It may be the property company that killed Focus.

In the past decade, only two industries have become more and more expensive, one is traffic and the other is real estate.

Some people say that Focus Media (SZ:002027) is simply amazing, because it is equivalent to "traffic+real estate". This is inappropriate. Everyone knows that Focus's elevator media resources are rich and well located, but these resources are rented.

In other words, its offline traffic entrance is stuck in the hands of the property.

When Focus was privatized, it was because of the story of elevator media that Wall Street didn't accept it.

This can't be weird Americans. There is no such thing in their daily life. In Europe and America, because of the completely different understanding of property rights, it is really difficult for advertising companies to negotiate pricing with owners in order to get elevator resources.

Not to mention the loop "shoot wherever you want", and the crooked nut reports that you violated my "right to silence" in minutes.

When we arrived here, the owner was too weak, and these things were handed over to the property agent. When the screen enters the elevator, there is income every year, and the rest is the distribution of interests between the owners and the property, which has little to do with the advertising company.

In 2009, some owners sued Focus for being harassed by elevator advertisements, believing that it violated their own rights and interests and finally went away.

Ten years later, Focus's career is getting bigger and bigger.

Let's just say that Focus's media resources are very dense, forming a network. Property resources are very scattered, and only in this network can a single property attract high-quality advertisers and get the greatest benefits. Therefore, in the cooperation between Focus and property, the bargaining power lies in Focus.

In 20 17, Focus had 15 10000 advertising spaces in China, and the annual media rental fee was 2.466 billion, up only 8.45% year-on-year, less than 200 million. Ignoring the expansion factor and sharing it, the rent increase of this property to Focus is only 130 yuan/set.

"The repeat signing rate of focus real estate is over 95%. The re-signing rate is high and the probability of being taken away from the building is low. "

Therefore, even if the trendy wave that is not afraid of death raises the banner of resistance and vows to overthrow the tyranny of Focus, and the upstream and downstream are fair, Focus can still talk and laugh.

"This year's single-screen cost and single-board cost will not rise, but should be balanced, because the competition is not fierce, and the increase last year was not bad."

It's true. But Focus didn't tell you that the trend of property centralization is becoming more and more obvious, and it is hard to say the ownership of bargaining power in the future.

Just last week, an executive of a domestic head property company also told Read Jun that Focus is indeed a good business, but in the next five years, the share of head property will increase to 30%. This means that in the future, large property companies may do this work by themselves. ...

For example, Pony said that it must not be another WeChat that defeated WeChat. Beating Focus is definitely not trendy, but it may also be a property company.

Relying on the rented million elevator media, the focus advertising market, which is in a downward cycle, still handed over the transcripts of revenue growth 15% and net profit growth of 30% in the past three years.

This is because, in traditional industries, it can seize the share of traditional media such as television and newspapers; In the new economy and internet industry, its ability to detonate brands among the core population is very attractive.

But the situation has changed irreversibly. 20 19 in the first quarter, not only Focus, but all companies that make a living by advertising had a hard time.

In addition to the inevitable cycle, focusing on this "problem" is also extremely special.

In 20 18, Focus mainly did two things. First, in order to meet the challenge of the new wave, we began to re-expand, dig deep into the first and second lines, and get through the third and fourth lines, resulting in a sharp increase in costs such as rent and equipment depreciation;

Affected by this, in 20 18, the performance of Focus was contrary to the normal growth, and the net profit decreased by 3.03% year-on-year; By the first quarter of 20 19, the downward trend was further intensified. At the same time, Focus expects the net profit in the first half of the year to drop by 67. 12%-77.88% year-on-year.

"Last year's layout, on the whole, was excessive." Jiang Nanchun said that he worked for four or five years a year, but he believed that the war was about complete victory, regardless of the cost.

After the expansion, the location of the focus elevator is four times that of the trendy one. Soon, the new wave stopped this "war". Focus will also change from expansion to optimization this year, in other words, its cost will not continue to increase significantly.

Second, in order to cope with the new economic downturn, Focus began to adjust its customer structure, but the effect was not obvious.

