Wanda Film "Out Of Wanda"

Wanda cinema was forced to be born. Fourteen years later, as the only listed entity under Wanda, the company is on another path.

"Forced to Liangshan." When talking about Wanda Group's chairman, Wang Jianci sighed. In 2006, Wanda first signed a joint venture agreement with Time Warner of the United States, but failed to pass the examination and approval. After several twists and turns, the strategic cooperation agreement signed with Shanghai radio and television also died. "There is no way, can only do their own theater, the results, the year to achieve profit." In 2010, Wang Jianlin said at a public event.

In 2015, Wanda film was listed on the Shenzhen Stock Exchange, and the trading limit was realized at the opening. Wanda Group also flies with Wanda film. According to the official website, Wanda plans to invest 120 billion yuan in Liaoning Province, 150 billion yuan in Chongqing City, 120 billion yuan in Henan Province and 130 billion yuan in Shandong Province this year. Behind each plan, there are countless Wanda squares, and the situation is very good.

"Wanda Plaza is the earliest form of entertainment, because it is a very important content for Wanda cinema." Wang Jianlin said to the public. But he did not shy away from saying that, like the transformation of commercial real estate, it was controversial to do cinema at the beginning. "In 2003, the total box office of the whole country was less than 800 million yuan. If the investment was made, there would be 30 million yuan in a cinema."

Wang Jianlin won the bet and the box office of Chinese films grew rapidly. According to wind data, from 2006 to 2010, the compound growth rate of China's total box office reached 40.4%, and the compound growth rate of film viewers was 30%. As a guide to the large-scale expansion of the film industry, the film industry will benefit from the development of the film industry in 2010. During the seven years from 2011 to 2018, the compound growth rate of the number of cinemas and screens was 21.8% and 30.6%, respectively, which exceeded that before 2010. From 2011 to 2018, the compound growth rate of box office was 24.5%, and the compound growth rate of audience was 24.5%.

But the reverse of rapid growth is gradual surplus. After 2011, the box office of single screen in China has declined. The intensified competition has led to the decrease of operating efficiency and difficulty in cost recovery. Based on the financial reports of different companies, the box office revenue of single screen in 2019 is 921000 yuan, down 9.3% year-on-year, reaching the lowest level since 2010.

In 2019, the industry will go down, but labor, property, energy consumption and other rigid expenses still exist, leading to a 12.45% year-on-year decrease in the operating performance of Wanda film, and the net profit has also decreased significantly. Therefore, Wanda film only made provision for impairment of goodwill of 2.339.7 billion yuan in Cinemas. In that year, Wanda film made a total of 5.575 billion yuan of goodwill impairment reserves, and a net loss of 4.729 billion yuan.

Wanda itself is changing. In 2017, Wanda signed a strategic cooperation agreement with rongchuang group and R & F real estate, selling nearly 70 billion cultural and tourism assets. So far, the focus has shifted to asset light brand management.

After the outbreak, the film industry stopped for 178 days, which exacerbated the situation. Under internal and external pressure, Wanda films opened up. In June, Wanda film announced that Wanda cinema will open franchise. However, the president of Wanda Film Co., Ltd. said that the core of its expansion lies in the film industry's self-management, and that Wanda will continue to focus on the film industry's competitiveness. "We started to make preparations 10 years ago. The key is systematization. In the future, we have to benchmark Hilton. At present, Wanda Plaza store and feiwan Plaza store are basically around 50:50. " He said.

However, Zeng Maojun's statement has attracted doubts from the market. "Why is this node open? There is no money to expand. With the continuous downward trend of the industry, the water has been almost squeezed. Wanda's brand and supply chain bring limited increment. " A person in charge of the shadow casting in Beijing said that his statement was recognized by many film makers. The data disclosed by Wanda executives shows that the opening of the cinema line is progressing smoothly and the existing projects are actually implemented.

With the completion of the acquisition of Wanda film and television, the content has also become the core plate of Wanda film. However, Wanda film and television, which has not completed its gambling performance, is also facing greater doubts. "Wanda's management is too rigid, it has no ability to produce content, and its products rely on investment under channel advantages, which is very fragile." Some film company executives stressed to the 21st century economic reporter.

This seems to be an internal voice. "If it is too strict, it will be examined and approved at all levels, and the result is that nothing can be done." There are former employees of Wanda film and even former executives of Wanda Department.

Behind the sword is Wanda's proud "Iron Army" culture, which is highly executive, weakens individuals and emphasizes system. This is an inevitable move for the real estate industry which is prone to breed corruption.

For Wanda film, when "out" Wanda, everything is being re examined.

Stock increment

When it comes to cinema, we have to mention its biggest driving force - commercial real estate.

