It is difficult to improve the performance of Internet film and television companies to lengthen the front line, but also be vigilant against acclimatization

At present, the performance of my country's Internet film and television companies is somewhat low, and the film business expansion of major giants is not satisfactory. Alibaba Pictures is losing money, LeTV Pictures is in danger of itself, and Tencent has failed to leverage its resource advantages.

Original title: Internet film and television companies have extended their front lines. Is it a blessing or a disaster?

Recently, the news that Beili Pictures was sold off at a low price by Shanghai Shangshi Pictures has become rampant, attracting a lot of public attention. Among them, the profits have been negative for a year and a half. The situation of Shangshi filling 1.485 million loopholes has once again put the problem of difficulty in realizing secondary culture before the market.

Everyone depends on benevolence and wise people. Regardless of whether the responsibility for the incident lies with Station B or Shang Shi, it is undeniable that the unfavorable situation caused by this severe setback will continue to affect its future development. It is even conceivable that unless the next company it takes over is strong, otherwise this unique secondary film industry may enter a critical moment of life and death.

However, excluding the label of secondary yuan and placing this incident in the Internet film market, we can find that the failure of Bili Bili Films should be only a microcosm of Internet film and television companies. After all, the film business expansion of major giants is not satisfactory. Alibaba Pictures is losing money, LeTV Pictures is in danger of itself, and Tencent has failed to leverage its resource advantages, especially in contrast to Amazon Pictures winning multiple Oscars. The performance of my country's Internet film and television companies is even bleak and frustrated.

So why on earth do these companies that want money, money, and people, start high but fly low?

Internet giants enter the film market, are they not acclimatized?

In 2016, the domestic film market suffered from frequent bad films and a wave of bad reviews. The contributors to such a "grand occasion" were not only traditional film and television companies such as Enlight Media and Huayi Brothers, but also entertainment companies owned by Internet giants such as Alibaba and Tencent. This not only means that consumers are disappointed with the quality of domestic films, but also raises questions about the ability of Internet film and television companies to change the film market environment.

Let's first look at Alibaba Pictures. The main investment company was defeated miserably, its works were mixed, and the business conflict between the content production and publicity system became more obvious. The so-called "strategic failure" was a bit of a boost in the face of huge losses. It is clear that Alibaba Pictures still needs more time to think about changes and changes.

According to Alibaba Pictures 'financial reports in the past three years, the company's revenue in 2014 was 126 million yuan, down 63.7% from 2013. Compared with the previous year's net profit of 179 million yuan, the company turned from profit to loss, with a net loss of 415 million yuan; In 2015, the total revenue was 264 million yuan, a year-on-year increase of 108.30%. The net profit attributable to shareholders for the whole year was 466 million yuan. The reason why the loss turned from loss to profit was the income of about 800 million yuan from foreign exchange differences, which not only helped Alibaba Pictures make up for the huge losses, but also left some of it can be used as net profit.

However, profits did not continue. According to the profit warning issued by Alibaba Pictures on the evening of February 17, as of December 31, 2016, total revenue reached 905 million yuan, an increase of 243% from the previous year. However, due to the impact of ticket promotion expenses, Alibaba Pictures lost 959 million yuan for the whole year.

Looking at the financial report, the investment in the ticketing platform in the publicity and distribution system is the main reason for the loss, and this has indeed been confirmed. According to relevant data, the expenditure on Internet publicity and distribution projects in 2016 reached 1.29 billion yuan, 11 times more than this expenditure in 2015, and the losses caused exceeded 600 million yuan, accounting for 62.23% of the annual losses of listed companies.

However, this part of the investment is currently worth the money. On the one hand, the financial report pointed out that the revenue from the publicity system accounts for 75% of Alibaba Pictures 'overall revenue. On the other hand, the overall proportion of online ticket sales this year has exceeded 83%, and the proportion of online ticket sales for some popular films has reached 90%. It can be said that online ticket sales have become the mainstream. It can be seen that after consolidating its market share of online platforms, it is entirely possible for Alibaba Pictures to stabilize its profits through this.

