Enter the film to find a new business model

If you have seen the movie "Old Boy", "after the meeting", "White hair Witch", you should notice that the titles of these films have been "Youku produced" words.

However, in these films, although Youku for investors, but did not really put cash, but through the video site channel resources to replace the share of investment, to get the box office. Despite the name appearing at the beginning of the movie, the excellent Earth still stays online. The situation is changing. At the end of August, Youku Potato set up the Oneness film, will come out cash investment movies.

For better soil, the move to the film industry is a milestone in the company's line to the line, and the GEO is trying to transform itself from a video site into a cultural entertainment media group.

In a sense, this is the "fifth evolution" of the excellent Earth. The first four times are: to the United States listed, combined with potatoes, "big homemade", Allied Ali. However, after the first four "evolutions", the country's biggest video site is still losing money.

This time, the excellent Earth hope that online and offline integration to find opportunities to get rid of the loss of China's video industry "fate."

Direct Investment Hospital Line movie

Excellent soil into the film, experienced from the provision of promotional resources to obtain commissions, through the replacement of channel resources to get the box office, and then to direct investment in the movie process.

"A lot of film parties would have called me and wanted to give their movie trailers a good spot on the site," he said. "In September 2014, Zhu Huirong, senior vice president of Youku, recalled the experience he had just taken over the Youku Film Center 3 years ago.

The company itself wants to be a film-making party, which is not satisfied with helping the studios to advertise. This August 28, Youku Potato announced the establishment of a film company------the next year will invest in not less than 8 lines of film, not less than 9 Internet movies. By contrast, Huayi Brothers, China's biggest film company, has only 10 to 15 films a year.

The founding ceremony of the Unity Film Company is packed, a number of movie companies "big Guy", the famous director, producer gathered. So many film people come to the "platform", and excellent soil in the film industry is closely related to the operation.

Zhu Huirong, the CEO of the Oneness film, has a good relationship with many filmmakers, who call him "Tai Lung". Under the leadership of Tai Lung, excellent soil and traditional film companies explore two modes of cooperation: first, marketing propaganda, the second is joint production.

In the mode of cooperation in the marketing promotion, the excellent soil is a media that provides the propaganda resources for the movie, and obtains the commission income from the film party. In the past two years, there are 58 domestic and foreign film marketing preferred excellent soil, the total box office amounted to 16 billion yuan, accounting for China's total box-office 30%. Among them, the deep marketing movie, the average box office exceed 400 million.

In recent years, more and more films began to choose the joint production with the excellent soil, which makes the excellent soil began to get more film box office.

At present, the excellent soil to participate in the production of the film has 8, the 8 film has been accumulated 2 billion yuan in the box office. This year's most popular movies, "After Life", "eavesdropping 3", "White Hair Witch Biography", "Old boy" have Youku joint production.

As for the difference between the two business models, Koo, chairman of the board, has a straightforward saying, "I used to buy some ads, you buy how much I contribute, now we are a joint production side, then we push hard." "In addition, in the marketing model, the excellent soil is more at the executive level, and joint production allows the excellent soil in the process of making the film more proactive, and even in the early intervention to the whole development of the project."

Excellent soil in the "joint production" model, the company does not put a penny to the film side, but with channel resources to replace the share of investment, so as to get the box office. There is little risk of such a co-operative approach for the gifted, but the box office is usually quite limited.

Today, the good Earth wants a bigger cake in the film industry.

Liu Kaihui, president of the Unity film, told the Beijing News reporter, the establishment of the Unity pictures, the excellent soil will break the "0 cash investment" approach, take out the real money to their own fancy movie projects, so as to get a bigger box office split. More importantly, the excellent soil will also go from the line to the offline, film online development, production, publicity, distribution, the unity of the pictures will be involved.

Unlike the traditional studios, the company limits its investment to below 30% per cent. The reason for this arrangement is that we hope to co-operate with more film companies. "A movie takes several companies and works best together," he said. "Koo said.

"We want to bring some internet stuff to the film industry." Liu Kaihui, president of the Unification film, told the Beijing News reporter. In contrast to the traditional studios, the company is more focused on incubating the Internet's premium content.

For example, "Old boy" was originally only a fine heat of a micro-film, after moving to the big screen, won more than 200 million yuan box office. Today, the excellent soil is the video site hit the "Never Thought of", "Miss Bubble" and other popular network plays adapted, moved to the big screen.

To create a "new business model"

Since the listing, Youku and the combination of potatoes after the excellent soil, has been sustained losses, while the income structure, more than 90% of income from advertising.

