“The Voice of China” Suspended Following Coco Lee Recording, Xingkong Huawen’s Future Becomes Bleak
By Huang Cong, Changjiang Commercial Daily
The reputation of “The Voice of China” has taken a hit after a recording made by well-known singer Coco Lee during his lifetime surfaced, leading to the program’s suspension. This added another blow to the already struggling parent company, Xingkong Huawen (06698.HK).
On August 25, Zhejiang Satellite TV announced that the broadcast of “The Voice of China” was suspended due to problems reported by viewers and netizens. Xingkong Huawen, the parent company of the program, also issued a statement on the same day, stating that it would suspend the broadcast pending further investigation into certain incidents disclosed in recent media reports.
The suspension of “The Voice of China” exacerbates the poor performance of Xingkong Huawen. Data shows that the company’s revenue is expected to drop by approximately 52% from 2019 to 2022. The revenue from their variety show IP business has also fallen by about 48% in the same period.
Industry insiders believe that the aging brand of “The Voice of China” and the successive scandals have contributed to the declining ratings of the program. Currently, Xingkong Huawen is facing difficulties in its ongoing operations.
In the secondary market, Xingkong Huawen’s stock price plummeted. As of the close on August 25, the company’s stock price dropped by about 56% from August 17, resulting in a market value loss of approximately 27.7 billion Hong Kong dollars (about 25.7 billion yuan).
The controversy surrounding “The Voice of China” began on August 17 when a 9-minute recording of Coco Lee discussing his conflict with the program group was circulated online. In the recording, Coco Lee expressed disappointment with the “unfair competition system” of the show and claimed that the program group wanted him to leave.
The “Voice of China” program team denied the allegations in the recording in a statement released on August 18, stating that the recording was maliciously edited. They also mentioned that they had resolved their misunderstanding with Coco Lee and paid tribute to him.
However, on August 20, Zhejiang Satellite TV issued an article stating that they would listen to the opinions of viewers and netizens and urge the program producer, Canxing Culture Media Co., Ltd., to improve their work and ensure fairness and justice for all participants.
Following Zhejiang Satellite TV’s announcement of the program’s suspension, Xingkong Huawen’s stock price plummeted further. Overall, Xingkong Huawen’s revenue has been on a downward trend in recent years. From 2019 to 2022, the company’s revenue decreased by about 52%. Their variety show IP business revenue also declined by approximately 48% during the same period.
Furthermore, Xingkong Huawen’s profitability has been unstable. After four years, the company made a profit of only 10 million yuan. The company attributed this decline to the negative impact of the COVID-19 pandemic and the decrease in the number of variety shows broadcasted compared to previous years.
Xingkong Huawen expects its revenue in the first half of 2023 to continue to decline, with a net loss between 18.3 million yuan and 14.6 million yuan. The company has not been profitable for the past four and a half years.
With the suspension of “The Voice of China” and the ongoing challenges faced by Xingkong Huawen, the company’s future appears bleak. It remains to be seen how the investigation into the recent events surrounding the program will impact the company’s business operations and financial conditions.