Expert Meeting Minutes | Maoyan Entertainment Telephone Conference Exchange Minutes

1. In 2022, the content segment became the company's first revenue segment for the first time. In 2015, all the company's revenue basically came from ticket sales. In 2023, the content and service segment became the first. We can see the industry changes and the company's growth. Chance.

2. The company's content segment will see breakthrough growth in 2021 and 2022, and will be affected by the epidemic in 3-6 months of 2022, but the company has overcome difficulties and outperformed the market. The company's domestic film participation is very high. For three consecutive Spring Festival files from 2021 to 2023, Maoyan participated in the distribution/production of films that were either the first or the second, including "Hello, Li Huanying", "This Killer Is Not So Calm" and "Manjianghong". This represents the underlying logical growth that the company has achieved in recent years, that is, it does not want the company to rely on luck, but to improve its capabilities in a solid manner and realize the accumulation of core capabilities of "product + system + organization".

3. The company's market space is not limited to mainland China. In December, the company cooperated with the Hong Kong City Ticketing Network, and the performance venues under the government, such as Hung Hom, basically use the Maoyan system. The performance market will rebound significantly in 2023. There will be more than 9,400 commercial performances nationwide during the Spring Festival holiday in 2023, a 40% increase from 2022 and a 22.5% year-on-year increase from 2019.

In 2022, the entertainment industry will still face the complex epidemic situation and the resulting risks and challenges. In 2022, the total box office of movies in mainland China (including service fees) will drop by 36.38% year-on-year to 30.067 billion yuan, and the performance market will also be greatly affected. Against such a severe background, in 2022, the company's overall performance will outperform the broader market, its revenue structure will be further optimized, and it will continue to maintain profitability. The ability to resist risks and the driving force for business development will continue to increase. In particular, the entertainment content business will continue to grow in 2022, and the revenue of the sector will outperform the broader market. The company's publicity and distribution capabilities and market coverage have been further verified.

As an important participant in the entertainment industry, the company continues to focus on the promotion, distribution, production and development of film content. In 2022, although the industry has been severely affected by the epidemic, based on the forward-looking layout of the business, the continuous deepening of the content, and the continuous precipitation and iteration of publicity and distribution capabilities, the company's entertainment content services will continue to grow and break through the market stage adverse effects of sexual decline. During the reporting period, the number and box office performance of the released films that the company participated in the distribution/production remained at the forefront of the industry. It is the proportion of the number of participating films and the number of main releases of the top ten domestic films at the annual box office, which is basically the same as that in 2021, and has significantly exceeded the pre-epidemic level.

In the field of publicity and distribution, the company gives full play to its advantages and capabilities in publicity and distribution resources and services, and continues to promote the transparency of real-time data. By grasping market trends, mining actual needs, iterating and innovating publicity and distribution products, optimizing the publicity and distribution path, Further enrich the intelligent publicity system. During the reporting period, the company took the lead in proposing the concept of "real-time publicity and distribution" to help users capture the dynamic changes of video publicity topics in real time. The company further promotes the "cloud charter" service to increase the conversion rate from publicity to consumption. In 2022, the order of the cloud charter will increase by about 50% year-on-year, and successfully cover 100% of domestic films with a box office of over 100 million. Moreover, the company achieved the first closed-loop publicity and distribution of WeChat video accounts in the industry during the 2023 Spring Festival, and continued to explore new paths for publicity and distribution.

These innovations and achievements reflect the company's stable performance in publicity and distribution in 2022. It is worth mentioning that in the three consecutive years of Spring Festival from 2021 to 2023, the films released by the company have successfully entered the top two at the box office, including "Man Jianghong", "This Killer Is Not So Calm", "Hello Li Huanying" , which fully reflects the continuous and stable content recognition ability of Maoyan for head videos, and the steady improvement of publicity and distribution capabilities. In the future, there will be a series of high-quality films released and produced by the company, such as "In the Octagonal Cage", "Student Dad", "Rescue the Suspect", "Crisis Route" and "Goldfinger", as well as "I passed by" developed by the company. Films such as "Storm" and "Game of Genius" are steadily advancing and will meet the audience at an appropriate time.

