Huayu 05, our science fiction movie universe

Chapter 606 2017 Company Business Review (Part 2)
Wang Hao believes that the cultural project adaptation work of Xinghe Group's Content and Culture Business Group is progressing quite well.

Another business that is performing very well is the group company's Media Distribution Business Group.

This business group is mainly responsible for the various media companies under Galaxy Group, as well as the promotion and distribution of the group's works.

Among them, Taobao Tickets, Starry Sky Video, book publishing department, advertising company, online marketing department, overseas streaming media platform, global distribution department, and Toutiao, needless to say, have continued to thrive on the basis of previous years.

The most remarkable achievement is undoubtedly Douyin, the short video platform that Galaxy Group has focused on developing.

If 2016 was the first year of live streaming in the internet market, then 2017 can be called the first year of short videos.

Since Galaxy Group made a major foray into the short video field at the end of 2016, the short video trend has become increasingly intense, both in terms of platforms and the market.

In China, that's just how it is. There's never any blue ocean in business competition, or if there is, it's extremely short-lived.

This applies to e-commerce, group buying, food delivery, ride-hailing, and naturally, the short video industry is no exception.

At least when Wang Hao had his secretary pull out the report on Douyin from that pile of documents, the first page showed that market competition in this field had intensified this year.

Tencent's Weishi has "risen from the dead," repositioning itself in the short video market; Taobao's short video platform is vying for content; Baidu launched its short video app "Haokan Video," making a strong entry into the battlefield, along with Sina Weibo, 360, Sohu...

It's clear that the short video market is not just a competition among small companies and platforms. With the entry of Galaxy Group, other domestic internet giants of similar scale have also begun to expand into this area.

According to incomplete statistics from Xinghe Group's industry information department, 15 new short video apps were launched across the internet in 2017, and one short video app returned after being shut down.

These short video apps include those focused on special effects and editing tools, such as Huangka and Waqu Video; those positioned for short video content aggregation and production, such as Liangsanfen and Kankanma; and those specializing in a particular field, such as Naitang Short Video and Tangdou Video.

From a content perspective, comedy, music, food, cross-dressing, and editing remain popular, but content related to mothers and babies, and outdoor activities is also rapidly emerging.

Among these platforms, Kuaishou short video still leads the entire platform with its first-mover advantage and its penetration into lower-tier markets.

However, Kuaishou's success and failure both stem from its access to lower-tier markets. Currently, Kuaishou is limited by the low-quality users and content in these markets, making it difficult to upgrade its customer base. Consequently, its commercial value is far lower than that of Douyin, which is closely following behind.

In contrast, Douyin, which ranks second in the market, is backed by Xinghe Group and has a wealth of entertainment resources, so it is naturally associated with entertainment content.

This year, I've only ever heard of celebrities opening accounts on Douyin to livestream, and movie and TV drama crews promoting their films and TV series on Douyin, but no one ever promotes their films on Kuaishou.

However, even though Kuaishou and Douyin occupy the first and second positions in the market, the short video field is still in an expansion phase, and other apps still occupy a certain market share.

But this won't last long.

After reviewing the report from the Douyin department, Wang Hao quickly contacted Luo Wei, the head of the department, via internal phone.

This person is a talent who has been promoted from within the Xinghe Group. Although he is not particularly proficient in technology, he has his own unique insights into marketing and user needs.

How are Douyin's preparations going for this year's Spring Festival red envelope campaign and Spring Festival Gala sponsorship?

Spring Festival red envelopes and Spring Festival Gala sponsorships are innovative approaches that have emerged in the internet industry in recent years.

In 2015, CCTV's Spring Festival Gala introduced new media interactive channels for the first time. In the same year, Tencent's WeChat took the lead and, relying on the powerful influence of the Spring Festival Gala, used WeChat red envelopes as a starting point to "make a name for itself" on the 2015 Spring Festival Gala, starting a nationwide craze for grabbing and sending red envelopes.

According to official data released by WeChat, on New Year's Eve, the total number of people participating in WeChat's "shake for red envelopes" activity reached 110 billion, with a total of 155 billion red envelopes shaken, and the peak interaction rate reached as high as 8.1 million people per minute.

Whether in terms of the number of participants, the density of participation, or the amount of red envelopes, this year's Spring Festival Gala red envelope giveaway has undoubtedly become a nationwide carnival.

