The epidemic has spawned a “house economy”, and the transition of cinema movies to webcasts has become a new trend. New changes in the entertainment industry or the reconstruction of the traditional film and television industry pattern will have a certain impact on cat eyes.

Editor’s note: This article comes from the WeChat public account “Blue Whale TMT” (ID: ilanjingtmt) , author: Fei Teng.

After six consecutive years of losses, Cat Eye Entertainment finally ushered in its first annual profit in 2019. However, a sudden outbreak caused him to fall into trouble again.

After six consecutive years of losses, Cat Eye Entertainment finally ushered in its first annual profit in 2019. The financial report shows that thanks to Cat Eye Entertainment’s strategic transformation of the “full text entertainment industry” of Alibaba Entertainment, its profit in 2019 was 460 million yuan.

However, under the impact of the epidemic, closed entertainment venues such as movie theaters were unable to operate, and cat-eye entertainment, which was backed by the film industry chain, was in trouble. It had just climbed out of the loss quagmire, and it seemed to be sinking again.

“Danger and Opportunity” Behind Cat Eye Transformation

Since its establishment, Catseye Entertainment has been dominated by ticketing revenue, with a relatively single revenue structure, and basically relies on offline scenarios to make profits. Aurora big data shows that in the online ticketing app for movie performances, users prefer the first name to Ali “Tao ticket”, followed by barley, and the third is Cat’s Eye.

Currently, cat-eye traffic comes from shareholders Tencent, Meituan, slanted light flow and financial support, which has led to almost no cat-eye remaining in its own apps after users divert. According to the prospectus, Cateye Entertainment’s own channel has only 5.1% monthly active users.

In order to broaden the profit path, Cat Eye had to seek transformation. When going public in Hong Kong in 2019, Cateye Entertainment CEO Zheng Zhihao announced the adjustment of the company’s strategic goals, from a ticketing platform to a comprehensive entertainment platform for Ali Da Entertainment, starting with products, data, marketing and capital, and laying out the full-text entertainment industry chain .

“The cat eye product platform corresponds to entertainment content, mainly relying on the cat eye publicity system cat eye pass and venue rental platform venue pass, the former from the film industry chain upstream production announcement, the latter from the movie industry chain downstream theater screening “, A cat eye entertainment person introduced.

In addition to the two major competitors in the online ticketing field: “Tao ticket” and “Damai.com”, the competition in the entertainment industry in which Cat’s Eyes is located is more fierce.IQiyi’s “Apple Orchard Ecology” and ByteDance are all competitors faced by Cat Eye Entertainment after its strategic transformation.

Zheng Zhihao proposed at the strategic upgrade conference that he will join hands with Tencent to launch the “Teng Mao Alliance” to create a film industry announcement system. Some in the industry believe that this move means that Cat’s Eye will develop deeper cooperation with Tencent to target Alibaba Entertainment, and Tencent’s joining will also provide Cat Eye with sustainable development guarantee.

In terms of performance, Cat Eye strategic transformation has achieved certain results. The financial report shows that in 2019 Cateye Entertainment’s revenue was 4.27 billion, an increase of 13.6% year-on-year, and the annual profit was 460 million; the revenue of online ticketing business decreased from 60.6% in 2018 to 54.6%, and the proportion of entertainment content services, advertising and other business revenue was significant The improvement reached 32.7% and 13.3% respectively.

However, when seizing new development opportunities, Cat’s Eye faces more challenges.

“Diversified content layout, increasing the possibilities of Cat ’s Eye revenue, and competing with more platforms”, Internet analyst Qian Hao believes that the online ticketing market hits the ceiling, its own traffic accounts for too low, and the entertainment industry Competition is fierce, and Cat Eye Entertainment urgently needs to break through the dilemma.

Under the epidemic, Cat ’s Eye Entertainment will make it harder to profit again

Since this year, the epidemic has had a huge impact on the entire entertainment industry. Zheng Zhihao publicly stated that the industry as a whole is under pressure, but offline enterprises are particularly under pressure due to fixed costs such as rent. “If you can’t solve the problem of the survival of offline entities, it will have a huge impact on the health of the entire entertainment industry.”

Today, the epidemic is not over, and closed entertainment venues such as movie theaters cannot operate. The impact on the film and television industry is difficult to estimate. For Cat’s Eye, its revenue in the first quarter is bound to face greater losses, and it will be more difficult to continue to maintain profitability.

An industry source pointed out that the full-text entertainment strategy will further stimulate Cat ’s Eye ’s funding needs, and as Cat ’s eye increases in the field of film production, continued profitability may not be easy for Cat ’s Eye.

Relevant information shows that Catseye Entertainment has cooperated with nearly 10,000 theaters across the country, and has deployed 1 million exposure points in 130 city business districts. With heavy capital investment, costs also increase. Affected by the epidemic, Cateye Entertainment’s offline layout cannot be carried out, which will also be reflected in the financial report. According to CICC estimates, Cateye’s revenue in 2020 will decline by 24% year-on-year, and adjusted net profit will decline by 40% year-on-year.

In addition, the sudden outbreak also affected its continued profitability. Relevant information shows that the refund amount of the Cat’s Eye Spring Festival file exceeds 200 million yuan, and the overall income has also declined. According to Lens Club ’s report, during the outbreak, Cat Eye Entertainment ’s online ticketing and entertainment content(Produced) income almost dropped to 0.

The house economy is spawned in the epidemic, “and it has become a new trend to turn cinema movies into webcasts. New changes in the entertainment industry or reconstruction of the traditional film and television industry will have a certain impact on Cat ’s Eye.

Liu Zhengshan, director of the National Film Think Tank Office of the Beijing Film Academy, said that after the epidemic, Internet technology capital and enterprises will accelerate the reconstruction of the traditional film and television industry, and new film production methods, distribution and projection models, and profit models will continue to emerge.

This means that the entertainment industry will usher in major changes, and ticketing platforms, theater companies, etc., as a key part of the entertainment industry, need to face new challenges.

For Cat’s Eye, who has not yet got rid of traffic dependence, it is impossible to achieve the coordinated development of various sectors like Ali Entertainment in the short term. Qian Hao believes, “The downturn of the film industry, whether Cat’s Eye Entertainment under the impact of the epidemic can successfully confront Ali Entertainment, and make profits again, will take time to prove.”