Young people, have you watched the "News Broadcast"? This is an awesome IP!

Judging from the major trends this year, one phenomenon is that the giants are all strengthening their own pan-entertainment.

IP is really popular nowadays.

Everyone claims to be an IP, so braised chicken rice will probably become an IP soon too. So cherish it while it’s still an IP, because the price might go up someday.

But what exactly is IP? What kind of IP is a good IP? What does an IP worth investing in look like?

Tong Chen, vice president of IDG Capital, has already given his answers to these questions at the "2016 IDG VIEW Conference" .

Pan-entertainment is one of the three major directions of the TMT industry that IDG Capital is optimistic about this year. The following content comes from the pan-entertainment roundtable discussion at the conference - "Entertainment to Death", Entertainment to Wealth. Behind the roundtable is Tong Chen, vice president of IDG Capital, who will interpret investments in the pan-entertainment industry. Don’t worry, just scroll down.

Roundtable Moderator:

IDG Capital Vice President Tong Chen (far right)

Roundtable guests:

Uncle Tongque, CEO of King Kong Culture (left)

Faceu CEO Guo Lie (center)

Insta360 CEO Liu Jingkang (right)

Uncle Tongque, CEO of King Kong Culture:

My name is Lin Rui. I used to work for a company called Gushan Culture. We signed 70% of the big joke tellers on Weibo, making us number one in the Weibo agency industry. Later I found that people have a lot of bored time besides short content, so my new company "King Kong Culture" started to produce long content.

Faceu CEO Guo Lie:

Our previous product was called “Lianmeng”, and we are now working on “Faceu”, which is a social app for young users to chat with pictures and short videos . Our goal is to become the next QQ.

Insta360 CEO Liu Jingkang:

We are a company that provides hardware equipment for shooting 360-degree panoramic content and VR content for industry users and ordinary users.

Tong Chen, Vice President of IDG Capital:

Uncle Tongque is engaged in new media and new content; Faceu is exploring new ways of socializing; and Insta360 is a company at the forefront of VR and AR fields. Each of you has just successfully raised funds this year, and your companies are at the forefront of your respective fields. What do you think are the biggest changes and opportunities in your respective industries this year?

Uncle Tongque:

When it comes to content, traffic no longer counts. Instead, word of mouth and fans are the deciding factors. For a piece of content, "deep love" is more important than "many people love it." In the process of helping with marketing for "The Mermaid", we found that transferring a large amount of money to word of mouth and communicating with people would have much better results than before.

Guo Lie:

From Faceu to Faceu, I found that by 2015 and 2016, most picture content could no longer stimulate users. On the contrary, some emerging applications were more video-oriented. So one trend we see is that the combination of social media, pictures and videos is getting better and better, and some streaming video and short video applications are becoming more and more mainstream.

Lin Chi-ling is using Faceu

Liu Jingkang:

We see three opportunities this year:

First, let me share a fact. In April and October last year, Facebook provided resources for 360-degree videos on their social platform. What does that mean? 360-degree videos, like current photos or short videos, will become a way for the next generation to share experiences and lives. However, at present, there is no very convenient device for 360-degree shooting on the market. Our product can be plugged into a mobile phone and can be shared after shooting, so we seized this opportunity: ordinary users have a new way to share, which can be said to be an upgrade.

Second, the live broadcast, news, and on-site shooting of large-scale events, including documentaries, by media companies are also being upgraded in terms of video formats, which is another opportunity. For example, many media reports at this year's Two Sessions used our equipment.

Third, our current equipment is 360 video, but we have also made 360 ​​3D video, which means that what your left and right eyes see are different, giving a three-dimensional feel. Many people watch our 360-degree videos and find them interesting and novel, but they have never seen 3D videos without feeling dizzy. We are trying to cooperate with some fashion shows in China, so that they can see not only the flat surface but also the sense of layers. We did an experiment. One colleague wore VR glasses and there was a live camera screen. I kissed the camera and that colleague screamed. It felt like I really kissed him!