This celebration and impressive data have also brought new opportunities to WeChat Pay, successfully breaking Alipay's monopoly on payment and allowing it to compete with Alipay on equal footing.

Last year, stimulated by WeChat Pay and in order to acquire more traffic, Alipay "spent a huge sum of money" to become a Spring Festival Gala red envelope partner.

According to information obtained by Wang Hao from internal CCTV channels, Alipay's investment in securing this project was more than five times that of WeChat.

Such investment also reflects Alipay's ambition in the payment field and its fear of WeChat Pay.

However, despite the high cost, the results were also extremely impressive. On New Year's Eve in 2016, Alipay launched the "Collect Five Blessings" campaign, firing a new shot in the Spring Festival Gala red envelope campaign.

Meanwhile, in 2017, Alipay, as a partner of the Spring Festival Gala's red envelope campaign, continued this approach.

In this way, Alipay regained users' attention and consolidated its position in the payment field.

The competition for the title sponsorship of the Spring Festival Gala among the three major internet giants, BAT (Baidu, Alibaba, and Tencent), will remain extremely fierce in the upcoming 2018 Spring Festival.

However, a new disruptor emerged this year: Douyin (TikTok) from Galaxy Group.

In Wang Hao's previous life, because Douyin started relatively late, it wasn't until 2021 that it successfully snatched the title sponsorship rights for the Spring Festival Gala from Pinduoduo.

However, by then, the influence of the Spring Festival Gala was no longer comparable to what it used to be. The numerous sponsorships with internet companies had also made the audience lose interest in this format, and the overall effect was definitely greatly diminished.

But now, with the backing of Xinghe Group, Douyin is a different story. Its development is undoubtedly smoother and more advanced than in Wang Hao's previous life.

At the very least, because it owns a ticketing platform like Taopiaopiao.com and understands the importance of payment functionality for an internet company, Xinghe Group has long been involved in the payment software field, with its own Xingfutong.

With its payment software and Douyin video platform, Galaxy Group could very well replicate Douyin's approach during the 2021 Spring Festival Gala.

As for whether Galaxy Group has the ability to compete with BAT (Baidu, Alibaba, Tencent)?

That is undoubtedly true, after all, Xinghe Group's financial resources are also extremely strong, not much less than those of the three BAT companies.

Moreover, compared to the other three companies, Xinghe Group has several advantages in this matter. First, Xinghe Group is a cultural enterprise with a history of cooperation with CCTV and cultural departments. In fact, its uncle, Lu Guotao, once served as the head of the movie channel.

Although Lu Guotao was later forced to step down to a secondary position in the cultural department to avoid suspicion due to Wang Hao's influence, and the movie channel was ultimately separated from CCTV by a layer, Xinghe Group still had a certain advantage over BAT companies in communicating with them because they were both under the cultural department and had connections with higher authorities.

Moreover, even without using this advantage to obtain inside information or transfer benefits, Xinghe Group is more in line with the needs of the Spring Festival Gala than the three BAT companies.

Because they are the largest cultural enterprises in China and have a huge influence overseas, which is something that the BAT companies, whose business scope is limited to China, cannot match.

First of all, the "Douyin short video + Spring Festival Gala" model is extremely suitable for the Spring Festival Gala to expand its influence among young audiences.

It's important to understand that the Spring Festival Gala didn't just decline five or six years later; it's been slowly going downhill since then, becoming increasingly unpopular with young audiences.

CCTV, the organizer of the Spring Festival Gala, is not unaware of this, but due to the constraints of the system, it is difficult for them to make major changes. At most, they can only make some changes in the selection of the Spring Festival Gala director and some lighting, stage design and special effects.

However, the effect of this change can only be described as mediocre.

The involvement of Galaxy Group undoubtedly has a high probability of injecting new vitality into the Spring Festival Gala.

At least they had extended an olive branch to Wang Hao, hoping he could serve as the chief director of the Spring Festival Gala.

After all, Feng Xiaogang, an outsider, served as the chief director of the Spring Festival Gala in 2014. Wang Hao is younger, has more outstanding achievements, and has greater fame and influence, which perfectly matches the Spring Festival Gala's idea of ​​getting closer to young audiences.

However, considering Douyin's competition for the Spring Festival Gala title sponsorship, Wang Hao politely declined the invitation, which is enough to prove Wang Hao's influence on CCTV.

