Focus Jiang Nanchun: Increase investment layout in sports and entertainment and no longer seek wholly-owned acquisitions

An important reason for Focus Media's layout along sports, film, television and entertainment is that consumer experiential waste is on the rise in China. In the new wave of investment, including consumers 'time expenditures and money expenditures, many of them focus on film, television, entertainment, tourism, sports, etc.

Original title: Interview with Jiang Nanchun: Through investment mergers and acquisitions,

Focus Media shares have recently entered the China Securities 100 and Shanghai and Shenzhen 300 Index. Brokers pointed out that index stocks have a great influence on the market and will attract more institutions to pay attention, which means that Focus Media will have greater influence in the A-share market.

Focus Media has also been taking continuous actions in the capital market recently. The sports fund jointly established by Focus Media and Fangyuan Capital has just invested US$30 million in the sports social platform Gulu. This is a major move in the capital market since its backdoor listing.

According to the annual report, Focus Media will increase its investment in the field of sports and entertainment, entering the production and distribution of TV variety content, film production and promotion, sports program production and distribution, event operations, Internet sports social and other fields.

The establishment of the sports fund and investment is the implementation of Focus Media's strategy. Jiang Nanchun, CEO of Focus Media, recently accepted an exclusive interview with reporters that he would use investment and mergers to recreate Focus Media in the fields of film, television and sports.

According to reports, Focus Media's investment and mergers and acquisitions in the fields of film, television, sports, etc. are not just a superficial experience, but will have increasingly heavy investments. Focus Media values the sustainability and explosiveness of these businesses, and everyone will soon see Focus Media's actions.

Jiang Nanchun said,"Focus Media in the future will be a 'two-wheel drive'. On one hand, Focus Media is the film, television, entertainment, sports and culture, and on the other hand, Focus Media is the media advertising platform. These two businesses form two major industries, with two wings flying together."

While deeply involved in the two major fields of participatory and ornamental sports

, Focus Media will help Gulong further strengthen and upgrade in the field of sports and social networking by combining its rich B-end advertiser resources and C-end user resources.

Focus Media said that on the B-end, Focus has strong cooperative relationships with most domestic advertisers. Relying on Focus's existing strong advertising sales network, it can create greater advertising revenue for Gulong and improve its traffic monetization capabilities;

On the C-end, Focus Media can reach 300 million mainstream users through the influence of life media, and can use existing publicity platforms to further stimulate Gulong's user penetration and influence.

The reason why Focus Media invested in Gudong is that on the one hand, Jiang Nanchun is a long-term user of Gudong. On the other hand, running, cycling and walking are the most widely participated sports in by China. Gudong is a leader in this industry, and the business model itself does not burn money.

"Gutong has never burned money in history. Gutong had raised US$30 million before. We still had more than 100 million yuan in our account when we invested."

Jiang Nanchun told reporters that the cost of the 3 million daily jobs and 60 million users that Gudong is currently doing is not high, and this year's revenue is expected to be at the level of 100 million yuan.

"I told Gulong not to stop growth, but to hit 10 million daily jobs and 200 million users at once. Advertising in this position may reach 1 billion in one year, and the actual cost may be 200 to 300 million. In this way, Gulong may have strong profitability in two or three years."

Jiang Nanchun revealed that Focus Media has been distributing advertisements to various screens. Once Focus Media cooperates with Gulong, it will be able to distribute many brands that are interested in sports people to Gulong, which can also be derived from it. Many services and profit points.

Gulong is just one project that Focus Media looks at in the field of sports. Focus Media wants to cut into all dimensions in the field of sports. It has not only entered participatory sports with a broad mass base, but also entered those spectator sports fields through international and domestic investment and acquisitions.

To get involved in variety shows and invest in phenomenal programs

, in addition to sports, film and television variety shows are also an area that Focus Media focuses on. Focus Media hopes to invest in phenomenal programs.

"The advertising revenue of a phenomenal program is 2 billion yuan, but the advertising revenue of a program with a ratings of 2% is 200 to 300 million yuan. There is a big gap."

