Great! Someone from an MCN agency received a million-dollar luxury car as a year-end bonus

As an emerging industry, MCN has become a field that "working people" are eager to enter. With the coming of the new year, the year-end bonus has become the most concerned topic for working people. Some people get three times the salary, and some get a Porsche. What is the unknown side behind these high welfare year-end bonuses? Let's follow the author to take a look.

The Lunar New Year is approaching, and year-end bonuses have once again become the most concerned topic among workers.

In 2022, in just one year, Oriental Selection opened 6 live broadcast accounts and its fans exceeded 36 million; Liu Genghong set off a home fitness craze and his fans increased by 10 million in 7 days; Yaowang Technology, backed by stars such as Wang Zulan, Cecilia Cheung, and Huang Zitao, had an annual GMV of over 15 billion yuan.

A soft advertisement can be offered at a price of one million yuan, and a live broadcast can bring in sales of over 100 million yuan. The "get-rich-quick myth" is constantly being played out in this industry. As the operator behind the scenes, MCN organizations can quickly realize commercial realization once they gain considerable traffic by producing content and incubating celebrity IPs.

The low threshold of the industry has attracted a large number of gold diggers. According to iMedia Research, there were only 160 MCN agencies in China in 2015, but this number soared to 34,000 in 2021.

As an emerging industry, MCN has become a field that "working people" are vying to step into. Wang Xin, an employee of a leading MCN agency in China, told Times Finance, "We have all the benefits that big companies like ByteDance, Tencent, and NetEase can offer." Times Finance also learned that a supervisor at an MCN agency in a second-tier city received a million-dollar luxury car, a Porsche, as his year-end bonus in 2022.

Will the year-end bonuses of the MCN industry be on par with those of large companies? What is the survival status of practitioners behind the data boom? At the end of the year and the beginning of the next year, Times Finance talked with several practitioners from MCN agencies.

1. At the end of the year, some people get triple their salary, while others get a Porsche

"2022 will definitely be better than 2021." Zhang Yu works in a non-business position in a leading e-commerce MCN agency. According to him, the GMV of the company's top anchors increased by 20% in 2022.

He also clearly felt that the company's business dealings with the outside world had increased. "Every time a show starts, there will be a big scene inside the company. During the show, there will be more outsiders such as brands, and there will be KT boards and other promotional materials downstairs."

"The year-end bonus has been paid, and it is indeed much higher than last year." Zhang Yu revealed that he received three months' monthly salary due to his outstanding performance and promotion, which was at least double that of 2021. Other colleagues in the company generally also received higher bonuses than in 2021.

Why did the year-end bonus increase? In Zhang Yu's opinion, in addition to the individual performance of employees, the most important factor affecting the company's year-end bonus is the company's profit for the year.

Zhang Yu pointed out, "Previously, the company lacked experience in dealing with epidemic lockdowns, which had a significant impact on the supply chain and logistics. Even though the GMV data was impressive, the consumer return rate skyrocketed. On the other hand, the company was required to pay back taxes in 2021, which had a significant impact on the company's profits."

In 2021, anchors Xue Li, Lin Shanshan, and Wei Ya were successively involved in huge tax evasion incidents. In the same year, as part of the "Clear and Bright" campaign, cities across the country, including Beijing, Shanghai, Guangdong, and Zhejiang, issued announcements requiring celebrities, online anchors, etc. to conduct rectification and self-inspection, and to actively report and correct tax-related issues to the tax authorities by the end of December 2021.

The company where Zhang Yu worked was one of the companies that had to pay back taxes, which directly led to a sharp drop in the company's profits that year and a drastic reduction of more than 50% in employees' year-end bonuses.

In 2022, the company not only has no pressure to pay back taxes, but also began to establish a more sound mechanism to deal with supply chain issues. "In previous years, the preparation for 'Double 11' started two months in advance. But in 2022, in order to ensure the smooth launch and delivery, we prepared the goods in July. Before and after the big promotion, the core team including anchors, operations, quality control, investment promotion, etc. all lived in the company without going in or out." Zhang Yu revealed.

Liu Jing was also happy to receive an increased year-end bonus in 2022. She works as an editor and director in an MCN company whose main business is short videos. The company has several influencers with tens of millions of fans on the Douyin platform. "In 2022, we expanded a lot of influencers, so the overall revenue is better than in 2021. Although the year-end bonus is only one month's salary, everyone in the company will get it, including those who have just been here for two months."

In addition to the year-end bonus that made Liu Jing satisfied, she also used "excellent" to describe the benefits of the MCN company. "The company has small gifts during festivals and holidays. Because most of the team members are young people born after 1995, the company also chooses to rent out bars for disco for team building."

Xie Shuangshuang, a veteran in the MCN industry, revealed to Times Finance that due to impressive business performance, the year-end bonus list for executives at a leading MCN company in a second-tier city includes many million-dollar luxury cars such as Mercedes-Benz, Porsche, and Maserati.

2. “All the benefits that big companies can offer are available here”

Workers in MCN not only receive inflated year-end bonuses, but also considerable salary packages.

According to iiMedia Research, the profits of Chinese MCN agencies are mainly divided into two directions: one is for C-end users, such as commercial cooperation, traffic sharing, platform subsidies, advertising marketing, IP authorization, etc.; the other is for B-end merchants, mainly through derivative sales, celebrity e-commerce, live broadcast rewards, content e-commerce, knowledge payment, etc. In addition, profit models such as self-created brands are gradually being adopted by agencies.

For MCN organizations whose main business is short videos, commercial cooperation is still the main source of income. A short video team generally consists of talents, cameramen, editors, assistant editors, and post-production positions. The team's performance is basically equivalent to the advertising income of the team's talents. The higher the advertising income created, the higher the salary of the team members. For companies dominated by live broadcasting, the income of core team members is more dependent on the slot fees of their anchors and the sales of live broadcasting.