In the past five years, Focus has been the first choice for Internet new economic companies, contributing 40-50% of the revenue. However, most of this demand comes from entrepreneurial companies that need to compete and expand through financing. When the financing environment deteriorates, brand expenditure bears the brunt. At present, this part of Focus's income has decreased by 50%, and the management indicated that it would take 1-2 years to make up for it.

Although Focus said that since the second half of 20 17, the income contribution of traditional non-internet customers has further improved, and the industry that contributed the most to the income growth in 20 18 was consumer goods.

The reality is that its "new economy" burden has not been alleviated.

Why is it understood as "new economy" instead of "Internet"? Because the scope of the Internet can be large or small, the details of the proportion of the Internet that many people argue about are an example: the financial report shows that "Internet" accounts for 20%, and the performance meeting says that "Internet plus new economy" contributes 40-50%.

If you think about it carefully, you will understand that the data does not conflict: there are lucky customers who belong to consumer goods and melon seeds who transport customers. In fact, there is a shadow of the new economy. And they all need to be detonated, and VC/PE is needed. Naturally, we should look for Focus, "the media with the most explosive brand advertising in China".

In recent years, almost all well-known new economic Internet companies, such as Tmall and JD.COM, have gone to Jiang Nanchun's office to "visit the pier" and have to pay "tolls" to focus on the elevator every year.

These are the top ten financial owners who put elevator advertisements, and the main force is the new economic brand. It can only be said that the focusing structure still has a long way to go.

In the short term, Focus needs to absorb the huge rigid cost brought by excessive expansion points, and its performance depends more on the face of the big environment than its own efforts to adjust its structure.

The "bad" financial report is likely to be temporary, but the robbery of Focus is not so easy to survive.

In the foreseeable future, even if the market picks up and the performance of Focus picks up, the competitive dividend of the Internet industry will no longer be superimposed on the high dependence on the new economic Internet, and the previous high growth and high gross profit may be difficult to maintain.

Focus mode can be understood as offline internet, or offline network, with one end connected to advertisers and the other end connected to media resources.

Elevator advertisements seem easy to enter, but in fact it is difficult to form an effective supply. If you have too few billboards, your media value is very low, and there is no scale effect in operation. Therefore, this business naturally has scale effect and first-Mover advantage.

This can be clearly seen from the performance comparison between Fox and the younger brothers on the track.

Then, why is the high growth and high gross profit of Focus unsustainable?

According to Qunyi's forecast, in 20 19, Internet, TV and outdoor will become the three media forms with the highest proportion in China advertising market, accounting for 65.7%, 23.3% and 8.3% respectively. Core media is the key choice for advertisers to focus on advertising in the future, and the media ranking is the core Internet (Tik Tok, friends circle, video website) >; Outdoor (focus) > TV (CCTV).

In other words, Focus's elevator media plays an important role in the advertising industry, but it is also difficult to grab brand advertisements from Tik Tok, friends circle, CCTV and other channels. Not to mention, even the fastest-growing Internet advertising growth rate has dropped to 15%.

Focus's revenue depends on the number of media outlets and the realization efficiency of a single media (advertising price * publication rate), that is, whether its advertisements can be sold more and more expensive than competitors.

Of course, it was possible before, but in the first quarter, Focus's revenue dropped by 1 1.78%, which broke the logic that Focus entered the stage of supply growth driving revenue growth. The new points not only did not bring any income growth, but also dragged down its performance due to the rapid increase in costs.

The liquidation efficiency of Focus is also changing.

In the core high-value point, Focus is basically monopolized, and the coverage density of the point is much higher than that of the opponent. Focus has the highest attraction to brand advertisers, so its release rate is higher than that of its rivals.

This is the same as the attendance rate of cinemas and the turnover rate of catering industry. The gross profit of a full theater is higher than the attendance rate, and the restaurant with high turnover has better profitability.

Because under the same integral scale, expenses such as rent are rigid, while income is elastic. The more saturated the advertising order is, the higher the revenue and gross profit margin of Focus will be, not to mention its point size is unparalleled.

On the contrary, once the publication rate drops, the impact on Focus will be enormous.

