Why did Shiguang choose Wanda instead of BAT for US$280 million?

In the announcement issued by Wanda, it can be found that Shiguang's loss in 2015 reached 34.051 million yuan and in the first half of 2016, it lost 6.831 million yuan. But even so, Wanda is still relatively optimistic about Shiguang's performance, saying that Shiguang is expected to achieve profit in 2016.

On the evening of July 27, Wanda Cinema issued an announcement "Announcement on the Acquisition of Equity in Shiguang. com", acquiring the entire online ticketing platform Shiguang. com for US$280 million and owning 100% equity in Shiguang. com.

Here, Shiguang officially sold its life.

Last year, it lost more than 34 million yuan, but Wanda expects to make profits this year

. As a "slow" company, in its nearly ten years of development, Shiguang has maintained a low-key style in the industry, and its CEO Hou Kaiwen hardly accepts any interviews. It is precisely because of its "slow" temperament that Shiguang. com has always been tight-lipped about its own profitability.

It was not until the acquisition was completed that Shiguang's revenue was made public.

(From the "Announcement on the Acquisition of Equity in Shiguang Network")

In the announcement issued by Wanda, it can be found that Shiguang Network suffered a loss of 34.051 million in 2015 and a loss of 6.831 million in the first half of 2016. But even so, Wanda is still relatively optimistic about Shiguang's performance, saying that Shiguang is expected to achieve profit in 2016.

However, Wanda did not provide any explanation for this. Regarding Wanda's statement, some media disagreed,"Mtime's net profit suffered consecutive losses in 2015 and the first half of 2016, which means that Mtime's profit situation will further deteriorate after Wanda takes over the offer."

It is worth noting that Wanda did not set up a gambling agreement in this acquisition, which is relatively rare in current domestic acquisition cases. However, it has to be said to be a good thing for Shiguang. This will reduce Shiguang. com to a certain extent. The profit pressure will enable it to continue to maintain its current development trend.

Why did Shiguang choose to sell its body at this time, and why did it sell it to Wanda? Founded in 2006, Shiguang. com has been in existence for nearly 10 years. Then why would you sell your body at this time?

This year is the best time. If you don't sell it, there will be no chance.

In 2015, the total box office of movies nationwide was 44.069 billion yuan, a year-on-year increase of 48.7%. It was called "the biggest miracle in five years" by the media. In the latest data, the total box office volume in the first half of 2016 has reached 24.6 billion yuan, which is expected to break last year's record. Corresponding to this is the growth of the movie ticketing platform business and the rapid development of the movie derivatives industry.

For Shiguang. com, it has adhered to ten years of film information and its deep cooperation with many foreign film companies, giving them unique advantages in film derivatives. And Wanda also took a fancy to this.

In the announcement issued by Wanda, Shiguang. com's total assets are 440.732 million yuan, and its ability to obtain Wanda's support at a premium of 7 times shows that this year is the best time.

Successive losses are the main reason why it was acquired

. Shiguang is a "slow" company. It is not easy to persist in doing one thing for ten years, especially for companies that do media.

With the continuous changes of the times, Internet media traffic and advertising are becoming less and less valuable. The media form changes too quickly, which directly makes it difficult to form barriers. It is easy to be directly copied by big capitalists when it is close to success, which is not worth the gain.

Of course, the more important thing is the issue of profitability. After ten years of running, Shiguang had to consider its own profits. This should be the main reason for the acquisition. It does not rule out the pressure exerted on it by investors.

However, why don't a vertical field boss like Shiguang? com hug BAT's thigh and choose Wanda?

In fact, as early as August last year, Wanda Cinema Line signed a strategic cooperation agreement with Shiguang. com, and Wanda strategically invested 20% of its equity. Although the specific amount was not announced at that time, there was a certain basis for cooperation between the two.

