This article is from WeChat public account: Duojiao entertainment investment (ID: ylwanjia) , author: Blue Lotus, Word problems from: vision China

Recently, the third-party data company Xiaohulu announced the ranking of MCN commercial valuation in November this year. Among them, Gumai Jiahe ranked first with a valuation of 35.48 million and Wuyou Media ranked second with a valuation of 31.77 million Vision Entertainment ranked third with a valuation of 30.14 million …

However, the valuation of this list is mainly calculated by KOL’s contribution to MCN institutions . Evaluation criteria include monthly sales, order prices, number of popular videos, fan growth, etc. Multiple dimensions, rather than investment valuations of real money institutions.

Since 2016, MCN institutions have successively received financing. Earlier financing cases such as Alibaba’s investment in new studios. Since then, various institutions have been looking at investment opportunities in the MCN field. For example, Sequoia Capital has invested in Erca Media, Huaying Capital and Qianhai Fund have invested in Quick Beauty, Chenhai Capital and Mango Culture have invested in Micron Technology.

But these investment cases are more like a sporadic layout rather than a system investment, and the logic is different. Some follow the logic of young content, some follow the logic of consumption,Some follow marketing logic.

If you pay attention to Douyin’s monthly release of the top 30 MCN institutions in the composite index, you will find that the top MCN institutions such as Gumai Jiahe, Vision Entertainment, OST Entertainment, Dalu Changwan, and Wuyou Media have never raised funds.

On the one hand, there is still a lot of controversy about whether MCN institutions have investment value in the investment community; on the other hand, MCN generally has good cash flow, so the willingness to equity financing is not great.

In 2019, several MCN institutions have received financing, and investors continue to watch, but the requirements are relatively high. So what does a truly valuable MCN look like? What happened to the logic of investing in them?

MCN is a good business, but the ceiling is obvious

According to a data released by the Institute of Big Data, the number of MCN institutions in China has exceeded 6,500 by the end of June 2019.

At the MCN forum at the CEIS2020 opportunity venue hosted by Entertainment Capital, just now, the host asked Zhuang Jun, the cooperation leader of the watermelon video agency of the platform. I feel that MCN is already a red sea. If I do it now, is there any chance? ?

Zhuang Jun replied, The opportunity is always there. “You have MCN in the form of Youtube three or four years ago. There are still many people entering the game this year, and the MCN field has just begun.”

This has a lot to do with the platform’s policies. The platform has been supporting new content organizations to take the lead and continue to introduce new ideas. The platform also adjusted the live broadcast policy, lowered the threshold of guilds, so that all guilds had the opportunity to fight for high scores. This is considered to be a major benefit to small and medium sized associations.

In general, the prosperity of a field will attract a large number of capital to follow up, but in the face of the hot field of MCN, capital’s attitude does see more and less investment, and many investors believe that MCN ’s The investment value is not high.

In the chat with multiple investors, they have the following firm attitude from time to time:

“Not worth investing”, “I haven’t watched”, “I haven’t seen a very valuable company”, “I have seen a lot and haven’t voted” “Because of the MCN company, I have run less in Beijing this year, mainly to go Some of the following prefecture-level cities have explored the supply chain. “I always wanted to lay out and didn’t see the right one.” “MCN is a good business, but the ceiling is obvious.” “It’s just a business. It can’t be copied. It can’t be scaled up. Legal listing. “…

A Shanghai-based investor who invested in top-ranked anchor institutions stated that MCN institutions are not good at investing, and Internet investment is mainly invested in dividends, but from the Weibo era to the WeChat era to the Douyin Kuaishou era, the content platform ’s The change is getting faster and faster, and the online dividend is gradually equalized.

“The greatest investment value of a dividend is that only a few people seize it. When everyone knows that this is a dividend, and they want to seize it, and they all know how to operate, then he is not a real dividend. “

The greater concern for more investors is that is not optimistic about the business model of copying the head KOL.

From 2017, Sheng Di Jiacheng’s managing director Liu Di began to look at MCN institutions. At that time, Uncle He Xian, an early MCN institution, had just been invested by Sina, but Liu Di also never shot.

