Hot money surges in the film and television industry, focusing on copyright and overseas markets

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How hot is film and television capital? "What do Chinese enterprises that raise pigs, make dairy products, open restaurants, make metal pipes, sell hardware, and set off fireworks have in common? Answer: they have all become film and television companies."

How hot is film and television capital? "What do Chinese enterprises that raise pigs, make dairy products, open restaurants, make metal pipes, sell hardware, and set off fireworks have in common? Answer: they have all become film and television companies."

Editor's note: since this year, the relationship between capital with a keen sense of smell and the development of the hot cultural industry has become increasingly close. With the rapid development of the network economy, the integration and penetration of the "Internet Gang", the accompanying and mutual promotion of financial transformation, and the expectation and practice of private capital have injected vitality into cultural capital and also brought new problems

expansion of scale, mixed good and evil, high heat from January to September this year, the A-share market has disclosed more than 100 mergers and acquisitions involving the film and television industry

Many people judge that this round of film and television capital overheating began with a series of "stops" in the A-share market. On October 24, the website of the CSRC announced that Beijing energy film and Television Communication Co., Ltd. (IPO) failed. Earlier, on the 17th, Zhongnan heavy industry announced that the application for the merger of film and television company Datang brilliant had been suspended. Since this year, huanrui century has terminated its "backdoor" Taiya shares, Panda Fireworks has terminated its acquisition of Huahai times, and CCTV media has terminated its acquisition of Jin yingma... Although the reasons for the termination are different, they all seem to be ringing the alarm for the film and television capital foam

According to statistics, from January to September this year, the A-share market has disclosed more than 100 mergers and acquisitions involving the film and television industry, involving an amount of nearly 100billion yuan. Both the total number and the total scale are far higher than those in 2013. This includes both internal integration led by companies in the film and television industry and cross-border mergers and acquisitions conducted by companies in other industries

Mergers and acquisitions, holding, equity participation, equity investment, business cooperation... The rapid development of the industry and the aura of high return attract all kinds of capital to enter the film and television industry quickly. Take the fund as an example. Before 2000, China's film and television industry fund was only the China Film Foundation. From 2006 to 2011, nearly 30 domestic cultural industry funds invested in the film and television industry. Today, the number of funds, large and small, involving film and television has reached 100, with a total scale of about 100 billion yuan. In addition to professional film and television funds, almost all large and medium-sized PE have also set up film and television investment departments or film and television sub fund companies

Towards the end of the year, "film related" funds are springing up. On November 24, Wanda Group and Busan, South Korea, agreed to set up a "Korean Chinese film fund", which is expected to reach 1.12 billion yuan. On December 5, Hongtai fund under New Oriental founder Yu Minhong also announced that "free film" had become its first investment project and began to set foot in film and television

"Consumption upgrading has provided the driving force for the development of the industry, and China's film and television industry has entered the golden development cycle. Behind the upsurge of this round of film and television capital market, there is both the demand for internal integration of the film and television industry and the demand for a large number of traditional industries to seek strategic transformation." Chenshaofeng, vice president of the Cultural Industry Research Institute of Peking University, said, "a large number of mergers and acquisitions not only push up the valuation of the film and television industry, but also push up the investment risk of the film and television industry."

In addition to the risks of high valuation and difficult integration of film and television companies, some companies with no experience in the film and television market and operation have also begun to follow the trend of speculation, and mergers and acquisitions of popular industries have attracted capital attention. "Capital is a 'double-edged sword'." Liudeliniang, managing director of Xinyuan Wenzhi, said, "from the perspective of investment, the film and television capital foam has appeared, but a partial foam does not mean that the industry as a whole has no potential space. If capital can promote the rapid development of the film and television industry, the foam may be absorbed in the upgrading of the industry."

cross border mergers, vertical and horizontal planning layout cooperation attempts among film and television, Internet and financial industries inject fresh cross-border thinking into the film and television industry More capital operation is for integration. Over the years, the pace of vertical integration of film and television companies around the upstream and downstream of the industrial chain has never stopped. Pony Pentium once acquired digital Kingdom, a famous special effects production company in the United States, Wanda Group acquired AMC cinema, the world's second largest theater group, to obtain theater resources, and Huace film and television also obtained a large database of the film and television industry through the acquisition of kerton media. There are also some cases that have broken through the boundaries of film and television, most of which are concentrated in the field of games and animation with great relevance to the industry, such as Huayi Brothers' shareholding in zhangqu technology, a game enterprise, and the acquisition of Yinhan technology