However, what cannot be ignored is the investment and revenue situation of content production. In 2016, Alibaba Pictures 'content production revenue reached 212 million yuan, an increase of 70.53% over the previous year, but the loss reached 243 million yuan, while the loss in 2015 was less than 100 million yuan. The reason naturally involves the works invested and produced by Alibaba Pictures, especially the failure of the main investment "The Ferry Man", which not only caused the company to bear losses and abuse, but also represented the complete misfiring of the first shot that had high hopes. The film and television business is still in its infancy. It is undoubtedly a big blow.

Although Tencent Pictures has not been criticized for its ups and downs in financial reports and results like Alibaba Pictures, its mediocre and moderate performance last year is not very consistent with the title of having the largest film and television resources, especially compared to Penguin Films and Television's online dramas. The harvest has been quite fruitful, and Tencent Pictures has become increasingly unable to keep up.

In 2016, except for "Warcraft", which received a good box office, the other works that Tencent Pictures participated in investment and controlled were basically either hit the streets or had poor reputation. For example,"Juvenile" had only tens of millions of box office, and ended in dismal. And even "Warcraft", which performed well, was exposed to a loss of US$15 million.

In addition, Tencent Pictures has also performed poorly in other overseas film investments. For example,"King Kong: Skull Island" co-invested with Wanda has a good momentum at the beginning of its release, but it was quickly attacked by "Beauty and the Beast", which is also a sentimental film. Although it also exceeded 1 billion yuan in box office, it was still much worse than "Beauty and the Beast". All in all, it can be said that Tencent Pictures has not appeared in phenomenal works that are both popular and popular up to now.

Looking at Letv Pictures again, it can almost be regarded as the "king of bad films","Tomb Robber Notes,""Grand Trace,""Great Wall,""28-year-old minors" and other films, although the box office is not embarrassing, but the reputation almost without exception serious decline, of course, its current crisis lies in the direct impact of Letv, the future is difficult to predict. All in all, Internet companies flock to the entertainment market collectively, and few of them can really go to the end and get real benefits.

Amazon Pictures VS China Internet Film and Television Company: Is the front line an advantage?

In response to the unsatisfactory film and television business, both Ali and Tencent have said that they do not care whether a film can make money, but focus on the creation of an entertainment ecosystem and the formation of cultural carriers. In other words, the current and local interests are far less than the long-term and overall interests. For Ali, the core of the film business lies in platform operations, while Tencent wants to create a content ecosystem that allows IP and other resources to be circulated in all aspects., in short, it wants to gain full control over the entertainment industry chain, thereby tapping deeper commercial value.

It is precisely with this long-term interest as the goal that most Internet companies have spread out their businesses across the board as soon as they enter the film market, expanding as much as possible, both horizontally and vertically, and constantly acquiring affiliated companies to make up for the shortcomings of the entertainment system. However, this does not include companies such as 58 Tongcheng, Jumei Premium and even Three Squirrels. It is not because they are relatively small, but that they have shown a tendency to give it a try.

Looking at the entertainment system construction of Alibaba, Tencent and LeTV, it is not difficult to find that from a horizontal perspective, movies exist as a key link, and related TV dramas, games or anime are all parallel products. Moreover, no matter the order of time, it is necessary to rely on the common influence of each field to produce an overall effect and form an iconic brand of the company. This can be clearly seen from Tencent Pictures 'movie-game linkage.

On the other hand, from a vertical and in-depth perspective, taking Alibaba Pictures as an example, content production, Internet promotion and distribution, entertainment e-commerce and international business are its main business directions announced. If you are subdivided at different levels, you can see that Alibaba Pictures covers almost all aspects of the film industry. For example, the publicity and distribution system that currently occupies an important position mainly includes the publicity and distribution of film and television content, comprehensive online and offline channels, online movie ticketing platforms, cinema ticketing system services, etc. In addition to normal publicity, Ali is moving closer to the purchase and payment field closest to money, which is also the reason for fierce competition from Meituan, WeChat and other platforms.

In addition, Ali's cooperation with films does not just involve participating in investment, production or publicity. It has also tried to sell film derivatives. Tencent Pictures is also the same, and is exploring the commercial value of films as deeply as possible. However, the battle line of Internet film and television companies has been infinitely extended from the beginning. Is this really the right step to enter the entertainment market? Especially last year's dismal performance, in addition to the immature reasons of my country's film market, wasn't it also a negative effect of too long a front?