“I mainly think that Reds ca n’t be copied in batches. The appearance of a head online celebrity must be in harmony with each other. The problem that traditional brokerage companies cannot solve is also facing MCN. .This is why we did not invest in MCN institutions. “

Ruhan once wanted to copy Zhang Dayi, but failed. Mei ONE tried to copy Li Jiaqi, too. In the end, both of the head anchors became shareholders of the company. Li Jiaqi once joked during his speech: “The beauty ONE has not been copied for a long time.”

The relationship between the head KOL and MCN is similar to the relationship between a star and an artist agency. In fact, it is not very stable. It is not uncommon for artists to be solo after being strong.

MCN organization Gomei only makes mid-waist influencers, not hatching head influencers. The founder of the company, Nan Ya, joked that unless the head KOL is his wife, he will not train the head anchor, because it will form a huge backlash on the company.

Zheng Peimin, the founder of Rongzheng Capital, has always wanted to make a layout, but did not suffer from not having a suitable target.

“MCN institutions are very difficult to invest. Just like a drama company, 99% is not worth investing. If Happy Twist only has one star, then the company is worthless; to be able to replicate the star, in extreme cases, the head If the celebrity is canceled, then the company is still valuable. This is a valuable entertainment company. By analogy, MCNs with similar organization and brand value have the meaning of capital investment. “

Investors who have invested in MCN institutions have their own logic, and there are no institutions that do so, and they also have their own reasons.

“The main thing is that there is no way to withdraw. Investment does not exit. All are hooligans.” An investor joked that Ruhan was the only listed company in this field, but it broke first, and then the stock price did not reach the issue. price. “

MCN is relatively fast, it is scattered, fragmented, there is no way to form a large concentration, and it has the characteristics of content organization. This MCN institution may be very popular in two years, but whether it can make a 5 or even 10-year business and whether it can help investors achieve 10 times or even higher returns is a question mark.

MCN institutions are not short of money, and they want to raise funds through debts

Capitals despise MCN institutions, and MCN institutions also do not need equity financing. This is why the industry has not experienced a capital boom.

Since 2016, MCN institutions have also undergone some changes, becoming more comprehensive, and more profitable and risk-resistant. For example, those who are influential incubators start to move closer to the upstream and control their own goods; while companies in the supply chain want to incubate influentials themselves.

The platform is also actively promoting the diversified development of MCN institutions. Short videos and live broadcasts are inseparable, and Douyin is now actively embracing e-commerce.

Observing the monthly rankings of Douyin, we can see that the top MCN organizations on the Douyin list are all unions that used to broadcast live. From a horizontal perspective, MCN institutions have become more and more integrated with short videos, shows, e-commerce live broadcasts, and more diversified development.

Take the rigorous anchor of Vision Entertainment as an example. Its current fans on the Douyin platform have exceeded 7 million, the monthly live stream has reached more than 3 million, the monthly star map has more than 2 million, and the e-commerce monthly sales The volume exceeded one million and the annual sales reached more than 70 million.

The compound development of KOL determines the compound development pursuit of MCN institutions. In this way, the flow of each MCN institution is very good.

MCN’s most local business was advertising, with sufficient cash flow. Once the business is broadcast live on the compound, the head anchor seizes the rising dividend of Douyin Live, and lays directly to make money. In other words, even if these MCN institutions do not raise funds, they still live very moisturized.

A friend of reporters in the field of e-commerce was invited to a private gathering of the founders of the live broadcast union and the MCN organization. According to him, being in it feels a strong sense of local tyrants, among whichOne detail is that for the time of a dinner, the cigars are moved one box at a time, not to mention the red wine and Jane.

Until the middle of this year, Vision Entertainment is still recruiting at a rate of 6,000 anchors per month, and the speed will continue to increase. Xiao Yu once asked Chen Pengbo, at what time do you think your recruitment of anchors will slow down, he replied that when the company’s monthly turnover exceeds 200 million. “In April, there were 75 million live broadcasts, and the company’s major businesses totaled 101 million; by May, the live broadcasts had reached 120 million.”

