Wang Zhongjun, Chairman of Huayi Brothers (right) and Ma Yun, founder of Alibaba (data map)

　 　 1905 movie network news On the evening of November 18th, Huayi Brothers announced that it had raised no more than 3.6 billion yuan from four issuers, including Hangzhou Ali Venture Capital Co., Ltd. (hereinafter referred to as Ali) and Shenzhen Tencent Computer System Co., Ltd. (hereinafter referred to as Tencent), through non-public issuance of A shares. Among them, 3.1 billion will be directly used to invest in film and television projects, and Huayi Brothers promised to use this fund to complete the production of 31 films within the specified three years.

　 　 In addition to the simple private placement cooperation, Huayi Brothers also revealed in two announcements on strategic cooperation that the company will carry out mutual and deep cooperation with Ali and Tencent respectively, including Taobao, Entertainment Treasure, tencent games and other platforms. In addition, Huayi also reached an agreement with these two issuers to release a certain amount of investment in "Huayi Film Works" for their participation.

　 　 So far, Huayi Brothers has completed the largest financing business in the film industry in 2014. With this issuance, Huayi successfully joined hands with companies such as Ali and Tencent, further promoting the company’s layout in the Internet field.

Huayi financing 3.1 billion: 31 films completed in 3 years.

Ali and Tencent each received 10% of the shares.

　 　 For some time, the discussion about Huayi’s "de-filmization" strategy has continued to ferment. Some people are optimistic about using this method to expand the territory and realize industrial integration; Some people think that Huayi is "doing nothing", which leads to a decline in performance. Now it is announced that it has reached strategic cooperation with Internet companies Ali, Tencent, Ping An Asset Management Co., Ltd. and CITIC Construction Securities Co., Ltd. from the financial industry. Huayi’s move can be described as "killing two birds with one stone": not only did it not neglect the original multi-layout plan, it successfully broadened the company’s resource channels in film and television, games, e-commerce, finance and other fields, but also raised 3.1 billion yuan for film and television project production, which provided a solid guarantee for the company’s next big move in film and television. According to the analysis report on the use of raised funds issued by Huayi, the company promised to use this fund to invest and produce movies and TV series in the three years from January 2015 to December 2017. Among them, there are 31 films, and the investment will account for nearly 60% of the total, including 12 super-large films, 12 large-scale films and 7 small and medium-sized films.

　 　 Among the four companies participating in this non-public offering subscription, the cooperation between Ali and Tencent, two companies from the Internet industry, and Huayi is far from simple private placement. In addition to the deep cooperation with the superior resource "new media" platform, Huayi also reached an agreement with them to release 5%-10% of total investment of the project’s "Huayi Film Works" for Ali and Tencent to participate in the project, and completed the production and distribution of five films with the two companies within three years from the effective date of the agreement.

Join hands with Ali: Entertainment Bao participates in the operation of 10 Huayi projects.

Taobao takes the lead in derivatives promotion platform.

　 　 Ali plans to subscribe for Huayi shares this time for 1.533 billion yuan, accounting for 42.5% of the total amount raised. It is not difficult to see from the strategic cooperation announcement that the cooperation between the two parties involves many aspects of the company’s business. First of all, Huayi’s film works will officially enter Ali’s "Entertainment Treasure" in the next three years, and the two companies will jointly select 10 films and adopt this product model for production and distribution. Undoubtedly, the highly targeted business attributes and a large number of user data resources of "Entertainment Bao" will make Huayi, which has just set up a new media interactive platform and is focusing on developing a "fan economy", even more powerful.

　 　 Another cooperation is related to Ali’s most popular "Taobao". As early as 2012, Huayi began to test the water film derivative model and regarded it as a powerful performance growth point. According to statistics, in the last three years, Huayi’s movie and TV drama business and its derived income totaled more than two-thirds of the total revenue. In order to continue to focus on creating a brand-new interactive system that combines traditional media with Internet finance and e-commerce, Huayi will give priority to the cooperation of e-commerce platform with Ali on its derivatives with relevant rights. For the cooperative film [Note 4], Huayi will give priority to Taobao for online ticketing sales cooperation. The ticket sales and O2O business of Huayi’s real-life entertainment theme park will also be promoted on this platform.

Cooperation with Tencent: the priority of star IP adaptation is shared by both parties

Realize the common content of movies, literature and online games.

　 　 Compared with the multi-point cooperation with Ali, the purpose of cooperation between Huayi and Tencent is much simpler and more direct, that is, sharing the star IP resources of both parties. In the next five years, under the same conditions, Tencent must give priority to Huayi’s online games or literary works for which it enjoys relevant rights. In return, all the online games, online literature and animation adaptation rights of Huayi’s film and television works will also be given priority to Tencent. For Huayi, this seemingly independent content cooperation project also undertakes the important task of exploring new ways of cooperation between Huayi’s game business and tencent games platform, and provides help for the company’s game business that needs to be developed urgently.

　 　 Huayi has been trying to deploy its interactive entertainment business group. This time, the establishment of a priority cooperation mechanism between movie IP and Tencent literature and game IP, and the opening of IP rights circulation channels between the two sides to achieve common content will help to bring into play the synergy between the company’s businesses, provide great impetus for the company to establish an internet entertainment network ecosystem, and help enterprises further improve the industrial chain layout.

[Note 1] Private placement: that is, non-public offering, offering shares to specific investors, which is also commonly known as private placement.

[Note 2] Huayi’s film works refer to film projects which are developed and produced by Huayi, controlled by Huayi, and which enjoy the decision-making power of investment arrangement.

[Note 3] Derivatives of which Huayi enjoys relevant rights: including the related derivatives of its contracted artists developed by Huayi and enjoying relevant rights, and the derivatives of which Huayi enjoys the right to develop related derivatives.

[Note 4] Huayi and Ali co-produced films: namely, 10 entertainment treasure co-produced films, 5 co-produced and distributed films and Ali participated in the film.