In 2023, the company will continue to build publicity, production and development capabilities. The company firmly believes that with the rapid recovery of the market, these efforts will strengthen the company's business and enable the company to seize growth potential. In fact, companies are already beginning to reap the relevant rewards of this effort. Among the 6 films in the 2023 Spring Festival file, the company participated in 4 films through distribution/production; among them, the box office of "Man Jianghong", which the company controlled the distribution and production of, has exceeded 4.5 billion yuan, becoming the box office champion of the Spring Festival file, and ranked among the top ten films in China. The sixth place in film history. In 2023, the company has already stockpiled highly anticipated high-quality films for release.

In 2022, the company's online movie ticketing service business and market competitiveness will continue to be stable, and it will continue to maintain its leading position in the industry. The company continued to deepen strategic cooperation with Tencent and Meituan to further consolidate its user base. In addition, the company continues to actively serve the industry, contribute value, explore user and theater promotion activities, and provide first-class ticketing services for many domestic film festivals.

In 2022, the company will continue to invest in and develop live performance services, including online performance ticketing services, and continue to actively explore and develop performance project investment, production and IP development. The company's efforts to explore live entertainment have achieved certain results. For example, the company has successfully released the immersive food interactive drama "Playful Adventurer", the immersive interactive drama "Playful Studio", and the immersive game theater "Rising Fame". Since 2023, with the rapid recovery of the entertainment market, various live entertainment projects including large-scale concerts and music festivals have returned one after another, and the company will continue to provide professional services for various high-quality projects. The related sites of Carnival World Tour provide ticket agency services.

Relying on its professional ticketing system service capabilities and rich industry experience, the company has successfully started cooperation with Hong Kong City Ticketing Network, providing it with ticketing system and operation services, and serving the performance business in Hong Kong. From December 2022, the new ticketing system with a larger capacity developed by the company has been officially launched, which can effectively handle the ticket purchase needs of multiple performances. Multiple performances out of the project. In the future, based on the company's deep understanding of the performance market and the continuous construction of a professional service team, the company will also plan to provide further performance ticketing and other services for audiences in Hong Kong and other regions.

In 2022, the company will continue to enrich the publicity and distribution product tools to help the film achieve the best publicity and distribution effect, and the commercial value of the product will be significantly improved. In order to support the further implementation of publicity and distribution products, the company continues to expand market channels, enrich publicity and distribution resources, and improve the reach network covering all scenes of online and offline life of users. The number of films served by channel capabilities accounts for 60% of the annual films; in content marketing services , the company has expanded from movies to TV dramas and filmmakers, and has formed in-depth cooperation with multiple platforms. The number of projects served has increased by more than 50% year-on-year.

In 2022, the company will continue to refine its data capabilities and services. With its dedicated data analysis and rich knowledge of the entertainment market, it is committed to helping improve industry efficiency and transparency, solving pain points, and consolidating industry-wide service capabilities. During the reporting period, the company's Maoyan Professional Edition further enriched the data diversity and improved the efficiency of data services. The "Real-time Hot Search" was launched to provide industry partners with the required publicity data with second-level efficiency.

With the continuous optimization and adjustment of the national epidemic prevention and control policy, since December 2022, the operating rate of theaters across the country has increased rapidly, and the entertainment industry has recovered significantly. The 2023 Spring Festival file has a total box office of 6.758 billion yuan and ranks second in the Spring Festival file of Chinese film history. Live entertainment activities are gradually recovering with the normalization of large-scale concerts and other live events. These all reflect the strong resilience and strength of the Chinese entertainment market. vigorous vitality.