Media uses panoramic VR camera Insta360 4K beta to report on the two sessions

Tong Chen:

Judging from the major trends this year, one phenomenon is that the giants are all strengthening their own pan-entertainment. Tencent established Tencent Pictures, Alibaba also established Alibaba Pictures, and there are also giants like LeTV and others. What do you think about giants entering the pan-entertainment industry? What opportunities and challenges are there in the competition?

Guo Lie:

I came from Tencent, and here are some things I can share:

First, most of the giants are currently focusing on PGC or professional content production. But we see that the threshold for users to create content is becoming lower and lower, slowly changing from PGC to UGC. So the giants are in the PGC module, but entrepreneurs are more in the UGC module. This is the difference in everyone’s understanding of content and division of labor.

Second, we can see that giants and entrepreneurs are still quite different. I have seen many people in Tencent who are very good at management, but they don’t understand users or products very well. They are also a little older, but the mainstream culture is mostly driven by the preferences of young users. So we saw that when QQ Music held a party, fans gave QQ products one star and scolded them, because QQ Music regarded Li Yuchun as "the most popular male singer in mainland China" and fans are very passionate about celebrities. In fact, there are still some differences between startups and large companies in their understanding of users, the way they make products, and the degree of seriousness they have.

Uncle Tongque:

First, the big guys don’t think highly of what we are doing now.

Second, second-rate authors care about traffic and money, while first-rate authors don’t care about these, they want service. We focus on the creative end and don’t care much about it. They just help us raise the price.

Tong Chen:

To add one more question, "The Mermaid" was an unprecedented box office success in mainland China, setting a box office record of 3.3 billion. The powerful Internet promotion team behind it contributed greatly to this, and basically achieved zero negative reviews. What is your approach to positively or negatively guiding the speech of those born after 1995 on the Internet ?

Uncle Tongque:

Let me briefly explain. In fact, whether it is young people or ordinary people, their understanding of the content still requires someone to tell them whether it is good or bad. For those born after 1995, they have less and less trust in the entire mainstream media. They don’t trust the news broadcast, CCTV, or experts and scholars. They trust the people they like in countless small circles. If they are allowed to communicate fully with these people, they are willing to believe them.

Back to the case of "The Mermaid", at that time, more than a dozen people in our team communicated with a thousand influential people on the Internet, hoping that they would like the movie and let them publish some evidence. For young people, these pieces of evidence can be quickly copied to their circle of friends to tell others that this is what they think. When they see that all the positive comments are of this kind, there is no possibility of negative comments. (For more wonderful sharing from Tongque, please click on the popular article: "No matter what type of friend circle you are in, you are always showing off your superiority" )

Use the dumbest and most tiring method to do new media marketing

Liu Jingkang:

(On competing with giants)

First, we are essentially a hardware company, and we have not done much content-related work so far, so we make tools and are also one of the promoters of the industrialization of VR video shooting. I think there is still some difference in our relationship with the so-called Internet startups and giants. Why do you say that?

Internet companies have very typical characteristics. For example, for taxi-hailing apps, the more drivers they have, the better the service they can provide, and there will be passengers. Without drivers, there will be no passengers. It can be said that the strong will become stronger, and the accumulation of one end will enable them to grow rapidly. Tencent makes social software and has accumulated a large number of relationship chains. If my friends use it, I will use it, and if my friends don’t use it, I won’t use it.

Back to something a little more traditional. For example, when it comes to shampoo, different brands have different preferences. We do all kinds of things, and it's hard to see one company or one brand having an absolute monopoly like the Internet. One reason traditional companies use price to differentiate markets is that they have different user groups and users have different preferences, so it is difficult for giants to form a monopoly in this area.

