Phoenix Media Investment (Holdings) Stock

Phoenix Media Investment (Holdings) Limited (Phoenix TV), through its subsidiaries, operates as a media company that provides premium content on an integrated Internet platform, including PC and mobile, in the People’s Republic of China (PRC or China).

The company enables consumers to access professional news and other quality information and upload text and images (UGC), on the Internet and through their PCs and mobile devices. Its premium content is organized in major verticals, such as news, video, finance, technology, automobile, entertainment, military, sport, real estate and fashion. The company’s main content distribution channels include its PC websites, mobile news application, mobile video application, mobile digital reading applications and mobile Internet websites. The company also acts as a content provider for multiple third-party channel.

The company offers a variety of paid services primarily through its mobile channel and operations with the telecom operators and other third parties.

Content

The company obtains its content from four major sources: professional content, its original contents with intellectual property rights (IP) content, we-media content and online literature content. The content it acquires covers a spectrum of user-targeted subjects, including news, current affairs, finance, technology, automobiles, fashion and entertainment, among others.

Content Sourcing

Acquired Professional Content: The company has entered into content licensing agreements with approximately 530 third-party professional content providers in aggregate. It obtains its print content from major Chinese print media and news wires. The company’s content sources include companies, such as China News Service, Xinhua News Agency and the Huanqiu.com, as well as China’s major image providers. The video content it sources from third parties primarily includes news and documentaries, which cater to its users’ preferences. The company obtains its third-party video content from major Chinese television broadcasters, such as Dongnan Satellite TV. In addition, according to the 2021 Program Resource License and Cooperation Agreement, the company entered into with Phoenix TV Group (Phoenix TV and its subsidiaries, not including the company), it has the exclusive right to broadcast copyrighted video content and the derived audio content from three television channels of Phoenix TV and its subsidiaries on the internet in Mainland China. The content that it sources from professional related and third parties comprises the majority of the content on its PC websites, mobile applications and mobile websites.

We-media Content: The company allows its users to upload text, images and videos content (UGC) to its PC websites, mobile applications and mobile websites through we-media accounts. We-media content adds an important complementary component to the content it delivers.

Online Literature Content: The company offers its users a full-fledged online reading experience by providing them a plenty of high-quality literary contents, such as science fiction, urban romantic fiction, mystery fiction, etc. Furthermore, the company is cultivating this content into online series, comic books, audiobooks and short-form videos to expand its content offerings.

Content Verticals

The company provides over 50 interest-based verticals, each of which features integrated text, image, video and livestreaming content and embedded interactive services, such as user surveys and comment postings. Its users can access all of its interest-based verticals’ content through its PC and mobile channel. The company’s popular verticals include:

News: Through the company’s news vertical, ifeng News, users have access to breaking news coverage from multiple sources and points of view. Its news vertical also features special reports and embedded interactive services. For the company’s special reports, it has teams deliver in-depth analysis and reports, and also integrated user surveys and comment postings into the featured websites.

Video: The company’s video vertical offers timely video-based coverage, as well as customized news programs. In addition, by leveraging the exclusive resources from its global journalism station, the company produces distinguished and influential news through short videos. By optimizing its AI image recognition technology, the company has enhanced its ability to identify and restrict video content violating its standards, cultivated a proprietary supply of content, and actively partnered with professional video content producers to provide users with more high-quality and original short-form video content. Meanwhile, its livestreaming vertical, FENG Live, offers live-streamed news and information to provide real-time professional reports of hit events, conferences, etc.

Finance: The company’s finance vertical, ifeng Finance, provides information about financial news, securities and personal finance. It also obtains independent finance content from Phoenix TV. The company’s finance vertical also offers stock quotes from the major exchanges, as well as breaking news from individual listed companies.

Technology: The company’s technology vertical provides content relates to real-time reports of relevant hot topics in the TMT industry. In addition, the remarkable content in its technology vertical is Phoenix Lab, whose video series is designed to offer reviews of products and services that are both trustworthy and entertaining in the form of short-form videos, thus providing unbiased purchasing advice to China’s rising middle-class.

Automobiles: The company’s automobiles vertical, ifeng Auto, offers the latest automobile-related news and information to provide car buyers and automobile enthusiasts with the current information on automotive pricing, reviews and featured guides.

Entertainment: The company’s entertainment vertical spans greater China and strives to cover entertainment news and developments in China, Hong Kong, Taiwan and globally among the Chinese community. This vertical provides coverage of the latest entertainment news, including movies, television programs, plays, and operas, as well as popular and classical music. It features its in-house produced video program of candid celebrity interviews.

Military Affairs: The company’s military affairs vertical provides updated information and commentary on military affairs and defense matters to target a broad audience, which both includes military professionals and amateurs.

Sports: The company’s sports vertical offers multimedia news and information on a range of sporting events, and broadcasts both live and recorded domestic and international sports matches.

Real Estate: Based on the media characteristic of the company, the real estate vertical integrates massive resources of the industry and make an objective and detailed interpretation to the real estate market. The company provides real estate related information, including building details, the information of rental and purchasing of new residential property and second housing, and residential ecological service. The main sections include house.ifeng.com, iqidian.com and wenlv.house.ifeng.com. Fengcx.com is a full-fledged digital media platform that tracks the latest real estate financial news in real time to provide valuable reference for buyers, investors and enterprises.

Fashion: The company’s fashion vertical provides coverage on fashion, beauty, weight loss, luxury goods, furniture, art and other popular topics around the theme of refined lifestyle. It offers information on international fashion trends and new fashion concepts. Its fashion vertical covers a variety of luxury topics, including wines, cigars, high-end brand apparel and accessories, as well as services aimed at the high net worth population. It also provides real-time coverage of major world fashion events, bringing users the latest information on styles and trends.

