From the second dimension to the Metaverse, IP business is being reshaped |

This is the era of better IP development.

   Text | Chen Xining

Editor | Peng Xiaoqiu

Even without relying on any physical goods, the valuation of an IP art company has skyrocketed to $4 billion. It is Yuga Labs, the parent company of BAYC. Equivalently, with the help of NFT and blockchain technology, the current floor price of the boring ape BAYC digital collection has also reached 420,000 US dollars. This defines a new height for IP commerce, that is, a higher commerce premium is accomplished with a lower cost.

On April 24th, Metaverse’s “top-notch” Boring Ape BAYC had a new job. Li Ning officially announced a joint T-shirt with a variety of NFT images, numbered 4102. Boring Ape will also become the pop-up shop manager. In the early hours of this morning, some media revealed that Zhu Xiaohu, the managing partner of Jinsha River Ventures, had also purchased the digital collection of the boring monkey BAYC#9729, and replaced the digital collection as an avatar.

This is the Nth time that the boring ape has interacted with the real world. At present, BAYC’s parent company completed a financing of 450 million US dollars in March this year. Such a high valuation is undoubtedly brought about by cross-border IP authorization and NFT gameplay.

Different from the centralized IP operation model in the past, after the release of the boring ape NFT based on web3 technology, the owner chooses to open the copyright, which means that the NFT holder can operate the IP independently, and then through various means such as exposure and joint name Increase its value, which is equivalent to the holder owning a real digital asset.

Of course, the case of Boring Ape is still an isolated case, and it represents the height of the IP operation industry after the integration of various modern gameplay. But what can be seen is that the ancient business model of IP operation will not be outdated in this era, and even has a higher commercial height.

IP generation path

Based on the experience of practitioners, there are currently two paths for IP generation. One is content-based IP, that is, through high-quality film and television works or profound role settings, the IP is deeply rooted in the hearts of users; the other is productization. IP image, this IP may be simple to set, but it is exposed through high frequency, and the symbolic image continues to occupy the user’s mind, such as expression packs, figurines and other presentation forms.

The top IPs can often be freely converted between the two, occupying the minds of users more deeply and widely, and at the same time, they can also realize the most ways to realize the realization.

Data can illustrate this problem. According to data released by the statistical agency Statista, as of January 2021, since the release of the Pokémon series of games established in 1996, it has earned $100 billion in revenue through merchandise sales, authorized transactions and retail sales. , which also makes it the most profitable IP in the world, while the second place is Sanrio, the parent company of Hello Kitty, which is more inclined to product IP, with revenue of $84.5 billion.

From the second dimension to the Metaverse, IP business is being reshaped |

From German data agency statista: Global IP-related revenue rankings

In China, in the period when various types of film and television IP were popular, the first batch of people who came out of the circle through the original IP image was B.DUCK’s owner Deying Holdings (HK: 02250).

In 1992, a freighter full of nearly 30,000 yellow rubber ducklings set off from China to Washington, USA. Passing through the Pacific Ocean, it encountered strong winds and huge waves. One of the containers overturned the sea, and nearly 30,000 little yellow ducks began to go around the world. Rafting trip. The founder and designer of Deying Holdings (HK:02250) Xu Xialin was influenced by this incident and created the image of B.Duck in 2005.

Today, this little yellow duck has also successfully landed on the Hong Kong Stock Exchange in early 2022. According to the prospectus, Deying Holdings’ main revenue comes from IP commodity licensing and e-commerce. In the 2021 annual report, Deying Holdings’ total revenue reached HK$290 million, and its IP licensing revenue also exceeded e-commerce revenue. reached 160 million Hong Kong dollars. In addition, Deying Holdings has a gross profit margin of 54%. It can be seen that once the IP effect is formed, this is a high-margin business model.

Different from the current trend of trendy games, the product authorization of Deying Holdings, a veteran IP manufacturer, mainly focuses on the authorization of daily necessities and clothing. According to its prospectus, the revenue of the two will reach HK$22.23 million and HK$16.08 million respectively in 2020, accounting for 35% and 25% of the revenue from commodity licensing. In addition, B.Duck also participates in the licensing of live entertainment, including theme parks and classics, catering, and other marketing promotions, such as the Nanjing Little Yellow Duck Theme Park opened in partnership with OCT in 2020.

During the development period of Deying Holdings, Bubble Mart made the market see a greater commercial height of productized IP through the form of IP + Chaowan, and successfully achieved overtaking in corners.

In 2010, Bubble Mart (HK:09992) was born, which initially represented some trendy toys and stationery brands. In 2016, Wang Ning, the founder of Bubble Mart, who needed to expand the scale, went to Hong Kong and signed Molly, the popular IP of Bubble Mart from designer Kenny. Everyone knows the story later. With clear play methods such as box and tide play, Molly has become an evergreen tree that has stood in the tide play world so far.

From the perspective of revenue scale and profit, the total revenue of Bubble Mart in 2021 is 4.49 billion yuan. Compared with Deying’s long-term gross profit margin of 50%-60%, Bubble Mart’s gross profit margin is almost stable at 60%. % or more, the gross profit margin, which will slightly decline compared with previous years, will also reach 61.4% in 2021. In terms of market value, although Bubble Mart’s share price has already halved, its market value is still about 28 times that of Deying Holdings.

It also takes IP operation and authorization as the core business. The reason behind the gap between the two is that the form of trendy games has given IP products higher commercial value. Users are no longer buying a product with a logo, but a more High premium investment items, collectibles and carriers with more emotional value.

