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MCN’s revenue sources generally include three categories: advertising, live broadcast and e-commerce. At present, there are relatively few MCNs that really rely on e-commerce to make profits, and most of them are head KOLs with resource accumulation. Most MCNs rely on advertising as their main source of income. At present, the monthly advertising flow of the head MCN agency of Douyin and Kuaishou is about 20-30 million yuan. For some MCNs, live broadcast revenue is also an important source of income. The share of MCN and KOL depends on the outcome of the game between Party A and Party B in their dominant position and resource input.

03 Who will survive?

For MCN institutions, large, early-to-market institutions bring together a large number of early influencers through time and volume advantages, and continue to consolidate their unique advantages, such as vertical field MCN institutions, the number of Internet celebrities in their corresponding fields can reach hundreds of people, and the interactive ability brought by them can reach hundreds of millions.

For emerging MCN institutions, due to the short entry time and insufficient company resources, the bargaining power is low, so most of them are below the breakeven point. However, by strengthening independent research and development, avoiding vicious competition, and incubating its own phenomenon-level IP, it can still bring a lot of attention and the development prospects are still promising.

The number of MCN signing accounts has increased significantly since 2018. Source: Crowray, iResearch, Guotai Junan Securities Research

Domestic MCN institutions started with Weibo and gradually spread to Douyin, Kuaishou, WeChat, Taobao Live, etc. Although the user groups of different platforms have different styles,Maximizing the coverage of the crowd and increasing the influence of institutions and celebrities are the core requirements for commercial realization.

MCN Qianxun, an e-commerce head, has 38.489 million followers, and 15.64 million in the United States; MCN, the bee colony head of marketing format, covers more than 500 million fans across the entire network, and more than 100 million fans are covered by Douyin alone. Daily average page views exceed 1 billion.

The top celebrities sit on top of multiple platforms and have strong sales-driven capabilities.

Weiya ’s double 11 sales in 2018 led 330 million sales and 2.7 billion in sales for the whole year;

The Lizi Tmall store opened for 6 days in 2018, and only 5 products sold more than 150,000 and sales exceeded 10 million.

However, 90% of the top celebrities have signed up. MCN institutions have begun to focus on the development and incubation of waist performers with higher cost performance. Qianxun signed a waist KOL for a group of millions of fans such as Zhang Mofan, Xiaoqiao, and Xue Oni. Using team output play, the UV accounted for 9.71% in the Double Eleven market in 2019, which is the second most nearly 3 Times.

With the gradual professionalization of the Internet celebrity economy and the improvement of the MCN agency industry, the signing of Internet celebrities and MCN agencies to become full-time Internet celebrities has become a new trend.