Internet companies encounter profit difficulties in cross-border film and television and have no advantages in content production

On the one hand, the domestic Internet company Cross-Border Pictures is optimistic about the future film industry market, and on the other hand, it hopes to maximize the value of the IP in its hands.

Original title: Will Internet companies pile up movies become "fast food"?

"Like You","Bomb Dismantling Expert","Spring Jiao rescues Zhiming","Memory Master"... The reporter found that Enlight Media, Alibaba Pictures, LeTV Pictures and even Xiaomi Pictures all participated in the box office of films released during the May Day period. competition.

This is just a microcosm of the Internet's entry into the film industry in recent years. According to incomplete statistics, in the past two years, more than 10 well-known Internet companies have established film subsidiaries, including not only Internet giants such as Tencent, Alibaba, and Baidu, but also online video companies such as iQiyi and Youku, as well as games. Companies, even online travel companies and hardware companies such as Xiaomi, even the "Three Squirrels", who started selling nuts on the Internet, joined the film and television cross-border last week, hoping to gain a share of the ever-expanding film market.

In the eyes of industry insiders, the domestic Internet company Cross-Border Pictures Company is optimistic about the future film market on the one hand, and hopes to maximize the value of the IP in its hands on the other.

According to a report released by Palm Reading, in the first quarter of 2016, half of the top 20 downloads of books published by users in Shenzhen were original works of film and television IP. Among the top 5 downloads, the top 4 have been adapted into film and television works, and these data have great reference value for judging the value of IP.

"Internet companies are young, have technology, and data, but what they lack is a sense of content, which needs to be accumulated. However, IP can ensure the quality of the project to a certain extent. This is the most direct way to control risks and the direct reason why Internet companies chase IP." A traditional filmmaker who declined to be named told reporters,"IP can minimize the experience gap between these young company and industry veterans in film judgment."

When front-line Internet companies are expanding and penetrating into the traditional film industry, they can, to a certain extent, promote the integration and docking of their own video playback platforms, games, literature and other links, and then based on their own user interests and relevant distributions. Data to "portray" users, support the overall derivative value exploration of IP, and finally use their own video websites to carry out secondary consumption of movies.

Internet companies can also use online ticket distribution, traffic and subsidies to block the ticket booking traffic entrance of the core ticketing business of the film industry, and cultivate user payment habits through ticket purchasing entrances and seize the online movie ticket market.

Profitability problems Many Internet film and television companies are still "burning money"

. After the "honeymoon period" based on Internet ticketing platforms in 2015, there has not been the beauty they imagined. In 2016, the national movie box office totaled approximately 45.5 billion yuan, an increase of approximately 3.2% from the 2015 level of 44.1 billion yuan, far lower than the ambitious market forecast at the beginning of 2016. Some industry insiders attribute the cliff-like decline in box office growth in China's film market from 2014 to 2016 to the fact that Internet companies represented by BAT entered the film industry with a bold and drastic manner. The high ticket price was unsustainable. Ordinary consumers returned to consumption rationality and the degree of criticism about films has rebounded.

As a representative of cross-border entry into the film industry, although Alibaba Pictures relies on the Internet's large platform, it has not achieved success in content creation. Alibaba Pictures 'net loss in 2016 reached US$139 million. The company attributed the loss to the huge market expenses of mobile ticketing websites. Baidu's glutinous rice film business did not achieve profit until this quarter.

Faced with the deficit, Alibaba Pictures not only burned money to seize the market, but also actively participated in film production upstream of the industrial chain. However, its first major film,"The Ferry Man", suffered a double defeat in reputation and box office after its release at the end of last year. Tencent Pictures 'first major film "Teenager" was defeated because the cumulative box office was less than 16 million yuan. Xiaomi Pictures even dissolved its publicity department in 2016.

Content is king. It is difficult to gain the "right to speak" solely through ticketing distribution and

sales. Industry insiders have found that if online distribution channels can be monopolized by Internet giants, Internet companies actually have no advantage in content production.

In December last year, Xu Yuanxiang, vice president of Alibaba Pictures, made remarks that "professional screenwriters will no longer be invited", which aroused opposition from many well-known screenwriters. "Movies are a handmade job and require craftsmanship spirit. Talents such as professional screenwriters are indispensable." Liu Jia, an expert in film industry and market research and film distributor, said that although the Internet platform has obvious advantages, it still cannot change the laws of the film industry-creativity and content are king, and the core industrial values of the film industry cannot be changed.

Internet companies have to seek new profit points upstream and downstream of the industrial chain. Alibaba Pictures has spent nearly 10 billion yuan in two years to acquire upstream and downstream companies in the film industry chain to occupy the market. Now it covers the entire industry chain of film and television investment and financing, content production, offline distribution, online ticketing platforms, offline cinemas, and entertainment e-commerce. Link. As Zhang Qiang, CEO of Alibaba Pictures, said,"Alibaba Pictures is not just a content-production film company, but a platform-based Internet film and television company."

Tencent Pictures also recently announced that it has officially reached a strategic cooperation with Gongfu Pictures. Cheng Wu, CEO of Tencent Pictures, has become a director of Gongfu Pictures. The first work of the two parties,"The Generation of Goblins", will be released this year. At the press conference, Cheng Wu announced that in addition to cooperating with industry celebrities, Tencent Pictures has officially established the sub-line brand "Chunteng Film Workshop" in order to specifically and long-term support for young filmmakers and support film and television projects with a unique spirit of exploration. This means that film companies transformed by Internet companies are beginning to try in a more professional direction.

Internet analyst Ge Jia said in an interview with this reporter that although the Internet giant has a strong layout of film industry, it is still a little acclimatized under the rules of the film industry game."Because traditional film industry has formed a mature market mechanism and a stable market pattern, it is difficult to make money by inserting it into the film and television industry chain as ticket distribution and sales."

"Every online ticketing company wants to monopolize the market through subsidies, and then raise the prices of users and distributors to achieve profits. But in the film industry market, content is still king, and the right to speak in distribution is very low." Ge Jia said that although laying out the upstream industry chain of the film industry, such as distribution, content and other industries, can gain greater benefits from it, the risks are also greater. Even if companies in the industry such as Enlight Media and Huayi Brothers invest in 10 films a year, only 1 or 2 films can succeed and achieve high box office. "The future is an era when content is king, but it is also an era when various Internet giants invest heavily. It will be difficult to make profits."

Editor: Nancy