Wu Wenhui ‘s dream is the Internet empire, but Tencent ‘s expectation for reading is the source of IP
On April 27, Reading Group (HK: 00772) announced the adjustment of the management team. Former co-CEOs Wu Wenhui and Liang Xiaodong, President Shang Xuesong, Senior Vice President Lin Tingfeng and other senior management team members resigned.The Vice Chairman of the Board of Directors, Liang Xiaodong and other senior executives will serve as group consultants to help the smooth transition of the new management team; Vice President of Tencent Group, CEO of Tencent Pictures Cheng Wu will serve as CEO and Executive Director of Yuewen Group.Hou Xiaonan, vice president of the content business group, served as president and executive director of Yuewen Group.Officially, Sauna.com exclusively learned that the management team of Reading Group has changed, and the Tencent team will manage the reading group. The successor of the joint CEO is Cheng Wu, vice president of Tencent Group and CEO of Tencent Pictures.When rumors prevailed in the afternoon, it was the trading hours of Reading Group, which continued to grow by 5.97% to thirty.95 construction, market value of 32.5 billion construction.Wu Wenhui’s latest appearance as Co-Chairman of Reading Group was on April 21st. Congratulations to the video of the 6th China Digital Reading Cloud Conference in 2020, when he was wearing a brown leather coat, feeling slightly tired and slightly hairygray.A reading group employee commented, “(The former) boss and several executives are very hardworking people. I remember that in the ChinaJoy event, he once stood in an exhibition hall over 30 degrees in a full suit to explain.And received the leaders and spectators who came to visit, all day long, we can see their efforts.”In the official statement, Reading Group described Wu Wenhui as” the founder and founder of the online literature industry “,” he led the core management team, based on the starting point of the Chinese network to create a online literature business model, operating system and writer incubation systemThe structure has also achieved important progress such as the company’s IPO, the acquisition of Xinli Media and the construction of the literary IP copyright system, which has solved its foundation for the development of the reading group in the era of new cultural creation, “the official statement of the reading group said.”This year is the 5th anniversary of the establishment of Yuewen Group, and the 18th anniversary of Qidian.com. As a founder, it’s like seeing that your ‘child’ has finally grown into an adult.At this moment, like many ‘parents’, we must not only accompany the ‘children’ to grow together, but also take a step back in time to allow the ‘children’ to start a new life course.Wu Wenhui said that in the future, Reading Group urgently needs to further build a more open ecology and new business rules that are more in line with future trends based on IP, which requires a more thorough management transformation.About the mode encountered the free mode blocking the byte buzz of the traffic in hand, Lian Shang Group, Fun Headlines made a foray into the online literature industry last year, and also proposed a free mode diametrically opposed to the viable mode, which was faced by the reading group last year.The biggest problem.According to its 2019 annual report, online reading, copyright operations and other businesses are the two main businesses of Reading Group, both of which account for 44% of revenue.5% and 55.5%, and in the United Nations year, the two accounted for 76% of revenue.0% and 24%.Among them, online reading business income 37.100 million US dollars, ranking 38 in the same period last year.300 million fell by 3%; copyright operating income and other income 46.800 million, ranking 12 in the same period last year.1 trillion rose 286.8%.The above data shows that, regardless of the contribution to revenue or the growth rate, the online reading business has declined to some extent.Regarding the decline in online reading revenue of Yuewen Group, the financial report stated that this was mainly due to the decline in revenue from Tencent ‘s self-operated channels and third-party platform revenue.5.2 billion fell to 8.3.6 billion, third-party platform revenue from 6 last year.6.3 billion fell to 4.4.9 billion US dollars, and the reading group’s own platform started from 22 last year.1.3 billion rose to 24.2.5 billion.Yuewen Group said that the two consecutive reductions were due to the decrease in reading and reading revenue of Tencent ‘s self-operated channels and the termination of cooperation with several distributors.This may be the reason for the collective retirement of the management team.The 21st Century Business Herald reporter of the Air Force once quoted an insider as saying, “It is said that free reading is to be promoted internally, but the opinions have not been unified.”Wu Wenhui, the former co-president of Yuewen Group, said in the merger response to Sauna Nightnet that the rise of free reading originated from the underground piracy market, which shows that its model is not recognized.”Previously, many users used pirated content to enjoy free content, and pirated websites profited from advertisements. Now, some websites use the market gap after combating piracy to establish a free business model.The way to attract to the platform is the reason why the business model can be established.”Wu Wenhui said.He also judged that the free reading mode and comment reading mode will coexist in the future, because the free business model can cause users from the original piracy market, and may generate in-depth users, which will then be converted into someone.Many teenagers mentioned that due to the relatively low prices of literary copyrights, low consumption costs, and long user stays, they have