Zhao Yifang, President of Huace Film and Television: We can't just focus on copyright prices, cultural media needs industrial ecology

In Zhao Yifang's view, Huace Film and Television is in the stage of "second entrepreneurship". With the arrival of the 2.0 era of the cultural media industry, Huace Film and Television will usher in a new round of development opportunities.

Original title Zhao Yifang, founder and president of Huace Film and Television Group: Huace will deploy the entire pan-entertainment industry chain through mergers and acquisitions,

and the cold air will arrive in Chengdu from the south. Near midnight, the flight carrying Zhao Yifang, founder and president of Huace Film and Television Group, and his party landed at the chilly Shuangliu Airport.

Although Zhao Yifang in front of her was tired, she did not lose her demeanor. Her neat short hair and windbreaker complemented the title of "TV drama queen". Since the founding of Huace Film and Television in 2005, the legendary "Iron Lady" has spent five years building Huace Film and Television into the "No. 1 TV series". The series produced by the company has been among the top ten TV series in ratings all year round. Famous.

In the first three quarters of this year, among the top 10, top 20, and top 50 TV dramas in ratings, Huace Film and Television Group accounted for 20% of the products. On the Internet, in the first 10 months of this year, the cumulative number of online clicks on Huace's film and television content was nearly 55 billion. This is not counting "The Beautiful View of the Year", which is being broadcast on multiple video websites. The 12-day network broadcast volume of this costume drama king has reached 6.6 billion.

However, in Zhao Yifang's view, Huace Film and Television is in the stage of "second entrepreneurship". With the arrival of the 2.0 era of the cultural media industry, Huace Film and Television will usher in a new round of development opportunities.

"In the first five years of listing, we relied on capital to do some key mergers and acquisitions and consolidated our main business. In the 2.0 era, we also hope to upgrade to China's cultural industry through the strength of professional teams and the help of capital. A solid force." Zhao Yifang told every reporter. In such an upgrade journey, building a pan-entertainment empire based on core competitiveness should be the "small goal" of the founder of Huace in the "second venture" stage. Zhao Yifang also revealed at the summit forum that Huace will adopt mergers and acquisitions Layout the entire pan-entertainment industry chain.

Talking about the main business: We can't just focus on copyright prices, cultural media needs industrial ecology.

Reporter: As the "first stock" of TV dramas, Huace Film and Television has produced many popular dramas. However, judging from the current prices of all-network dramas, such as "The Legend of Ruyi" to "Win the World", there have been many tens of millions of major dramas. What do you think will the price trend of TV dramas in the future? How will Huace Film and Television's future full-network dramas be laid out?

Zhao Yifang: I think this way. Just like the predictions made by many experts at today's meeting on future economic trends and social development trends, cultural media is a big entertainment industry and a golden track in the future. The price space and industrial space for future products lies in the upgrading of future services. I think there must be a lot of room for growth in the price of full-network dramas, but the prerequisite is the upgrading of industries, services and consumption.

The specific price can be compared from an international perspective and based on the pricing of Hollywood American dramas. Under the Internet model, the consumption model of TV dramas in China is also changing. Previously, under the B2B model, production and operation channels were separated, but currently channels, members and manufacturers are all integrated. We can directly make a charging model on the Internet, and the current content industry is a pan-entertainment industry with a long industrial chain. These factors have given pricing a new width and height.

Reporter: Are you still very optimistic about the purchasing power of TV stations and video websites?

Zhao Yifang: I think our all-network dramas are the same as Hollywood. We cannot just focus on copyright prices. In addition to the reasonable growth of prices, what is more important is the industrial chain of the content industry. In the industrial chain, our cultural industry in China has not developed rapidly, which means that we still have a lot of room for development. We often talk about a word called industrial ecology now. I think it is very appropriate to do industrial ecology within the cultural and creative industries.

Reporter: Which link do you think is most lacking in the industrial ecology of the cultural industry?

Zhao Yifang: The first element of the industrial ecology is to do a good job in content. We must make hot products and hot products, and make products that can meet user needs and generate topical topics.

Second, other content must be grafted and connected throughout the planning creative stage. Take Huace as an example. We have a "SIP" strategy. SIP is super IP. The "SIP+" we are exploring now is to use super IP to connect tourism, education, e-commerce, fashion industries, FMCG industries, etc. New consumption, new economy and new business formats are all the focus of future consumption upgrades.

Our Huace chose this strategic path based on our understanding of the entertainment industry. I believe that the entertainment sector will affect or penetrate into the upgrading of various industries in the future. Film and television content has a pan-entertainment process. Although it is not yet very mature in China, I think that in the next round of economic development, the development of cultural media is very worth looking forward to.

Reporter: In addition to full-network dramas, the layout of the film sector is also a key sector of Huace's main business. Please talk about your views on the film market and Huace's future plans?

Zhao Yifang: From the perspective of content manufacturing, movies and TV series are both entertainment content, but the business models are different. One is direct to consumers, and the other is through channels. We implement two-wheel drive in the film business. One end uses the distribution sector as the starting point and the other end uses content research and development as the starting point. One is the source and the other is the terminal. Through the two core grasping points, we can graft the middle sector to lay out our film industry. From this perspective, Huace's content advantages can be released and risks can also be achieved.

Reporter: In terms of performance in the variety show sector, Huace has also achieved good results in the past two years. At the same time, he has invited outstanding talents like Du Fang. How will he plan his future performance in the variety show sector?

Zhao Yifang: Variety shows are one of the troika that Huace will focus on building in terms of content in the future. On the one hand, we will focus on some key and good projects; on the other hand, we will also focus on some excellent and mature teams and core and key media channels.