According to the current market, even listed companies do not necessarily have the flow and profits like Vision Entertainment.

In fact, the monthly flow of MCN institutions in the head is not bad.

Not long ago, Xiaoyu and senior executives of Wuyou Media also talked about revenue and financing. He said: “Our cash flow is very good, and the need for financing is not so urgent, and there are good investment institutions to talk about.”

Wuyou Media’s head master Mao Maojie

What are the main places where an MCN institution spends money? There are two main aspects, first, the cost of signing up to the contractor; and second, the operating cost.

Early, signing heads is neededThe annual insurance premium is paid from tens of thousands to millions. But now there are not many heads who can pay the insurance premium, and the more head MCN agencies can even talk directly to the heads.

In view of the good profitability of MCN institutions, the demand for equity investment is not so urgent. Even if there is a demand for funds, debt is the main source, not equity financing.

“We want to raise funds, can we raise funds in the form of debts. Without the pressure of their withdrawal, I pay dividends to shareholders every year,” said the founder of a head MCN institution.

What does an MCN institution with 1% investment value look like?

Considering the issue of exit, in the current MCN field, large-scale investment is more about industrial capital than financial investment institutions.

For example, Sina Weibo, Cat’s Eye, and listed companies pass on entertainment, all have invested and acquired MCN institutions.

From an industry perspective, MCN, as a young form of content, has investment value.

One is the content value of MCN. If MCN institutions can produce high-quality content, it is valuable; the other is that if the quality of the content is not refined, it depends on the number of his accounts, which is the value of the quantity, then Have certain marketing value.

These two logics are exactly the changes in investment logic in the MCN field since 2016.

“In the beginning, investing in MCN was based on the logic of the celebrity. Now we invest in MCN as a marketing tool. For MCN, it is mainly the front-end celebrity traffic and the back-end goods. If you cannot control the traffic , Then control the supply chain of goods. Therefore, MCN institutions with a supply chain can take a look. “Liu Di said.

In Liu Di ’s view, If it ’s better to integrate an MCN with a live broadcast, they value the organization ’s delivery and marketing capabilities more. Many front-end traditional source companies hope that new media organizations can help them achieve online sales, and only the MCN company at the head cannot reach it. There must be a MCN organization at the waist to make this money.

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This kind of ending will become, some MCN operating agencies cooperate with the supply chain to form a joint venture company, holding the traditional upstream supply chain products to make their own brand.

It’s equivalent to an online celebrity company cut into the consumer field, and finally it is the logic of the brand. But as a brand, no company understands it better than a marketing company. “So, I want to find an MCN company with a marketing gene.”

In fact, many e-commerce live broadcast MCNs are transitioning to brands. Not long ago, Li Jiaqi also mentioned in a public speech that he would also set up his own brand in the future, and ONE is no longer an MCN company, but an IP commercial company.

Taobao Broadcasting another head MCN agency Gomei is also taking a similar path. Establish a brand company on top of MCN, and use its multiple MCN agencies as sales channels to sell its own brand products, thereby overcoming large fluctuations in MCN revenue.

Before that, Mango Culture and Investment invested in two MCN institutions, one is entertainment plus entertainment, and the other is Weinian (the company where Li Ziyi is) .

“MCN has a good cash flow, similar to the film and television industry. We need to see if it has the ability to continuously produce explosive models, and its comprehensive strength can lengthen the life cycle of the Internet celebrity and ensure continuous improvement. Content output, maintain a certain influence and carry out traffic conversion, realizing. Generally speaking, the volatility and randomness are still very strong. “Cui Wei, executive director of Mango Culture and Innovation said.

Cui Wei believes that there are not many mcn companies worth investing in the market. If you look at it, “Must be a company that can demonstrate platformization and continuous production capacity. There are some successful cases in the past, vertical sustainable development, horizontal Can be done at scale. “

Investors from the aforementioned Shanghai investment institutions said that instead of investing in a company that transitions from anchor MCN to a brand, it is better to invest in a brand company that understands Internet operations and has a sense of network, using MCN as a sales channel. Perfect Diary and other brands.