gradually become the standard content of major super apps.This has been confirmed on QQ browser, Youku, and UC browser, and is being confirmed on the WiFi master key today.The bidding model is a business model that has been successfully verified and developed after more than 15 years of online literature experience.Adopt similar mode of web-based software for QQ reading. There are usually five types of reading in book flag novels: free reading for the whole book, reading for the whole study, reading for some chapters, and basic monthly membership and super monthly membership.Among them, basic monthly members can read about 70% of the library, which generally costs tens of yuan per month, and super members can read most of the library, except for very few copyright books, which generally cost about 100 yuan per month.Tomato small book, even reading for free, Mi reading novels initially used a free model, that is, reading is free, but users need to endure a certain amount of advertising.Sauna and Yeenet experience found that Tomato Reading inserts an advertisement every 4 to 7 pages, and the advertisement and text are mixed. After clicking, it is directly redirected to the download page of games, friends, etc .; even at the end of each chapter, there is an advertisement at the end of each chapter.Push to Lian Shang’s original website Zhulang.com; Mi Dian has an advertisement every 3 pages. After clicking, it will be directly replaced to the registration or download page for fitness, dating, etc.Another thing worth mentioning is that several leading figures who competed in the field of online literature last year all worked together in Shanda.They are, respectively, Wu Wenhui, who served as the president of Shanda Literature in 2004 and the CEO of Starting Point Chinese. Wang Jingying (now CEO of Lian Shang Network, chairman of Lian Shang Reading) and Wang Xiaoshu (former vice president of Lian Shang Network, Lian(Shangshu) Chief Executive Officer); Tan Siliang who joined Shanda after 2010 (now founder and chairman of Toutiao).On January 6, 2020, Wu Wenhui, who was then CEO of Reading Group, participated in the 2019 Original Literature Reading Ceremony. Picture / Visual China Reading Group’s past and present life Due to the Wu Wenhui team, the relationship between Reading Group and Tencent Literature and Shanda Literature is inextricably linked.Wu Wenhui, who was born as a technical man, once used the name “Heart of Darkness” as his online name. He is in charge of technical work on China’s preliminary online literature website-Qidian Chinese. He is also one of the founders.He launched a “pay-to-read” model, established a manuscript fee system divided by author and platform, and successfully realized the commercial operation of the content.In October 2004, Shanda Group acquired Qidian Chinese Website, and Wu Wenhui became the president of Shanda Literature Society and CEO of Xidian Chinese Website.As early as 2011, Shanda Literature submitted an IPO prospectus, which was planned to be listed in the United States.In early 2012, Shanda Literature once again launched a related IPO plan.At this time, Shanda Literature has replaced online literature with a market share of nearly 80%, and merged the “net bidding” model to start making money.Later, the time shifted to the IP era, and Internet literature platforms such as Reading Group have been highly sought after by capital because they hold the copyright of multiple online documents.Shortly thereafter, the team of Wu Wenhui resigned collectively due to issues such as the direction of development, “Forcing the Palace” Shanda Group, and then moved to the starting point in April 2013. The Chinese network section was called “Leaving”.On September 10, 2013, Tencent Literature was established.Wu Wenhui, who has always been at home, joined Tencent in April 2014 as CEO of Tencent Literature.In early 2015, Tencent Literature merged with Shanda Literature for RMB 5 billion. Compared with the valuation of USD 600 million, the premium of this acquisition is not too high.Since then, QQ reading affiliated with Tencent, Genesis Chinese Network, Yunqi Academy, and Starting Point Chinese Network affiliated with the cascading grand literature, Xiaoxiang Academy, Red Sleeve and Tianxiang, etc., are all managed by the reading group.The meeting acquisition was Wu Wenhui’s “perfect revenge.”Wu Wenhui Air Force has never concealed its pursuit of independent development.The pilot said in an interview with the media: “Yuewen is an independently developed company. Although the majority shareholder is Tencent, we operate independently and develop independently.”Yuewen Group landed on the Hong Kong stock market in October 2017. As the first share of online literature, plus the blessing of Tencent Holdings, it was once reset as high as 110, and the market value exceeded 100 billion.After the acquisition of Xinli Media, Yuewen Group became a consolidated company of Tencent Holdings. However, due to the rectification and double uncertainty in the film and television industry, Yuewen Group has been in a low state until its close today.95 construction, market value of 32.5 billion construction.”For reading, there are two purposes listed. One is a summary of the work of the past few decades, which proves that there is no waste in these ten years. We have done this thing well; the second is that we have newThe goal requires more money to complete, “said Luo Li, vice president of Reading Group and co-founder of Qidian.com, in an interview with our reporter.In the past five years of development, the two major sectors of Reading Group’s online reading and copyright operations complement each other, with 8.1 million creators, 12.2 million works reserves, and reaching hundreds of millions of users.As of December 31, 2019, Yuewen Group achieved monthly active users of 