Huanrui Century (000892.SZ), which is stuck in the quagmire, seems to have just found a way to save itself.
On the afternoon of June 21, 2022, Huanrui Century held the 2021 online performance briefing. At the performance meeting, Huanrui Century said that combined with its advantages in artist management and content production, digital artists are already being developed and promoted.
digital artists refer to virtual people who use digital technology to create simulated human images and carry out various performing arts activities through the Internet and other mass media.
"Many entertainment companies are now starting to create digital artists one after another. On the one hand, they can indeed resist the risk of real people overturning. On the other hand, they also make some attempts and breakthroughs in business in order to keep up with emerging concepts and trends. If digital artists are popular enough, they can also It can leverage greater commercial value and consolidate its position in the eyes of new and old audiences," Wang Yuanya, senior analyst of the cultural consumption industry at Analysys, told a reporter from Times Weekly.
Regarding the progress of Huanrui Century’s deployment of digital artists, on June 23, a reporter from Time Weekly called the company according to the official website phone number of “Huanrui Century” but was unable to get in touch with it.
As a film and television production company established in 2006, Huanrui Century has won the love of young audiences with its high-quality film and television works. For more than ten years, Huanrui Century has produced " Palace Lock Heart Jade ", " Ancient Swords and Legends ", " Notes on Tomb Robbers ", " Qingyunzhi ", " Sparrow " and " Glory of the Tang Dynasty " "Liu Li" and many other popular dramas; and "leading people with dramas" made celebrities such as Yang Mi , Li Yifeng , Tang Yan , Yang Yang , Yang Zi , Ren Jialun , etc. The "screen-dominating" costume drama market is a veritable "traffic giant of ancient costume dramas."
2016 is the highlight moment of Happy Century. This year, Huanrui Century successfully went public through a backdoor merger. But in the blink of an eye, this film and television giant turned from prosperity to decline. Not only did "popular" artists such as Yang Yang, Yang Mi, Li Yifeng, and Yang Zi leave one after another, many film and television dramas were backlogged, and financial fraud was also exposed.
Nowadays, the two pillar businesses of film and television production and artist management have been hit hard. Huanrui Century's territory has begun to collapse. With no way out, it has begun to place its hope on digital artists.
"Grab tickets" and play the "digital artist" brand
As early as before the performance meeting, Huanrui Century had begun to develop "digital artists". In Huanrui Century's 2021 annual report, the company proposed that "artist managers will embrace new media, new technologies, multi-platform commercialization, virtual idols, etc. to further enhance the value of artist IP."
digital artists can be traced back to 2007 , a Japanese company called Crypton, developed a sound source library based on Yamaha 's VOCALOID series electronic voices, sampled Japanese voice actor Fujita Saki , developed a set of sweet and clear new sound sources, and designed an exclusive set of sound sources for this set of sound sources. Anthropomorphic image - Hatsune Miku, a 16-year-old girl with green twin tails. At this point, the first digital artist with global influence was born.
Picture source: @ Hatsune Miku CryptonFutureMedia Official Weibo
In 2021, as the concept of the Metaverse quickly became popular in the investment market, more and more companies are pouring into this field, including Huayi Brothers, Huace Film and Television, and other films and televisions. company. As one of the metaverse tracks, digital artists have attracted much attention due to their low threshold. Some analysts said that if the Metaverse is compared to a spaceship sailing to the future, then virtual humans are the first ticket.
"As other film and television companies, Internet technology platforms, etc. enter the field of digital artists, all companies with strength need to follow suit." Industry analyst Zhang Shule told the Times Weekly reporter that Huanrui Century's layout of digital artists, on the one hand, is to account for sub-layout and avoid falling behind; on the other hand, it is to explore new business possibilities. Xiao Fan (pseudonym), a film and television promotion staff member of
, told a reporter from Times Weekly that the deployment of digital artists can reduce Huanrui Century's dependence on leading artists. “In contrast to real artists, artist management companies can exercise full control over digital artists."
In the view of Xiang Kai, a young Chinese playwright and director, the development of digital artists is just a "hype" for Huanrui Century. "Huanrui Century, which has been losing money for many years, needs to find a development goal for the future, so as to continue to make money and The purpose of continuing to burn money. "
According to the 2021 annual report of Huanrui Century, the company will lose 334 million yuan in 2021. This is the third consecutive year of losses for Huanrui Century. The financial report shows that Huanrui Century will lose 785 million yuan in 2020 and 551 million yuan in 2019. The reason is that the company's annual losses are related to the problems in the two pillar businesses of film and television production and artist management.