On the contrary, it is difficult for Shiguang to establish a member of BAT, and I believe this is not Hou Kaiwen's original wish. On the one hand, Ali has Taobao tickets, Baidu has glutinous rice, and Tencent has Weibo tickets. These online ticketing platforms all have direct business conflicts with Shiguang. com, making it difficult for Shiguang. com and BAT to have a basis for cooperation.

In addition, in this acquisition, Shiguang still maintains independent operations. This should be Hou Kaiwen's bottom line, that is, he can pay for the acquisition, but he must maintain independent operations. If acquired by BAT, Hou Kaiwen is likely to be kicked out, which is something Hou Kaiwen and Shiguang do not want to see.

From Wanda itself, breaking through the transformation bottleneck of Internet-based transformation is the key. Winning Shiguang will help Wanda wrestle with BAT in terms of film derivatives.

What opportunities does Shiguang have to compete with competing products?

At present, Shiguang. com mainly focuses on news information, online ticketing, movie derivatives and other aspects.

First of all, in terms of film review, both Shiguang and Douban have similar sections, and both are "slow" companies, full of literary atmosphere. However, both Shiguang and Douban will face a problem, that is, after becoming more popular, the influx of low-quality new users will directly eliminate the high-quality users gathered on the original platform, which is reflected in the quality of film reviews.

In the long run, professional movie information and high-quality soft articles are still Mtime's advantages in this regard, but if profit is considered, it is relatively unlikely that it will add more to this in the future.

Secondly, in terms of ticket sales. According to the "Big Data Report on China Online Ticketing Platforms in the First Half of 2016", the domestic ticketing market has been divided by BAT+ Cat's Eye and has entered a state of market saturation. Some industry insiders pointed out that Shiguang's ticketing market accounts for less than 3%.

But even so, these online ticketing platforms on the list still have certain flaws. For example, after Cat Eye became independent, it gradually lost its support for large traffic, and the future situation is unclear; for example, the entrance to micro-tickets is hidden in WeChat, and the entrance is not obvious. Once WeChat dividends become a thing of the past, micro-tickets will also lose their traffic support.

However, Shiguang has not shown its ambition for online ticketing. Its CEO Hou Kaiwen has always insisted that Shiguang is a media and not simply a ticket sales.

Thirdly, in terms of film derivatives. The reporter believes that this should be the biggest advantage of Shiguang. com and the place with the most potential. As mentioned earlier, Shiguang has had in-depth cooperation with many foreign film companies for a long time and opened a movie derivatives monopoly area for movie theaters. In this regard, Hou Kaiwen does not hide his ambition at all. The most profitable thing around the movie is Super IP, which is also the place with the highest fan loyalty. However, in this regard, the main influencing factors should be Ali's Ali Fish and Entertainment Bao. According to official statistics from Alibaba Fish, Alibaba Fish has cooperated with Tmall and many brands to cooperate with global IP, resulting in a daily transaction of 22 million yuan for "Return of the Great Sage" derivatives, and Kung Fu Panda derivatives won a total of 165 million yuan for sales through the Ali New Year Festival.

On the other hand, the entertainment treasure, which focuses on "entertainment + finance" services, also announced the opening of derivatives e-commerce new play methods this year, directly targeting Time Network. With the traffic support of Alibaba's relevant platforms, Entertainment Bao will likely become a strong rival of Time Network.

However, as mentioned earlier, there was still a way to go on the Time Net, or it could open the door to a new world. That is to say, using the user data accumulated by the platform and the mature mode of derivative sales, launch financial services and create equity crowdfunding mode.

Of course, after cooperating with Wanda Cinema, we can also consider the equity model of film and television crowdfunding. After calculating, Wanda does have less layout in the equity crowdfunding field.

However, this may affect the third-party independence of Shiguang. com. Hou Kaiwen once said in an interview,"I never do anything that conflicts." So, it depends on how Hou Kaiwen weighs it.

This article is reproduced from Titanium Media, and the original link is: http://www.tmtpost.com/2425545.html.

Editor: yvette