CATDOLL: IP Universe Explodes Aofei•You Yaoqi Together Media Exchange Meeting Q&A with Reporters

On the afternoon of August 12, 2015, a media exchange meeting themed "IP Universe Explosion - Aofei·YouYaoqi Together" was officially held in the conference hall of Beijing National Hotel. Chen Derong, senior vice president of Aofei Animation and Interactive Entertainment CEO, Zhou Jingqi, founder and CEO of YouYaoqi, and many well-known media attended the event. The Q&A session was as follows:

Host : Good afternoon, friends from the media. I wonder how you feel about this press conference. Although I have watched it several times over the past few days, I couldn't help but feel moved when I watched it backstage. It was very shocking. We also invited two male gods from the press conference here, one is Zhou Jingqi, a handsome man with a lot of feelings from You Yaoqi, and Mr. Chen from Alpha Animation. He is a very fun person. Our original intention was to hold a more entertaining and two-dimensional media press conference. I hope everyone can speak freely and have more exchanges. Now we are open to media questions.

Q : Hello, Mr. Chen. I am from Southern Metropolis Daily. I have a question about the valuation of You Yao Qi. In 2013, the IP of Pleasant Goat alone was worth more than 500 million yuan. Why is the IP gold mine of You Yao Qi worth 900 million yuan? Can you introduce this valuation? Thank you.

Mr. Chen : This is a very interesting question. First of all, there is really no way to compare the two. The situation of each case was different at the time. How can we say that? We thought we had found a gold mine with YouYaoQi. In fact, some people offered a higher price than us. But in the end, as Jingqi said at the meeting, we are really suitable to be together. We have met more than 17 times, and our ideas are very similar. So in terms of price, I believe that in the future, we will prove to everyone that the value of YouYaoQi will be immeasurable.

Host : Thank you, Mr. Chen. I was worried that everyone would ask us if we bought it too expensive, but it turns out that they asked us if we bought it too cheap.

Q : Hello, Mr. Chen. I am a reporter from 21st Century Business Herald. I would like to ask, after we have acquired YouYaoQi, will the original YouYaoQi team continue to be retained? Will Aofei make any changes to its organizational structure in the future?

Mr. Chen : Both of us can answer this question, I will answer it first. From the perspective of Aofei, YouYaoQi will definitely maintain its integrity and independence, because YouYaoQi is a very special treasure mine, it has very special features, if this treasure mine wants to really flourish in the future, it must maintain its independence, so YouYaoQi will be independent, many sectors of YouYaoQi will be independent, and the YouYaoQi team will work hand in hand with Aofei. I would like to ask Jingqi to make some additional comments.

Mr. Zhou : Indeed, animation is something that can be done for a long time. During this process, Aofei and I, as mentioned in the previous question, have always been unwilling to set the price very high. There are companies willing to set higher prices, but we want to choose the most suitable one. We want to go on and keep the YouYaoQi brand intact, but it will not become a simple tool. Therefore, YouYaoQi will maintain independent operation and continue to carry forward its own ideas. We hope that it can continue to continue, and it can continue to gain more support in the animation industry and influence more people. Secondly, our team, Aofei has never said that there will be management coming in, and YouYaoQi has never said that it will replace any executives or main colleagues. We will continue to grow and become stronger within this system. Thank you.

Q : Hello, I am from the Wall Street Journal. I have a question about internationalization. I would like to ask the two heads of Aofei. You just mentioned that Aofei has already made some international moves, including the contract signed at the end of last year. We would like to know what the current status of these international cooperation is? We have seen that many other companies have various cooperations with Hollywood one after another, but then, there is no later. I would like to ask about the progress of Aofei's cooperation with the Hollywood team, including what difficulties it has encountered? In addition, what other international actions will be taken in the near future?