From last year to this year, the influx of non industry capital has changed this integration, which is highlighted by the obvious increase in the trend of horizontal cross-border integration involving Internet companies and financial companies. In March this year, Alibaba launched its insurance and financial management product "entertainment treasure", which attracted the attention of netizens. Later, baidu teamed up with China Film Group, CITIC Trust and Deheng Law firm to launch the country's first Internet consumption trust platform, "Baifa Youju", using the "consumption + finance" model to determine the income of financial products according to the box office of the film "golden age". On November 18, Ma Yun (ALI), Ma Huateng (Tencent) and Ma Mingzhe (Ping An, China) participated in the fixed increase of Huayi Brothers' shares to jointly explore the possibility of the Internet of film and television entertainment. Almost at the same time, Ping An of China announced the launch of an entertainment finance platform called "Ping An drama" to carry out joint marketing with the film "a year in a hurry"

Insiders pointed out that "entertainment treasure" and "Baifa Youxi" are essentially financial products. "Driven by capital, the combination of the application of Internet thinking and o2o mode will make the publicity, promotion, distribution and even derivative marketing of films no longer the same as the traditional film and television industry." Zhang Zhao, CEO of LETV film, said, "the film industry is changing from manufacturing to service industry. Before everyone talked about film companies, the first reaction was to make films, but now the important thing is to make films for whom and pay more attention to the sense of audience participation."

These cooperation attempts among the film and television, Internet and financial industries have injected fresh cross-border thinking into the film and television industry, and also represent a possible development trend. Even Fosun Group, which has a broad investment field, is also interested in this trend. Liang Xinjun, CEO of Renaissance group, said recently that after investing in film and television production, the next step will be film and television finance

"A new round of film and television industry reconstruction is beginning. In this process, the film and television industry chain will also be reconstructed, and those small, scattered and weak film and television companies may face some crises." Liu Deliang said, "companies with first mover advantages should adopt investment and M & A strategies to further integrate film and television resources and form scale advantages."

increasingly professional, big capital has a broad vision

Capital concentrates on acquiring copyright resources and distributing overseas markets

The capital performance in the film and television field is becoming more and more professional. On the one hand, more and more companies realize that the key to film and television mergers and acquisitions at this stage is the acquisition of copyright resources. At the 2014 China online audio visual industry forum just held, Li Yansong, President of iqiyi film, made it clear that he would not make pure financial investment. "The purpose of iqiyi film investment is to take online copyright and downstream game IP, combine film publicity, distribution, derivatives, e-commerce, and finally connect the value of this industrial chain through film tickets." Based on this, iqiyi also jointly announced with Huace film and television in August this year that it would jointly fund the establishment of Huace iqiyi film and television company to provide iqiyi with high-quality dramas, variety shows and other rich Internet content

There are not a few capital with the same idea, gradually setting off a "gold rush" of film and television copyright - the adaptation copyright of the science fiction "three bodies" was won by the Youzu film industry, which was established on November 27 after several changes of ownership, and is expected to be filmed as a "six series". On December 3, the newly established aofei film industry also announced that it would invest a total of no more than US $60million in the three films produced by Hollywood new Regent entertainment company to obtain the global distribution income of the three films and the exclusive distribution rights and related commercialization rights in Greater China. "After the film is offline, the film copyright transaction, single payment and development are the magic weapons for the survival of overseas film companies, which is also where we will invest heavily in the next step." Tang Xiaoming, executive director of China cultural industry investment fund, said

On the other hand, the strategic vision of film and television capital is also reflected in its layout of overseas markets. According to Chen Shaofeng, after the "wave of mergers and acquisitions", domestic film and television capital has ushered in an international trend. At present, the main forces of domestic film and television enterprises in overseas market layout are Huayi, Huace and Wanda, and their layout directions are also different

Wanda, which strives to build a global "film kingdom", has unparalleled advantages in downstream cinema resources. At present, it has become the world's largest cinema line operator with the second largest AMC cinema line in the world and the first Wanda cinema line in Asia, accounting for about 10% of the market share of the global industry. The recent contact with Lionsgate pictures and MGM, an established Hollywood production company, also shows its urgency for the integration of upstream production resources

Among the many domestic enterprises going out, Huayi Brothers is the first to try to invest heavily in Hollywood film production companies. In March this year, Huayi once formed a "Huayi Brothers investor" with other investors to invest in and purchase equity from Studio8 company in the United States, but was later "swept away" by Renaissance group. More insiders revealed that the investment of 3.6 billion yuan by "San Ma" in Huayi is actually paving the way for Huayi to closely promote the M & a plan of overseas film and television production companies

At present, the overseas market of Huace film and television is mainly in South Korea in Asia. Recently, Huace invested 323 million yuan to acquire the shares of South Korean film industry giant new company, which is also the largest investment of Chinese enterprises in the South Korean film and television industry so far. Zhao Yifang, general manager of Huace film and television, said that the negotiations on the China South Korea free trade zone at the APEC meeting have made substantial progress, especially the cooperation fund of 200billion won reached by the cultural departments of both sides, which is a good policy opportunity for China South Korea film and television companies. "From the perspective of policy, market proximity and cultural matching, choosing South Korea to become an overseas investor