40,000 "siege cities" encircle 1 million talent dreams

The contradiction between MCN and Internet celebrities has existed for a long time in the history of the industry. The operators of the industry are constantly selecting, changing and improving a more suitable operating system to balance the relationship between the two and protect the interests of more parties. The authors of this article share their thoughts through interviews and case analysis. Recommended to students who are interested in content industry operations, share your views together.

1. Mutual promotion and mutual restraint, love and hatred

The more famous the influencer is, the more money the MCN can make, but the more power they have to speak. If the two sides fall out, both the influencer and the agency will suffer considerable losses.

It costs an average of 500,000 yuan to train an amateur into an internet celebrity in half a year, so agencies are afraid that the money will go down the drain if the internet celebrity terminates the contract. Internet celebrities are facing a mixed industry, and they are also afraid that they are just an inconspicuous "fish" in the fish pond of the agency. The conflict between MCN and internet celebrities is not a matter of one day or one night, and the conflict between the two will not stop until the content industry finds a suitable operating system.

Mutual promotion and restraint, love and hate - the story of grievances between Internet celebrities and MCNs can be best described with these two words.

From the contract dispute between Dao Xiaodao, a beauty blogger with tens of millions of fans, and Jinchen Culture, to the termination of the contract between Peng Shiliu, the "first love of all boys on the Internet", and Wuyou Media, to the years-long lawsuit between Li Ziqi, a super-top Internet celebrity with a rural style, and Wei Nian, it is not uncommon to hear news of Internet celebrities and institutions "breaking up" or even "fighting" in public. When both parties break up, the result is often a lose-lose situation. MCN has lost its cash cow, and the economic losses in the short term are difficult to estimate. It is not so easy for Internet celebrities to leave and set up their own studios to regain popularity.

The essence of MCN is a brokerage agency, connecting with high-quality content upstream and looking for promotion platforms downstream to realize monetization. The two major advantages of MCN are to help content producers focus on content creation and to connect with platforms for packaging, promotion, and monetization. According to the iMedia Research report, the number of MCN agencies in China will exceed 40,000 in 2022 and will exceed 60,000 in 2025. Taobao, JD.com, Douyin and Video Account have become the main platforms for MCN operations and Internet celebrity incubation.

How do MCNs and Internet celebrities balance their relationship and protect their respective interests? Snow Leopard Finance talked to some MCNs and Internet celebrities. Here are their stories and ideas.

2. MCN: Spend 500,000 yuan in half a year, but terminate the contract if it fails to make back the investment

In 2017, Wu Xin, who wanted to be an internet celebrity, walked into the door of Xiamen MCN company "Zi Yu Zi Le" and recommended herself to CEO Yan Chi. She liked a beauty blogger with millions of fans and her goal was to "be as good as her."

It was the second year since Douyin was launched, and "Zi Yu Zi Le" had just moved to Douyin, and needed to train new people. Yan Chi chose to believe in Wu Xin's determination: he configured a team for her, polished her personality, customized content, and spent half a year to increase the number of fans to more than 2 million, which had exceeded the initial goal set by Wu Xin.

But no company can guarantee that an internet celebrity will remain popular forever. Soon, Wu Xin's account hit a bottleneck, and the number of fans grew slowly or even stagnated. She began to question whether the company was paying enough attention to her and wanted to terminate the contract. Unable to retain her, Yan Chi had no choice but to negotiate a termination.

But such peaceful breakups are not the norm in the industry. Instead, they are often "torn apart" and ended in a bad mood. "To sign a talentless person, we pay a signing fee of about 0 to 100,000 yuan, and we also have to pay wages. Not counting other artificial successes, the subsequent training, incubation, and promotion alone cost an average of at least 500,000 yuan per person in half a year." Wang Xu, founder of MCN, told Snow Leopard Finance, "It takes an average of two to three years to get back the investment to incubate an internet celebrity from June to December, and at the fastest, it takes one year."

Recruitment terms for anchors Source: Interviewee

Institutions are concerned about recovering their investment and making money, while experts pursue freedom and profit.

Lin Min has worked for an MCN in Northeast China for two years and is a small internet celebrity with millions of fans. In order to allow its talents to get in touch with more different types of creators, the agency will encourage them to communicate more with talents from other agencies and individual internet celebrities.

Lin Min became friends with an internet celebrity with tens of millions of fans, and they entertained together privately many times, which greatly changed her mentality. "When you look at those individual internet celebrities, who have creative freedom and make all the money from business orders, you will lose your balance and feel that the agency's profit sharing is unfair." She told Snow Leopard Finance, "Sometimes I don't make as much as they do from one business order in a month." Lin Min expressed her dissatisfaction to the company, and the company explained the reason, but at that time Lin Min "had been blinded by money, and all she could think about was that others made more than me."

She negotiated with the company no less than 10 times within a month, and finally terminated the contract at zero cost, and the original account was also taken back by the company. She had to start from scratch again, but the number of fans was less than 1/10 of the past. Although she earned all the money from the business orders, she still had to pay the staff in the end. In less than 3 months, Lin Min woke up. "The team behind them also costs money." But it's too late to regret now. Lin Min signed a new company, but she is still doing tepidly.

3. Internet celebrities: the shattered dream of wealth and freedom

MCN is afraid that the internet celebrities will run away and lose money, and the influencers are afraid that MCN will "cast a wide net and focus on fishing" and that they will not be the chosen koi.

Yuanzi is a small Douyin celebrity with 300,000 followers. When her account had only tens of thousands of followers, an MCN sent her a private message wanting to sign a contract. At that time, Yuanzi was still a college student and did not have much "ambition" for the operation and monetization of the account. She had never even thought about making money from short videos.