Second, as far as 360-degree VR cameras are concerned, the current giant is Ricoh, which produces 200,000 to 300,000 units a year, but the entire sports camera market is around 10 million units a year. Obviously, the 360-degree VR camera market is much larger than that of sports cameras. That is to say, before fierce competition arises between us and the giants or more powerful companies, the entire market capacity still has a very long period of time and a very large room for growth.

We are not afraid of any giants because we are competing with them ourselves.

Ricoh of Japan was founded in 1938. They liked our products very much and invited us to visit them for exchanges. We believe that there are many opportunities in traditional products. You don’t need to focus too much on the competition itself. Serve your users well and they will be willing to pay. At the same time, use what you gain from them to make better products. I believe that a company that has someone willing to pay for it will not fail.

Third, giants will also make investments. The lead investor in our Series B round is Xunlei, and Xunlei’s largest shareholder is Xiaomi.

For us, the entry of giants into the market with new concepts and new ways of playing is beneficial to the education market. For quite a long time, the entry of giants has brought more dividends to startups. I don’t think competition is something like 1+1=2, but rather competition at the comprehensive level of the company, including products, after-sales system, market, sales channels, etc. It is a multiplication relationship. In other words, if a giant fails in any one aspect, it will fail as a whole. Everyone is equal in this respect.

Tong Chen:

All three are very young entrepreneurs. Some time ago, there was some opinion that young entrepreneurs would face very great challenges in society. I would like to ask you, what do you think is the biggest difficulty in the past year and what difficulties do you encounter when doing what you are doing now?

Uncle Tongque:

It's quite difficult as a young person. Your ideas are different from the young people who have a say now. I think it still depends on time and build up fan stickiness.

Guo Lie:

I clearly feel that I can't poach people. It's still quite difficult for startups to recruit people right now. The capital market is not very good, and people from large companies are reluctant to leave. The difficulties we face here are more in terms of talent.

Liu Jingkang:

My opinion is the same as Guo Lie's. Our company was originally located in Nanjing, and moved to Shenzhen in March 2015. Why? Because we started to make hardware at that time, there were many factories and hardware supporting resources in Shenzhen. But when we arrived in Shenzhen, we were dumbfounded. Basically, the talents we were interested in were already favored by Tencent and Huawei, and we couldn't poach them. Any of them had an annual salary of 500,000 or 600,000 yuan. With what we have been doing before and now, we still have to think twice before offering an annual salary of 500,000 or 600,000. In addition to money, people still have many doubts about whether a young boss like you can handle so many things, so we encounter great difficulties in this regard.

Conversely, what kind of team is needed to do this? They are definitely not all born in the 90s, after all, our business is more traditional. But for bosses born after 1990, how to attract more experienced talents, or uncles to come in? Will you feel uncomfortable when working with a 40-year-old uncle? These issues are huge challenges for us.

Tong Chen: The investment logic of pan-entertainment

IDG Capital’s pan-entertainment investment layout (not exhaustive)

Entertainment changes: method and content

VCs are paying attention to changing industries, and mass entertainment has ushered in consumption upgrades. We pay more attention to entrepreneurial teams that are good at seizing changes in universal trends. There are two main lines of change regarding entertainment: one is the change in method; the other is the change in content .

When we first considered BiliBili, we saw that barrage-style entertainment interaction was a new way. move! move! move! Important things should be said three times. Mobile gives us a lot to think about. Low threshold, anytime and privacy are the starting points for us to examine many projects in the context of mobile Internet . In 2015, large-screen devices have become very popular. With the low price of large screens, the increase in 4G network speed, and the dividend brought by the popularization of payment in 2016, on-demand, reward, and games will become even more powerful. From the perspective of finding investment opportunities in the form of methods, my understanding is that ubiquitous screens and evolving optical technology will bring about the next wave of changes in the form of methods, which may become the next big opportunity.

