Slowing box office growth affects the performance of the four major film companies, and film and television securitization is restricted

"Even if the box office results are very good, the performance of listed companies may not be very good. Nowadays, for any movie that is a bit of a gimmick, there are more than 10 distributors or producers. The original box office earned 100 million yuan, and all 100 million yuan belonged to Huayi. Now, even if it earns 500 million yuan, each family will only get 50 million yuan."

Original title: The slowdown in box office growth has affected the performance of the four major film companies."Film and television securitization" has been put under pressure.

China's film market peaked

2015 was a year for China's film market to make rapid progress. After a strong start in the first quarter of this year with "Mermaid", everyone was generally optimistic about the market in 2016, but the second quarter turned sharply, with a rare year-on-year decline. The semi-annual box office was only 24.581 billion yuan. The four major film companies performed poorly in the first half of the year. Not only did domestic films account for only 30% of the top ten box office, but Huayi Brothers 'profits even fell in the first half of the year.

The growth of the film market in the past two years has been stimulated by the rapid development of new theaters and screens, as well as supporting market-based means such as online ticketing subsidies. Due to the excessively single profit model of China films, which leads to a strong dependence on the box office, the phenomenon of "injecting water into the box office" has occurred frequently, and the current real box office market may be further discounted. But these cannot be sustained over the long term. At the same time, in the first half of this year, the capital operation space of media, film and television companies was gradually compressed by increasingly stringent regulatory standards. If there are no breakthroughs in film profit model and quality, the "good days" of China films may be gone forever.

At

this stage, the transformation of media film and television companies into TV dramas or variety shows is of little significance. The TV drama market cannot be large enough to exceed the size of the film market, and the models are all the same. No new technologies will be applied to this industry in the next two years.

According to statistical data from the National Film Ticketing Comprehensive Information Management System, from January 1 to June 30, 2016, the national movie box office was 24.581 billion yuan, with 34.58 million performances and 723 million moviegoers.

Previously, the industry estimated that this year's box office would be close to 60 billion yuan. Compared with last year's box office of 44 billion yuan, the box office growth rate would have to remain at 36.4% to complete this task, but the box office growth rate in the first half of the year was only 21%.

Yu Chao, general manager of the Capital Cinema, also said in an interview with the media: "The growth rate of the film market is indeed slowing down, because the growth of the film market in the past two years has been brought about by the rapid development of new theaters and screens, as well as supporting market-based measures, such as the stimulation of online ticketing subsidies, but these cannot be sustained in the long term."

The slowdown in box office growth has also been transmitted to the level of listed companies, with some performance of listed companies in the film and television media category falling short of expectations.

Among the four major film companies whose box office was poor

, semi-annual reports of listed film and television companies in the A-share A-share market have appeared one after another. However, except for Enlight Media, which reported a profit increase of nearly 300%, the remaining several companies (Wanda Cinema Line has not yet announced its semi-annual report performance report) The performance of the company fell short of expectations.

Among them, Huayi Brothers, represented by them, even saw a decline in profit in the first half of the year compared with the same period. Huayi Brothers 'performance forecast shows that the company's performance in the first half of 2016 was 250 million to 370 million, compared with the net profit of 500 million in the same period last year. 25%-50% decline.

In addition, the net profit growth of Tangde Films and Huace Films compared with the same period last year was not ideal. Tangde Film and Television's net profit for the first half of the year is forecast to be 55 - 67 million yuan, a growth rate of only 0.99%-23.03% compared with the same period last year. Huace Film and Television's net profit forecast for the first half of 2016 is 251 million to 295 million, a growth rate of 15% to 35% compared with the same period last year.

The reporter analyzed and sorted out the sales of film works in each family in the first half of the year and found that the slowdown or even decline in performance growth of each family is related to the slowdown in box office growth in the domestic film market to a certain extent.

An insider at Donde Film and Television revealed that the reason why the first quarter, including the semi-annual report, was not so good was that there were no good works released, but "The Jedi Escape", which was released on July 21, is expected to boost the performance of the entire second half of the year. According to the previously signed guaranteed agreement, the minimum box office forecast for "The Escape of the Jedi" is 1 billion yuan.

Taking Huayi Brothers as an example, in the first half of the year, four films were released: "Ben Ai","The Spiritual Puppet Contract","New York New York", and "The Tear Detective", but the box office results were below 50 million yuan."New York New York" only recorded 9.5 million yuan in box office.