Looking forward to the future, the company will continue to strengthen the breadth and depth of participation in the promotion, production and development of headline films. In terms of live performances, the company will also closely follow the strong recovery trend of the performance market and increase its business development, including ticketing services for live performances, production and distribution of live performance projects. In terms of movie ticketing business, the company will also continue to reduce costs and increase efficiency while continuing to steadily develop movie ticketing service business, and increase profit margins. In addition, based on the company's compound advantages covering both technology services and entertainment industries, the company will also actively explore other innovative business areas and regions.

A: Regardless of whether it is the relevant state departments or the media, this question has been asked after the Spring Festival. The company has conveyed its confidence in the industry in the form of a Maoyan researcher on many occasions. From a short-term and long-term perspective, the film market is optimistic and confident:

1) Favorable national policies : The country is very supportive of the film industry, including cultural power, film power, and cultural confidence. Many positive policies can be seen in the industry. The national and local film bureaus continue to introduce policies to benefit the people, which will really help the market recover, help creations, and drive audiences back to theaters. Maoyan has participated in many subsidy activities with the state, and the subsidy amount is very high.

2) The demand side is strong : the audience's willingness to watch movies is always very strong, and it will not disappear due to the form of online entertainment, especially for particularly high-quality content. Cinema viewing has social, consumption, and leisure attributes at the same time, and these needs cannot be replaced by others. The audience's desire for high-quality content is obvious to all, including the previous "Watergate Bridge", "This Killer Is Not Calm", 2023 "The Wandering Earth 2", "Man Jianghong", and 2022 "Lonely on the Moon" and "Life Events". Very good box office and word of mouth.

3) Supply-side recovery : At present, the supply-side recovery is very fast. With the optimization of prevention and control policies, various industries will resume work and production in early December, and the operating rate of theaters will increase from less than 40% in November 2022 to more than 80% in December; The reserve and start-up projects have been greatly increased, and the quantity and quality of imported films have also increased, including "Journey to Bell Bud" just released today, "Slam Dunk" released in April, and the follow-up "Mission: Impossible 7" and "Speed ​​and Speed". Passion 10" and so on.

From these three perspectives, we can see that Maoyan has confidence in the market, especially during the Spring Festival. In the Spring Festival, the seven films have various types and have their own advantages, attracting 129 million viewers. "The Red River", "The Wandering Earth 2" and "Bear Infested" have achieved both box office and word-of-mouth. The Spring Festival box office has a box office of 6.76 billion yuan. Second Spring Festival stalls. The first Spring Festival file after the epidemic performed well, injecting a boost to the industry. From a longer-term perspective, the market space is not simply going back to before the epidemic. There should be a lot of room for growth on the basis before the epidemic. Content, audience, and marketing may see better development. For example, the proportion of third- and fourth-tier audiences and young audiences continues to increase, and many of them are the possibility of incremental markets.

Going back to Maoyan, 2022 is the first time that the content segment has become the company’s top revenue segment. In 2015, all of the company’s revenue basically came from ticket sales. In 2023, the content and service segment will become the first. We can see the changes in the industry and the company. opportunities for growth. Maoyan’s business and future development are not limited to the film industry. New businesses such as exploring overseas and fast-growing performances will expand Maoyan’s pattern to a larger field, and we can see more hope for future possibilities. Movies and ticketing are the starting point of the company, but they are no longer the first source of income; in the future, it is also possible that the film industry will no longer be the largest source of income.

A: The company's content segment will see breakthrough growth in 2021 and 2022, and will be affected by the epidemic in 3 to 6 months of 2022, but the company has overcome difficulties and outperformed the market. The company's domestic film participation is very high. For three consecutive Spring Festival files from 2021 to 2023, Maoyan participated in the distribution/production of films that were either the first or the second, including "Hello, Li Huanying", "This Killer Is Not So Calm" and "Manjianghong". This represents the underlying logical growth that the company has achieved in recent years, that is, it does not want the company to rely on luck, but to improve its capabilities in a solid manner and realize the accumulation of core capabilities of "product + system + organization".

