The first semi-annual report of the A-share film and television media industry has finally been released.

The first half of 2023 results released by artist Yang Zi's "former employer" 000892.SZ showed that the current operating income and return net profit were 96 million yuan and-43 million yuan respectively, down 73.31% and 246.32% respectively from the same period last year.

The decline in film and television revenue is an important reason for the sharp decline in the performance of Huanrui Century.

In the first half of 2023, Huanrui's film and television drama and derivatives business generated only 38 million yuan, down 87.61% from a year earlier.

With the successful landing of Huanrui Century's film and TV drama "Lotus House" on iQIYI, Inc. at the end of July this year, it has attracted a lot of attention whether more backlog of dramas are expected to be broadcast online to improve revenue.

According to incomplete statistics of ID:TradeWind01, seven films and TV dramas owned by Huanrui Century, such as "Nanfeng knows what I mean", "Qianqiu Ling" and "Ten-year Pin Wen Ruyan", have obtained distribution licenses, but they have not yet been broadcast.

In addition, the risk of reliance on core artists is becoming an important challenge for Happy Century.

In the first half of 2023, Huanrui Century Financial report suspected to point to Ren Jialun and Cheng Yi's "Artist 1" and "Artist II" generated 20 million yuan and 15 million yuan respectively, accounting for more than 80% of the income of artist brokers.

Recently, the news that Ren Jialun will terminate the contract with Huanrui has been widely circulated on social platforms, and whether this will bring more uncertainty to his brokerage business income still needs to be further verified.

ID:TradeWind01 wanted to verify the inventory of films and TV dramas and artist agents from Huanrui, but the caller hung up on the grounds of "no need".

When will the backlog play be broadcast?

In the first half of 2023, the operating income and net profit of Huanrui were 96 million yuan and-43 million yuan respectively, down 73.31% and 246.32% respectively from the same period last year.

The sharp decline in film and television revenue has impacted the performance level of Huanrui Century.

In the first half of 2023, Huanrui's film and television drama and derivatives business generated only 38 million yuan, down 87.61% from a year earlier.

Huanrui explained that it was "affected by the project cycle" and that the main revenue in the first half of this year came from "multiple releases of films and TV dramas".

From the beginning of 2023 to the day of semi-annual disclosure, Huanrui Century has only two films and TV dramas, "our Day" and "Lotus House", which have been broadcast for the first time, compared with a total of 6 movies and TV dramas / jointly invested films in the first half of 2022, such as "Mountain and River Moonlight" and "fragrance like shavings", there have been 4 fewer.

According to the definition of revenue recognition by Huanrui Century, if the broadcast time is stipulated in the contract and the buyer is unable to dominate the broadcast time, the transfer of control will be made at the time when the broadcast tape or other carrier is delivered and the time of the start of the film and TV series is used as the time point of control transfer.

As a matter of fact, Huanrui Century does not lack the inventory of films and TV dramas, or because they are not online, some of them may not actually be converted into revenue.

According to incomplete statistics of ID:TradeWind01, a total of seven films and TV dramas owned by Huanrui Century, including "Nanfeng knows what I mean", "Qianqiu Ling", "every Ten years", "the Apocalypse of God", "Changan under the World", "Power and profit" and "Deep submergence", have obtained distribution licenses, but have not yet been broadcast.

By the end of June 2023, the book balance of "inventory goods" of licensed film and TV drama products recorded by Huanrui Century was still as high as 625 million yuan.

In June this year, Huanrui pointed out that "Lotus House", "the South Wind knows what I mean", "Qianqiu Ling", "one temperature in a decade" and "Deep diving" will be released or broadcast one after another in 2023.

Although halfway through this year, only "Lotus House" has been successfully broadcast online, and there is still no specific schedule for the rest of the film and TV series.

ID:TradeWind01 noted that none of the five TV dramas to be broadcast / produced starred Ren Jialun, the head artist of Huanrui Century, and that one of the stars of "Lotus House", "South Wind knows what I mean", "one of the warm words in a decade" and "Deep diving" were all starred by artist Cheng Yi.

According to Huanrui's website, Ren Jialun ranks first in the ranking of artists, followed by Cheng Yi.

But as a top-ranked artist, Ren Jialun did not participate in the homemade drama of Huanrui Century, which may mean that the rumors that the two may terminate the contract are not groundless.

In March this year, some social platforms rumored that Ren Jialun's contract with Huanrui Segi was about to expire, and the former may not renew it.

However, the rumor has not yet been confirmed.

In fact, the "running away" of artists will also be a great loss for Huanrui Century.

In the first half of 2023, "Artist 1" and "Artist II", suspected of pointing to Ren Jialun and Cheng Yi, generated 20 million yuan and 15 million yuan respectively, accounting for 20.83% and 15.63%, respectively.

This means that of the 42 million yuan of artist brokerage income in the first half of 2023, these two artists have contributed more than 80% of the income.

Or aware of this risk, Huanrui is also actively cultivating new artists.

"the company continues to promote the Huanrui freshman program and strengthen the training of outstanding new actors." Huanrui century said.

On July 30 this year, Huanrui announced eight "Huanrui Xinsheng" male artists on the social platform. Whether this can bring new hope to its artist brokerage business remains to be seen.

ID:TradeWind01 wanted to verify the inventory of films and TV dramas and artist agents from Huanrui, but the caller hung up on the grounds of "no need".

E-commerce came to rescue.

Although there has been a sharp decline in revenue in the film and television business sector, Huanrui's e-commerce business is "booming".

In the first half of 2023, Huanrui's e-commerce business generated 15 million yuan in revenue, an increase of 83.63% over the same period last year.

This is also one of the important businesses in the diversified layout of a number of film and television media companies.

At present, the e-commerce business with sufficient revenue is TVB Television Broadcasting (0511.HK) (hereinafter referred to as "TVB"). In 2022, the revenue of the e-commerce sector has reached 791 million yuan, an increase of 58% over the same period last year.

"We continue to effectively drive the traffic and transaction volume of the e-commerce platform through the use of TV programmes and artist / KOL strategies." TVB said.

Many market participants believe that film and television media companies with rich artist resources have an advantage in the layout of e-commerce business.

However, the "high flow" of e-commerce business is also a long-standing problem.

Trade wind (ID:TradeWind01) noted that the cost of Huanrui's e-commerce business was as high as 14 million yuan in the first half of 2023.

This means that after deducting costs, Huanrui's e-commerce business made a profit of only 1 million yuan in the first half of 2023, compared with a profit margin of 6.67% in the same period.

This is also the norm for e-commerce companies at present.

"our company mainly relies on live streaming on Douyin, and we have to spend money on traffic every month. If you don't buy it, the data will not look good. " A staff member engaged in tea live broadcast explained to ID:TradeWind01.

In addition to the high cost, it is still unknown whether the business model of "cross-border" live streaming of goods activities by artists will be successful.

In October last year, Huanrui, who charged Hangzhou Light Food Health Technology Co., Ltd. (hereinafter referred to as "Light Food Technology") for a live broadcast service fee of 5 million yuan, was pushed into the dock because he ended up carrying only more than 2 million yuan of goods.

It is understood that at that time, Huanrui promised light food technology that a total of seven artists, including Cao Ying, Li Xinai, Zhao Yingzi, Dai Jiaoqian, Liu Mengmeng, and so on, would carry goods through live broadcast, with a monthly sales target of 15 million yuan.

However, Huanrui Century only completed sales of 2.7979 million yuan in three months, which is a far cry from the previous sales target.

Whether Huanrui Century can give full play to the flow advantages of artists and take the road of live e-commerce still needs the answer of time.