YOLO’s ＂Yunian Qing 2＂ opened the explosion year, and AI, going to sea, and accelerating IP visualization drove medium and long-term growth.

On March 18th, Reading Group (0772.HK) announced its annual performance report for 2023. The report shows that in 2023, Reading Group achieved revenue of 7.01 billion yuan; The net profit attributable to shareholders of the company was 800 million yuan, up 32.3% year-on-year, and the corresponding net interest rate attributable to the mother reached 11.5%, up 3.5 percentage points year-on-year. At the same time, the operating profit of reading books reached 710 million yuan, up 12.8% year-on-year, which realized the double improvement of operating efficiency and profit performance.

Hou Xiaonan, CEO and President of Yuewen Group, said: "In 2023, Yuewen continued to build an IP life cycle development system across all content forms, and at the same time empowered creators with the latest AI technology to continuously consolidate the content ecology. In terms of online business, through a series of measures, such as optimizing product operation and channel structure, we have promoted the ecological competitiveness of fine content, and the growth of starting reading has reached a record high. At the same time, we announced the acquisition of Tencent animation assets, and the advantages of reading IP incubation and reserve have been continuously enhanced. In addition, in the field of IP visualization and commercialization, we present a series of high-quality works to users, and actively explore emerging content forms such as high-quality short plays. We believe that in the wave of industry upgrading, reading articles is ready in terms of high-quality content storage, ecological cooperation and technological innovation. We will continue to adhere to the core values of’ content, platform, IP’, realize our mission, and make good stories endless. "

According to the performance report, in 2023, Reading Wen continued to improve its platform capability to serve the content creation ecology, focusing on the strategy of producing high-quality boutique content, implementing strong anti-piracy measures and optimizing the operation of core products. The online business realized revenue of 3.95 billion yuan, of which the income from reading core self-owned products increased by 40% year-on-year.

Driven by the strategy of high-quality content, the ecological quality and vitality of content creation of reading articles have been continuously improved. The data shows that the number of new writers on the platform has reached 380,000, the number of new works has exceeded 670,000, and the number of new words has reached 39 billion. Among them, the continuous improvement of the number of new creators and the outstanding performance are particularly eye-catching. It is reported that after 60% of the new writers in the reading platform in 2023 were 00, the number of new writers whose total income exceeded 100,000 yuan increased by 60% year-on-year; Among the new books whose income exceeds 1 million yuan, new writers account for nearly one-third; After 00, the number of writers whose works have been ordered for more than 10,000 yuan has increased by 230% year-on-year. A new generation of young writers are becoming the main force in the creation of reading platforms, and they are mutually positive elements of ecological circulation with the operation of platform products.

On the user side, with the IP community as the link, reading articles continuously strengthens the close connection between readers and works through a series of operational activities. For example, the number of words in "This Chapter" of "The Ring of Destiny" read at the starting point in 2023 totaled over 70 million, and a single user dubbed the work for over 2,800 times. At the same time, the official theme station "Curly Baboon Research Association" built by the platform for "The Lord of Secrets" gathered over 600,000 fans in the first month of its launch by relying on new interactive methods, and the daily activities of users increased by over 200% month-on-month, which not only effectively enhanced the user’s stickiness, but also provided a new path and new amount for the creation of "secretive" audio books, blind boxes, adapted animations and other categories.

Thanks to the active creative ecology, the continuous improvement of product operation and the effective copyright protection mechanism, the "starting point reading" of Yuewen has shown a continuous growth trend in recent years, and its revenue increased by 40% in 2023. At the same time, the subscription records of the platform have been continuously broken, and the number of newly added works with orders of 100,000 has increased by 125% year-on-year; The number of new books with millions of comments on the platform increased by 67% year-on-year; The number of works that received 100,000 monthly tickets in the whole year increased by 66% year-on-year. In 2023, the average MAU of reading platform reached 210 million, and the average number of monthly paying users reached 8.7 million, up 10.1% year-on-year.

Hou Xiaonan said: "In order to realize the social and commercial value of head IP in the whole life cycle, it is necessary to carry out systematic and integrated development. Therefore, reading has always been the top priority to build an IP life cycle development system that spans all content forms. "

During the reporting period, reading continued to consolidate the construction of high-quality IP life cycle development ecology, and increased the explosion rate of different content forms. The data shows that in 2023, the copyright operation and other income of Reading Group was 3.06 billion yuan, with a growth rate of 46.2% in the second half of the year, which was obvious.

