Business blocked, turn loss again

&The impact on the entertainment industry in the past year is obvious to all parties, which undoubtedly affects the performance of listed companies. Among them, cat’s eye entertainment, which has just turned from a loss to a profit in 2019, will enter a loss state again in 2020. On the evening of March 30, cat’s eye entertainment officially released its annual performance for the year ended December 31, 2020, with a loss of more than 600 million yuan. In recent years, cat’s eye entertainment is also expanding its layout towards the full-text entertainment industry, not only from the downstream ticketing end to the upstream industry chain, but also from movies, performances to music and other fields. Can this become a magic weapon for cat’s eye entertainment to make profits and maintain stable performance in the later stage?

Fall into loss again

According to the financial report of cat’s eye entertainment, during the reporting period, the operating revenue of cat’s eye entertainment was 1.37 billion yuan, a year-on-year decrease of 68%, while the scale of loss was 646 million yuan, a year-on-year change from profit to loss.

In terms of performance in 2020, cat eye entertainment showed that the year-on-year decrease in revenue was mainly due to the impact of COVID-19 in 2020, while online entertainment ticketing services, entertainment content services, advertising services and other income decreased.

The announcement shows that the revenue from online entertainment ticketing business of cat eye entertainment has been reduced by 67.2% yuan from 2 billion 303 million yuan in 2019 to 757 million yuan in 2020, mainly because of the influence of COVID-19. Domestic theaters have been closed for 183 days since January 23, 2020. Most of the offline performances and events have also been cancelled due to COVID-19’s cancellation, resulting in a significant reduction in online entertainment ticketing service revenue.

In terms of entertainment content services, the income decreased from 1 billion 397 million yuan in 2019 to 74.7% yuan in 2020 to 353 million yuan in 2019. This is mainly due to the impact of the impact of the cat. In addition, the advertising service and other income of cat’s eye entertainment decreased by 54.9% from 568 million yuan in 2019 to 256 million yuan in 2020, mainly due to the decrease in advertising demand caused by the epidemic.

It is worth noting that cat’s eye entertainment just got rid of the cloud of successive losses in 2019. According to the performance data of cat’s eye entertainment from 2015 to 2018, the single year losses were RMB 1.297 billion, RMB 508 million, RMB 75.469 million and RMB 137 million respectively. In 2019, the company will achieve a net profit of 463 million yuan, turning losses into profits. But I didn’t expect that a year later, in 2020, cat’s eye entertainment will return to the state of loss.

Planning to set foot in entertainment industry

Although the loss of cat’s eye entertainment will appear again in 2020, it has not hindered the company’s pace of aiming at the full-text entertainment industry, and continues to carry out various layouts. First of all, it is necessary to mention that cat’s eye entertainment continues to add weight to the upstream content of film and television, performance and other fields.

According to the announcement, in terms of cinema films, there are four films with a total box office of more than 1 billion yuan in 2020. Cat’s eye entertainment has participated in the production / distribution of three of them, namely “my hometown and me”, “Jiang Ziya” and “Jin Gangchuan”. Meanwhile, it has also produced and controlled the distribution of “one second”, “calm waves” and other films. In addition, in 2020, cat’s eye entertainment and Tencent have jointly cooperated in platform customized dramas “Miss crow and Mr. lizard” and “Tongtian tower”. In terms of investment in online movies, cat’s eye entertainment has gradually formed an online movie product matrix in Northeast comedy, new martial arts, military themes and other fields, which will be launched in succession this year and beyond.

Zeng Rong, an analyst in the film and television media industry, believes that the development of cat’s eye entertainment will be greatly limited if it is only arranged on the ticketing side, and it will also be easily disturbed by the external environment, which will lead to unstable performance. Therefore, it is an inevitable development trend to extend along the industrial chain, especially after mastering the market feedback of a large number of works and the data of users’ preferences The layout of cat’s eye entertainment in the upstream of the content.

It is worth noting that cat’s eye entertainment will also enter the field of music in 2020.

According to public information, in the first half of 2020, cat’s eye entertainment will lay out the film and television music industry chain for the first time. It will work with domestic music producers and musicians to jointly develop the original soundtrack of film and television drama, and form an organic combination with Tencent Music Entertainment Group in the film and television music sector.

In the second half of 2020, the TV series Shichahai, which is broadcast simultaneously on CCTV and video platforms, will be released exclusively by cat’s eye entertainment. In addition, cat’s eye entertainment also signed up with Shan Yichun, who won the ninth season championship of the voice of China, to serve as the latter’s exclusive cooperation platform for film and television music.

Music critic Wang Le said that in recent years, the development of film and television music is relatively rapid, and the promotion songs, theme songs and tail songs of many popular dramas or films have become popular music works that people are familiar with, and through the heat fermentation of film and television drama, this kind of music can often get higher broadcast volume and derive higher commercial value, so we choose to play in the field of film and television music The number of operators is also gradually increasing to tap the market dividend in this field.

Internal and external challenges remain

Getting involved in more business areas can expand the source of income to a certain extent, and is expected to enhance the overall scale of the company. However, it will also face challenges to make the relevant layout obtain the ideal market feedback. For example, from the perspective of market environment, although all walks of life have returned to work, it still needs a period of relaxation to realize the complete “return of blood”, and the fields including film and television are still in the adjustment period, there are market risks, and the market competition can not be underestimated.

As for cat’s eye entertainment, in Zeng Rong’s view, the first challenge to face is whether he has acquired enough professional ability to complete the layout of business in different fields. “Every field has its own specialty. Even in the film and television industry, there will be differences between films and TV dramas in the practical stage, not to mention music and other fields. If the professional ability does not match the pace of layout, the time, energy, manpower and material resources invested in the early stage will be wasted, which will increase the instability of the company’s operation.

In addition, whether it can realize the effective linkage between different businesses is also a key factor. Xu Shan, an investment analyst, believes that the reason for the layout of multi sector business is not only that there are market dividends in the sector that need to be tapped by the entrants, but also to obtain better market feedback with the help of the effective linkage of its business sectors. However, how to linkage also tests the operation ability of the relevant companies. Some companies have had many businesses before, but they have failed to achieve some The effect linkage, on the contrary, affects the performance, and reminds other companies that choose similar layout to strengthen relevant capabilities.

In view of how cat’s eye entertainment will boost its performance in the later stage, ensure the professional ability of business layout, and realize the effective linkage of various sectors, a reporter from Beijing business daily sent an interview letter to the other side, but no reply was received as of press release.

In the financial report, cat’s eye entertainment mentioned that the film ticketing business will recover simultaneously with the recovery of the market. In the future, it will continue to promote the construction of ticketing system, strictly control the cost and expenses of ticketing business, and improve the profitability of ticketing business. In terms of content, it will continue to strengthen the participation in high-quality films, especially the in-depth participation in the head films of the head schedule, and continue to improve the competitiveness of ticketing business Strengthen the ability of internet entertainment marketing platform and data analysis of entertainment content, as well as data support solutions.

Beijing Business Daily reporter Zheng Rui

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