Under the epidemic, the online reading industry showed a positive trend
In Q1 2020, the overall revenue of the media industry fell by 8.5%, and the net profit fell by 42.8%; however, the industry ’s internal differentiation was obvious, and the animation and film and television sectors suffered losses. %, The net profit attributable to the mother turned from profit to loss; the profits of publishing and broadcasting also fell sharply, and the net profit attributable to both mothers fell by 41.15% and 77.96% year-on-year respectively.
In the context of falling profits in other sectors of the media industry, the reading industry has grown against the trend. The 2020 Q1 online reading sector achieved a revenue of 1.011 billion yuan, a year-on-year increase of 31.62%, and a net profit of 115 million yuan.
Source: Wind, Guoyuan Securities Research Center
On the one hand, the rebound in the online reading sector benefited from the increase in the number of online readers and the length of reading during the epidemic; on the other hand, the Internet giants such as Tencent and Baidu have increased their layout in the online reading industry, which also promotes the development of the industry.
In terms of overall revenue, the proportion of online reading revenues has declined, and digital reading companies have focused on copyright revenues to drive performance. In 2019, Tencent’s Reading Group’s copyright operating income after the consolidation of Xinli reached 4.42 billion yuan, accounting for 53%, a year-on-year increase of 341%, and the proportion has exceeded digital reading revenue. Revenue from copyrighted products reached 260 million, accounting for 13.9%, a year-on-year increase of 91.1%. Guosheng Securities said in the report that it is expected that these data still have room for improvement in the future.
After the vice president of Tencent Group and CEO of Tencent Pictures Cheng Wu formally became the CEO and executive director of Reading Group, New Times Securities stated in the report that Tencent and Reading have deepened the development of IP linkage and new cultural and creative content, It is expected to promote reading from “the largest industry genuine digital reading and literature IP cultivation platform” to “a stronger literary content ecology”.
In addition to the promotion of copyright business, the industry-leading palm reading technology promotes the “pay + free” model, which has also shown initial success in exploring the way of traffic realization. According to the 2020 Q1 financial report released by Palm Reading Technology, the first quarter revenue reached 491 million yuan, an increase of 9.25% year-on-year; the net profit attributable to shareholders of listed companies was 55 million yuan, an increase of 78.24% year-on-year.
Cheng Xiang, chairman and CEO of Palm Reading Technology, said that free reading or paid reading may eventually evolve into a free and paid dual-wheel drive business model. Liang Xiaodong, co-CEO of Reading Group, said at the financial report meeting that Reading Group willContinue to expand its free reading service in 2020.
Closed on May 8th, Reading Group reported HK $ 37.40, up 7.78%; Palm Technology reported 32.19 yuan, up 1.07%.