2.2 billion people, an increase of 6.2 million people every year from before 2018; of which, the number of monthly active users of reading own platform products increased by 9.4% to 1.200 million people.In 2019, ARPU (average user revenue) reached 25.3 yuan, an increase of 1 every year.2 yuan.Tencent executives have also revealed that they are optimistic about original literature.One of the implementations of Ma Huateng’s two sessions in 2017 was “Improving the Competitiveness of the Digital Content Industry”.At the media meeting at the time, Ma Huateng also distinguished the essence of literary IP.He believes that the upstream and downstream industry chains of the content industry are very long, from upstream IP to content production, to channel distribution, and finally to terminal platforms, all of which are profitable, with upstream IP variable control, “IP is the commanding height, otherFollows this intellectual property right.”Ma Huateng said.Tencent President and Executive Director Liu Chiping said at the above performance conference, “Reading is not just a platform that connects readers and authors. Over the years, reading has accumulated the copyright of many novels and is also of great value to the entire film and entertainment industry.It is hoped that this spin-off will make it a listed company and can have a longer-term development.The future of IP operations or online literature If the battle for free is the present of online literature, then the transformation and derivation of IP is the future of online literature.Wu Wenhui noted at a summit in late 2016 that even for US $ 20 billion, it is still “seriously underestimated” for the reading group.In his view, China’s future cultural industry is a trillion-level market. Network literature not only inherits literary creation, but also is the core part of the pan-entertainment field-IP provider.However, the industry has not yet seen the full value of online literature released on the pan-entertainment chain, so it is difficult to describe the reading estimates in numbers.This can be seen in the reading group’s annual report: online business, copyright operations and other businesses are the two main businesses of reading group, and the two account for 44% of the revenue respectively.5% and 55.5%, and in the United Nations year, the two accounted for 76% of revenue.0% and 24%.Specifically for this fiscal year, the reading group’s online reading business revenue was 37.100 million US dollars, ranking 38 in the same period last year.300 million fell by 3%; copyright operating income and other income 46.800 million, ranking 12 in the same period last year.1 trillion rose 286.8%, of which copyright operating income surged 342 in ten years.0% to 44.2000000000.This shows that regardless of the contribution to revenue or the growth rate, the copyright operation business has surpassed the traditional online reading business of the reading group.Wu Wenhui said in an interview with the United Nations, such as Sauna.com, that in the future, Reading Group will promote a full copyright operation strategy. Through copyright sales, joint investment and production, it will independently develop this “troika” to accelerate the diversified development of copyright and fully release it.IP value.He revealed that in the two modes of joint investment and production and independent development, the ratio of joint investment and production is relatively overlapping, and the proportion of independent development is relatively replaced.Cheng Wu, who took over as CEO of Yuewen Group, said that the foreseeable upgrade of Yuewen Group includes three aspects: first, the core of internal strength, to achieve the upgrade of IP cultivation capabilities, to strengthen its own foundation and accelerate cross-industry development, and promote the gradual growth of IP; secondIt is a robust platform to realize the upgrade of connection capabilities. Through the integration of multiple product platforms for reading and Tencent’s rich product platform and traffic advantages, it helps creators and users to establish a stronger connection bond; finally, the outreach space is maintained and consolidatedOn the basis of existing research models, through business model upgrades, more value space is opened at the level of embracing new technologies and industrial Internet.The reading financial report shows that in 2019, the reading group’s revenue from copyright operations and other increases increased by 283.1% to 46.4 trillion; of which, revenue from copyright operation business reached 44.200 million, a surge of 341 per year.0%.Initially, the readers cooperated with the copyright authorization of major publishers and content producers in the entertainment industry. In 2019, they authorized about 160 adaptations of online literary works to partners, involving various forms such as film and television dramas, online dramas and games.Yuewen Group’s financial report said that the increase in copyright operations and other revenues was mainly due to the acquisition of Xinli Media in September 2018, so it merged the entire year of Xinli Media’s business.At the same time, the increase in the revenue of online games related to the copyright of Yuewen Group and the episodes of joint investment are also the revenue of this part of the increase in revenue.However, the focus on betting on copyright operations and joint investment in dramas has increased the cost of Reading Group.The financial report shows that the revenue cost of Reading Group increased by 87.7% to 46.5.6 billion US dollars, mainly due to the increase in the production cost of TV series, online dramas, movies and animations, the cost of which was increased from 2 in 2018.7.3 billion quickly increased to 21 in 2019.3.4 billion yuan.Sauna, Ye Wang Bai Jinlei editor Zhao Ze proofreading Li Shihui