The Zhitong Finance App learned that Minsheng Securities released a research report saying that on January 3, the short drama “72 Lives” produced on the Douyin platform was officially launched, with 28,000 likes in 1 hour. The short drama was the first virtual production short in China. It uses a “virtual production” method combining real life shooting and virtual reality, and LED virtual studios were used instead of real scenes. As a new type of film and television production technology, XR virtual shooting has expanded to include scenes such as skit production, variety shows, and live broadcasts. The bank believes that high-quality content such as live streaming of movies and TV is expected to show more forms of viewing in new device scenarios such as MR. With the rapid expansion of the demand side, XR virtual shooting is expected to open up application scenarios as one of the high-quality content production methods.

Incident: On January 3, 2024, the short drama “72 Lives” produced by the Douyin platform was officially launched, receiving 28,000 likes in 1 hour of launch. As of 8 p.m. on January 3, the official “72 Lives” account had 2.99 million fans.

Minsheng Securities's views are as follows:

“Seventy-two Lives” innovatively uses virtual shooting technology to achieve breakthroughs in content and production.

This skit is the first virtual short drama produced in China. The total length of the series is 16 episodes, and the total length of the main film is 90 minutes. In terms of content, the story of “72 Lives” revolves around a child kidnapping case, showing the story of a woman who overcame multiple difficulties and eventually achieved self-growth, and is embedded in a suspenseful plot with a “script kill” structure. In terms of production, the drama uses a “virtual production” method that combines real life shooting with virtual reality, and uses LED virtual studios instead of real scenes. Details include a panoramic view of the building in the torrential rain in the drama, images of a cable car facing a fall, and the rapid transformation of different scene spaces. Through real-time rendering and motion tracking technology, the shooting team recreated real scenes in a virtual environment to achieve a freer camera language.

XR virtual application scenarios have expanded from film and television filming to scenes such as skit production, variety shows, and live broadcasts, and can effectively improve production efficiency.

As a new type of film and television production technology, XR virtual shooting has expanded to include scenes such as skit production, variety shows, and live broadcasts. XR virtual shooting is a film and television production technology that uses an LED display and content engine to achieve real-time visualization. Pre-designed 3D digital scenes are presented in front of actors and directors, providing an immersive production experience and creative environment. The first installment of “The Mandalorian”, made in depth with Unreal Engine, was released in 2019, making XR virtual filming a hit. Virtual filming has continued to develop rapidly in the past two years, and application scenarios have gradually expanded from film and television filming to scenes such as skit production, variety shows, and live streaming. Currently, XR virtual shooting is mainly divided into VP and XR. VP (VirtualProduction) is a large-scale LED screen with a complete virtual background, mainly used in movies, TV series, commercials, etc.; XR (extendedReality) is a virtual shooting technology that extends reality, mainly used in variety shows, live broadcasts, studios, etc.

Virtual shooting technology saves costs and improves production efficiency. Using XR shooting technology can save the cost of actually building a scene, including the cost of site rental, construction, props, etc., while saving time and improving production efficiency. Taking “seventy two lives” as an example, using virtual filming compared to traditional shooting methods, the drama's special effects time was shortened by 10 months, while the cost was cut in half, bringing about a significant increase in efficiency.

Technological empowerment, theme expansion, continuous interpretation of the trend of short drama production.

As the trend of boutique skits continues to evolve, short drama filming also carries the trend of technical production in the film and television industry. In the past, virtual production was mainly widely used in major film productions, and a small number of film and TV drama applications concentrated on long dramas, while “72 Lives” was the first online short drama in China to use virtual production. Chuangyi Technology, the producer of this drama, created the phenomenal IP “Liu Yehee” to drive a sci-fi craze in the field of short dramas. As the trend of boutique skits continues to be interpreted, various themes in past movies and long dramas are expected to be “skimmed” by professional teams in the future.

Investment advice:

The bank believes that high-quality content such as live streaming of movies and TV is expected to show more forms of viewing in new device scenarios such as MR. With the rapid expansion of the demand side, XR virtual shooting is expected to open up application scenarios as one of the high-quality content production methods.

It is recommended to focus on companies with relevant products and technical reserves, such as Alto Electronics (002587.SZ), Insai Group (300781.SZ), Jiachuang Video (300264.SZ), etc.;

In addition, the boutique logic of skits continues to be interpreted. It is recommended to focus on premium film and television content companies, such as Mango Supermedia (300413.SZ), Huace Film and Television (300133.SZ), and Jebsen Co., Ltd. (300182.SZ).

Risk warning: Technology development falls short of expectations, product launch falls short of expectations, industry competition risks.