Chinese Culture participates in Siba Media to expand the artist brokerage market

On April 14, the Chinese Culture Holding Group and the Chinese Cultural Industry Investment Fund (also known as "Chinese Culture" or "CMC") led by Li Ruigang announced that they would jointly invest in Siba Media, a company affiliated to the women's idol group "SNH48".

Yesterday (April 14), the Chinese Culture Holding Group led by Li Ruigang and the Chinese Cultural Industry Investment Fund (also known as "Chinese Culture" or "CMC") announced that they would jointly invest in Siba Media, a company affiliated to the women's idol group "SNH48". Chinese Culture has not disclosed the amount of the investment and its share ratio.

Siba Media was established in 2010. On August 31, 2015, it accepted a series B investment of 100 million yuan from Junlian Capital and Innovation Works. Among them, Innovation Works is also a Series A investor of Siba Media, with an investment amount of tens of millions of yuan. Siba Media spent three years building the women's idol group "SNH48". It currently has more than 170 members and performs more than 300 performances throughout the year. The number of core fans has increased by more than 400% annually, and it has branches across the country.

According to media reports, SNH48 has begun to make a profit, and its male to female fan ratio has increased from 9:1 at the beginning to 7:3 now.

So what are the reasons for Chinese Culture to invest in Siba Media?

Li Ruigang once introduced that investment in Chinese culture will follow three directions:

first: the media and entertainment industry, which is more focused on content;

second: the Internet and mobile, which mainly depends on the platform;

third: focus on lifestyle. With the emergence of a large number of middle class in China, middle class lifestyle will be the focus;

looking at the companies invested by Chinese culture based on these three investment directions: Star Media/Canxing Productions, Noon Sunshine, Sports Sports Power, Hong Kong Wireless TVB, Oriental DreamWorks, Flagship Pictures, IMAX China, Micro Whale Technology, Station B, Microlithography/Guevara, Junt, Base FX, Imagine Entertainment, First-line film industry, Gravity Film and Television, Sun and Moon Stars, Changrong Communication, Zilong Mutual Entertainment, Shanghai Dream Center, Legoland (China), Manchester City Premier League Club, Shengli Family, Sorford Sports, Urban Football, YOHO, Caixin Media, Wall Street News, Senpu Information, etc.

Siba Media, which invested in Chinese culture this time, belongs to the first category in Li Ruigang's investment logic: the media and entertainment industries, and is good at services between content production and channels-artist brokerage. Siba Media, which owns the idol group "SNH48", can provide artist resources and connection channels to other content production companies invested by Chinese culture. At the same time, due to the fan characteristics of "SNH48", Chinese culture has also grasped the young group.

According to Guotai Junan's forecast, the market size of artist brokerage is expected to reach 100 billion yuan in 2020, with an average annual growth rate of around 30% in the next five years.

In addition to Siba Media, Star Media/Xingcan Productions and Lehua Entertainment, which are invested by Chinese Culture, perform well and involve artist brokerage services. The following is information about the two companies:

Lehua Entertainment: A comprehensive entertainment company that integrates music and film production and distribution, artist brokerage, artist training, public relations event planning and execution, entertainment marketing, digital media promotion and other contents. The company's artists include Han Geng, Zhou Bichang, Adu, etc. On August 1, 2014, it accepted a Series B investment of RMB 300 million from Chinese Culture and its partner company Gravity Media.

Star Media/Canxing Productions: Its businesses include Canxing Productions, Star International Channel, Star Chinese Channel, Channel "V", Chinese Film Library, etc. In 2010, Chinese Culture acquired 53% of Star Media's shares (the other 47% of the shares were in the hands of Murdoch's News Corporation) and established Star Media; in early 2014, Chinese Culture and Star Media jointly acquired Star Media from Murdoch. Another 47% stake. The companies behind "The Voice of China" Canxing Production and Mengxiang Qiangyin are affiliated companies, responsible for program production, advertising sharing and artist brokerage, brand management, and Internet derivative business respectively. On March 23, 2016, Canxing Productions (Shanghai Canxing Cultural Communication Co., Ltd.) became a shareholder of Mengxiang Qiangyin. This is equivalent to Star Media having an artist brokerage business.

In addition to artist brokers, what is the investment logic of Chinese culture?

At the "China Cultural and Entertainment Industry Investment Summit" on March 30, Li Chuan, managing director of the Chinese Cultural Industry Investment Fund, analyzed the current investment logic of Chinese culture. The following is part of Li Chuan's speech:

Chinese culture is deeply involved in culture and entertainment, from people to content, to channels, and to terminals.

Investment content is indispensable. We have invested in the companies of "The Voice of China" and "Nirvana in Fire". They collect the value generated in the industrial chain in different proportions. This is a big direction for us.

Then there is the channel. BAT plus LeTV and Mango TV have basically taken shape. Our micro-whale TVs, which adopt Apple's model from hardware to software, are a huge challenge.

At the intermediate level, there are various service companies, including advertising service companies and artist agency companies, which provide services and deliver talents to film and television organizations. The Internet also has a greater impact on culture and entertainment. We divide our own investment, two-thirds of which is in culture and entertainment, and one-third is in the Internet, especially the mobile Internet.

China's market is developing rapidly, but all walks of life are scattered. For example, American film and television companies are already very concentrated, with six major groups and independent producers below. China film and television companies have opportunities for mergers and acquisitions. How to generate value in mergers and acquisitions is also a theme.

Editor: Tsai