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Media/Entertainment
youngchinabiz.com : latest Business news about Media – Entertainment in China by expert / journalist Doug Young : more than two decades of experience in writting about Chinese Companies
Bottom line: Baidu’s sale of its Qiyi video unit is a first step before a domestic IPO, and the valuation from that sale shows that Alibaba is overpaying for rival video site Youku Tudou and that industry leader LeTV is still highly overvalued.
Baidu sells Qiyi video unit in run-up to IPO
Two of China’s largest online video sites are in the headlines as the nation returns to work after the week-long Lunar New Year holiday, led by word that Baidu (Nasdaq: BIDU) is selling its controlling stake of its iQiyi online video unit. In this case the move looks like preparation for a domestic IPO by the unit, since the buyer of the stake is a group led by Baidu founder Robin Li and iQiyi chief Gong Yu.
The second report has Youku Tudou (NYSE: YOKU) announcing a date for its shareholders to vote on an offer to sell the company to e-commerce leader Alibaba (NYSE: BABA). The meeting will take place on March 14, and will mark a final step before Youku Tudou ceases its brief but stormy life as a publicly traded company and becomes part of Alibaba. Read Full Post…
Bottom line: Shanghai Disneyland’s ticket pricing and proactive efforts to stop scalpers are being well received by media and local Chinese, boding well for a broadly positive launch when the park opens in June.
Shanghai Disneyland prices tickets
It’s still 4 months until Shanghai Disneyland (NYSE: DIS) formally opens its doors to the public, but already the park operator is fixating on its entrance tickets that are almost certain to become a hot commodity when they start hitting the market next month. The announcement of pricing for Shanghai Disneyland tickets, which was quickly followed by measures the company is taking to avoid scalpers, are part of a barrage of hype that will only accelerate as the park charges towards its opening date in mid June.
I’m usually a bit cynical about this kind of thing, since companies like Disney are masters at creating news just to keep their names in the headlines ahead of a big event, even if there’s no real news to report. But in this case the opening of the Shanghai Disneyland really does seem worthy of the buzz, since the new park marks a major milestone for both China and Disney itself. Read Full Post…
The wildly popular “Voice of China” variety show has landed at the center of a major copyright dispute in China, attracting big audiences in its own right. How the conflict gets resolved will pose a major test for China’s young and fiercely competitive industry that makes programs for TV and other video channels.
The conflict’s origins lie in “Voice of China’s” copyright owner, the Dutch company Talpa, and Vico Systems, which has been producing the program for the last 4 seasons. After failing to come to financial terms for a fifth season of the show, Talpa found a new production partner, Talent TV and Film (Shenzhen: 300426). (Chinese article) Read Full Post…
Bottom line: An internal review that netted a Youku Tudou executive for suspected abuse of position was likely linked to the company’s pending purchase by Alibaba, and could be followed by more similar internal actions by China’s big tech companies this year.
Internal probe nets Youku VP
E-commerce leader Alibaba (NYSE: BABA) is quickly learning that major M&A can be a tricky business, as 2 of its largest purchases deliver headaches with the exposure of problems at acquired companies. First there were a series of accounting irregularities and a criminal investigation against an official at its Alibaba Pictures (HKEx: 1060) unit purchased in 2014, and now newly acquired online video unit Youku Tudou (NYSE: YOKU) is providing yet more headaches.
The latest problems are related to a single executive, with reports that a company vice president named Lu Fanxi has been taken away for questioning by police on suspicion of using his position for personal gain. This kind of activity is quite common in smaller Chinese companies, and Alibaba itself uncovered similarly inappropriate behavior by salespeople and fraudulent merchants at its B2B marketplace unit in 2011. Read Full Post…
Bottom line: Wall Street Round-Up’s new venture funding from China Media Capital testifies to its rapid rise, using a similar formula to the popular US-based Business Insider financial news aggregator.
SMG backs Wall Street Round-Up
A fast-rising financial news website that looks like China’s answer to the popular US site Business Insider has just netted its latest funding, in the amount of a relatively modest 100 million yuan ($15 million). But what’s attracting the biggest interest in this story is the source of the funding, which is coming from China Media Capital (CMC), the new media investment arm of the aggressive Shanghai Media Group (SMG).
As a member of the media, this story is of particular interest to me because of the controversial nature of the funding recipient, called Huawerjie Jianwen, or roughly Wall Street Round-Up. The company was founded as a financial news blog in New York in 2010 by a group of young entrepreneurs, but its rapid rise didn’t begin until they returned to China in 2013 and re-registered the company here in Shanghai. Read Full Post…
Bottom line: M&A and IPOs by Chinese gaming companies will remain low for the next 2-3 years due to lack of investor interest, but could pick up after that if some players start losing money and have to close or sell themselves to rivals.
Investors shun gaming companies
A new report on global gaming deals in 2015 is shining a spotlight on 2 major trends in China, namely the sector’s high degree of fragmentation and also the near-freeze in IPOs by Chinese companies last year. In fact, 3 Chinese gaming companies actually privatized from New York stock exchanges last year, accounting for more than half of the sector’s global deals last year in terms of total value.