For the excellent soil, after becoming the industry first, and in the United States listed, did not get rid of the fate of sustained losses. In the fourth quarter of last year, the excellent Earth achieved the only quarterly profit (according to non-US GAAP, net profit of 44.2 million yuan; According to the United States General accounting standards, excellent soil is still a loss, net profit is negative 24.6 million yuan), but the first half of this year, the excellent soil and two consecutive quarterly losses

Beijing, a private equity analyst, said that as a video site, the main revenue is video advertising, the cost is mainly bandwidth costs and content costs (including copyright procurement and cost-control), the reason why the main reason for the loss, the most important thing is that bandwidth and copyright procurement costs are always more expensive than advertising.

Compared with the video industry in the United States, China's more video sites, more competitive with each other, which directly led to the soaring cost of broadband, China's CDN (Network content distribution accelerated) Price is almost 8 to 10 times times the United States, film and television shows, variety of copyright costs in recent years has also risen sharply.

For a video site, to attract advertising, you must have traffic, and to have the flow must have quality content. Now a TV series network copyright has reached a maximum of 2 million yuan, and Tencent video to buy the "good voice of China" third-quarter copyright, spent 200 million yuan.

In this context, the video industry is almost an industry-wide loss. Although it has long been China's largest video site, but also failed to get rid of the "curse" of loss.

To enter the film industry, can help the excellent soil out of the situation of loss?

Prior to the establishment of the Unity film, the 8 films produced jointly by the excellent Earth have gained a total of 2 billion yuan in the box office. Among them, what is the partitioning of the excellent soil?

Zhu Huirong has said that although the excellent soil is involved in the box office, the proportion is not high. In the Q2 's quarterly earnings, the box office income was not a pillar of merit, and 95% of the company's earnings were still advertised this year.

In the future, the unity film will have more investment in the movie, and from the movie online marketing, more toward the line, in the film project "system, propaganda, hair" whole industry chain layout.

Liu Kaihui told Beijing News reporter that the film company does have operating indicators, but the profit is not the first consideration, consider more is the accumulation of the brand, and to the movie industry to bring more elements of the Internet.

"We want to create new business models. "Liu Kaihui said. In the studio's plan, 9 "Internet movies" will be launched each year, with the first consideration being paid for on the Internet platform, but unlike previous online dramas, which are 5 minutes to 15 minutes long, internet movies will have 90 minutes to 120 minutes. Online pay for the broadcast at the same time, will also want to push down the line of the hospital line market.

"These Internet movies, the future may be the video site and the hospital line synchronized release, may be first broadcast on the video site, and then the upper house line show." Liu Kaihui said: "There is no such attempt." ”

For the investment of the cinema, the excellent soil will also be the advantage of its internet, the film after the video site for Pay-per-view, and the sale of related derivatives. "Love apartment of the same clothing on Taobao sales of about 600 million, but these income is not the revenue of the film side, in the future with the cooperation of the electrical business, there will be more attempts." ”

No longer just "video site"

In the film industry expansion, will make the excellent soil from a single "video site" is expected to become a "cultural entertainment group."

Neither paid income nor derivative income can be a cool revenue pillar in the short term.

However, the expansion of the film industry helps Youku to be transformed from a video site to a cultural entertainment group.

A media industry fund analyst told Beijing News correspondent that the real future for Youku is to transform itself into a broadcast channel and production entertainment company, like the light media.

In his view, the future of the country will likely eventually appear in 8 to 12 new Media Entertainment Group, excellent soil is expected to rely on channel advantage to become one, but this requires a variety of excellent soil transformation.

For example, the establishment of the entire entertainment industry chain, from UGC (user production content) found boutique, covering from the birth of IP (intellectual property) to content production, and then to derivative sales and other links, and with Boehner, Ali industry and other film companies to improve the layout of the industrial chain. In addition, the excellent soil should also butt Ali's advertising system, broaden the source of income.

Such a transformation has begun. At the two quarterly earnings analysis, Koo called Youku "a multicultural ecosystem of multiple screens."

He introduced that at present, the excellent soil already has more than 50 homemade programs, 2014 will invest 300 million yuan for self-control. In addition, the excellent soil also has a large number of UGC content, as well as to provide users with income sharing of the "photosynthetic program."

Earlier in the interview, Koo also said that in the process of integration with the traditional industry, internet boundaries and concepts are in fact blurred, objectively also for vertical companies to provide another way out, Youku's future lies in the industrial chain upstream and downstream integration, through the content, production, distribution, hospital line such as "multiple screen integration", Bigger and stronger, to create competitive barriers.

"I hope you will look at us more as a culture and entertainment Group, not just a video site." In an interview, Liu Kaihui told the Beijing News. In fact, his arrival is a microcosm of the transformation of the excellent soil, before coming to the excellent soil, Liu Kaihui in Wanda Pictures, pony Pentium and other companies long term, in the film production has a wealth of experience.

"The Oneness film has just been set up and my biggest task right now is to recruit." "Liu Kaihui said.