Home Entertainment Wang Yu and Zhu Biying: What do you think of this year’s National Day file? | Movies | Box Office_Netease Finance

Wang Yu and Zhu Biying: What do you think of this year’s National Day file? | Movies | Box Office_Netease Finance

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Wang Yu and Zhu Biying: What do you think of this year’s National Day file? | Movies | Box Office_Netease Finance

*The original articles of NetEase Finance Think Tank are reproduced with permission. This article does not constitute an investment decision.

Author|Wang Yu (Fund Manager of Film and Television ETF (516620)), Zhu Biying (Researcher of Cathay Pacific Fund)

Wang Yu (Fund Manager of Film and Television ETF (516620))

60s point speed reading:

1. On August 11, the State Film Administration issued a notice on the launch of the 2022 Film Benefit Consumer Season, which once again highlighted the country’s attitude and determination to speed up the recovery of the film market from a policy perspective. The 100 million yuan movie viewing subsidy is expected to strongly promote The demand side of the industry picks up, which in turn catalyzes the release of high-quality production capacity from the supply side, helping the industry to enter the reversal channel.

2. For optimistic investors, although the pressure on the fundamentals has made the stock price of listed companies in the film and television industry more volatile, the long-term value expectations of China‘s film and television industry have never changed, and film and television, entertainment and leisure consumption will definitely be a stable and strong growth point in the future. .

3. Following the government’s relevant guiding opinions on actors’ remuneration and the industry’s gradual regulation of market pricing, actors’ remuneration began to be lowered in the second half of 2018, which greatly reduced the cost of copyright procurement and content production for film and television works.

text:

After the outbreak of the new crown epidemic, the National Day files in 2020 and 2021 achieved a box office of 3.967 billion and 4.388 billion respectively, and the first movies with a box office of more than 2.5 billion such as “My Hometown and Me” and “Changjin Lake” appeared. Under the initiative of “celebrating the festival in place” in various places, the 2022 National Day box office is particularly worth looking forward to.

Three years into the cold winter of film and television, and now the cinema line is scheduled to be released until the time limit is compressed, ranging from a week to a few days. The National Day is approaching, but looking around, the major heavyweight blockbusters are still undecided.

In the past few years, under the background of repeated epidemics, the film industry has weakened as a whole, with low attendance rates, lower-than-expected film box office, and a decline in the prosperity of the theater chain. Due to regulatory concerns such as tax evasion, the capital operation of film and television companies also faces many challenges.

Back in 2019, the epidemic has led to the closure of a large number of theaters, the film and television industry funds have been depressed, investors have been discouraged, and the industry has entered a vicious circle. At the same time, industry consolidation and industry risk clearing are also being carried out simultaneously.

On the one hand, the epidemic has led to the closure of theaters on a large scale, which has also affected the income of film and television companies. When the macro economy deteriorates, corporate customers will reduce their advertising spending budget, which is also the main source of income for variety shows/TV dramas; the income level and structure of the company’s C-end customers will also be affected by the epidemic, another main source of income for variety shows/TV dramas Source membership fees will also come under pressure.

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On the other hand, it is not uncommon for celebrities to collapse. An accident with a star means that the upcoming works will be stranded or even permanently sealed, and the efforts of many film and television practitioners will be wasted overnight. In the environment of economic downturn and repeated epidemics, the collapse of the star’s house again and again is a worse blow to the film and television industry in the darkest hour.

According to statistics from relevant agencies, since 2019, 167,800 film and television companies have quietly collapsed. According to the 2022 semi-annual report, more than half of the film and television companies lost money due to factors such as the epidemic. Since the beginning of this year, the crew dynamics announced by Hengdian Film and Television City has dropped by nearly 50% compared with the same period last year. Relevant data show that in the first half of the year, the supply of domestic films decreased by 40% year-on-year, the national film box office fell by 37.7% year-on-year, and the number of moviegoers shrank by 41.7% year-on-year.

In this context, Bona Films, which has produced “Changjin Lake”, “Chinese Doctor”, “Operation Red Sea”, etc., has had a particularly difficult journey back to A. Market Interpretation The main concerns of the regulators are: 1) The performance of film and television companies is unstable; 2) In the past, the performance of mergers and acquisitions of film and television companies changed their face after the gambling period and the subsequent thunderstorm of goodwill; 3) Star super-high pay, tax evasion and tax evasion and other negative social impacts.

On July 28, 2022, Bona Pictures’ IPO was approved. The IPO application was approved in November 2020, and the approval was finally obtained after nearly two years. Signal. The bottom of the film and television industry is confirmed, and it is expected to enter the reversal channel.

On August 11, 2022, the State Film Administration released the industry’s “Saving Heart Pill” again, and issued a notice on the launch of the 2022 Film Benefit Consumer Season, proposing four measures to promote film consumption that benefit the people and enterprises: 1) Enrich the film 2) Cooperate with Maoyan, Taopiao Piao, Douyin and other movie ticketing platforms to issue a total of 100 million yuan of movie viewing coupons; 3) tap the potential of rural movie consumption and organize rural movie consumption promotion activities 4) Promote the implementation of the bailout policy in the film industry. The film consumption season will last from August to October 2022.

