example, Zhihu is a good example." He told the Times Weekly reporter that animation IP focuses on the industrial chain, such as making extensions and games.

Take Kuangan comics as an example. It initially attracted users with free content, but its strength on incubation IP was far less than that on platforms such as Tencent and Youqi. There has never been a quick watch work in the top ten of Baidu's domestic animation rankings.

As Chen Anni, who was once a representative of young entrepreneurs, has long since moved away from her identity as a cartoonist. She must think about Kuaowan's business future from the perspective of a businessman. However, from her external remarks, it seems that the planning of Kuaowan's model is still slightly confusing.

Regarding the issue of profit model, Chen publicly stated last year that Kuaikan Comics does not intend to ask users for money, but uses comics or stories as an IP, a seed, and a carrier. "It was incubated from us, and then in the middle reaches it may become an online drama, it may become a TV series, and finally it may become a movie and game. At this time, some IP monetization may be realized." However, she also said that at present, Quickwatch does not use IP production and film and television as its main revenue-generating methods. The value of IP development will not be seen until the next two or three years. The combined transportation of advertising and games is the only profit point for Quickwatch at the moment.

However, in May, Quickview quietly started paying. Once the platform route is changed to pay for reading, Quickwatch comics may face the risk of declining traffic, and the payment ability of younger users is also limited. This is undoubtedly a dilemma for Quickwatch.

Traffic first and IP thinking

In fact, China's animation industry has currently presented two different business models: one is to target traffic and use free entertainment content to attract enough user traffic, so that it can continue to carry out the next round of financing, and then continue to attract and raise funds; the other is to incubate IP as the task, exporting high-quality IP to film, television and games, forming an internal synergy of the pan-entertainment ecosystem.

Regarding the Quickwatch model, there is a view from the outside world that Quickwatch comics are not actually an animation content platform, but a platform that uses comics as a medium to display adult-oriented popular entertainment content to attract traffic.

Different from the rapid expansion of comics, platforms such as Tencent Animation, Youyao, and Buka Comics have established an IP path from the beginning, aiming to create IP, and then commercialized it through the pan-entertainment industry chain.

Among them, IP Shileng, a demonstrative representative, once created a benchmark score of domestic animated films that exceeded 100 million a day. Among them,"Duan Nao","Zhen Soul Street" and "The Young Bee", represented by the "Three Great Comics of Evil Qi", have considerable influence. In 2015, Aofei acquired Youyao for RMB 900 million.

Tencent Animation under Tencent Mutual Entertainment is represented by "Under One Person" and "Fox Demon Little Matchmaker". At the UP2017 press conference, facing a reporter from Times Weekly, Zou Zhengyu, general manager of Tencent Animation Business Department, emphasized that Tencent Animation must insist on creating high-quality animation content. According to data provided by Tencent Interactive Entertainment's Public Relations Department in response to Times Weekly reporters, there are currently more than 50,000 authors submitting articles on Tencent Animation Platform, and the number of signed authors exceeds 600. Last year, the total amount Tencent Animation gave back to content creators exceeded 370 million yuan. More than 9 works have entered the top ten of the domestic animation rankings.

In addition, Beijing Ruosen's "Painting Bad People in the Jianghu" and Hangzhou Xuanji's "Qin Shi Ming Yue" also belong to well-known national manga IPs.

In the competition of animation platforms, the incubation ability of IP is the most important moat. Only with continuous and stable IP output capabilities can animation platforms generate value in the entire pan-entertainment ecosystem.

Cen Saiyin, vice president of Bedrock Capital, told reporters that compared with a single vertical pan-entertainment content provider, platform-based companies have greater stability, their profits are more certain, and their growth probability is greater. "A single IP may be popular this year, but it will be less popular next year, and its sustainability is not as good as the platform. Platforms are different. The departure of a popular IP will not cause the platform to collapse, because there are many IPs on the platform supporting the development of the platform."

Editor: jessica