Among the big Chinese deals, the largest saw stalwart Shanda Games finally privatize in a buyout valued at nearly $2 billion, ending a 2-year process. Another big gaming firm to privatize last year was veteran Perfect World, whose buyout was valued at $1 billion. The third was China Mobile Games, whose buyout was worth about $700 million. Read Full Post…
Bottom line: Baidu’s reported plan to spin off many of its non-core units for separate listings in China looks like a smart move to attract Chinese buyers for its newer businesses while retaining US investors for its lucrative core search business.
Baidu eyes domestic IPOs for non-core units
Leading search engine Baidu(Nasdaq: BIDU) is reportedly eyeing plans to spin off many of its smaller units for IPOs in China, marking a novel alternative for the growing number of Chinese tech firms torn between listing at home and in the US. The US was the traditional choice for listings by Chinese venture-backed tech firms for most of the last 2 decades, since domestic listings were difficult or impossible during that time due to a heavy bias towards big state-owned companies.
But more recently China has rolled out a new group of boards aimed at attracting high-growth venture-backed companies. The earliest of those, the ChiNext board launched in 2009, has proven quite successful, nurturing such high-flyers as online video site LeTV (Shenzhen: 300104) and film production company Huayi Bros (Shenzhen: 300027). A more recently launched over-the-counter (OTC) board has also proven quite popular, and Shanghai plans to launch its own emerging industries board later this year. Read Full Post…
Bottom line: Fox’s new “Simpsons”-themed China stores will meet with lukewarm response, and will pave the way for announcements later this year of a new Chinese theme park and film production joint venture.
Fox brings ‘Simpsons’ stores to China
After years of standing on the sidelines, media mogul Rupert Murdoch is finally taking his first big step back into China with plans to open a new chain of concept stores based on the popular TV series “The Simpsons”. An executive with Murdoch’s Twentieth Century Fox (Nasdaq: FOX), which owns the animated TV series, discussed this particular plan last year, even mentioning the “Simpsons” name at that time. Still, some are scratching their heads at this particular concept, since the TV series is relatively unknown in China and was actually banned here until recently.
This announcement is probably just a teaser for the bigger events that will come later this year, including announcement of a 20th Century Fox theme park for China, and possibly a new film production tie-up. Fox is actually playing catch-up to other major Hollywood studios in all 3 areas, following its withdrawal from the market with the sale of its main Chinese TV station to Shanghai’s China Media Capital (CMC) in 2010. Read Full Post…
There are at least three ways Netflix (Nasdaq: NFLX) can win in China. And they are realistic options that have worked for others.
But first, a few points about the situation in Chinese online streaming.
Point 1: The China entertainment market is rocketing upwards, and it will soon be the largest in the world. This huge opportunity is fueling a major fight between China’s cash-rich Internet and media giants. This hyper-competition is also creating a window of opportunity for Netflix because it has valuable things to offer to these competitors as they slug it out.
Point 2: Online media in China is very political and likely no foreign company will have control of a license or broadcast rights. So Netflix needs to be realistic about what is possible.
Point 3: The other big issue is the strong local competition. If Netflix wants to win in online streaming in China, they need to be prepared to fight for a long time.
Bottom line: Billionaire Guo Guangchang’s new sporting venture reflects his desire to move into entertainment, and also to win goodwill by supporting Beijing’s initiative to build up Chinese athletics.
Fosun’s Guo in sports tie-up with Europe’s GestiFute
After his brief and somewhat ominous disappearance last month, the man once called China’s Warren Buffett is back in the headlines, with word that Guo Guangchang has joined the growing ranks of Chinese billionaires making major investments in sports. In this case Guo is teaming up with Portuguese “super broker” GestiFute, whose main business is engineering the deals that allow European players to move from one soccer club to another. Among its deals, GestiFute was involved in previous transfers involving superstar Cristiano Ronaldo, showing the company is itself a major player in the business.
This particular deal is just the latest by some of China’s richest men and biggest private companies, which have suddenly discovered a huge appetite for all things sports. Previous investors in the growing trend include Alibaba (NYSE: BABA) founder Jack Ma and Wanda Group chief Wang Jianlin, who are 2 of the country’s wealthiest individuals. They also have been joined by a growing number of entertainment-related companies like online video firm LeTV(Shenzhen: 300104) and electronics retailer Suning (Shenzhen: 002024), which also owns a major online video site. Read Full Post…
Bottom line: TCL’s smart TV alliance with LeTV brings together 2 strong names and is getting off to a good start with a strong lineup of new products, but could have trouble over the longer term due to the rapidly changing industry.
TCL announces new products with LeTV
TV stalwart TCL (Shenzhen: 000100) has just announced an expansion of its young partnership in smart TVs with industry high-flyer LeTV (Shenzhen: 300104), in what could become the first of an earlier wave of such tie-ups to finally gain some traction. Many of the similar tie-ups were announced in rapid succession a couple of years ago, as newer online video companies rushed to forge partnerships with traditional TV manufacturers.
The idea was that the TV makers would produce customized products optimized to offer video services from a particular Internet company, creating a new generation of online-connected smart TVs that could compete with traditional cable TV services. But it seems many of those alliances never really got very far, and these days many video companies have decided to focus instead on making special set-top boxes that be easily mounted on any TV. Read Full Post…