In terms of products, the company itself is a technology company, and has formed a good accumulation from the aspects of quantification, information, and tools. Chartered venues, etc., there are still many products that are still being polished. On the one hand, the company hopes to improve the industry's ability to apply data and technology. On the other hand, the company is also constantly improving its own cognition, learning and growth, and constantly optimizing products and systems in the underlying cognition. In terms of organization, the company has also undergone great changes in the organization and talent echelon in recent years. It has continuously promoted and cultivated outstanding young people with learning ability, and they have reached management positions and the executive level of the new team. The team has strong learning ability, conscientiousness. It is difficult to find such a combination in the industry, and Maoyan has a special growth path. Maoyan’s ability to identify excellent content is based on its leading data analysis capabilities. It has relatively accurate identification capabilities for scripts, finished films, main creators, box office predictions, etc., and is gradually developing upstream. From the analysis ability focusing on box office and user portraits, to the gradually increasing participation in main creation and editing, all of them have been continuously precipitated and strengthened with the accumulation of the company. In the future, the company will continue to improve its capabilities along this path, increase the participation and publicity of headline schedules and headline films, and participate in driving the growth of the industry through Maoyan.

Subsequent films unilaterally, participated in the production and distribution of films including "Not Ending" (3.24), "Hachiko" (3.31), "Universe Exploration Editorial Department" (4.1), "King of the Sky" (4.28), "Unfamiliar Life" "(4.28) "Prosecution" (4.29) "Castle in the Sky" (6.1). It can be seen that Maoyan continues to increase its content reserves, with 40 to 50 films to be screened each year. The main released films include the realistic film "In the Octagonal Cage" directed and acted by Wang Baoqiang himself, and the re-cooperation between Tony Leung and Andy Lau after 20 years The crime drama "Goldfinger", starring Andy Lau and Zhang Zifeng, and "Crisis Route" starring Wang Yuan and "Stars and Seas" starring Wang Yuan will also be released.

A: In 2023, the growth of offline performing arts and ticket sales exceeded expectations at the beginning of the year, and the rebound is very good. The audience's willingness to participate in performances and offline activities is very high. In various fields such as immersive performances, the company hopes to serve high-quality content, help each category to do a good job in service and transaction, and do a good job in publicity and layout. This is the company's key idea in the field layout. In order to achieve this goal, the company needs a lot of basic work, even if it takes a long time, the company is willing to invest financial resources and manpower. To be specific, the company has been deploying offline performing arts ticketing almost since 2018. At that time, Damai had a market share of more than 80%. Complete. Therefore, the offline ticketing field is not only an incremental market, Maoyan will further outperform the market in the incremental market and gradually gain the No. 1 position in the market.

The company believes that the offline ticketing performance industry chain will have a situation similar to that of the film industry, that is, the logic of moving from ticketing to the upstream. For example, the company will increase the production of immersive performances in 2022. Shenzhen; in 2023, "Playful Studio" will be opened in Shanghai. At the same time, the immersive game drama "Fame and Li Wan" will be produced, which will be performed in Shanghai Great World. Later, "Legend of the Pearl" will perform interactively on the boat on the Huangpu River. These are new explorations of the company. The new young crowd and consumers will increasingly demand live entertainment, and it will not be limited to limited formats. The company will serve the existing forms, and explore various novel forms of entertainment that new consumer groups need. On the one hand, it will lay a good foundation, and on the other hand, it will go upstream.

The company's market space is not limited to mainland China. In December, the company cooperated with the Hong Kong City Ticketing Network. The performance venues under the government such as Hung Hom basically use the Maoyan system, which not only covers online websites, but also has offline ticketing services and ticket checking systems. , The management is orderly, and it has received good feedback from the Hong Kong audience. As Hong Kong gradually contacts more venues, performance venues and partners in Hong Kong, Macau and other places have expressed interest in the company's services, and will see if it is more likely to serve more partners.