Mr. Chen : I will answer first, and then Mr. Su will answer. Alpha's internationalization is not something that has just started today. Ten years ago, 30% of Alpha's business came from overseas. Secondly, Alpha has started a very famous domestic project with overseas companies in the past few years. I believe this project will have good results next year. This project is also being actively implemented. It is a large bilateral cooperation project and a very deep project. From products, creativity, animation and many other aspects, Alpha has also carried out many animation and children's themes with many companies in Europe, Asia, the United States and other countries before this. This is the first level.

On the second level, in the field of pan-entertainment, the first is naturally the film industry. Mr. Su will introduce the details later, but from my perspective, I can tell you that what you just said is also what we think about when we cooperate overseas. We can't make a lot of noise but not get results, and we can't have a beginning without an end. It is indeed not an easy thing to go international. However, since Aofei itself started out as an industry, we will learn from previous experiences and lessons in the way Aofei goes international. Internationalization is based on your needs. Aofei's internationalization is not because everyone else is going international, so we are very clear about what needs we have for internationalization. Simply put, we hope to make up for our shortcomings. What are our strengths? Others also have needs for us. So this is a kind of clear need between both parties, not just for internationalization, so I believe our projects will be more solid and more practical. Please let Mr. Su introduce the specific projects.

Mr. Su : Basically, we don’t call what we did in the past internationalization, we are now globalization. Because the several waves of international films we invested in last year were also distributed globally, we are responsible for the distribution in China and Southeast Asia, and the overseas distribution is still through several existing channels. We hope that our team and the American team can have a run-in, we learn their overall global operation, including setting up a pan-entertainment company in the United States in the future. Through cooperation with the United States, we will give our existing team a good foundation to go to the United States, so Aofei Pictures may have a press conference before the end of the year, and this press conference will reiterate our overall plan to everyone.

In addition, our layout is not only in the film industry, and not only in investing in films. Many companies that do internationalization just invest in films, simply seeking returns and recovery, but we start from the source, from the IP, the story content, from the source, including the idea of ​​participation. We participate in all aspects of them, including the story and content. It is not just a basic investment of money, but an overall cooperation. They help us do other things, and we also help them enter China. We have a mutual need, including that one of the shareholders of YouYaoQi is the director of "Transformers", and we will have deeper cooperation in the future. This is also at YouYaoQi's press conference today, and I am not convenient to talk about it.

Q : I have two questions. I saw that "Ten Cold" became the Chinese film with the highest box office return rate in the past 30 years. What is the specific situation?

Mr. Zhou : This statement is not quite accurate. It should be one of the movies with the highest box office return rate. It is not the highest. In fact, we ourselves do not know. We went to the Radio and Television Bureau, and the leaders of the Radio and Television Bureau told us that you are similar to one of the movies with the highest box office return rate in the Chinese film market. "One Hundred Thousand Bad Jokes" ranks tenth, the first is "Lost in Thailand", with a return rate of 1000%, "Ten Cold Jokes" is tenth, with a return rate of 500%, and the ninth is "Love Is Not Blind", with a return rate of 600%. So relatively speaking, and from the perspective of animation, it is the animation with the highest return rate so far. Of course, now with "The Return of the Great Sage", we are not sure whether it will be overtaken, but everyone is moving forward in this way. It is a good thing for you to surpass me.

Q : The theme park was mentioned at the press conference. I would like to ask about the planning of the theme park and Aofei. How long will it take for Aofei to actually implement it?

Mr. Chen : As we all know, theme parks are a very important sector in the entire pan-entertainment industry. Theme parks are already on the agenda of Aofei. It is difficult for us to give you a clear and specific timetable here, but I believe that Aofei has so many IPs. In China, I would like to explain that one of the characteristics of theme parks is "theme". It is not an amusement park, not an amusement park, and it is not about equipment, but about culture and themes. From this perspective, we believe that Aofei is the company with the most potential to build theme parks in China. So this is already on our agenda. With YouYaoQi and Aofei together, we believe that the process will be accelerated.

