4% to 455 million yuan in 2020.
The main reason for the increase in revenue was that the revenue from the licensing of the broadcasting rights of buy-out dramas increased by about 164 million yuan, but this was offset by the following three factors: The revenue from the licensing of the broadcasting rights of self-made dramas decreased by 78.8 million, under the joint financing arrangement. The revenue from broadcasting rights licensing decreased by 11.1 million yuan, and the revenue from the provision of distribution agency services decreased by 9.5 million yuan.
According to the business segment, the revenue of Litian Pictures’ self-produced dramas decreased by 88.6% from RMB 88.98 million in 2019 to 10.17 million in 2020. This is mainly due to the fact that only one self-produced drama has been approved to premiere on Satellite TV in 2020. Carousel screening, this is because the company has shifted its focus to expand the licensing business of buying out the broadcasting rights of dramas to meet the needs and content preferences of customers in different periods.
Under the self-produced drama business segment, in 2019 and 2020, revenue from TV channel customers accounted for approximately 94.0% and 81.1% of the revenue from the licensing of self-produced drama broadcasting rights, and the remaining revenue came from other third-party customers.
In 2019 and 2020, about 62% and 43% of the revenue from the licensing of the broadcasting rights of self-made dramas came from satellite TV’s first rotation, about 32% and 38.1% came from satellite TV’s multi-rotation and terrestrial TV broadcasting, and the remainder came from Licensing the broadcasting rights of self-made dramas to other third-party customers.
Following the production of the self-made drama “Unparalleled Beauty” in 2020, Litian Pictures plans to start filming a number of self-produced dramas in 2021, such as the TV series “Don’t Worry, We Grow Up Together”.
“Rock Sugar Stewed Sydney” and other buyout dramas increased revenue by 58.8%
But it also lowered the company’s overall gross profit margin
In addition to the licensing of the broadcasting rights of self-produced dramas, Litian Films also engages in the licensing of the broadcasting rights of TV dramas purchased from third-party copyright owners or licensors.
Under this business segment, the company purchases the entire copyright of the TV series (in this case, the company will be able to license the broadcasting rights to customers in any region of China at any time at its discretion), or only purchase the TV series within a certain period of time in China The right to use certain designated areas or the right to transfer broadcasting rights. The company usually signs a content distribution agreement with the copyright owner or licensor to obtain the copyright, use right, and the right to licensed broadcast rights (as the case may be) of a specific TV series. After that, the company released related TV dramas to customers.
In 2019 and 2020, the revenue from TV channel customers accounted for approximately 89.9% and 91.8% of the revenue from buying out the broadcasting rights of dramas, and the remaining revenue came from other third-party customers.
In 2019 and 2020, about 60.7% and 49.8% of the revenue from the license to buy out the broadcasting rights of dramas will come from satellite TV’s first rotation, about 28.8% and 42.0% will come from satellite TV’s multi-rotation broadcasting, and the remainder will come from terrestrial TV stations. And other third-party customers.
The income from Litian Films’ purchase of licensing rights for drama broadcasting increased by about 58.8% from 279 million yuan in 2019 to 442 million yuan in 2020, mainly due to the following two reasons:
(1) The licenses for the first-run broadcasting rights of “I’m Waiting for You in Beijing”, “Snow Stewed with Rock Sugar” and “The Story of Happiness” will enable the company to obtain about 220 million yuan in revenue from the first broadcast on Satellite TV in 2020; ( 2) The company obtained income of approximately 53.4 million yuan through the multi-rotation broadcasting rights license of the TV series “An Jia”.
In addition to self-produced dramas and buy-out dramas, Litian Films also obtains income through joint financing arrangements under the licensing of broadcasting rights and acting as a distribution agent for the broadcasting rights of TV dramas.
Among them, the former’s revenue decreased by 80% from 14 million yuan in 2019 to 2.8 million yuan in 2020, mainly because the company only obtained one TV series broadcasting rights license income from the joint financing arrangement in 2020.
The latter’s revenue decreased from 9.5 million yuan in 2019 to 0 yuan in 2020, mainly because the company did not provide issuance agency services in 2020.
In terms of gross profit margin, in 2019 and 2020, the gross profit margin of Litian Films’ self-produced dramas will be approximately 31.7% and -65.4%, respectively. The gross profit margin in 2020 is negative, mainly due to the company’s account of the two dramas “Double Gun” and “Jagged Glory”The situation and intended use are as follows:
The board of directors of Litian Pictures expressed that it believes that the company will be able to meet its liquidity needs by combining cash from operating activities, bank loans and other borrowings, and other funds raised from the capital market from time to time.
The company’s goal is to maintain the balance of continuity and flexibility of funds by using cash flow from internal operations and bank loans and other borrowings. The company will regularly review the main fund status to ensure that it has sufficient financial resources to meet its financial responsibilities.