In terms of film and television, following the explosive works such as Joy of Life’s "My Husband", "The World" and "Hi, Mom", in 2023, Yuewen successively released some excellent hit works such as "Let the Wind Rise", "Ordinary Road", "The Sun Accompany Me" and "The Stalker". Among them, the popularity of "Ordinary Road" remained high during the broadcast period, ranking first in the hit list of Tencent video TV series for 16 consecutive days, ranking first in the prime-time TV series ratings of China Audio-visual Big Data (CVB) for 15 consecutive days, and ranking first in the popularity list of multiple third-party professional video data platforms; "Sun with Me" ranked first in the cool cloud full-end broadcast volume list for 16 consecutive days; During the broadcast of "Stalker", it ranked first in the prime-time TV series ratings of audio-visual big data in China.

In the field of animation, Reading has continuously introduced sequels and new versions of classic IP-adapted animation, which keeps the IP content in the head high. During the period, high-profile animation sequels such as Breaking the Sky, Stars Change, Full-time Magician and Wu Dong Gan Kun performed brilliantly, especially "Breaking the Sky Year" topped the list of the most popular animation in Weibo for three consecutive months, and continues to maintain the popularity of the first animation popularity in the whole network. According to Yunhe data, among the top 10 works in the animation play list of the whole network in 2023, there are 6 IP adapted from reading texts.

In the field of comics, among the comic works adapted from reading IP launched in 2023, 13 comics have exceeded 100 million in popularity. At the same time, Yuewen Group announced its intention to acquire Tencent’s animation assets, and incorporated well-known Guoman IP such as One Man, Fox Demon and Little Matchmaker into the copyright library, enriching the IP reserve of the reading head, and further consolidating the cooperative production line of novels and supplementing the animation production capacity.

In the field of games, the successful launch of works authorized by Yuewen, such as Biography of Immortals and Swallowing the Starry Sky, and the smooth progress of IP game projects such as Breaking the Sky and Daily Life of Chat Groups, show the competitiveness of Yuewen IP in the game market. At the same time, the self-operated ability of reading games is also constantly improving. The continuous iteration and optimization of "New Douro Continent" has brought players a more immersive game experience. In the future, self-operated reading games such as "Breaking the Sky: A Three-Year Covenant" and "Da Feng Da Geng Ren" will also meet with you one after another.

In the Spring Festival of 2024, YOLO, a film jointly produced by Xinli Film and Yuewen Film and Television under Yuewen Group, won the box office championship, with a total box office exceeding 3.4 billion yuan, which opened the "explosive year" of reading. In the follow-up, reading will also usher in the big product cycle of IP business. In addition to YOLO, the film Under the Alien, which was co-directed by Yue Wen and Wu Ershan, and the film Customs Front, which was co-directed by Emperor Huang, are progressing smoothly. In terms of drama series, in the major lists of dramas to be broadcast in 2024, the content of "reading and producing" is very high. In the most anticipated list of Tencent’s videos, Joy of Life’s second season, With the Phoenix, Da Feng Da Geng Ren, Rose Story and other works are in the forefront. Among them, the number of Tencent video bookings in the second quarter of Joy of Life has exceeded 12 million, which is the first drama series in the whole network to make reservations of over 10 million.

On the basis of continuously consolidating the basic skills of IP ecology and improving the development efficiency of IP life cycle, Reading also actively explores emerging content forms such as short plays, accelerates the comprehensive application of AI in IP ecology and the process of going to sea, thus driving the long-term diversified growth of the company’s business.

In terms of short plays, in 2023, Yuewen Group released the "Star River Incubation Plan for Short Plays", and launched three major initiatives: 100 IP cultivation plans, 100 million yuan creative fund support and exploration of interactive short plays. At present, there have been several short plays in reading, and the animation production capacity has expanded after the acquisition of Tencent Animation, and the IP visualization of reading is expected to be further accelerated.

In terms of AI technology empowerment, in 2023, Wenwen released the first large model in the online text industry, "Reading Wonderful Pen" and the wonderful pen version of the writer’s assistant. The latter is now open to all contracted writers who read the text, and the utilization rate of AI function week reaches 30%. In addition, as an important application scenario of AI application, AI Machine Flip is expected to help WebNovel, an overseas reading platform, gradually establish a strategic competitive advantage in some core areas. In December, 2023, among the top 100 works in WebNovel bestseller list, 21 were translated by AI.

The overseas business process of reading is also accelerating. The overseas reading platform WebNovel provides about 3,800 Chinese translations and about 620,000 local original works. At the same time, YOLO and Joy of Life’s second season and other high-quality works are also released globally, or contribute new performance growth points for reading.

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