Moreover, Galaxy Group has another advantage: its unique overseas channels.

The Spring Festival Gala has always been a unique New Year's Eve gala program in China. Although it has a great influence in China, it has always been difficult to go abroad due to its content limitations.

Don't be fooled by the fact that every year during the Spring Festival Gala, the hosts read out greetings from abroad; everyone knows the real story behind it.

If we're talking about spreading the Spring Festival Gala's influence overseas or even globally, we couldn't even manage it when it was at its peak and had the greatest impact, so CCTV probably doesn't have much hope for it now.

However, if Douyin and Xinghe Group are chosen as partners for this year's Spring Festival Gala, the situation will be different.

It's important to understand that unlike Kuaishou, which is limited to the domestic market, Xinghe Group is a multinational corporation, and Douyin is naturally a global app.

In 2016, Galaxy Group spent approximately $7 million to acquire Musical.ly, a social video application headquartered in Shanghai with over 2 million young users worldwide. It was a star company in North America and had long held the top spot on the North American app rankings.

After Galaxy Group successfully acquired Musical.ly, it combined Douyin's AI data stream with Musical.ly's product innovation, and the overseas version of Douyin, "TikTok", was well adapted to the tastes and preferences of mainstream Western users.

The integrated TikTok gained approximately 3000 million new users from major North American app stores within three months, and its influence overseas is still expanding.

With the short video app TikTok in hand, Galaxy Group is no longer begging to be on the Spring Festival Gala, but can instead establish a mutually beneficial partnership with the Gala's organizing committee.

According to the head of Douyin's department, they have reached an agreement with CCTV that, given the "same price," CCTV will give priority to Douyin.

"Okay, I trust you to handle things."

Wang Hao hung up the phone with satisfaction and then continued reading the report.

This time, he was looking at the group company's Consumer Products Business Group, which is mainly responsible for the development and sales of peripheral products for the group's film, animation, novel and other IP projects.

Its subsidiaries mainly include Xingle Company, which is responsible for the production of toys, clothing, stationery and other products; Xinggou Company, which sells peripheral products on multiple platforms; Xingyou Entertainment, which is currently attracting attention from many people and companies; and Xinghe Paradise, which is under construction.

[Xinghe Paradise] is currently undergoing final decoration, landscaping, and equipment installation work, and will not open until 2018. Everything is normal.

As for Xingyou Entertainment, the newly released trailer for "Black Myth: Wukong" has gone viral online, giving gamers across the country a taste of the game.

In addition, its online game "Wolf Warrior: Peace Elite" has PC and mobile versions, generating substantial profits each year. Combined with the company's other seven or eight popular games, it can be considered one of the group's cash cows.

Furthermore, Wang Hao previously mentioned at the press conference that two other games, a AAA-level shooting adventure game called "High Table" and a AAA mecha monster raising and competitive game called "Pacific Rim," will enter the development stage in the future.

In this respect, Xingyou Entertainment can be said to be thriving.

As for Star Joy Company and Star Shopping Company, the two companies complement each other.

Galaxy Group owns many major IPs, including the Galaxy Cinematic Universe series alone, which involves elements suitable for peripheral production, such as exoskeletons, aerospace equipment, military weapons, mutated monsters, and ancient artifacts.

In addition, there are animated works such as "Nezha" and "Monkey King", as well as the "Shushan Cinematic Universe" series and some other scattered projects under the company.

Xinggou is currently operating both online and offline, with stores on major online shopping platforms such as Taobao and JD.com.

On the other hand, they also expand product sales and increase brand awareness by leasing real estate from the group's asset management business group to open offline physical stores and related toy exhibitions in major cities at home and abroad.

Overall, the Consumer Products Business Group performed exceptionally well in 2017. Thanks to these IP-based content, their profits from peripheral consumer products accounted for 17.9% of the company's total profits.

Furthermore, the report indicates that the Consumer Products Business Group has noticed a rising trendy toy brand, Pop Mart, whose "blind box + IP" strategy has great potential, and the Consumer Products Business Group is currently experimenting with it.

However, regardless of the type of merchandise, its high profits still rely on excellent and well-known content, which is the foundation of the entire merchandise sales.

Therefore, the document that Wang Hao focused on most, and which was left at the end, was the annual business report of the [Film and Television Production Business Group].

(End of this chapter)