Film and television production is one of the pillar businesses of Huanrui Century. First, there has been a serious downward trend in recent years. The reason is closely related to the company's adherence to the "costume drama" market. The company's 2021 annual report shows that the company's revenue from film and television dramas and derivatives in 2021 is 268 million yuan, although it is slightly lower than in 2020. Growth, but down nearly 5 times from 1.473 billion yuan in 2017.
As the first domestic company to focus on costume dramas, Huanrui Century has enjoyed the dividends brought by costume dramas in 2011. " became an instant hit on Hunan Satellite TV , making popular actress Yang Mi famous, and also made Huanrui Century famous. Later, Huanrui Century devoted itself to ancient puppet dramas and successively produced "Gu Jian Qi Tan". There are many popular TV dramas such as "Palace Lock Bead Curtain", "Tomb Robber Notes" and "Qingyun Zhi", which have also made popular artists such as Li Yifeng, Tang Yan, Yang Yang, Yang Zi, etc., and have worked with Ruby Lin , Jia Nailiang , Ming Dao, etc.
The Huanrui Century at that time was full of glory.
The turning point came from the " Ancient Order ". In the newly issued " TV Series Management Regulations", the State Administration of Radio, Film and Television made it clear. : The total number of episodes of costume dramas broadcast in prime time on all satellite TV comprehensive channels each month and year shall not exceed 15% of the total number of episodes of all dramas broadcast in prime time in the month and year. This undoubtedly gives Huan the benefit of using costume dramas as the pillar of output. Ruijishi was a heavy blow.
However, Huanruiji, who had benefited from costume dramas, still focused on the production of costume dramas despite the "restriction on ancient costumes". This also led to the company's subsequent problems. Problems such as high inventory and huge accruals
Take "天下长安" as an example. As a costume drama created by Huanrui Century, the investment amount is as high as 360 million yuan, and it was completed as early as 2017. Release license, but has not yet been broadcast. "The World in Chang'an" is adapted from the novel, which tells the story of the rise of the Li Tang dynasty amidst the battles of heroes and the chaos of clans, and the rise of the Zhenguan Dynasty at the end of the Sui Dynasty and the beginning of the Tang Dynasty. The delay in broadcasting has brought Huanrui Century to fully accrue huge accounts receivable. According to the company's 2018 annual report, the balance of accounts receivable of "Tianxia Changan" was as high as 506 million yuan, and the company's management followed the accounts. The age analysis method was used to accrue bad debt provisions of RMB 25 million.
At the same time, the company's another costume drama "Fengshen: Apocalypse ", which spent a huge investment of 119 million yuan to create, also suffered from huge provisions for bad debts. The drama was jointly produced by Huanrui Century and Shanghai New Culture, and was Obtained distribution license in 2018. The company stated in its 2020 annual report that the TV series "Apocalypse of the Gods" could not be broadcast due to policy reasons, and bad debts of 214 million yuan were accrued based on the probability of withdrawal and broadcast.
At present, the broadcast of Huanrui Century's TV series will not go smoothly. At present, the "restriction on ancient times" still exists. According to the latest data on the "Registration of National Film and Production TV Series" released by the State Administration of Radio, Film and Television , there were only 3 movies and 110 episodes on ancient themes in May this year, accounting for 7.69% and 8.38% of the total number of announcements respectively. There are 24 movies and 777 episodes of contemporary themes, accounting for 61.54% and 59.22% of the total number of announcements respectively. It can be seen that ancient themes are no longer the mainstream of current film and television dramas.
Looking back at Huanrui Century, the film and television dramas it is creating still have costume themes as the mainstream. The company's 2021 annual report shows that as of the end of 2021, the company has the film and television adaptation rights for more than 40 scripts and novels.Times Weekly reporter inquired and found that among them, "Thousands of Fragrances", "Lotus Tower with Auspicious Patterns", "A Match Made in Heaven", " The Biography of Zhou Yu ", "Eternal Shura", "The Holy Monkey King", " Legend of Flowers in the Mirror ", "Feng Qingtian" "Lan" and so on are all ancient costume themes.