Mr. Zhou : I would like to add two sentences. The theme park is like this. We regard it as the ultimate form. It requires several prerequisites. The first prerequisite is that there must be a lot of content and IP. If there are such conditions in China, we will have such conditions after combining with Aofei. The second is to achieve great success, with a wide range of influence, recognition and popularity, which is in line with our entire strategic goals and direction. The third is that when I was working on YouYaoQi, I always told my colleagues that Walt Disney, the founder of Disney, did not see his theme park built before he died. It was built ten years after his death. At that time, we asked whether we could see it in our lifetime, but it was on our agenda. We have been describing this grand plan from the very beginning. It is very close to us, maybe three to five years, maybe ten to eight years, but it is not far away. I think ten years will pass in the blink of an eye for us. I have been working on YouYaoQi for ten years. In another ten years, maybe our dream will come true.

Moderator : With the development of various technologies, including virtual reality, Aofei calls itself the Disney of the new era, but maybe it won't take that long. Finally, I have three questions.

Q : Because today's topic is IP, I will ask the two companies two questions. The first is that you also position yourself as an Internet company. What is the difference between making animation in the Internet era and the era when television was the main communication channel? The second question is that animation and film and television are very popular recently, such as "The Return of the Great Sage", "Monster Hunt" and "One Hundred Thousand Bad Jokes". These are three different types of IP. "The Return of the Great Sage" is a public IP. Everyone knows that Huba is a made-up IP that suddenly appeared. "Ten Cold" and "Pleasant Goat" are IPs that have been accumulated for a long time. What are the advantages and disadvantages of operating these three IPs in the current market? Do you have a judgment in your mind which one may be more successful? Ask these two companies.

Mr. Zhou : Because we were all Internet people before we did animation. We loved animation but had never entered the animation industry. We didn’t know animation people, cartoonists, or anything. So when we came in, the animation industry was wondering who we were and how we suddenly came in. For people in the animation industry, we are Internet people, but when we face Internet people, we say we are cultural people and animation people. We have a very complex positioning and characterization. Internet companies now also say that online needs offline, offline needs online, tradition needs the Internet, and the Internet needs tradition. Everyone’s identity is becoming more and more mixed. I think it’s just that we need to adapt to this new era in the new era, and many animation companies have not adapted to this new era. They still follow the original path, but experience may be your biggest enemy. In the Internet era, when everyone's communication methods, communication methods, and gameplay have begun to change, animation used to be like this. When making TV, there were regulations on how long an episode of animation should be. How about 23 minutes? It must be shot in a certain number of episodes, like 14 episodes, 12 episodes, etc., and it must be this level. But in the Internet era, these rules are no longer applicable, even the width and height of our screens are no longer applicable, including your broadcast time, duration, sound and light, sound effects, and many other things. You can play with them at will. In the Internet era, no one cares about you, they only care about whether your creativity is enough and whether it can catch my eye. This is one of the biggest changes in the Internet.

Second, the Internet has its own rules for success, and the Internet has its own rules for the preferences and interests of people in the new era of the Internet. We must pay attention to these rules and observe what young people on the current Internet like. I found that their interests change very quickly. They like new things, but they are sincere and enthusiastic. They also like things that are made with heart. Generally speaking, one is to understand the Internet, and the other is to understand contemporary young people, because young people are replaced every few years, and the young people of our generation may be different from this generation. The Internet age is an era of comprehensive contact with the arrival of new culture.

As for the differences between the IPs I mentioned earlier, I don't think there are any differences. Everyone has a day when they start from scratch. Some are very touching when they come out, and some walk slowly and reach their own position. For example, Boonie Bears was very popular in 2014, but I checked and found that it started from 2009 or 2007 or 2008, and one movie had a box office of 200 million yuan, close to 300 million yuan, and everyone has come this way. The Monkey King: Hero is Back was also made for six or seven years, and it was very hard to make. Sometimes the previous accumulation will be useful, but it is not necessarily necessary to have the previous accumulation. Good things will bloom by themselves. The key is whether you make good things. Opportunity is like a person who is very good, but you don't get lucky every day. Some people are poached by big companies as soon as they graduate from school, and some people have to shine slowly. This is fate, not a way to play. People are not willing to play this way. If you ask whether The Monkey King: Hero is willing to wait for so many years, it is definitely not willing. Thank you.