The performance market will rebound significantly in 2023. There will be more than 9,400 commercial performances nationwide during the Spring Festival holiday in 2023, a 40% increase from 2022 and a 22.5% year-on-year increase from 2019. With the optimization of the epidemic prevention and control policy, concerts and large-scale concerts by leading artists have all entered the approval process. I believe that 2023 will have good results. Maoyan invests more in the long-term and does not want to ask for short-term results. In essence, it hopes to make the business run further in terms of basic capabilities and service system building. This is the company's confidence to grow patiently and long-term with the performing arts industry. The company is optimistic about the industry in the long run , and hope to grow together with the industry.

A: The company has always been a close partner with Tencent and Meituan, not just a strategic shareholder. The advantages of the company and the two parties have a good synergy effect, and have an irreplaceable support effect for each other. Through this cooperation, the company will consolidate each other's value, user base and service perfection. In addition to the traffic portal, the company is also implementing some in-depth cooperation, such as the launch of trailers on the video account during the Spring Festival, which is a leading attempt and experience in Tencent's product system. The company not only collaborates with Tencent and Meituan on products and operations, but also innovates together: cooperates with Tencent on film promotion, content investment and production, advertising marketing, etc., and has rich cooperation with Meituan on traffic cooperation, infrastructure construction, and transaction conclusion. It is mentioned in the contract renewal announcement that this renewal will incur corresponding cost expenditures, but the company believes that it will not have a fundamental impact on the profit trend, and at the same time the company will continue to optimize costs and improve efficiency. On the whole, I believe that maintaining cooperation with the two companies will have a positive effect on the company's development.

A: The main strategic direction in recent years is the "technology + pan-entertainment" track. The company is thinking about which has more priorities under the overall strategic direction. The exploration in the past few years has been adjusted over time.

1) Entertainment content business: This segment is the focus of strategic development in the past three years. Everyone can see that the company has achieved corresponding results, and the results can be seen in terms of participation, penetration, growth of self-owned capabilities, and excellent content recognition capabilities. There is still a lot of room in the future, and the previously mentioned "product + system + organization" also has room for development.

2) Live entertainment and performances: The market has not yet fully shown its due potential. The company hopes to achieve common development with the industry in terms of product and service capabilities through earlier layout.

3) Technology: The company is a technology company that needs to continuously optimize the underlying core capabilities to create more value for the entire industry. The company's data capabilities are commonly used by the industry. Many services and products are industry firsts, such as real-time publicity and real-time hot search , cloud chartering, etc., driving the industry to use data and intelligence to understand the underlying core capabilities. The company is also exploring new technologies such as AIGC, etc., to understand the impact of new technologies and capabilities on the industry, and how to affect the industrial structure, production and production process. In the process of continuous exploration, the company also helps the industry to recognize the new organizational structure.

4) Going out to sea: The company has been exploring the plan to go out to sea. In December 2022, the company will take the first step, covering local performance business in Hong Kong, with a full set of system services, supporting multiple languages ​​and scenes, including venues, sports events, scenic spots, theaters, etc., to provide The audience provides good services, and the company is more confident to go to more overseas markets.

5) Innovation: In addition to exploring overseas, the company also continues to explore and innovate. Specifically, an IP may be able to explore other upstream monetization capabilities. For example, the dark horse work "Being Famous" may be made into an immersive theater, and IP helps partners eat more with one fish in derivatives. Innovation is also reflected in the continuously growing AIGC. The impact of AI and GC on the industrial chain is different. The company will consider embedding part of its capabilities into the company's processes to explore whether it will bring about efficiency improvements and cost reductions, helping the industry and partners to grow better . It is hard to say what form it will grow into in the future, but it is very in line with the company's "technology + full entertainment" framework. The company believes that under this framework, the company will enter upstream from ticketing, from upstream to production, from a single film industry to performances, and from performances to media in different fields. Judging from the past few years, the company has continued to cut into new fields, and there will be new breakthroughs under the overall strategic framework in the future.