Huayi Brothers Wang Zhonglei: Capital has made many good IPs aggressive in conversion

Recently, at the headquarters of Huayi Brothers in Kunlunhui, Chaoyang District, Beijing, Wang Zhonglei, co-founder, vice chairman and CEO of Huayi Brothers, accepted an exclusive interview with reporters to express his views on the current status of the film industry and the development of Huayi Brothers.

Original title: Huayi Brothers Wang Zhonglei: The lack of continuous good works in the entire film industry has caused a decline in box office. Film capital will be reorganized

Wang Zhonglei, born in 1970, has served as an employee of China Mechanical and Electrical Equipment Corporation, administrative director of Beijing Huayi Exhibition Advertising Company, deputy general manager of Beijing Huayi Brothers Advertising Co., Ltd., and deputy general manager of Beijing Huayi Brothers Film Investment Co., Ltd. He is currently the vice chairman and CEO of Huayi Brothers Media Co., Ltd.

Recently, at the headquarters of Huayi Brothers in Kunlunhui, Chaoyang District, Beijing, Wang Zhonglei, co-founder, vice chairman and CEO of Huayi Brothers, accepted an exclusive interview with reporters to express his views on the current status of the film industry and the development of Huayi Brothers.

Kunlun Hui was purchased by Huayi Brothers from Huayuan Real Estate in 2015 with a spending of 400 million yuan, mainly for office use. This investment can be regarded as a microcosm of Huayi Brothers 'diversified layout in recent years.

This film company, founded by brothers Wang Zhongjun and Wang Zhonglei, has extended its strategic reach from film production to Internet entertainment, overseas mergers and acquisitions, real-life entertainment and other fields, and has controlled or participated in a number of listed companies. However, in Wang Zhonglei's subconscious, he still regards himself as a filmmaker and believes that well-made films are the core of Huayi.

Faced with external doubts about the decline in Huayi Brothers 'box office share, Wang Zhonglei explained that it was the result of the company's initiative and slowed down the frequency of launching excellent works.

Wang Zhonglei attributed this self-slowing strategy to a "sense of urgency." Although Huayi Brothers is a leading company in China's film industry, it said that compared with the entire national industry and even looking at the international market, Huayi is still a small company."While moving forward, we must pay attention to self-safety and protection.""Survival is the most important thing."

Since the founding of Huayi Brothers in 1994, the company has gone through more than 20 years of development. Wang Zhonglei, who humbly said that he did not have any lofty goals, has a greater ambition."I hope Huayi can become a century-old brand. It may not belong to me in the future. It belongs to the audience."

"The decline in box office growth triggers introspection that is a sign of maturity in the industry."

Reporter: The growth rate of domestic box office has declined this year, and there is also a lot of controversy about the turning point. Do you think it is the turning point?

Wang Zhonglei: I think all conclusions now are phased. Whether it is the inflection point theory or the normal theory, they are both exploratory topics. Many people will be worried, such as the capital bubble, which will have an impact on this industry, but they did not expect the impact to be so fast.

Reporter: What is the impact of capital reflected in?

Wang Zhonglei: Funds from competitive markets have changed users 'movie-watching habits, ticket purchasing habits, and even ticket price habits. For Huayi and I, we are also in this industry environment. Capital is naturally profit-seeking, but it is only a fuel to help the situation, not a prairie fire. It is the lack of continuous good works in the entire industry that has caused the decline in box office growth.

Reporter: So do you think slowing growth will become a norm?

Wang Zhonglei: I think it still needs to be discussed whether slow growth will become the norm. I think it will definitely develop in the next two years. In terms of data, although China's film market is developing rapidly, it is still far from being saturated. Regarding the slowdown in box office growth, the industry has automatically stood up and reflected since the summer break, which is a sign of the industry's maturity. After introspection, industry leaders will begin to adjust, and the future market will still have great potential.

"Capital has caused many good IPs to move forward in the conversion."

Reporter: Speaking of capital bubbles, what do you think is the current relationship between capital and movies?

Wang Zhonglei: Capital has no concept of right or wrong. It just pursues benefits. From an industry perspective, the film industry is the only one that develops higher than GDP, so capital is most enthusiastic about the film industry. But at the same time, capital will also bring certain harm to the industry. For example, capital may not understand how to connect with this industry. I personally think there are many reasons. One is that the core creative forces in this industry, such as directors and screenwriters, have lost their creative direction during the capitalization process; the other is the disappearance of many industry rules.

Reporter: In what ways does this loss manifest itself?

Wang Zhonglei: Recently, everyone has been talking about the relatively popular concept of IP. It is not just movies, but also a big research topic in online dramas and TV dramas. There is even a phenomenon that if you don't have IP, don't produce content; as long as you have IP, you don't need to be creative., as long as you have fans. For example, for this summer's drama, IP and a large number of young meat and idol stars were used. As a result, there were problems with subsequent ratings and media response. Up to now, some works that people thought were not good, such as "Ode to Joy" and other realistic themes, have had good results. Then everyone had another voice saying that the IP was useless and they wanted to shoot original works.

Reporter: It seems that Huayi was the one who initially proposed the concept of IP in the film and television industry.

Wang Zhonglei: Tracing the origin, I think it comes from the game industry, because the game industry will shrink intellectual property and copyright into one concept, namely "IP". But the original IP concept was not what everyone thinks now.

Reporter: How should the original IP concept be understood?