Mr. Chen : I think your question is very professional. I believe you are also thinking about this aspect. Frankly speaking, first, I don’t have an answer for you. In fact, this is also a question we are thinking about, and it is also what many cultural people in China are thinking about, but so far no one dares to pat their chests and say that my method will definitely succeed. Aofei has very successful experience in certain types of animation in the past. We can basically achieve a very low error rate, but many of our IPs have also been in business for many years. Everyone knows that "Pleasant Goat" has been around for nearly 10 years, "Balala" has also been around for nearly 10 years, including many other IPs, as well as the ones you just mentioned. China does need to think about it at the moment, but I can tell you one thing with confidence, everyone will definitely see more and more animations succeed, and there will be more successful examples than before, this is certain. "The Return of the Great Sage" is a miracle, but there is no way to pat your chest and say that the next one will also be "The Return of the Great Sage". This is no longer likely. But everyone can feel that in the Internet era, a big breakthrough point for Chinese animation will be on the Internet, because the number of animations on the Internet is obviously much larger than before. By next year, the entire YouYaoQi Internet animation will exceed 10. The current "Hinabee" is only the first episode, but it already has a great influence. So I personally think that since Americans are in movies and Japanese are on TV, Chinese should be on the Internet. This is our general directional determination.

Q : I have two questions. Let me introduce myself first. I am Chen Daosen (sound), a reporter from the WeChat public account Entertainment Capital Theory. My first question is for Mr. Su and Mr. Chen. When I was listening to the press conference just now, I admired Aofei's layout in the pan-entertainment sector very much. Games, movies, consumer products, portals, content creation, this entire covers the upstream, midstream and downstream of the pan-entertainment industry chain, but I would like Mr. Chen and Mr. Su to interpret the internal logic of the pan-entertainment layout? In which sectors will the biggest revenue or profit sources be in the future? The second question is for Mr. Zhou of You Yaoqi. Recently, I saw that this summer belongs to the summer season of animated movies. All investors, including distributors, are asking the same question, which movie will be the next "The Return of the Great Sage" or the next "Monster Hunt", and what kind of characteristics of animated movies can produce the ability to explode at the box office? I would like to hear your opinion.

Mr. Chen : Each question is very professional and challenging. The first question involves the layout of interactive entertainment and pan-entertainment mentioned by Aofei. In terms of structure and sectors, there is no big difference from the layout of many companies in the current cultural industry in China. For example, Tencent is on the same path. There is no special difference between everyone in games, movies, animation, comics, novels, traffic portals, etc. When Aofei does this, the basic idea is not very different from everyone else, but one difference is that Aofei still hopes to be a pan-entertainment company with its own foundation and expertise. Aofei will definitely not be a platform-dominated culture like BT, but Aofei should be centered on content. Content is the core in the entire pan-entertainment, and these contents will be relatively different. What exactly are these contents and what kind of path will the future be? Whether in movies or animations, or in these sectors, it can reflect Aofei's positioning on content. We hope that the content we make will have its own characteristics and will be more obvious in the industry. I don't know if I have made this clear. We cannot give a clear description of the content now, but you will see in the future that the content produced by Aofei is different from that of other companies. This content is the pan-entertainment layout of Aofei's entire Internet. It will have its particularity and uniqueness. Our benchmark is to become the Disney of the new era. This sentence may help you understand what the pan-entertainment of Aofei will look like in the future.

As for where there will be profits and the greatest value in the future, it is difficult to answer this question in general. We have seen many successful examples in the past. When it comes to a specific project or IP, it will actually generate profits between certain sectors. The methods of profit are different. Some are mainly from movies, some are mainly from consumer goods, and some are mainly from games. However, from the current situation in China, there are certain basic rules. For example, consumer goods are profitable. Games are very typical and are currently the main profitable place. We also see that many TV series and movies are also profitable. We also see that the profitability of You Yaoqi's animation works is also significantly improving. As for the profit outlet, we need to look at each specific example. It's probably like this.

