Following the explosion of the “short drama+game” concept, the short drama industry has recently been catalyzed by another iconic event. The stock prices of companies that target the concept, such as Chinese Online, Tianwei Video, and Gravity Media, have been active for two weeks in a row.

(Source: Tono Flush)

The content circuit has always been an easy “storytelling” circuit. From the metaverse, AIGC, AI+ media, to today's skits, how will these events affect the industry, and for how long can new stories be told for listed companies?

01

The first major event is that regulators and platforms have once again stepped up the regulation and management of online mini-dramas.

On November 15, according to the China Internet Audiovisual Program Service Association, the State Administration of Radio, Film, and Television will take a number of measures to continue to carry out the management of online mini-dramas.

The State Administration of Radio, Film, and Television has once again carried out a one-month special rectification work focusing on the direction, title, content, aesthetics, personnel, publicity, and broadcasting of online short dramas.

In fact, starting in late November '22, the State Administration of Radio, Film, and Television concentrated on organizing and carrying out a special rectification of “mini-program” online mini-dramas, which achieved positive results.

After the special rectification work was completed, the State Administration of Radio, Film, and Television normalized the management of online mini-dramas, expedited the formulation of the “Rules for the Creation, Production and Content Review of Online Mini-Drama”, and studied and promoted the inclusion of skit apps and mini-programs in daily institutional management, established a “black list” mechanism for mini-programs, a statistical mechanism for the promotion of online micro-dramas, and commissioned the China Internet Audiovisual Association to carry out daily monitoring of online short dramas, and carry out special rectification work for a period of 1 month.

At the same time, the three short video platforms WeChat, Douyin, and Kuaishou responded positively to the State Administration of Radio and Television's efforts to regulate and manage the ecology of the online miniseries industry, and have successively banned a large number of accounts that post mini-dramas in violation of regulations.

According to the “Notice on Further Regulating the “Mini-Minute” Content of the Mini Program and the “Notice on the Phased Management of the Mini Program's “Mini Short Drama” category content, issued by WeChat, some illegal mini-drama shows have been removed, and related illegal mini-programs have been dealt with.

In addition, Kuaishou removed more than 10 minor dramas that violated regulations, and at the same time, 13 accounts that posted illegal content were punished accordingly according to the extent of the violation. Douyin has been the most vigorous in this round of rectification. Recently, 119 illegal micro-dramas have been removed, and 1,188 Douyin accounts that promote micro-dramas in violation of regulations have been disposed of.

According to the relevant person in charge of Tianze Zhongguang, “The qualification requirements of mainstream platforms for micro-dramas include the “Internet Culture Management License”, the “Radio and Television Program Production and Operation License”, the “Information Network Dissemination Audiovisual Program License”, and the “ICP Telecom Value-Added Business License”.

Currently, there are many micro-drama creation and communication agencies on the market that have almost no relevant qualifications. At the same time as barbaric growth, crude works abound, causing damage to the order of the industry and the ecological environment. The State Administration of Radio, Film, and Television's supervision of the normalization of short dramas will effectively purify the industry ecology.

Content regulation is undoubtedly a good thing for the healthy and orderly development of the industry. Content production is moving in the direction of quality compliance, and its advantages for leading enterprises that have standardized operations have been more prominent for a long time.

02

The second thing is that Douyin started a paid video test to share paid revenue with creators. However, the subject of the video is not limited to the subject of short dramas.

Douyin is an inclusive and diverse content ecosystem. It includes short or midfield videos of daily life, knowledge, entertainment, etc., and can be set up for paid viewing. The launch of payment has created an incentive for entrepreneurs themselves. For the MCN agency behind it, in addition to advertising, rewards, and live streaming, there is another way to generate revenue. Referring to the content of Station B, there is great potential for payment, especially for content in the field of popular science education and entertainment.

The video content payment service needs to be set up by the creator. Currently, the function is only open for testing by some creators. Creators need to meet the three requirements of no illegal account blocking records in the past 90 days, no fewer than 100,000 fans, and complete the Douyin real-name certification before they can launch the paid service.

Paid video content usually includes a certain number of episodes of free trial content. After the trial part is over, subsequent content is often unlocked through a recharge payment. Payment is made using the platform's TikTok (1 shake coin = 0.1 yuan). The price of the specific episode of the program content is determined by the creator, and Douyin may take 30% of the total order amount.