As her account gained more and more followers, advertisers approached her. Yuanzi tried to take a mascara advertisement and earned 20,000 yuan by shooting only one short video. Yuanzi then realized the opportunity to make money from short videos and began to accept almost all business orders. Advertisers often have strict requirements on the time of video delivery, and Yuanzi soon became too busy to handle it alone, so she came up with the idea of ​​signing a contract with an agency.

Before signing the contract, many people around her told Yuanzi that the MCN would help her operate and increase her followers, but would not give her much money. However, Yuanzi was "lucky" to meet an MCN that was willing to split the revenue with her 20:80 and signed a 5-year contract with it. She thought she would embark on a smooth road of receiving numerous advertisements and achieving financial freedom soon, but she did not expect to step into a quagmire.

When Yuanzi joined the company, the MCN already had two influencers with tens of millions of fans and several influencers with millions of fans. In comparison, Yuanzi was inconspicuous. She even shared a team with other influencers for editing and operation. She did not make as much money as she had imagined. She received less than 10 advertisements in half a year, and her income was far less than when she was fighting alone. Yuanzi went to the company to ask for an explanation. The company's answer made her feel dissatisfied but unable to refute: "They (the top ones) have many fans and good traffic, so we must give them the first place if there are advertisements."

Most MCNs will allocate more and better resources to the top influencers. For the same advertiser, the price quoted for a short video by Yuanzi is 20,000 yuan, while the price quoted for a top influencer may be 500,000 yuan or even higher. Zhang Mingxin, vice president of marketing at MCN agency "Miracle Mountain", told Snow Leopard Finance that "in the agency, it is inevitable to focus on the top influencers in terms of business."

Yuanzi has been working at MCN for a year, but the money she gets every month is not enough to support herself. She has to rely on her parents for living allowance, and even has to ask for money to buy cosmetics. "If I had known this would happen, I would have chosen to take the basic salary," she complained to Snow Leopard Finance.

But Xiao Liu, who chose the basic salary, also had a bad life in MCN. Xiao Liu shot 18 commercials a month, which was more than Yuanzi's workload in half a year, but he only got more than 20,000 yuan. "My friend tutors junior high school students in his hometown and earns about the same amount a month." But because he signed a contract, he dared not take private orders.

What's more, when there is no shooting task, Xiao Liu has to "observe" the shooting of the top Internet celebrities under the arrangement of the company, and help out on the spot, doing some work such as printing scripts, locating behind-the-scenes shooting, etc. She even joked to herself, "If I go out to find a job as an assistant, I should be able to enter the industry directly." Wang Xu has seen many similar things. He told Xuebao Finance, "Many companies in the industry sign 100 to 80 talents, and promote whoever comes out, and the rest earn the money from the termination of the contract."

4. Self-defense and counterattack in the love-hate relationship

After several years of love-hate relationship, MCN and Internet celebrities have each entered "self-defense mode".

Zhang Kaiyi, a web celebrity with tens of millions of fans, and Lan Pulan, a beauty blogger with millions of fans, have set up their own businesses, reopened their accounts, recruited teams, and established companies to take control of the initiative. Many people have clearly stated publicly that they will not sign contracts with any MCN.

Yuanzi wanted to terminate the contract, but she didn't want to be involved in a lawsuit before graduation, so she could only survive in the cracks and wait for the contract to expire. Before signing the next contract, she will focus on the size of the company and the cooperation model. Xiao Liu, who was "scared" by the MCN, did not renew the contract after the contract ended. He found a new job and managed his own account in his spare time. If there was a suitable advertisement, he would take it. If there was no advertisement, he would not force it. He did not care about losing fans. "To be honest, it's a bit tiring, but I made two incomes and I am more free. I don't need to update if I don't want to." He told Xuebao Finance.

Faced with the coming and going of Internet celebrities, MCNs have also tried to increase certainty in some ways. MCN agencies "entertain themselves" and carefully control the number of talents under their umbrella. They also spend 1 to 3 months evaluating each talent they sign, calculating the training cost and payback time, and determining the contract period on this basis. "Multiple departments such as casting, marketing, and business conduct multiple rounds of evaluation and scoring, and put forward corresponding opinions before deciding whether to sign or not." Yan Chi told Snow Leopard Finance, "In this process, (talents) may be eliminated at any time."

After seeing the impact of big influencers leaving the company, some MCNs have begun to refuse to support top influencers to prevent the influencer's personal IP from dominating. The head of Fenghuo Culture told Snow Leopard Finance that they would avoid cultivating a big influencer who is too closely connected to the company, because once such a person leaves, the negative impact on the company is too heavy and the consequences are unbearable.

"Miracle Mountain" insists on incubating from 0 to 1, and establishing a closer connection and trust relationship with its influencers. Under this strong binding situation, influencers are more dependent on the company and are less likely to "escape". There are also some MCNs with super-head influencers who make Internet celebrities partners of the company and establish a community of interests. Lin Yilun and Li Jing under Qianxun Culture are not only star anchors, but also important strategic partners of the company. Taobao's number one brother Li Jiaqi is a partner of Mei One.

What is certain is that the conflict between MCN and Internet celebrities did not happen overnight. How to build a stable cooperative relationship while avoiding excessive binding and how to find a suitable way to distribute benefits are not easy to find in a short time. "Before finding a suitable operating system, the conflict between influencers and MCN will not stop." Zhang Mingxin told Snow Leopard Finance, "but every conflict will make the system more perfect and eventually reach a balance."

(Except Yan Chi and Zhang Mingxin, all characters in this article are pseudonyms.)

Author: Feng Wen

Source: WeChat official account: "Xuebao Finance (ID: xuebaocaijingshe)"