This can be compared with Amazon Pictures. After all, both the box office and the recognition of mainstream awards confirm the correctness of its decisions and direction last year. According to the way Amazon Pictures participates in films and its business operations, we can find the basic differences with my country's Internet film industry, which are roughly reflected in two points:

First, in terms of film production, Amazon obtains high-risk returns by completely betting on a certain film based on purchasing the distribution rights for films, or cooperating with independent studios to obtain priority distribution rights. The key point is that Amazon Pictures does not participate in film production; my country's Internet film and television companies focus on main investment and participation in production, and even important film and television resources themselves belong to Internet companies, so the production of some films is largely affected by it.

Second, in terms of development steps, Amazon Pictures is a typical step-by-step approach. With the distribution in the middle and lower reaches as the entry point, it gradually moves towards upstream film production on the premise of gaining recognition from the mainstream market and public opinion; while my country's Internet companies have adopted It is a comprehensive upstream and downstream approach, focusing on building an ecosystem.

It is too early to say which method has more advantages. After all, compared with Amazon, which has nearly ten years of film and television experience, my country's Internet film and television companies are more like they are in their infancy, and everything needs to grow in practice. However, from the perspective of comparison, we can still see the risks that Alibaba Pictures and other companies need to be vigilant about when lengthening their front lines.

Risks and choices

No matter how grand the entertainment empire Ali and Tencent want to build is, or whether they can stand on the commanding heights after being labeled as a cultural carrier, they must ultimately be based on the performance of film and television. Once the situation in the future is similar to last year, it is far from being able to support the ambitions of these Internet giants by simply relying on publicity or accumulating resources. Therefore, by comparing it with Amazon, it is easier to see the current hidden risks of Internet film and television companies, and these risks are also related to their future strategic choices.

The frequent appearance of bad films last year once again showed the conflict between high-quality and mass production, which is also a key choice for Internet film and television companies. In fact, in essence, the artistry of films and Internet thinking have an irreconcilable contradiction. The former should require refined polishing of time and details, while the latter often advocates solving existing problems as quickly and efficiently. Even if the current film market is somewhat inclined to fast food culture, in the final analysis, only films that can stand the test of time and public opinion can better promote the maturity of domestic films. This is a unified and inevitable pursuit.

However, my country's Internet companies are often better at expanding their user base in a short period of time and are always outsiders in film production. Not only will direct participation in it create ideological conflicts with the producers, but their pursuit of efficiency also makes them more inclined to follow the mass production route. However, now Amazon has given up this choice and switched to the method of accumulating credibility with high-quality products, so that it has the style it has at the Oscar Gala. However, the result of investment by my country's Internet film and television companies has ended miserably. This cannot be regarded as a lesson.

In addition, judging from the industry-wide layout of Alibaba Pictures, it is difficult for even a giant to attempt to take into account all parties and maximize the benefits of various businesses. After all, the film market, whether it is film production, publicity, cinemas and post-production derivatives, requires deep cultivation and careful work. Especially the upper reaches of the industrial chain, although it is the ultimate pursuit of all film and television companies, at least it needs the performance of the industry as the basis to make it easier to enter.

Alibaba Pictures and Tencent Pictures are obviously making all-round advances without any explanation, which has largely led to the dispersion of resources. Moreover, due to the lack of core businesses in related fields as support, it may be one of the reasons for last year's sluggish performance. This is similar to the situation of Le.com. When the business of Internet TV and video platforms was not yet fully stable, it rashly expanded, and one link was disconnected and the entire line collapsed.

Moreover, the IP resources accumulated by Tencent Pictures are a great advantage in entering film and television. However, the over-squeezing of IP is consuming its commercial value. Especially after the IP products are formed, they are hit by the double blow of playback volume and reputation, but they still have no scruples to develop related games, movies, etc. is still a problem whether it is a profit or a loss. I have to say that it is time for Tencent Pictures to make a choice between the healthy operation of IP and rapid commercialization.

The commercial value of the film and television industry is indeed difficult to estimate, but it is still difficult to determine whether Internet thinking can operate freely in this industry. At least the current expansion of the entire line has not brought market recognition, which shows that the development method of Internet film and television companies may still need improvement.

Editor: jessica