Another main theme is the changes in entertainment content. We have new ways of producing content (you can shoot videos with your mobile phone, and the resolution of cameras will become higher and higher) and new ways of disseminating content (new channels appear on mobile devices), which will bring changes to the content side. IP has been very popular recently, but it is a bit too prevalent nowadays. Why is it called pan-entertainment? In fact, this concept is all connected by IP. What is IP? It must be able to sell derivatives, be able to influence everyone’s three views, and have a certain space for population development. For more niche IPs, the investment value will not be that great. I think a good IP can definitely accompany people for a long time , like "News Broadcast", Disney, etc.

I just mentioned the new channels on mobile devices. The production methods of new media have enabled young and talented producers, who originally needed a lot of money to make TV series and movies, to now have the opportunity to make their mark on major channels. Now with new media production methods and dissemination channels , some young and talented people can better emerge.

On the content side, there is also a new way of dissemination. Nowadays, netizens born after 1995 have reached the age where they start to show off, and the main form of showing off is that they like to show off and spread themselves online. By grasping this psychology and change, the new generation of platforms will lead to a new generation of content production.

The thrill of live streaming

The concept of live streaming should be regarded as a traffic monetization model that suddenly emerged in 2016. The logic behind it is that the pretentiousness and hormonal stimulation brought by live streaming are easier to get pleasure from than games . In the vertical category of live streaming, we believe that some platforms may emerge. First-mover advantages are certainly there, but live streaming itself is still a traffic business . YY’s live streaming started later than other platforms, but now YY’s live streaming revenue itself is more than 4 times that of the second place. Live streaming is definitely a new way of socializing, because the user experience is quickly improved from the vague feeling of pictures and sounds. The fashionable term is "upward dimensional attack", which is now equivalent to three-dimensional attack . Since the so-called online KTV is feasible, hypermarkets and shopping methods will have great opportunities.

Internet celebrities : Really fat or just puffy?

An internet celebrity must be a rapidly rising traffic source. I personally think that before the emergence of "Internet celebrities", there was no such thing as "a person who got rich overnight", but now there are behind-the-scenes promoters, including purchased traffic and public opinion. Maybe some Internet celebrities are fake, while some are real. Therefore, when we judge the Internet celebrity itself, we need to see where the traffic comes from. To sum up: No one can become fat by eating one bite, but nowadays there are more bulking agents, so we need to see whether it is real fat or just puffy fat.

Many people are discussing the investment in Papi Jiang. In fact, there is no difference in the logic of investing in internet celebrities and Internet products. If you use internet celebrities as traffic sources, you need to examine their uniqueness, scalability, stability, and ability to monetize traffic. If I have to choose between being famous myself and letting others become famous, I would definitely vote for letting others become famous. The ultimate goal of being an internet celebrity is actually to express your opinions and influence the people you want to influence.

VR/AR, consoles and offline stores explode?

Otakus are definitely the first batch of users and early adopters of VR/AR. I just came back from the Japanese Anime Expo, and from what I observed, Akihabara is not as hot as everyone imagines. The concept is leading in China. In fact, the hardware needs to be ready before the content . How long is this cycle? Based on Moore's Law and IMAX's mature path, I guess it will take at least 5 years. The console market and offline experience stores are most likely to explode first in this field , because the console market is the most "homebound" and the people who are most likely to change. Offline experience stores are very suitable for opening in business districts in major Chinese cities.

E-sports: Subculture has a chance to shine

The reason for the development of e-sports is that subculture has become mainstream recognition, especially after the post-80s generation has gained their own voice . Users will pursue experience upgrades more, including technology upgrades and equipment upgrades. The opportunities here are especially brought about by a sense of identity. One example is that the transfer fee of the most expensive LOL player now is as high as 40 million RMB, which is basically the same as or even higher than the level of top players in many sports.

To sum up pan-entertainment investment, what we love most is a team that is smart and passionate . The threshold for pan-entertainment entrepreneurship itself is not high, but at the same time the ceiling is difficult to break through . We hope to see "new" projects, and IDG Capital, as a VC institution with passion and warmth, hopes to invest more in companies with ideals and culture.

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