[Exploration of PFP operation in China. This article is a record of the video speech. The content is quite long. If you are interested, you can go to the official account to watch the original video. ]
Hello everyone, I am Qin Zhiyong from Zhongchuan Yuezhong. Today I want to talk to you about what PFP is, and hope to use an easy-to-understand way to help you better understand such a cultural product and its business model.
1. What is PFP?
PFP is a copyrighted social avatar that originated in the United States and is cast on the blockchain. Why was such a project born? Many of our young people and our current society do a lot of socializing online, especially on social platforms. There are several ways to express our identity on social platforms, such as the Blue V certification and Big V certification, which are one way to express it, and another way is the avatar.
The earliest project of PFP is to create an avatar for social media. It is produced by casting it on the blockchain. It is different from ordinary avatars in several ways: First of all, it is a copyrighted product, which means that if you buy it, you not only have the right to use it, but also the ownership of its copyright. Second, it is not homogenized. Each of them is unique and unique through computer programming and the combination of components to highlight your social identity. For most young people, what avatar to use on social platforms is a very tangled issue. It is not easy for us to use a lot of images that we find casually, or to find a lot of life photos in our lives to make avatars for social platforms. In the physical world and real society, we show our superiority for our identity, such as I have a luxury car, or I have something. But on social platforms, how can people pay more attention to you and better reflect your identity? At this time, an avatar like PFP came into being. The most representative one is "Bored Ape", the PFP avatar called "Bored Ape" in the West. The earliest idea and design of its avatar came from a writer and an editor. It is a way of production at the content level.
2. Change from MG model to copyright profit-sharing model
What is our understanding of the PFP project? It is not just a social media avatar, it is a huge change in the entire IP content production method and new business model. We think its value may be here.
Let's first look at the new content production method we mentioned. In the past, when we wanted to create an IP, it was a centralized way to create it. Our company that wants to produce content and IP will, for example, make light novels, comics, animations, and movies. It has various ways to produce this IP and this content. But what are its commonalities? It is created by a company, which is a centralized content production method. But from the perspective of PFP, it still has designers, it may have a main image, it may not even have a main image, it is composed of tens of thousands of different images, this is its content production method. It relies on or even produces together, even a club produces it, it is not a centralized thing.
The second point is its business model. What is the business model of our traditional IP licensing? I license it to you, and then we adopt MG plus profit sharing, which is B2B. What is its source of income? It is called licensing fee. I license you the right to use it, and you pay me a certain amount of licensing fee. Our authorization refers to the right to use, not the ownership.
So what is the business model of the PFP project? I sell it to you, and then you can use it to develop your business model. For example, as mentioned earlier in the "Boring Ape" brand, for example, China's Li Ning, and various brand companies, they all use the purchased IP, that is, the "Boring Ape" IP, to co-produce with it, so what they buy is the ownership, so the rights are clearer.
3. Realize the co-creation of IP brands and the sharing of IP value
This business model has another huge feature, that is, since we have bought the ownership, it has become an asset, and assets always have the choice of appreciation and depreciation. If we have 10,000 people who have purchased such an IP with the same name and different images, in order to make the digital content or IP we purchased generate greater returns, then all of us are not just consumers, we must also be its promoters, promote its IP to be more influential, and promote its IP to be accepted by more people. At this time, it forms a model called multi-party mutual achievement. Why do we want to promote it to become a more famous IP? Because it is very simple, the greater its brand influence, we as holders will benefit more. Or as a holder, I make a product myself, I use this IP, my product will sell better, this is our motivation. From this perspective, under this business model, we have solved the problem of consumers becoming promoters.
It is also a beneficiary at the same time. We have blurred the concepts of beneficiaries and consumers. This is the biggest difference between the decentralized business model and the traditional model. Then we are faced with another problem, that is, what should the copyright holder do? After all, he has a designer. What is the benefit of the designer and copyright holder? He should also have better benefits as the brand influence continues to expand. So at this time, we adopt the so-called copyright profit sharing. Copyright profit sharing means that in addition to the first time I sell you the right to use, every time you sell the copyrighted product of PFP in your hand, I will share profits from your transaction, which is called copyright profit sharing. This copyright profit sharing is different from traditional authorization. The income obtained from this perspective refers to the transaction between holders to generate copyright income from a transaction. Because the greater its brand influence, the more market vitality it has, its liquidity, the liquidity of its assets, its content dissemination, the dissemination of its content, and the dissemination of its holdings, it will be more active. Then our copyright has a new way to earn money, copyright profit sharing.
If we want to adopt this approach from the perspective of PFP operation, first of all, our dissemination method must change, our benefit method must change, our production method and business model must change. What is the core of its change? That is, we must make this IP more vital, and have more people participate in it to help it re-create, promote and benefit from it. This is the core, I think this is the core of PFP.
4. Three elements of operating a PFP project
In addition, based on our experience in China, because of projects like "Boring Ape", Western PFPs are all built on public chains, but there are not many successful cases, which means that there may be more failures. We have studied many cases and we believe that in order to make such a successful project in China, it must meet three major requirements.
