Key investment points:
Classification of cultural media industry
Generally speaking, the cultural media industry is divided into seven fields, with many segments. Specifically, the cultural media industry can be divided into seven fields: Games, video, literature, music, live broadcasting, social networking and advertising. There are many sub fields involved in these seven fields, and their development and business models are different.
In terms of industry distribution and structure, the cultural media industry is mainly composed of upstream content and downstream channels, of which content is generally considered to be the core. Upstream content is the link of production value in the industry, enabling users to receive or use the most direct products, so it is the core of the cultural media industry.
According to the distribution of Listed Companies in the A-share culture and media industry and the classification of business types, the culture and media industry can be divided into four secondary sub industries: media, advertising and marketing, culture and entertainment and Internet media, and 10 tertiary sub industries, with a total of 152 constituent shares. There are representative listed companies in each subdivided tertiary sub industry, but due to the policy, business model Due to the different business volume and future development expectations, the market value and valuation of these subdivided industries and representative companies are different.
Industry development status
Similar to the global development trend, at present, China’s culture and media industry as a whole has entered the stable development stage in the middle and late stage of the mobile Internet era. The development growth rate of the industry has gradually declined after 2015. With the influence of external factors such as policy control and epidemic situation, the development growth rate of major sub industries such as film drama, game and marketing has slowed down, And the market concentration of leading enterprises has increased.
Increasing user payment is the development trend after the number of users is saturated. The scale of the industry is determined by the number of users and user payment. Therefore, when China’s cultural media industry has experienced the first wave of dividend period of rapid growth in the number of users, the overall development direction in the future will focus on the in-depth mining of the payment of existing users.
Industry research framework: Mobile Games
The industrial chain of the mobile game industry is mainly divided into three links: R & D, distribution and channel, of which the upstream R & D link is the most important link in the industrial chain. Specifically:
(1) Upstream R & D is the process from planning to production and improvement of rival game products, providing mature and reliable products for downstream publishers, and whether game products are popular in the market is the most core competitiveness; (2) Midstream distribution is to connect with downstream distribution channels after obtaining product authorization from upstream developers, and conduct operation and maintenance after the game goes online. Whether it can cooperate with well-known channels for product distribution and effectively control the promotion cost is the core competitiveness; (3) Downstream channel is the link of user promotion and distribution of mobile games. Whether the game can be pushed to target users quickly and effectively is its core competitiveness.
Industry research framework: TV series
TV series industry chain: production and broadcasting are the main links. The TV series industry chain includes four links: production factors, production, distribution and broadcasting. Among them, upstream production and midstream broadcasting are the core subjects of the industry. Companies from different industries provide ERP implementation and outsourcing services. In terms of revenue structure, at present, copyright and advertising revenue account for the largest proportion, and payment revenue has the most potential. The revenue composition of TV drama industry is divided into three categories:
(1) Copyright income, that is, the income from the upstream producer (including distribution) selling plays and broadcasting copyrights to the midstream TV stations and video websites, is the main source of income for the producer and the core indicator of the TV drama industry; (2) Advertising revenue, that is, the revenue obtained by the midstream TV station and video website from inserting advertisements in the play broadcasting, is the only source of revenue for the TV station; (3) Paid Revenue: the video website provides user paid value-added services such as removing Title ads, watching in HD format and watching the complete works first through exclusive broadcasting of high-quality dramas. It is the most potential source of revenue for the video website.
Industry research framework: Film
The China Film Co.Ltd(600977) industrial chain is mainly divided into three links: upstream production, midstream distribution and downstream Cinemas (Cinemas).
The main revenue of the industry comes from the box office revenue generated by the films shown in the downstream cinemas. Therefore, the structure and bargaining power of the upstream and downstream are one tenth, and the revenue sharing is the key factor determining the voice and development space of the upstream and downstream of the industrial chain.
(1) The upstream production links of the film industry mainly include script development, project approval and film production. Among them, director service and actor performance service are the main service contents of external procurement; (2) Distribution link: close contact with upstream and downstream. Upstream and downstream communication in the issuance process is very important. In the later stage of film shooting, the production management team will prepare the publicity and distribution plan and coordinate the establishment of the distribution team. After the film production is completed and reviewed by the State Administration of radio, film and television, the Distributor shall organize the publicity and distribution of the film and complete the public release of the film and the sales of derivatives according to the public release license and release schedule of the film; (3) Downstream Cinema (Cinema): Cinema is the basic unit. The film distribution company needs to cooperate with each cinema line company on the film screening business, and then each cinema line company is responsible for making unified arrangements and management for the film screening of its cinemas. Therefore, the cinema line company has developed into an independent business unit in the China Film Co.Ltd(600977) industry that connects film distributors and film screeners, and implements unified film arrangement, unified operation and unified management of cinemas.
Risk statement
Stricter industrial policies, intensified industrial competition, industry development not up to expectations, the impact of the black swan incident, and the risk of epidemic spread.
(Bohai Securities)