Zhang Heng, an Internet analyst at Industrial Securities, believes: "There are two main reasons for the slowdown in the box office in the first half of this year. The first is that the growth rate of the number of theaters and screens is declining, so the growth rate of movie-goers will slow down. Second, the lack of popular film production in domestic films this year has had an impact on theater attendance."

The phenomenon of hit movies mentioned by Zhang Heng is also reflected in Huace Film and Television. In the first half of the year, Huace Film and Television also released 4 films, and the box office of the four films, except for "The Formula of True Love for a Girl", which reached 60 million yuan. In addition to the remaining films, none of the more than 50 million yuan. The film "Xuanzang of the Tang Dynasty" starring Huang Xiaoming only grossed 33.5 million yuan at the box office.

Faced with the situation that film and television companies were affected by the slowdown in box office growth in the first half of the year, a researcher in the media group of a medium-sized brokerage firm who declined to be named said: "Everyone's expectations for this industry are relatively optimistic, but it is uncertain whether the growth of endogenous capabilities will be of great help to the entire listed company."

The person further said,"Even if the box office results are good at present, the performance of listed companies may not be very good. Nowadays, for any movie that is a bit of a gimmick, there are more than 10 distributors or producers. The original movie box office earned 100 million yuan, and that 100 million yuan was all Huayi's. Now, even if it earns 500 million yuan, each family will only get 50 million yuan."

Film and television securitization is restricted

In addition to the slowdown in box office growth, the capital operation space of media, film and television companies in the first half of this year was gradually compressed by increasingly stringent regulatory standards.

This is represented by the revision of the "GEM Industry Information Disclosure Guidelines No. 1-Listed Companies Engaging in Radio, Film and Television Business"(hereinafter referred to as the "Guidelines") issued by the Shenzhen Stock Exchange last week.

According to the reporter's understanding, this amendment requires companies to disclose the operating income range derived from high-box office movies, emphasizes the difference between box office revenue and the company's actual identifiable operating income, and requires companies to remind relevant risks. At the same time, specific disclosure requirements will also be put forward for the cooperation between listed companies and cast members, including the specific cooperation methods, authorization matters, exclusivity terms, etc. between the two parties.

"Film and television box office revenue is not equal to the company's operating income. If the company's announcement does not clarify the specific impact of high box office on the company's operating income, it may mislead investors. In addition, the cooperation between listed companies and cast members often has a certain impact on the company's future operations and financial statements." Cao Gang, investment director of Zehao Investment, told reporters.

The relevant person in charge of the Shenzhen Stock Exchange pointed out that at present, the domestic film and television industry is developing rapidly, with more and more high-box office works. The cooperation methods between listed companies and producers, directors, actors in terms of business and equity are constantly innovating, and star securitization has become a hot spot in the market. Judging from the current situation, the box office of the company's film and television works has a greater role in promoting the company's stock price in the secondary market. The cooperation between listed companies and cast members and their performance have a significant impact on the operations of listed companies.

In addition, the regulatory authorities 'tightening of mergers and acquisitions has also had a huge impact on the concept of "star securitization." Several cases in which Storm Group and Tangde Films acquired star-held companies have failed.

Moving to variety shows and TV series

In fact, some listed companies have also realized that the scale of the film market may reach its peak in recent years, and TV series and variety shows have naturally become the transformation direction of these companies.

Tang De Film and Television, which did not release a movie in the first half of the year, was still able to maintain profits. It relied on the income from the transfer of satellite TV broadcasting rights and information network communication rights from the first and second rounds of its TV series "Tianlun", as well as the income from the transfer of satellite TV broadcasting rights and information network communication rights from the first round of the TV series "Why Get Married".

Huayi Brothers and Huace Film and Television are also making arrangements in variety shows and TV dramas. Zhang Heng said: "Huayi Light's entire content industry chain is becoming more and more abundant, and all lines of movies, TV series, and variety shows are developing. The strategy of listed companies is developing in the direction of pan-entertainment content, which has basically become an industry trend."

However, the above-mentioned medium-sized brokerage person said: "At this stage, the transformation of media film and television companies into TV dramas or variety shows is of little significance. I don't think the TV drama market can be large enough to exceed the scale of the film market, and the models are the same. In the next two years, there should be no newer technologies to be applied to this industry. At least the profit model and monetization model are still the old models before. I just think there will be a few oligarchs in the film industry in the future, but the overall valuation will decline."

Editor: Nancy