The first is that if you want to operate this PFP successfully in China, it must have a strong IP parent company to operate this IP and operate and plan this IP as a whole. In the current situation in China, I don’t think it can be successful just by a group of users or simply selling a picture. I think it must have a strong parent company to operate this IP, this is the first premise. Secondly, I think it needs a strong sales platform to operate its various activities, this is the second point. It must be operated, and operation is the key. Third, it needs a strong club, or "DAO" to establish the consensus of this group of people and the spread of private domain traffic between users. I think these three points are not just one, it must have all three at the same time, I think it is possible to achieve our expected goals. So from the perspective of "Te PANDA" that we are about to release, we are also making preparations for these three directions.
First of all, the parent company of this IP, the Fashion Group under China Cultural Media Group, is the best in China in the fashion field, and they will continue to operate this IP in this area. As for the sales platform, we will first sell it on the China Cultural Media New Cultural and Creative Collection Platform. At the same time, we also have the Cultural Tourism China Metaverse that can be circulated across chains, and we will open up many future scenarios and applications for it.
There will be another major version update of the China Cultural Media New Creative Collection Platform, which will be updated at the end of the year, namely "DAO", the "DAO" community. We will rely on this "DAO" community to operate such a club. In order to make this "DAO" system or this "DAO" community better, as everyone knows, we have been operating our volunteer group, and our volunteer group is also well-known in this industry.
5. Think from the buyer’s perspective
There is another more important reason, a more important factor, that is, when we were selling, I did a lot of research. I think many people only consider the PFP projects sold by other platforms from their own perspective, that is, whether they can sell it and what is the appropriate price, but few platforms consider it from the perspective of buyers.
I think if we want to do this PFP project well, we must think about this issue from the perspective of the partner or the buyer. Why does he buy? This is a very core question. If he says that people will speculate and make profits after the purchase, then this project should not be done. Relying on the profits brought by speculation is a thing without foundation, built on the desert, and it can collapse at any time. Because it has no anchor, we need an anchor for its value and its price.
So when we consider why buyers want to buy our PFP, we consider it from the perspective of benefits. Buyers must have benefits, but these benefits cannot be generated through hype without anchoring. This path is definitely not feasible. It can be that the influence of the brand continues to expand, which leads to its value rising continuously, so its price rises. This is an anchor, which is acceptable. But it cannot be anchored on no value basis. So in terms of buyers' benefits, we have also planned several categories.
For the first category, we believe that the beneficiary should hold the copyright income. You bought it, you have its copyright, so how do you use this copyright to bring you income? It is not your problem, but our problem, the problem of the platform. Because you are an amateur and we are professionals, we should help you plan the copyright you bought, and we will provide you with a channel to generate copyright income. This is what we should do.
The second point is the revenue from brand activities. This is what we just said, why we use a very powerful IP parent company to operate it, because it will do a lot of brand activities, and the holder can participate in major brand activities. Then major activities and brand activities may have revenue, or may not have revenue, or perhaps its revenue is just an activity, you are qualified, you can participate, this is the revenue of a brand activity, this is the second point.
The third point is that as a sales platform, it must have platform activity income. This is what we often emphasize on the Zhongchuan New Cultural and Creative Collection Platform, which is called holding income, not speculation income. For example, we often organize activities for the club, the "Te PANDA" club or the holders, such as airdrop activities, lucky draw activities, and various other activities. As long as you hold it, it is called platform activity income. In addition, there is also the income from commercial operations. What is the income from commercial operations? It means that if you hold it, you have ownership, not the right to use it. We also have a large module to be launched on our platform, which is the mall. The mall platform mainly comes from the creation and sale of copyrighted products. We have contacted many brands and producers of derivatives, and we will provide an industrial chain. This industrial chain is that as long as you hold the copyrighted product, we can directly give full play to your creative imagination and directly customize some copyrighted products. Through our platform, we will help you sell it, and we will open more sales channels in the future. What do we hope for more? It is that everyone can stimulate more creativity and stimulate and activate a larger market under the premise of a common main IP.
6. We don’t sell pictures, we sell the industry chain
From the perspective of the copyright industry chain, a transaction is only the first step. The industry chain is very deep, with the second, third, and fourth steps. However, ordinary consumers do not have the ability to reach the second step, let alone the third and fourth steps. Therefore, we are not only selling a copyrighted avatar like PFP, but we should also be selling an industry chain, which provides new IP content production methods and business models in various dimensions. In other words, our understanding of PFP is that it does not sell you a picture, but sells you an industry chain. This is our understanding of the PFP project.
Finally, I would like to talk about our plan for the PFP project. We will also cast 10,000 copies of "Te PANDA", but we will divide it into five series to correspond to different groups of people, such as national style, punk, and street. Our fashion group is very good at this, they are in the fashion business, and I don't think we need to worry about fashion. As for future PFP, we also welcome more IP parties to cooperate with us and do more PFP projects.
Then, we also have the Cultural Tourism China Metaverse, and the CCCC New Cultural and Creative Collection Platform. We are still continuing to build our derivative channels and supply chains. We hope to build a complete PFP copyright project at CCCC, an industrial chain based on Web3.0, instead of selling you a picture. This is what we want to emphasize. We are different from others. We don't sell pictures, we sell an industrial chain. Okay, thank you!