Mr. Zhou : Where or how will the next "Monster Hunt" be born? I am afraid to answer such questions. I found a problem. After the rise of the cultural industry, the capital circle, the media circle and analysts all like to do one thing and try to analyze it to see how to copy it or make another one. But what is special is that we are in the cultural industry. It has no fixed pattern and it is almost impossible to copy it. It is always adapting to circumstances and constantly challenging you. When "Lost in Thailand" was first released, people would think about where the next "Lost in Thailand" would be, but it turned out that the next one was not "Lost in Thailand" but something else; when "Fast and Furious" was very good, everyone wondered who could surpass its box office, but found that it was not the same movie, but it might be "Monster Hunt" again. There is a very true saying in this industry, "Those who learn from me will live, those who are like me will die." Never say that the next work will be similar to this one, it will never be, it is often like this, think about what elements it has in it that are in line with the present, don't look at two or three years ago, just look at this year, say what people like now, when you make it, what people need in your year, go and analyze those things. Now, in my opinion, there are several elements that need to be possessed when making movies. The first is that the average age of the current moviegoers is constantly and rapidly getting younger, about 20 years old, and young people are becoming the main force of moviegoers. This group of people has distinctive characteristics. The first is that they are very smart. In the past, no matter whether the movie is good or bad, as long as it is made, everyone will watch it. Now it is no longer such an era. They know very well whether the movie is good or bad. The second is that the power of word of mouth in the Internet era has become extremely powerful. No matter what kind of movie it is, word of mouth is the most important. The word of mouth of a good movie can lift a movie to the sky, or it can make a big investment movie fall to the ground.

The second question you asked is how to produce a hit? One of its major characteristics is that it must be fresh and have a very strong sense of freshness. This work cannot be very similar to others, nor can it be something that has been released before. If there are three or five films like "The Return of the Great Sage", it may not have such a strong explosive effect, just because it is fresh. If there were films like "Monster Hunt" before, it would not have such an explosive effect today. Everyone thinks it is so fresh and must go and see it. It is the best special effects movie in Chinese history. So freshness is very important, and word of mouth is also very important. The third is to have love. This generation of young people is more romantic. They will unconditionally support what they love. When we watch "The Return of the Great Sage", there are often people who book the whole theater. When they agree with you, they will support you infinitely. This is very important. For this generation, the inner pursuit is much stronger than the material pursuit. Feelings and love influence him. The last point is not tired. At present, movies have entered the era of entertainment consumption. People don’t want to see things that are too tiring in the cinema. "1942" is very good, but everyone feels very tired. In the movie, not being tired is a big demand of moviegoers at present. Adding these points together, if there is a movie that possesses these comprehensive aspects, it should become the next hit.

Q : Mr. Chen, I’m a reporter from China Business News. In the past few years, Alpha Animation and Toys has continuously brought many opportunities to many animation and cultural companies through acquisitions. I would like to ask, what plans does Alpha Animation and Toys have for its own original team and continuous innovation?

Mr. Chen : Actually, Alpha Animation is developing on two legs. In today's China, facing such a huge market opportunity, Alpha must use many market means to achieve rapid development. Speaking of internal, you may know recently that we have a cartoon called "Peter Pan", which is a very outstanding cartoon. The ratings are very high in Korea and the United States. This is the display of Alpha's internal originality. In addition, we will bring you something new and different in projects such as "Pleasant Goat" and "Balala" in the future, just like the shocking things you saw at the conference today. I don't know if I answered your question.

Host : Thank you. Due to time constraints, today's press conference may come to an end. Finally, I would like to say that both Aofei and YouYaoQi are companies of very large scale and size. The creativity of these two companies and their understanding of love may produce something shocking or let us see more possibilities. We will have more expectations in the future, and hope that everyone will continue to pay attention to us in the future. Thank you.