From the second dimension to the Metaverse, IP business is being reshaped |

Guosheng Securities Chaowan Report, the industry chain of Chaowan

From this, we can also see the path of IP generation. This high-margin model is very similar to star-making. The designer constructs original IP, and the operator and agent use extensive face recognition, story creation, various marketing methods and consumption. The gameplay allows IP to have influence and popularity, and then IP has commercial value, and then realizes the realization of multiple services such as authorization and product sales. After the IP is successfully realized, its influence is further expanded, thereby consolidating the commercial value of the IP.

IP Pain Points

When it comes to the pain points of IP business, this kind of pain is very similar to idol brokerage companies. Although the gross profit margin is high, high-quality idols are still scarce resources, and it takes a little luck and probability to cultivate their amateurs into high-quality idols. This is all business. Uncertainty has sown the root – how to realize multi-IP support business from a single IP profit has become the biggest pain point for all IP business companies.

The average gross profit margin of high-quality IP is around 50% or even higher, and there are many companies in the world that rely on IP monetization to successfully leverage hundreds of billions of revenue. It seems that the IP business seems to be a lucrative one. However, judging from the performance of Deying Holdings and Bubble Mart after their listing, the repeated bearish market value also revealed the difficulty of IP business.

At the beginning of Bubble Mart’s IPO, “Molly” was able to sell 456 million yuan in one year, accounting for 27.1%. Since then, Bubble Mart has continued to launch new IP characters to enrich Molly’s family, but judging from the 2021 financial report, this is still not enough.

One obvious change is that Molly has gradually been questioned as “outdated” before the new explosion model – the growth rate of Bubble Mart’s revenue has slowed down. Previously, the revenue growth rate exceeded 225%, but the total revenue in 2021 will be 4.49 billion yuan, a year-on-year increase of 78.7%.

However, judging from the 2021 financial report, Bubble Mart’s own IP revenue is no longer completely dependent on Molly, and the layout is more balanced.

From the second dimension to the Metaverse, IP business is being reshaped |

Proportion of IP revenue of Bubble Mart

Such problems also exist in the IP matrix of Deying Holdings. Although the outside world’s concept of Deying Holdings is a little yellow duck, after years of layout, Deying also has its own little yellow duck family, but from the perspective of revenue ratio , Although the proportion of other roles’ revenue has increased slightly, B.Duck still accounts for half of the revenue, and improving the commercial value of more roles is still a problem to be solved.

From the second dimension to the Metaverse, IP business is being reshaped |

Proportion of IP revenue of Deying Holdings

But that’s still not enough. How to continue to achieve high growth, in addition to having more “playable” IPs, it is also necessary to dig more business stories and profit points on the increasingly “involutionary” IP track. This is also the second breakthrough for IP companies. .

According to the financial report information, the solutions given by Bubble Mart can be summed up in three ways. One is to develop more channels, including overseas territories; Special is also actively deploying the construction of theme parks; the third is to dig deep into the commercial value of IP products, such as the production of collectible “Big Baby” and other collectible fashionable goods with higher unit prices.

Deying Holdings disclosed in its financial report that it will explore more new business models such as digital collections in the future.

The next stop for IP commerce will be even better

Regardless of whether China’s IP market is a dominant player or a hundred flowers bloom in the future, it is certain that the prospect of IP business is still optimistic. This is also based on the degree of attention paid to copyright, which has reached a higher dimension with the promotion of blockchain technology and digital collections.

Piracy and infringement incidents will become fewer, and the ceiling of IP licensing business will definitely be higher.

In addition, the value of IP itself is no longer completely determined by “carrying volume”. The active market of trendy games has given the public a new understanding of IP. It is not just a symbol that is attached to clothes to show attitudes and preferences. It has also become a commodity that can add value by itself, which itself has broadened the audience market of IP.

At the peak of Bubble Mart’s development, according to data released by Xianyu to the media in December 2020, there were over 440,000 blind box players trading, and the transaction volume of idle blind boxes in November 2020 exceeded 120 million yuan. A year-on-year increase of over 70%. This is also the reason why Chaowan has become larger and more refined, collectibles, and limited-edition products have begun to increase-the value of IP is no longer limited by the part that the IP side invests in the market. In the transaction and sharing of , the influence and value are constantly improving.

In this link, in fact, the value of IP has been decentralized.

So what’s next for IP?

When the era of the Metaverse really comes, the holders and beneficiaries of IP may no longer be just designers, but also consumers with different digital collections and limited collections. A decentralized IP era is coming.

For example, the employment path of the boring ape mentioned in the previous article, but in fact, the employment opportunity of the boring ape is actually far more than the old path of IP licensing revenue in the past.

On March 18 of this year, Universal Music Group announced that it had paid $360,000 for Bored Ape Yacht Club #5537 to lead a Metaverse group it launched in November called Kingship. Because of the copyright transfer characteristics of digital collections, the openness of BAYC can transfer commercial rights, which also means that when the holder has different resources, the IP in his hands will also have a new value direction.

Of course, the decentralized model may not be completely reproduced in China, but the business and imagination of IP are still fascinating and full of imagination.


1. “Re-discussion on Bubble Mart’s Barriers and Spaces” Guosheng Securities

2. “Industrial Chain Hundreds of Flowers Bloom, Trendy Games and IP Resonate” CITIC Securities

3. “Opening the Pattern: NFT Holders Decide on the IP Ceiling” Kai Pineapple Finance

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