On August 30, Hong Kong-listed Joy Spreader announced its interim results for 2021, detailing the Group’s business model and marketing vision: facilitating direct-to-consumer (DTC) access for its customers and generating revenue chiefly through the cost-per-sale (CPS) model.

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The unique business model has not only become a template for the new media performance-based marketing sector, but has also delivered enviable returns for Joy Spreader. For the first half of 2021, Joy Spreader achieved revenue of HK$624 million (approx. US$79.8 million), an increase of 62.37 per cent from the same period of the prior year. Net profit excluding extraordinary items climbed to HK$137 million (approx. US$17.5 million), an increase of 102.26 per cent YoY.

The Group’s rapid growth could not have been achieved without the firm support provided as a result of the acquisition of the Online Culture Operating Permit. In a general sense, securing of the government-issued Online Culture Operating Permits is necessary if a firm or organization intends to provide cultural and entertainment products and services via the Internet with the goal of deriving a profit or other benefits by charging users for access or purchase by way of e-commerce, advertising or sponsorship. Generally speaking, if an enterprise is engaged in sales or distribution of cultural and entertainment products and services via the Internet, including the production and distribution of as well as the provision of access to videos, music, novels, animation and games, it needs to apply and obtain a Online Culture Operating Permit, prior to entry into such business.

By extension, if a company or organizations intended to become engaged in the distribution of interactive entertainment products, it must obtain a Online Culture Operating Permit. If the company’s business covers the sales and distribution of Internet-based cultural and entertainment products and services such as games, books and other literary works, downloadable apps or anything that requires a copyright, then the need for the permit is further heightened.

Joy Spreader is already in possession of all necessary Online Culture Operating Permits. Both the Beijing operating entity and the Xinjiang operating entity of the Group have obtained their respective Online Culture Operating Permit. For Xinjiang-based firms, it is generally more difficult to obtain such a permit, as a result, few private companies possess one. This makes the permit obtained by the Xinjiang-based entity all the more valuable.

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With these difficult-to-obtain Online Culture Operating Permit in hand, Joy Spreader is authorized to distribute interactive entertainment products. This allows the firm to assist their customers in determining the best distribution platforms and most beneficial marketing points for their products and services, and to be able to offer a profit-sharing model based on final sales performance. This also changed Joy Spreader’s role in the marketplace in that it is not acting as the advertiser, but rather as a publisher who helps clients gain direct access to their target audience. In this sense, the acquisition of the license assured the firm’s ability to implement its DTC marketing plan.

From the perspective of the cultural industry as a whole, the license represents all that much more for the Group. Relying on the Online Culture Operating Permit and its unique business model, Joy Spreader has great advantages over rivals deploying other marketing models in terms of platform innovation, experiential scenario creation, precise content customization as well as direct access to audiences and consumers. The licenses in tandem with Joy Spreader’s technical advantages provide the firm with substantially more headroom for growth.

It is becoming a broad consensus that the cultural and entertainment sector needs to digitalize and to do so across the board. In the 14th Five-Year Plan for Culture and Tourism, innovation in technology is also regarded as fundamental to the promotion of the cultural and tourism sectors, and must be done in a way that delivers quality, operational efficiency, equal access, sustainability and security of the content.

Looking ahead, Joy Spreader intends to, in response to the call for “cultural prosperity and development in the new era” advocated by the Chinese government, promote the integrated and innovative growth of the cultural and entertainment sector and new online media, and inject vitality into the new economy, through the application of its data algorithm capabilities and the distribution of cultural content on mobile new media.

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