According to the market interpretation, this film benefit consumption season activity once again highlights the country’s attitude and determination to speed up the recovery of the film market from the policy level. The 100 million yuan movie viewing subsidy is expected to strongly promote the recovery of the demand side of the industry, and then catalyze the release of high-quality production capacity from the supply side. Help the industry to enter the reverse channel.

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Pain will make an industry grow, and it is necessary to see the “crises and opportunities” of the film and television industry in the changing times.

First, the development of the industry is more centralized and standardized. In the past two years, the policy control of the TV drama industry has been tightened, and the reshuffle of the industry structure has accelerated. The main manifestations are: restricting themes of costume dramas, palace fighting dramas, and anti-Japanese war dramas, controlling the number of episodes, and cracking down on water-filled dramas; salary restrictions to combat sky-high remuneration; The film and television industry is constantly shuffling in the stock market, and relevant resources are accelerated to concentrate on leading companies. The outbreak of the new crown epidemic has greatly interfered with the business activities of the film and television drama industry, and small and medium-sized players with less experience are the first to bear the brunt. The trend of high-quality products in the industry is obvious, and the concentration is expected to be further improved.

In addition, following the government’s relevant guiding opinions on actor remuneration and the industry’s gradual regulation of market pricing, actors’ remuneration began to decrease in the second half of 2018, which greatly reduced the cost of copyright procurement and content production for film and television works. Affected by the epidemic in 2020, the three major video websites and the six major production companies once again put forward a joint initiative to further strengthen the management of actors’ remuneration. The film and television industry has continued to strengthen its control over content costs, and the decline in actor remuneration has effectively pushed the growth rate of content costs in the industry down.

In addition, domestic films have entered the era of “content is king”. Since 2016, the total share of foreign films in the total box office has shown a downward trend. In recent years, domestic films have gradually caught up with foreign films, and the quality and market performance have improved, driving domestic film box office to achieve steady growth. The audience’s attention has gradually shifted from overseas blockbusters to high-quality domestic films. This trend is likely to continue under the background of continuous optimization of domestic films in the future.

It is not difficult to see from the cases of “I’m not the God of Medicine”, “Wolf Warrior 2” and “Nezha” that received relatively little attention in the early stage but eventually became box office masterpieces. The audience’s preference for film themes and content settings, the upgrade of taste, the double improvement of aesthetic level and values, is expected to force film producers to produce more films with high-quality content, and the industry may enter the era of “content is king”. Form a healthy development of “high-quality content – high return – high-quality content”.

Some excellent works even went to sea. Recently, “New Gods List: Yang Jian” will be released in North America. American film distributor Gkids has won the North American distribution rights of the film. The film will be launched in local theaters in early 2023 in both original Chinese and new English dubbing versions.

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For optimistic investors, although the pressure on the fundamentals has made the stock price of listed companies in the film and television industry more volatile, the long-term value expectations of China‘s film and television industry have never changed, and film and television, entertainment and leisure consumption will definitely be a stable and strong growth point in the future. After the epidemic and the baptism of policies in the past few years, the film and television industry has now entered a long-term bottom. More and more investors are beginning to re-examine the value of the film and television sector, and the capital market has continued to reverse the capital game sector.

Data source: wind

Looking forward to the light in the darkness, the cold winter of China‘s film and television industry will one day pass.

risk warning:

The Fund is a stock fund, and its expected return and expected risk level are theoretically higher than those of hybrid funds, bond funds and money market funds. The Fund is an index fund, which mainly uses a full replication strategy to track the underlying index, and its risk-return characteristics are similar to the risk-return characteristics of the market portfolio represented by the underlying index. Investing is risky and should be done with caution. A publicly offered securities investment fund is a long-term investment tool whose main function is to diversify investment and reduce the individual risks brought about by investing in a single security. Funds are different from bank savings and other financial instruments that can provide fixed income expectations. When you purchase fund products, you may share the income generated by the fund investment according to the shares you hold, and you may also bear the losses caused by the fund investment. Before you make an investment decision, please carefully read the fund contract, fund prospectus and fund product information summary and other product legal documents, fully understand the risk-return characteristics and product characteristics of the fund, and carefully consider the various risk factors existing in the fund. According to their own investment purpose, investment period, investment experience, asset status and other factors, fully consider their own risk tolerance, and make rational judgments and prudent investment decisions on the basis of understanding product conditions and sales suitability opinions. Funds in my country operate for a short period of time, and the historical performance of the index does not constitute a guarantee for the future performance of the Fund.

NetEase Finance Think Tank (WeChat account: wyyjj163)

NetEase Financial Think TankIt is a professional think tank for finance and economics created by NetEase News. It integrates the original multimedia matrix of NetEase Finance and relies on the wisdom achievements of hundreds of top economists at home and abroad. It conducts rational and objective analysis and interpretation of hot topics in economics, and creates a cutting-edge attitude. Financial Think Tank. Contributions are welcome (submission email: [email protected]).

Ren Xiaoling

Source of this article: Editor-in-charge of Netease Finance Think Tank: Ren Xiaoling_NB28271

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