Jiang Nanchun said that it is easy for Focus Media to earn tens of millions of yuan per project, but it is not of great significance. Only a phenomenal program that can achieve 2 billion yuan in advertising revenue at once has more potential. Focus Media has certain judgment in this regard.

An important reason for Focus Media's layout along sports, film, television and entertainment is that consumer experiential waste is on the rise in China. In the new wave of investment, including consumers 'time expenditures and money expenditures, many of them focus on film, television, entertainment, tourism, sports, etc.

Another trajectory is that the future development direction of advertising is to integrate into major social events and major topics, into society's largest entertainment, and into the core life trajectory of consumers. The rise and detonation of the brand all occurred in this entertainment scene.

Jiang Nanchun believes that the rise of consumption in entertainment scenes will bring many brands to invest in four major fields-variety shows, videos, movies, and sports. These four aspects will produce very important scenes and support for the rise of brands.

In terms of integrating the core quality of life into consumers, Focus Media has office buildings, stores, and theaters, which are the core scenes of life. The needs of advertisers will also promote Focus Media to expand its field into film and television, variety shows, culture, sports and other fields.

Focus Media's involvement in film and television, variety show, culture, sports and other fields will be of great help to brand owners 'brand detonation. Now Focus Media is communicating and negotiating with the creator of the top content and the top company, and it is expected that more information will be disclosed in the future.

Focus Investment Logic: Not seeking wholly-owned acquisitions

Compared with Focus Media's aggressive acquisitions when it was listed in the U.S. stocks in 2005, Focus Media, which has returned to A-shares, is now more stable and no longer seeks wholly-owned acquisitions. It is more likely to hold 20% of the shares to control, Focus Media wants entrepreneurs to become very important shareholders in their company.

"Unless it is a very mature and resource-based company, I don't think it is suitable for a wholly-owned acquisition." Jiang Nanchun said that Focus Media is more cautious in mergers and acquisitions, and emphasizes other elements of the company when acquiring. One is that the scale must be large enough and the other is sustainability.

Jiang Nanchun told reporters that Focus Media is a company with very strong profitability. When entering these mergers and acquisitions, it pays more attention to whether these companies can create a new capability-driven body outside Focus Media's living space media.

This leads to Focus Media's investment standards: 1. Whether the company conforms to Focus Media's strategy;2. Whether its field is an area that Focus Media is familiar with;3. Whether the company has enough room for growth, and with the promotion of Focus Media, growth can be released.

According to the plan, Focus Media estimates that it will take 3 to 5 years for the revenue from film, television, culture, sports, and entertainment to reach a 1:1 ratio of advertising revenue from the original business, achieving the goal of recreating Focus Media.

The annual report released earlier showed that Focus Media's net profit in 2015 was 3.39 billion yuan, a growth rate of 35%. In 2016, its business plan will achieve a net profit of 4.4 billion to 4.6 billion yuan, a year-on-year growth of more than 30%. Today, Focus Media has a market value of 120 billion yuan.

To achieve the second drive, with Focus Media's large size, it is difficult to start again from scratch. This requires investment and mergers as the main focus.

Jiang Nanchun told reporters that Focus Media is not conducting acquisitions with Gulong now because Gulong still needs to continue fighting fiercely for two years. When it rushes out and really starts to generate profits, Focus Media will have the opportunity to conduct acquisitions.

"Gulong has not yet reached the turning point of development, and the movement in China has just begun. Think about it, there is a sports company with a daily life of 10 million, selling equipment, advertising, and doing online events. There is a lot of room for Gulong's business model in the future."

Data shows that Gulong received tens of thousands of angel investments from Shanda Group in early 2011. In March 2014, it received US$10 million in Series A financing led by Shenzhen Venture Capital and followed by CITIC Capital. In November of the same year, Gulong received US$30 million in investment from SIG and SoftBank.

According to the analysis, Focus Media's investment pace is constantly moving forward. Perhaps in the near future, you can see the birth of a more stable and low-key investment giant in the capital market than before. Focus Media is also playing its own A shares. legend.

Editor: Nancy