’s large accumulation of IP is destined to be impossible to achieve film and television adaptation. Previously, many works of Huanrui Century could not be adapted within the authorization period, such as "The Stolen Love", " Zhuxian I", "The Lost Love Front Alliance", etc. This is equivalent to a waste of the original IP purchase money. Purchasing IP is not a small expense. According to the annual report, from 2017 to 2021, Huanrui Century's script and copyright fees totaled 261 million yuan.
Old dramas cannot be broadcast on time, and new dramas are being created one after another. Huanrui Century's inventory is facing "high pressure". According to the company's 2021 annual report, as of the end of the reporting period, Huanrui Century's inventory balance was 1.367 billion yuan, accounting for 44.75% of total assets; inventory depreciation provisions were 2.252 billion yuan, accounting for 75.37% of the net profit attributable to the parent; the balance of depreciation provisions 303 million yuan, and the net book value of inventory is 1.064 billion yuan.
In terms of film and television production, Happy Century faces huge bottlenecks.
Huanrui Century has frequently lost its "money tree"
Another pillar business, "artist management", is also not optimistic. According to the company's 2021 annual report, the company's artist brokerage business income for the current period was only 107 million yuan, which was almost halved compared with the artist brokerage business income of 211 million yuan during the peak period in 2018.
The decline in income from artist management business is related to the departure of top traffic artists. In November 2021, Yang Zi officially announced that her contract with Huanrui Century had expired and would not be renewed. So far, the company's last "top" star has also left.
Yang Zi’s departure has brought a “big shock” to Huanrui Century’s stock. After Yang Zi officially announced the termination of the contract, Huanrui Century's stock price fell by more than 4% that day. In terms of performance, the company's artist management business will also be hit hard. According to the company's semi-annual report, in the first half of 2021, the artist agent (Artist 1) achieved revenue of 20.3926 million yuan, accounting for 33.08% of the main business income of the current period; in the first half of 2020, the artist agent (Artist 1) achieved revenue of 14.2971 million yuan, accounting for 33.08% of the current main business income. 56.42% of current revenue. During this period, Yang Zi was the company's top star, so the industry generally believed that the "number one artist" was Yang Zi.
Yang Zi joined Huanrui Century in 2015. Having become famous with "Family with Children", she was eager to break the label of a child star. After graduation, she joined Huanrui Century, a "large ancient puppet company". After joining Huanrui Century, Yang Zi's first drama was "Qingyun Zhi", and then became Huanrui Century's most popular self-produced drama heroine. She participated in " Tianji: The Legend of the White Snake " and " Dragon Ball". "Legend of Infernal Affairs " and other dramas.
It is worth noting that after Yang Zi joined Happy Century, it was not the self-made dramas of Happy Century that made her popular, but the dramas of three external companies. These three dramas are " Ode to Joy ", " Sweet Ashes Like Frost " and " Dear Loving ", and these three dramas come from Noon Sunshine, Perfect World and Hua Hua respectively. Zeketon.
At that time, Huanrui Century had already found it difficult to retain people by producing high-quality content. "The costume dramas filmed are all the same, especially in terms of costumes, costumes, Taoism, beauty, etc., the homogeneity is quite serious." Xiang Kai told a reporter from Time Weekly that the content production level of Huanrui Century has seriously declined, which led to the departure of artists. main reason.
Before Yang Zi left, Happy Century had experienced the departure of many contracted artists. Among them are Yang Mi, Yang Yang, Liu Kaiwei, Tang Yan, Li Yifeng and other traffic stars. As of the end of 2021, the company only has more than 20 contracted artists including Ren Jialun, Cheng Yi, Li Xiaoran , Yinger , which has been reduced by half compared with the end of 2020. The departure of
's core artists may also reflect its disapproval of the company's film and television production. "The 'restriction on ancient times' has had an impact on Huanrui Century dramas. Artists have fewer dramas to choose from within the company and have no choice but to leave." Wang Yuanya said.
In addition, the departure of popular artists is also related to the "unstable" business model of the artist agency itself.On the one hand, after artists become famous, they have a greater say and tend to go out independently. Compared with relying on large companies, this can better ensure that their interests are maximized; on the other hand, companies are in order to cultivate new talents and Adding new characters to the show will lead to serious water content in the plot, and will also damage the reputation of the leading artist.
Currently, Ren Jialun has become Huanrui's "big brother", and his whereabouts are also attracting much attention. In this regard, Chen Yadong, deputy general manager of Huanrui Century, said at the performance exchange meeting that the company's core artists are stable and there is no situation where their contracts are about to expire.
