Edited by Shen Wanhong: "firmly optimistic about the two major unicorn races: content payment and head traffic"
Shen Wanhongyuan research gives investment advice for the media Internet industry in the second half of 2018: focus on two main lines: content payment and head traffic.
1. The rise of content payment
In 2017, the number of new Internet users in China was only 40.74 million, down from the previous two years; the average number of online hours per week was 27 hours, an increase of 48 per cent from 2010. It can be predicted that the scale of Internet users will continue to grow steadily in the future, but the time for users to use the network will increase, and the application scene will be broadened. Shen Wanhongyuan believes that the core of the growth of the Internet industry has been transformed from user growth to user payment growth.
Five factors drive content payment
Shen Wanhongyuan defines content payment as a way for users to get better content and experience on the online platform by paying for videos, pictures, music, text, virtual items, etc. It is also believed that there are five major factors that play a promoting role.
Make all-round efforts in the five major economic areas
Shen Wanhongyuan believes that the following five major areas are the starting points for content charges:
（1）Online videoThere are 150 billion potential markets, iQIYI, Inc., Tencent video, Youtu three major video content platform content input to increase revenue; (2)Online readingThe market size exceeds 15 billion, legitimate content drives users to pay more, and some online reading platforms open up the vertical integration chain of IP, film and television, and games. (3)Visual contentThe potential market size of the domestic picture content copyright industry is more than 10 billion, and the Internet self-media is the source of market increment. (4)Game contentNot only does the revenue of traditional games grow steadily, but WeChat Mini Programs's game innovation brings a new incremental market; (5)EducationTAL Education Group and New Oriental Education & Technology Group, leaders of the K12 training industry, have further strengthened their competitive advantages, the A-share market has paid more attention to the non-academic vocational education industry, and the market scale has been growing.
Under the content payment main line, Shen Wanhongyuan recommends to follow:Jiecheng shares(the only leader of network video distribution),Perfect World(a-share video games interactive scarcity leader),Visual China(a-share picture rights are paid only by unicorns),Baiyang shares(a-share visual vocational education leader),New classics(pay for classic content).
2. The head flow is just in time.
Short video: forming a new blue ocean of traffic
In March 2018, short videos accounted for 7.4% of the total time spent on mobile devices, with a total of 460 million monthly active users and a user penetration rate of 42%. Its main direct realization mode is advertising and e-commerce, which can guide other cooperative platforms.
Cinema line + ticketing: head flow entrance is formed to seek diversified realization of traffic.
From January to June 2018, the national box office totaled 32.03 billion yuan, an increase of 18% over the same period last year. Cinema has become the most important traffic entrance for offline entertainment, driving the growth of advertising and selling goods. Among them, the box office growth rate of the cities below the third tier is much higher than that of the first and second tier cities, and the sinking of the channel has led to the new traffic of watching movies. At the same time, the number of screens across the country continues to grow at a rate of 20% +. With reference to the experience of the United States, when the market matures, the cinema industry will begin to integrate horizontally, bringing benefits to the leading companies with strong profits and plenty of cash.
In terms of online ticketing, according to Analysys, in 2017, China's online ticketing platform earned 42.4 billion yuan, with 150 million users and an online rate of 76%. The online ticketing platform has become an indispensable part of China's film market. The online box office platform can extend the industrial chain, such as Internet publicity, connect filmmakers, advertisers, audiences and cinemas, and seek diversified realization of traffic.
At the same time, the concentration of the industry has increased, and Q3 has basically entered the stage of competing for hegemony in 2017.
Building advertising: head traffic is favored by advertisers.
The building advertising market continues to grow by more than 20%. As new fashion and other companies join the competition, the overall number of editions of building and elevator advertising increases, leading to the expansion of market space. Building flow entrance continues to be favored by major customer brand promotion. Advertisers are involved in e-commerce (JD.com, Pinduoduo), Quick Consumer (NONGFU SPRING CO., LTD., Mengniu), catering (KFC, Ruixing), finance (small Blackfish, Renren loan) and other fields, and the strong advertising demand is good for the head traffic platform with national coverage.
According to focus Media's 2017 annual report, the company's major sales contract customers include Taobao (total contract amount 710 million), JD.com (total contract amount 620 million), Uxin Ltd. (total contract amount 550 million) and so on. Shen Wanhongyuan believes that BABA's strategy to invest in focus also reflects the importance that the Internet platform attaches to the entrance of building traffic.
Below the headline, Shen Wanhongyuan recommends to pay attention to:Focus Media(the only unicorn listed in elevator media industry),Light media(absolute leader of online and offline movie distribution),Chinese film(the only listed leader in the film import and the whole industry chain),Mango supermedium(a-share online video paid for scarce unicorns),Benz information。
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