Original Title: Station B plans to acquire Netease Comics, which has been independently financed with Netease Literature, LOFTER and other businesses.
Gao Honghao, finance and economics reporter, Liu Fang / Wen Wei Song / Editor
In the hopeless situation of surpassing the giants, Netease comic book business, which is more chicken ribs and money-burning for Netease, may be a win-win outcome if it can achieve a marriage with a platform like Station B.
On Nov. 2, Caijing reporters learned from multiple sources that Bilbili. com, a second-yuan video community, plans to acquire Netease comics, a comic community owned by Netease, but has not yet learned about the specific trading time and price. B stations and NetEase have frequent capital operations recently. On October 23, Netease Yunyun Music accepted Baidu's strategic investment. On October 31, the media reported that station B, which belongs to Tencent Department, had recently obtained Alibaba's investment.
Reporters to NetEase to verify, as of press release, NetEase has not yet responded to this.
The NetEase cartoons that B plans to buy is NetEase's original comic platform. According to public information, B Station has invested in five animation companies in 2017. At present, B Station has invested nearly 50 companies in the secondary field, including content production, virtual idols, secondary communities and so on. It has carried out a very extensive layout in the ACG industry chain.
But a head VC cultural industry investor on this matter to "Finance and Economics" reporter analysis, station B has reason to buy a comic business, but Netease should not want to completely sell the comic business. At present, Netease has many layouts in the secondary business. If it does, it will still lose.
In fact, this is not the first time NetEase has sold NetEase cartoons. A person familiar with the matter told Caijing that at the end of 2017, Netease packaged and independently financed the business of Netease's Manga Business Division, including Netease Comics, Netease Literature, Netease Snail Reading and LOFTER.
The aforementioned insiders told Caijing that in the last year's transaction, several businesses of NetEase Man Business Department are now in a loss state, with a package valuation of about 400 million yuan. Enterprises in such fields as Huace Film and Television, Mango Wenchuang and Shanghai Wenguang SMG intend to take shares, but the deal failed to be concluded.
In the current cartoon platform, Tencent animation user base and content of the first camp has obvious advantages, while Fast View cartoon belonging to the first camp has more advantages in the number of active users. A quick look at comics completed the D round of financing at the end of 2017, valued at around 1 billion 200 million yuan. Next is the friend, the current valuation of 567 million yuan.
The advantages of NetEase cartoons are not obvious. Finance and Economics reporter learned from a person close to Netease Comics that Netease Comics is in a loss state, its DAU is about 100-2 million medium-sized, content and head comic platform does not have much advantage, user fee attempt is just beginning. A cartoon industry personage said that Netease cartoons in recent years have made rapid progress, comprehensive industry rankings, belonging to the industry's fourth and fifth positions.
It is worth noting that Netease's multiple content sections are continuously financing and selling, which to some extent reflects the current anxiety of Netease.
In the first quarter of 2018, according to Netease's earnings, its net profit was 752 million yuan, down 69.2% year-on-year, which was the second consecutive quarter of Netease's net profit decline. In the fourth quarter of 2017, its net profit fell 65.1% year-on-year.
At the same time, as the biggest revenue source of Netease, Netease's online game service revenue also declined by 10.7% in the first quarter to 8.040 billion yuan (the second quarter's low-speed growth reached 10.061 billion yuan, an increase of more than 6% year-on-year).
Although Netease's second largest revenue source, e-commerce business, had a revenue of 4.654 billion yuan in the first quarter, up to 175.2% year-on-year, the proportion of e-commerce business to total revenue in the first quarter fell by 5.53% to 26.33% compared with the previous quarter, while the game business continued to rise to 61.81%.
Today, the game has been strictly controlled by the state, and the game version number is still banned. Netease's game business is bound to be under pressure, thus affecting the overall performance of Netease and the future strategic direction.
Therefore, even though NetEase has repeatedly stressed that the emphasis of other non-core businesses lies in the reputation and popularity of the market, under the general trend, NetEase will not accelerate the process of scale and commercialization of other businesses. At the same time, NetEase has a threat from the giants in every content business.
Take Netease Cloud Music as an example. After four years of independent development, Netease Cloud Music financed 750 million yuan in 2017, with an estimated value of 8 billion yuan. Despite gaining popularity among users, this valuation is far behind Tencent Music's $30 billion mark. Faced with the attack of the giants, if we want to speed up the development of Netease cloud music, in the copyright war, Netease cloud music needs strong financial support, and in terms of traffic, we must rely on greater channels to support.
The business of NetEase man man business is the same. Unlike Tencent, which has actively tried to develop linkage in its own animation, games, film and television, literature, music and other business, the content section of Netease does not have strong synergy. Netease Literature, Netease Cartoon and other businesses in the case of limited user size and volume, it is difficult to achieve good commercialization only through good word-of-mouth can be imagined. (Spotify, the best-known music streaming media in the market, paid 75 million subscribers in the first quarter of 2018, with a net loss of $218 million.)
Therefore, at the end of 2017, Netease Manga Business Department, which belongs to the content source business, plans to pack up independent financing. If the platform resources (Mango TV, Shanghai Wenguang) and content production resources (Huaze Film and Television) enter successfully, they can help Netease Literature and Netease Manga to adapt the content of film and television, and have broadcasting. The whole industry chain of the channel was commercialized, but it failed to take the lead.
From this point of view, in the case of hopelessness beyond the giants, Netease comics and other businesses which are more chicken ribs and burn money for Netease may be a win-win outcome if we can achieve a strong connection with the platform side of Station B.