"At present, China's commercial real estate is basically saturated, and the incremental space is small, but there is. At the cost of zero sum game, the new and more luxurious commercial real estate will replace the old property. Wanda's current fundamentals are: the apparent debt ratio has decreased, but the actual business expansion has slowed down. " There are commercial real estate M & A fund personage to the 21st century economic reporter to evaluate the current market situation.

On this basis, it is easier to understand the opening of Wanda cinema. According to Liu Xiaobin, executive director of Wanda film, the opening of franchise rights this time focuses on exporting brands and operating standards, especially Wanda's supply chain. Under this mode, Wanda's film revenue comes from the franchise fee (currently the proportion of net box office revenue is 7%) and franchise management fee. Franchising can be divided into totally entrusted management and only using brand to accept Wanda's supervision. "From the point of view of the first 100 investors, the purpose is to increase the income, not to reduce the cost." He said. Liu Xiaobin responded to the 21st century economic reporter on the issue of franchise commodity control, saying that relying on the customer service system and relevant agreements developed by Wanda, it can be controlled.

Zeng Maojun stressed that Wanda had long planned to open its franchise, but he did not deny that the impact of the epidemic was also one of the factors. "If it's a company with both heavy and light weight, the management cost is relatively low in the face of uncontrollable factors. Now it is close to 15 billion (more than 600 cinemas, the largest scale in China). If we do it for three or four years, it means that the investment in the cinema industry will exceed 20 billion. Larger extensions can only be achieved by managing output. There is also an external push. Many owners find that the previous capitalization road is basically impassable, and it is difficult to sell. Entrusted Wanda management can improve the efficiency. Wanda's core advantage lies in its management ability. "

In fact, the shadow casting "abandoned ship" mentioned by Zeng Maojun does exist, and Wanda may be an option in the absence of a receiving party. On the day before Beijing cinema resumed its business, the reporter of 21st century economic report visited many cinemas and found that from the person in charge of the film casting to the manager of the chain cinema, they all bear great economic pressure. "In view of the pressure of epidemic prevention and control, opening a business is definitely a huge loss, but if it is not opened, people will be scattered, and it is very difficult to recover. Now we can only suppress manpower and reduce staff and wages." There is a similar consensus among several film directors. A deputy store manager in Beijing's core business district said that the revenue had dropped by more than a third, and many employees were worried that the consequence of not being able to return to work for a long time would be to continue to lay off staff. "There are a lot of people who quit, but the proportion is still higher." The shadow cast is responsible for humanity.

Zeng Maojun's confidence in promoting business comes from Wanda's management ability. According to the Wanda work law issued by Wanda official in 2015, Wanda cinema line control cost is quite detailed, from staffing, salary, promotion range, and even the use of a xenon lamp. "After several games between the cinema company and the cinema headquarters, the cinema headquarters thinks it is feasible and can report it. For example, the second round of competition between the group's representative stores and the group's 200000 stores is needed. In the end, the financial department will report the game results to several directors, vice presidents and presidents, and there will be games to get the final budget results. The advantage of Wanda film in 2020 is that the system and team are mature and more conducive to output.

But Wanda management output, the market seems to have different opinions. "The degree of freedom of franchise management is a problem, and this is the operator's private land. It is also the key to increase revenue and reduce costs. After all, Wanda brand is in relative decline, and the operating cost itself is also tending to be transparent. " A number of filmmakers said.

In addition, for the relatively good-looking operation data of Wanda films, many film investors believe that the rent of Wanda film in Wanda Plaza is a great advantage, which is not necessarily comparable. "Rent and labor are the biggest costs."

According to the annual report of 2019, the service fee for the venue rental service of Wanda Commercial Management Group and Wanda film is 11% of the net box office revenue. In many cinemas in Beijing, the proportion reached 30% - 40%.

The weakness of "Iron Army"

If we say that in the cinema channel, Wanda film still has advantages, in terms of content, it has more ups and downs.

After three years and five restructuring plans, Wanda film's acquisition of Wanda film was finally approved. On June 26, 2018, Wanda film released a major asset restructuring plan to acquire 96.83% equity of Wanda film and television by paying cash and issuing shares, with a transaction price of 11.619 billion yuan. As a result, Wanda has expanded its film production and distribution business from upstream to downstream. But after the deal is settled, what is left for the market is more fright. Shortly after the acquisition, Wanda film and television performance fell sharply. And film and television production revenue decreased by 880 million yuan in 2019.

In response to this, Wanda film said in the announcement that the growth rate of box office revenue in the film market slowed down, the number of major films cast was relatively small, and the box office of some films was lower than expected, and some films originally planned to be released were delayed.