At the end of this year, Huace Film and Television immediately aired two variety shows. One was "We Are Seventeen" broadcast on Zhejiang Satellite TV. This was the first large-scale star travel reality show in China. It invited six popular male guests, including Aaron Kwok, Lin Zhiying, Sun Yang, Hua Shao, Fan Ming, and Han Dongjun. The other is "Cross-border Ice and Snow King's Star Dance on Ice" broadcast on Beijing Satellite TV. Zhang Yimou serves as the chief director and Olympic champion Shen Xue Zhao Hongbo serves as the head coach. It has reached a cooperation with the 2022 Beijing Winter Olympics Organizing Committee. It will be broadcast for five consecutive seasons until before the Beijing Winter Olympics. The program will also be deeply integrated with the ice and snow sports industry to develop the entire industry chain and achieve cross-border monetization.

In the long run, the model of combining variety shows with tourism, e-commerce and other industries is the best. In the future, Huace will also focus on exploring and implementing diversified monetization models.

Talking about capital operation: Capital boost will become a key reporter for Huace's "second venture"

: In addition to endogenous development, Huace has also had some excellent cases of restructuring and mergers in the five years of listing. In your opinion, the film and television company's reorganization and mergers process. How to value the target? What are the risks?

Zhao Yifang: Judging from the past M & A cases of Huace Film and Television, we have done some M & A in the five years after we went public in 2010, but most of our M & A are based on the core capabilities of the industry to enhance our main business segment. Do it on demand. In 2013, we acquired a film and television company, Kedon Media. At that time, Kedon's valuation of 1.6 billion yuan was the highest in the industry. During the acquisition, we never bargained because we thought it was worth it through our evaluation, which proved that it was true.

Most of the film, television and cultural and creative companies are non-standard companies, and their valuation and value may be different from conventional industries. Therefore, when making a valuation, the key point should be to consider what are the core competencies of the cultural and creative industries? What is sustainability? What can be enhanced for future listed companies? These are the most important things. If we only evaluate gambling profits, there will be risks, especially cross-border mergers and acquisitions. The reason is that the characteristics of cultural and creative industries are sustainable but also uncertain.

Reporter: The case you mentioned above is the company's acquisition of Kerton Media in 2013. In this case, how did the company "deeply" bind the target?

Zhao Yifang: In addition to the acquisition of Kerton, we also have a team that invests in Love Apartment. They are all very excellent creative teams in the industry. We are very happy to cooperate at present. In fact, Kedon Media and Huace Film and Television itself are both among the best in the film and television industry even if they are counted separately. Now the result of the integration of strong companies is that Huace produces 1000 episodes of full-network dramas every year, and its market share. Among them, Huace produces 15- 20%.

Although Kedon Media completed the bet at the end of this year, through three or four years of integration, we have built several major systems. Among them, one is the construction of the entire industry platform, and the other is the partner system we are establishing. Not only Kerton Media, but also all subsidiaries, including our variety show segment, will establish a partnership mechanism. These deep integrations have made the cooperation between the two sides closer.

The development of cultural and creative industries can be viewed from Hollywood. If it is a win-win merger and acquisition of like-minded industries and achieves strong alliances, it will have a huge promotion effect on this industry. Our film and television cultural and creative industries in China are currently facing a 2.0 upgrade, so we must also promote higher-quality and strong mergers and acquisitions.

Talking about Industry 2.0: Big waves wash away the sand, Huace will strive to become the gold left on the beach

Reporter: Since its listing, Huace has been focusing on the development of the endogenous sector, and the extended sector has also connected tourism, Internet celebrities, VR, catering and other industries through our SIP+X strategic plan. Which industries will the company pay more attention to in its subsequent expansion?

Zhao Yifang: Huace is in sync with the development of China's film and television industry. Since 2009, the first batch of cultural and media companies have been listed. Dozens of film and television listed companies have formed a certain strength and scale with the support of the capital market. At the same time, a large number of film and television companies are also booming, and the promotion of capital during this period has also led to the first round of rapid development of the film and television industry. This year is also a phased point. The China Securities Regulatory Commission also has some window information to support this industry more professionally. At the same time, the industry itself is also adjusting.

I think the cultural media industry will enter the 2.0 era next year and enter a more mature development period. At this stage, some of the first listed companies, or some relatively powerful non-listed companies, should enter a faster and better development period. This must require the use of the capital market to build and expand the industrial chain in an "endogenous + epitaxial" model to achieve offensive development.

Today, China's film and television industry will also enter the 2.0 era. In this era, there will be six and eight major (film and television giant companies) in China. These must be teams and companies that need content core competitiveness advantages. However, the cultural industry 2.0 era is also a process of clearing away waves. Companies that can truly produce high-quality content are the gold left on the beach, and Huace will strive to become one of them.

Huace was a small company when it went public in 2010, and today it has a certain scale. In the past five years, we have been digesting and accumulating, further consolidating our main business, and further strengthening the long-term (core competitiveness) of our content advantages.), and at the same time, we will carry out the layout of the industrial ecology, which will be further expanded and strengthened in the next stage.

Reporter: You said that the cultural media industry will usher in 2.0. At the same time, you have also mentioned Huace Film and Television's "second venture" many times. What opportunities do you think this round of entrepreneurship means for Huace?

Zhao Yifang: Huace's "second venture" is consistent with the 2.0 era of China's film and television industry. Huace's listing is a stage. In the first five years of listing, we also relied on capital to do some key mergers and acquisitions, which greatly consolidated the strength of our main business. In the 2.0 era, we also hope to upgrade into a solid force in China's cultural industry through the power of our own team and capital. We hope to seize this opportunity.

Editor: yvette