After the substantial expansion, the demand could not keep up, the publishing rate declined, and the gross profit margin of Focus in the first quarter fell to 36%. After the release of the financial report, the Secretary-General indicated that the national average release rate was 60%. If the publishing rate reaches or exceeds 60% after the economic recovery, the gross profit margin and net interest rate will reach the previous level.

You know, in the past few years, Focus's gross profit margin has remained at around 70%. The gross profit is so high, on the one hand, because the publishing rate is high, and on the other hand, because the advertising price is high (more than twice that of peers).

The core of Focus is to detonate hundreds of millions of mainstream middle-class people for emerging brands.

Emerging brands and the middle class correspond to customers and audiences respectively. A typical example is the travel photography of Rui Xing and Bai Jue. Detonation effect without explanation. Talking about people is to occupy a large number of users' minds in a short time.

This is irreplaceable, so it has high bargaining power.

New economic companies rely on financing, and they must show the data to investors in a short time, so the requirements must be "detonation" and they are willing to pay a high premium for Focus.

Traditional brand companies are in no hurry. For them, brand building is a long-term thing, and they have a large choice, so they will not be willing to pay too high a premium.

Judging from the publishing price, the fastest growth rate is Internet advertising, elevator and cinema advertising represented by Focus.

Some people say that Focus's business is comparable to liquor, and the demand will always exist. You don't need continuous R&D investment, and you earn real money.

That's right. Although you think that the "two highs" of Focus are difficult to maintain, it does not prevent it from being a good business, but its attraction is not as great as before.

Based on Focus's brilliant financial report in the past and its monopoly position, it is believed that it can maintain 30% performance growth. But now, it takes 1-2 years for the revenue side to make up for the sharp decline in brand demand and the downward trend of the advertising market under the new economy.

If Focus can't find new growth points, how can it maintain a growth rate of 30%?

Even so, compared with international outdoor media, Focus is still very happy because it can get elevator resources.

Focus chose privatization at the beginning. One of the most important reasons is that the story of elevator media has not been well accepted by Wall Street. There is a reason for this.

In Europe and America, it is really difficult for advertising companies to negotiate pricing with owners if they want to get elevator resources, because their understanding of property rights is completely different. In China, the strength of the owners is too weak, and these things are left to the property agents.

You can think of it this way. Focus's media resources are already very dense, forming a network. A single property, only in this network, can attract high-quality advertisers and get the greatest benefits. Pay attention to both resources and customers, and the accumulated scale effect and first-Mover effect will not disappear because of the cycle, so it is still a good business.

Zhang Xin, founder of Trendy, said, "In the past 10 years, there was no big capital to enter because the industry was too small, the total revenue was less than 20 billion, and the capital was not attractive. This industry has no technical barriers and no network collaboration. It is economies of scale, cost and efficiency, and it is impossible to achieve monopoly. Today, since it is attracted by capital, even if you exile the new wave of the second child, there will be a new second child. "

"If someone wants to raise the water level, we have enough ability to deal with it. It must not be me who drowned first. " At the performance briefing, Jiang Nanchun said that it was just a water level problem.

The repeat signing rate of focus buildings exceeds 95%. The re-signing rate is high, and the probability of being taken away from the building is low.

This year's single-screen cost and single-board cost will not rise, but should be balanced, because the competition is not fierce, and the increase last year was not bad.

It's true. But Focus didn't tell you that the trend of property centralization is becoming more and more obvious, and it is hard to say the ownership of bargaining power in the future.

In 20 18, the national property management area was about 24.7 billion square meters, and the number of property management enterprises exceeded 10000, of which TOP 100 accounted for 32.08% of the total area, and the share of TOP 10 increased from 4.37% (2010).

Just last week, an executive of a domestic head property company told Wen Wenjun that Focus is really a good business. In the next five years, the share of head property companies will increase to 30%, and the first move or even scale effect of Focus will be greatly reduced in front of head property. This means that in the future, the property may do this work by itself. ...

For example, Pony said that it must not be another WeChat that defeated WeChat. Beating Focus is definitely not trendy, but it may also be a property company.