Of course, Wanda has no bright spots. In 2018, the box office of Wanda film and television's main investment film "Chinatown detective 2" reached 3.39 billion yuan, and "Chinatown detective 3" has always been at the top of the expected value list of this year's Spring Festival. "Detective in Chinatown" is Wanda film's own IP. The film version is directed by Chen Sicheng and starred by Wang Baoqiang and Liu Haoran. However, the film maker himself has no direct relationship with Wanda.

"Content is king is not all right. There is a saying that channel is king, even marketing is king. In Hollywood, 40% is the production cost and 20% is the actor cost. The cost of Chinese actors is too high. In the future, there will still be one or two small companies and one studio. "Love story" has a big effect on the box office of 400 million yuan, and the marketing cost is 300 million yuan. Of course, content still comes first. We don't highlight content. We want to earn more and do more. " In the 2014 Shanghai Cultural Industry Development lecture, Wang Jianlin responded to the audience's questions, which can also explain some of Wanda's marketing practices.

Wanda also brings its own culture into the film industry. In terms of production management, Wanda has promoted the implementation of industrial production management measures by learning from the production experience of film and television products such as "Chinatown detective 2". Based on the modular management ideas of real estate projects, combined with the film and television characteristics, Wanda film and television project management has initially established a node tracking and evaluation mechanism for the projects that have been put on line Several key links and hundreds of nodes have been set up. In addition, more than 100 production management forms have been improved to build a production industrialization system.

This tradition is closely related to Wanda's main business. In many foreign speeches, Wang Jianlin said that corruption is frequent in the construction industry and real estate industry. In order to prevent corruption, Wanda implements a highly centralized and centralized management mode, centralizing power to the headquarters and weakening the personal role of general managers of local companies. In addition, Wanda has also established an audit team headed by Wang Jianlin.

Wanda, which emphasizes systematization, encounters non-standard film and television industry, and conflicts arise. "The film and television industry is full of changes from IP grabbing to shooting and selling films. As a result of excessive mandatory standardization, the project can not progress normally." Some senior executives of film and television listed companies told reporters of the 21st century economic report.

Many senior executives of film companies deeply doubt the mode of Wanda film and television, believing that Wanda does not have core film and television resources, but relies more on capital and channels to leverage its investment share. It is not so much a film and television business as a strong participant. And that when encountering a more powerful ecology, Wanda film and television mode, it is difficult to sustain.

A sample for reference is sun Hongbin, an old friend of Wang Jianlin and chairman of rongchuang group. At present, rongchuang culture is in the charge of sun Hongbin's eldest son sun Jueyi. It owns such business sectors as rongchuang film and television, lechuang cultural entertainment, Oriental film capital rongchuang film and Television Industrial Park, Lerong, dream city culture, base and other business sectors. Among them, Oriental film capital and other assets are purchased from Wanda. However, sun Hongbin gave rongchuang culture considerable freedom, independent office location, enterprise atmosphere and relatively loose capital flow. "It is just because the cultural and entertainment industry is too deep that sun Zhe Yi is responsible for it." Some people close to the core level of rongchuang culture disclosed to the 21st century economic reporter.

Zeng Maojun's views on the market have been echoed one by one. He believes that many times, the outside world has high expectations of Wanda, at least from the performance, Wanda film and television is still relatively solid. "We're still a new company. In recent years, we have been doing series development, but in the past few years, we have made adjustments. For example, in terms of TV series, after the acquisition of new media Chengpin, TV series products can definitely rank among the top three in terms of output, broadcast, income and profit. In the future, the focus will be on the linkage between film and television, which can significantly improve the efficiency of IP creation. In addition, the series of searching for the dragon was formed. The key is still IP. "

In fact, the background of Zeng Maojun's speech is that due to various factors, the performance of domestic film companies has continued to decline. It is difficult to say that other companies have found the direction. Wanda's attempt is just different from the mainstream practice in the industry, and it can be regarded as a road. In the first quarter, Huayi Brothers' revenue was 229 million yuan, a year-on-year decrease of 61.4%; and a net loss of 143 million yuan, a year-on-year decrease of 52.64%. Over the same period, the revenue of light media was 226 million yuan, down 75.29% year-on-year; the net profit was 29.4806 million yuan, down 67.82% year-on-year.

Another controversy about Wanda film mode is that the integration of content and channel will significantly enlarge the risk. The performance forecast shows that in the first half of 2020, Wanda film is expected to have a loss of 1.5-1.6 billion yuan, compared with a profit of 524 million yuan in the same period of last year.

There is also support. "The channel does the content, can grasp the market trend more, and the industry chain is long, also can enhance the content quality control." The person in charge of the above said that he is also a film producer, but he does not consider joining Wanda cinema at present.

"Content and channel are the key points, and we will pay more attention to the content in the near future." When it comes to working time allocation, Zeng Maojun told reporters.

Reporter observation | repeated failures and battles, why do real estate developers pursue cultural and entertainment dreams?