History: The company’s history vertical provides content about Chinese and international history. It investigates relatively unexplored historical turning points and events and provide in-depth analyses of historical figures and events.

Channels

The company provides its content and services through three major channels, including its PC channel, its mobile channel and third-party channel. It also transmits its content to TV viewers, primarily through Phoenix TV. Together, these channels form a converged platform providing integrated text, image, video and livestreaming content, and employing a variety of interactive formats to create a personalized and hands-on experience for its users. The company derives advertising revenues through its PC channel and mobile channel. In addition, the company generates paid services revenues through PC, mobile and third-party channel.

PC Channel

The company’s PC channel consists of its website at ifeng.com, which comprises its interest-based content verticals and access to its licensed digital format books and its e-commerce platform. The company’s number of PC monthly unique visitors was 106 million in December 2021.

Mobile Channel

The company’s mobile channel includes ifeng news application, ifeng video application, mobile Internet websites i.ifeng.com (mobile websites), and digital reading applications.

ifeng News: The company offers a range of mobile applications for different mobile devices. Ifeng news application is the company’s flagship mobile product, which provides newsfeeds and other contents in the form of text, image, livestreaming and video.

ifeng Video: Ifeng video application provides video news, livestreaming, and Phoenix TV programs content, etc.

Mobile Websites: The company’s i.ifeng.com website is designed and tailored to the preferences of its mobile users on mobile browser and web-based pages. As part of its converged platform, i.ifeng.com allows its users to access convergence content, while they are on-the-go. Similar to ifeng.com, the company’s i.ifeng.com features an array of interest-based and interactive verticals, as well as a mobile video site for watching free mobile VOD.

Digital Reading Applications: The company’s digital reading application Fanyue Novel provides fee-based Internet literatures from writers and digital format books licensed from third-party publishers to customers on its mobile platform. In 2021, the company introduced a separate digital reading application Fun Novel, which offers users free literatures supported by advertising. Through these applications, its users are able to enjoy a full-fledged online reading experience and enable it to lay a foundation for building its own closed-loop IP ecosystem as it cultivates these content into online series, comic books, audiobooks and short-form videos to expand its content offerings and diversify its monetization channels.

Third-Party Channel

In addition to its own channels, the company has opened public accounts on popular social media in China, including but not limited to, WeChat, Weibo, Douyin, Kuaishou and Bilibili to distribute content in certain verticals, such as product reviews, finance, technology, fashion and entertainment.

The company also relies on Telecom Operators’ platforms, Internet search engines and navigation sites to provide content for its high-end users.

Advertising Services

The company provides advertising services primarily through its ifeng.com, its mobile Internet websites i.ifeng.com and its mobile applications in its mobile channel. Its advertising team consists of direct sales, agency sales, advertising technology and products support, customer support, advertising design and production, resource management, advertising strategy and sales promotion and other functions.

As is typical in China’s online advertising industry, the company primarily enters into advertising service contracts through third-party advertising agencies. In 2021, its advertising services were primarily on its mobile channel.

Paid Services

Paid services revenues mainly consist of revenues from paid content and E-commerce. Revenues generated from paid contents include fees from digital reading and revenues from the sale of audio books, paid videos, and other content-related sales activities. E-commerce revenues are generated from the sale of goods through the company’s e-commerce platform or other third-party platforms. The company has formed a team of professional buyers to select high-end products in categories, such as fine culture and creativity, food and wine, and health and wellness. Leveraging its user traffic, the company upgraded its online e-commerce brand and officially launched its private label brand in the health and wellness segment, Phoenix Premium Products, to cater to their lifestyle needs and improve the monetization capabilities of its e-commerce business.

Seasonality

Seasonal fluctuations and industry cyclicality have affected, and are likely to continue to affect the company’s business. It generally generates less revenue from advertising sales and paid services revenues during national holidays in China, in particular during the Chinese New Year holidays in the first quarter of each year. The company typically generates higher net advertising revenues in the fourth quarter (year ended December 2021) due to greater advertising spending by its advertisers near the end of each calendar year when they spend the remaining portions of their annual budgets. In addition, advertising spending in China has historically been cyclical, reflecting overall economic conditions, as well as the budgeting and buying patterns of its advertisers. The company expects that the seasonal fluctuations and cyclicality to cause its quarterly and annual operating results to fluctuate.

Research and Development

In 2021, the company’s total technology and product development expenses, including related share-based compensation, were RMB158.6 million (U.S.$24.9 million).

Intellectual Property (IP)

The company had 317 PRC software registrations and owned 57 domain names, including ifeng.com, as of March 31, 2022.

The company has also designed proprietary logos for use in the respective businesses of Beijing Tianying Jiuzhou Network Technology Co., Ltd. (Tianying Jiuzhou) and Yifeng Lianhe (Beijing) Technology Co., Ltd. (Yifeng Lianhe). As of March 31, 2022, Tianying Jiuzhou owned 487 PRC registered trademarks, six of which were transferred from Phoenix Satellite Trademark Limited, and Yifeng Lianhe owned 50 PRC registered trademarks. Tianying Jiuzhou and Yifeng Lianhe continue to use certain of Phoenix TV’s logos that are licensed from Phoenix Satellite Television Trademark Limited.

Competition

On Internet content and service provision, the company competes primarily with Baidu Inc; NetEase, Inc.; Sina Corporation; Sohu.com Limited; and Tencent Technology Limited.

Besides, especially among mobile newsfeed sector, the company primarily competes against ByteDance (Jinri Toutiao) and Qutoutiao.

In terms of video content, the company competes with a number of online video companies, including ByteDance (Douyin), Kuaishou, Youku Tudou, iQIYI and Tencent video.

History

Phoenix Media Investment (Holdings) Limited was founded in 1996.