Wang Zhonglei: It is multi-directional and extensible development. That is to say, there is one thing that can be used for literature, stage plays, games, and movies, including many things. Huayi accepted the concept of IP since 2015. My understanding of IP lies in the homework of the "people" behind it. No matter how good the IP or how good the literature is, it relies on people to create and transform it. IP is not simply online literature with very high readership, or games with a lot of players, or even comics. It seems that only second-dimensional things can become IP, but it is not. Original things will soon become IP, such as "If You Are the One","Assembly Number", and "Di Renjie". We have formed a true IP conversion. Including games, publishing, and even offline theme park development.

Reporter: Then what do you think of the two views mentioned earlier that IP is not necessary or IP is no longer available?

Wang Zhonglei: I don't think the current problem is a problem with the IP itself, but a problem with the docking of IP conversion. Capital has caused many good IPs to advance aggressively during the conversion process. IPs that are not enough for industrial processes can be turned on in two to three months. There is no script at all, but changes are made while filming, which not only harms the original IP. Loyal fans and viewers who need film and television works. While maintaining its original richness, Huayi is more cautious in its IP creation and production process. We will still buy a lot of good IPs, but the conversion is more professional.

"The domestic film and television industry needs the Anti-Monopoly Law"

Reporter: Wanda recently acquired some film companies in the United States, which has encountered some opposition at the U.S. Congress level. Some U.S. lawmakers have called for increased censorship. Will this affect Huayi's layout in the United States?

Wang Zhonglei: I don't think so. Huayi's layout in the United States is not carried out through capital acquisition. It is more about establishing production institutions and doing it from the perspective of film creation. This may be popular all over the world. It has brought financial help and film exchanges. Capital acquisitions of companies may cause panic in some industries, who feel that capital will control their companies. This is not the first time in North America. When Japan's economy was developing rapidly, acquisitions of the American cultural and entertainment industry, especially films, also encountered some resistance. In the end, I think it still depends on whether it will bring development help to this industry.

Reporter: Now some film production companies are acquiring some theaters and moving from online to offline. What do you think of this? Does Huayi have any further plans and layout?

Wang Zhonglei: Huayi is a company that invested in physical theaters relatively early. However, we have not made particularly large-scale acquisitions. Huayi will also be very determined and persistent in building and investing in cinemas. There is indeed such a situation in China, where powerful companies usually open up upstream and downstream. For example, Wanda goes from the bottom up from theaters to content, and some Internet companies have also begun to develop into distribution and even production. These are all corporate behaviors caused by the rapidly developing China film market. Currently, we do not have strict regulations to define these behaviors. I think that as understanding changes, new regulations will come out. And a film law will be released on November 7 this year.

Reporter: Do you think the introduction of relevant regulations can solve the problem of capital monopoly in the film industry?

Wang Zhonglei: Relevant departments have conducted many surveys. While developing and sorting out, in fact, antitrust laws will not be introduced until the United States has been in the film industry for many years. Previously, some companies have formed a whole industrial chain, and when the law is promulgated, the capital will be regrouped.

"The top priority for all companies is to live"

Reporter: In the past two years, Huayi has reduced its holdings of some previously invested companies. What are the considerations for this reduction?

Wang Zhonglei: Both financial and strategic layout are considered. In terms of financial investment, our investment has entered a payback period, entering the stage of profit return and cash return; strategically, Huayi has divided its business into three major sections since 2014, one of which is the Internet sector. We want to develop this sector, but because the interaction and relevance are not so strong, we have to reduce our holdings and deploy the recovered funds to the game section.

Reporter: How is this going so far?

Wang Zhonglei: We can see that Huayi has acquired many excellent game companies through capital. There are both mature companies and newly developed companies. It will take some time before this can be announced.

Reporter: Huayi Investment is investing in more and more businesses. Will it affect the film business? In recent years, everyone will have a worry that Huayi's movie box office is declining?

Wang Zhonglei: Generally speaking, it will not have an impact. The foundation of all entertainment layout lies in the content of the movie. If your movie cannot produce something worth deriving, your industry chain does not exist.

Reporter: So why has Huayi's movie box office share declined in the past two years?

Wang Zhonglei: The problems that have arisen in Huayi's film share or the frequency of excellent works in the past two years are still inherent problems. We have slowed down the launch of many works. Jack Ma said that the top priority for all companies is to live. In terms of industry, we are a large company, but compared with companies in other domestic industries and our North American counterparts, we are still a small company. I think business leaders must not only bravely pioneer, but also have safety awareness and manage risks.

Question and answer

reporter: What was the most impressive thing in 2016?

Wang Zhonglei: The rapid development of films has slowed down and even experienced negative growth at a certain stage. This is what I am most concerned about.

Reporter: What do you think will be the biggest highlight of China in 2016? Will 2017 continue?

Wang Zhonglei: Because I don't study economics, I can't talk from a macro perspective. I still talk from the film industry. That is, the audience is more mature and the movie audience is becoming more and more divided.

Reporter: Which black technology is most optimistic about in 2017?

Wang Zhonglei: I see that everyone is very interested in VR, because of its combination with the offline experience of movies. I think a film master can conduct an experiment on VR movies, even if it fails. Once successful, it will be another revolutionary combination of film and technology.

Reporter: If you start a business again in 2017, what will you choose to do?

Wang Zhonglei: It must be a movie, and I have no enthusiasm for anything else.

Reporter: Which reform measures are you most concerned about in 2017?

Wang Zhonglei: The Film Law mentioned just now. I think there will be qualitative changes in 2017.

Reporter: What changes and opportunities will there be in your industry in 2017?

Wang Zhonglei: For all powerful and prepared film companies, 2017 - 2018 is a period of change for the China film market.

We all know that when the WTO resumes negotiations, a large number of foreign films may enter this market in 2018, and the distribution environment will also change. More distribution companies may enter this field. Huayi has been preparing for this.

Editor: yvette