"Take the short video industry as an example. If the performance of a shoulder expert is good, the monthly revenue can reach 1 million to 2 million yuan. According to the profit sharing ratio, the monthly salary can reach 200,000 to 300,000 yuan, which is equivalent to two or three years' salary of an ordinary person in our industry." Liu Jing said that of the team's advertising revenue, the MCN agency takes the lion's share, the expert's income commission ratio is about 10%-20%, while the director and editor position is 2%-5%.

Because the salary is quite competitive, Wang Xin, who graduated in 2021, chose a leading MCN company that focuses on live streaming business to engage in live streaming operations.

He told Times Finance, "We have all the benefits that big companies like ByteDance, Tencent, and NetEase can offer. Except for the IT industry, MCN raises salaries faster than any other industry."

According to Wang Xin, as a fresh graduate who joined the company in September 2021, the company's basic salary excluding commission was about 6,000 yuan per month that year. By the beginning of 2022, his basic salary exceeded 11,000 yuan/month; in mid-2022, his basic salary further increased to 16,000 yuan/month.

However, due to the multiple positions in MCN, income depends more on the team's profit commission, which also leads to huge salary differences within the company.

Liu Jing revealed to Times Finance that, taking the positions of director and assistant director as examples, theoretically, the director position is superior to the assistant director in terms of rank, but in fact, the monthly salary of the assistant director in the top talent team may far exceed the monthly salary of the director in the mid-level talent team.

3. The ranking of influencers’ revenue will be announced every month, and those who fail in one month will be replaced.

As the traffic dividend of Internet platforms gradually recedes, the wildly growing market has caused many MCN companies to begin to face some problems, and the leading companies in the industry are no exception.

An MCN agency manager has publicly expressed his anxiety about the development of the company's accounts. "Although we are still running, we are also worried that the account data will plummet due to the numbness and fatigue caused by long-term content production. On the one hand, we need to continuously produce new accounts, and on the other hand, we need to maintain the data and content output of old accounts."

Zhang Yu also feels that the lack of natural traffic has made it more difficult and costly for MCN organizations to incubate new anchors. "In the past, it seemed that everyone could become popular just by playing around. Now, all the mechanisms of the platform rely on spending money, and you can't play without a certain amount of funds."

Xie Shuangshuang said bluntly, "Even if large companies have a set of methodologies, 60%-80% of the incubation of newcomers now depends on luck."

For mature accounts, the company's operating costs are also increasing year by year. As early as 2018, Ji Fangyuan, CEO of MCN agency Qingteng Culture, revealed to the media that the company spends about 5 million to 10 million yuan a year on purchasing traffic. Today, this cost is only increasing.

Liu Jing revealed to Times Finance that some MCN companies have to create hits every once in a while in order to maintain the popularity of their accounts, including spending a lot of money to purchase traffic.

"The pressure is too great." Although she is optimistic about the industry prospects, Liu Jing admits that as a core content director, she has felt unprecedented work pressure since 2022. "The company began to announce the revenue rankings of talents every month. Ranking in the bottom 10 means that the talents and the team behind them are about to be eliminated." Liu Jing revealed that new people come in and old people leave the company every month.

Liu Jing's company is not an isolated case. According to Xie Shuangshuang's observation, the frequency of internal replacement is increasing in many MCN companies, especially in the leading agencies. "Generally speaking, if the data of newcomers cannot be improved in one month, the company will choose to reshuffle the team and try again for another month. If it still doesn't work, it will further evaluate whether there is a problem in the talent, director, or post-production, and replace the problematic one. Generally speaking, it is either the director or the talent who is eliminated."

Recently, the management of MCN company Yaowang Technology admitted that the company's personnel costs have become a burden. In December 2022, Yaowang Technology completed the first large-scale layoffs in its history, with a layoff scale of 300 people. Coincidentally, the layoff rate of Wang Xin's company in 2022 was as high as 30%.

Liu Jing pointed out that from the data point of view, although the company's revenue continued to grow in 2022, it benefited more from the expansion of the team size and the increase in talent prices. In fact, many talent accounts have encountered bottlenecks in fan retention and advertising cooperation data.

On the one hand, more and more brand customers have begun to set up their own live broadcast rooms and accounts, and the overall demand for influencer cooperation has declined. On the other hand, the number of advertisements for top influencers has decreased significantly, and brands are more willing to invest limited resources in top influencers who can bring goods and a large number of mid-level influencers with lower advertising unit prices. "Before and after the big promotion in 2021, some influencers could receive 10-20 advertisements, but during the 'Double 11' in 2022, there were only about 10." Liu Jing said.

For companies that mainly engage in live e-commerce business, breaking the growth bottleneck still depends more on expanding the scale and increasing the workload of anchors. Wang Xin said, "Selling 50 million yuan for a live broadcast is already the ceiling, and the only way is to further increase the number of live broadcasts by anchors." Currently, as a live broadcast operator, the increase in the frequency of broadcasts also makes him work more than 10 hours a day.

Today, the MCN industry has transformed from its previous barbaric development to a competition for existing stocks, where the strong prey on the weak. According to the forecast of iiMedia Research, by 2023, the content marketing of MCN will enter a fierce competition, and some MCN agencies will change from the rough strategy of horizontally expanding the user scale to the high-tech strategy of vertically tapping the attention value of a single user. However, MCN agencies still face the challenges of serious content homogeneity, immature incubation mechanism for Internet celebrities, and some regulatory issues.

Author: Zhou Jiabao; Editor: Li Qian

Source: WeChat official account "Times Finance APP (ID: tf-app)"