From the perspective of commercialization, the monetization model of content payment is a supplement to the traffic operation and monetization of UGC/PUGC platforms. Some high-quality content is not suitable for advertising monetization and delivery, so expanding the monetization capabilities of diverse creators is beneficial to ecological construction, but platforms also need to pay attention to balancing the relationship between user experience and creators' earnings.

Online mini-dramas have experienced rapid growth in the past two years. According to industry data, the mini-program skit market will be close to 25 billion yuan in 2023. Also, according to the relevant person in charge of Zhongguang Tianze mentioned above, the advertising scale for short dramas is about 60 million yuan/day. With the recent ban on several short video platforms and creators, advertising will create a large market gap.

Douyin began testing payment for short video content. Jiayun Technology, which has related business cooperation, rose and stopped by 20CM for two consecutive trading days last week. Guangguang Group, Guangbo Co., Ltd. and Gravity Media also received two consecutive boards.

There are three main types of cooperation: large-scale engine integrated agencies, advertising e-commerce cooperation, and content cooperation such as short dramas.

Cooperative agents:

Shengguang Group: The company has maintained a long-term close cooperative relationship with Headline Department. This time, it has obtained TikTok's overseas core agent qualification, which is conducive to promoting overseas marketing for client brands.

Tianlong Group: The company is a comprehensive agent for the operation of Massive Engine, a three-star service provider for Massive Engine, and a multi-product Internet advertising and marketing business under Jutang Engine, including Douyin clients.

Global Printing: The subsidiary Lingkai Technology is a comprehensive service provider and service provider for a huge number of engines for ByteDance's marketing service brands, and a service provider for a huge number of thousands of channels.

Zhejiang Internet: In the performance marketing business, the company's subsidiary Parry Weixing is an agency partner for a large number of engines. In addition to this, Xiaomi Group and Xiaomi Auto are partners in the company's digital marketing business.

Jiayun Technology: Advertising commercial agency. Customers include well-known brands in the industry such as BAT, Sina, and Today's Headline. Cooperative media channels include Xiaomi, Baidu, Huawei, vivo, OPPO, NetEase, etc., covering e-commerce, gaming, online services, live streaming, medical care, travel and other fields.

IP production:

Pocket Reading Technology: Douyin holds 7.49% of the shares, is officially endorsed, and at the same time, a number of paid skits dominate the Douyin list.

Chinese Online: The company signed a “Framework Cooperation Agreement” with Beijing ByteDance Network Technology Co., Ltd. and Beijing ByteDance Network Technology Co., Ltd. and the two sides have reached a long-term business cooperation based on long-term cooperative development considerations. The cooperation will focus on authorized use of audio works, joint construction of an anchor ecosystem, audio content co-construction, digital copyright licensing for use on platforms such as tomato novels and watermelon video, etc., and well-known IP works authorize the use of platforms such as tomato novels and watermelon video.

Insai Group: As a Douyin Star Map service provider and Douyin certified MCN agency that continues to export celebrity account content in the fields of drama, evaluation, etc., its subsidiary, revenue sources may be broadened.

Simei Media: Douyin's local lifestyle service provider and live streaming agency operator. Companies such as subsidiary Zhanwei Technology also participated in Douyin's short drama short video business.

Yuanwang Technology: The company's mini-program short drama platform is currently in trial operation, and homemade skits are being filmed. The platform for live streaming short videos has 500 million+ fans. The self-made content and platform are expected to be officially launched in December. The company began short video business on the Douyin platform in 2018, and has been running live e-commerce business on the Douyin platform since 2020. The holding subsidiary Yuanwang Network is a Douyin Star Map service provider, Qianchuan service provider, etc. Yuanwang is currently one of the best MCN agencies on the Douyin platform, and is the organization with the largest number of artists signed on the Douyin platform.

Gravity Media: The company is a gold medal service provider for massive engines. In 2023, the company once again won the full license for Douyin Massive Engine products, performance, sales, and social networking. The company teamed up with Vipshop to join 8 Kuaishou skits. The company was one of the first partners in Kuaishou's short dramas and a deep participant in the Starlight Project.

Lishang Guochao: Set up a joint venture with Douyin to produce short videos and short dramas. It is officially endorsed, and also has a joint venture with Kuaishou. Lishang Guochao (Zhejiang), a wholly-owned subsidiary, has a 25% stake in Beijing Xiaoyao II. The latter is a joint venture between the company and Douyin. Its main business is running self-media skits.