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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: Beijing needs to accelerate reform of traditional media in the face of rising challenges from players like Alibaba and Baidu, or risk seeing many of these state-run companies fall into irrelevance.
Alibaba challenges traditional media to speed up reform
A wave of mega-mergers sweeping through China’s Internet over the last 2 years saw its biggest deal to date announced late last week, when e-commerce leader Alibaba (NYSE: BABA) offered $4.6 billion for the more than 80 percent of leading online video site Youku Tudou (NYSE: YOKU) it doesn’t already own. The move marked the latest challenge to China’s traditional media industry, which has been monopolized for years by state-run broadcasters and printed publications.
If this latest mega-deal gets completed, a new Youku Tudou with access to Alibaba’s cash and other vast resources will almost certainly accelerate its challenge to traditional media by aggressively rolling out compelling new on-demand products and premium content. Read Full Post…
Bottom line: Alibaba could make a bid for Weibo in the next 6 months, in a deal that would share many similarities with its newly launched blockbuster offer for Youku Tudou.
Weibo next on Alibaba’s M&A menu?
China’s Internet is buzzing over the industry’s biggest acquisition to date with Alibaba’s (NYSE: BABA) offer for Youku Tudou (NYSE: YOKU), but that deal could presage an even higher-profile one that sees the fading Twitter-like Weibo (Nasdaq: WB) follow a similar fate. Or even more intriguing, Alibaba could make a potential play for Weibo’s parent and founder Sina (Nasdaq: SINA), in a move that would spell the end for China’s leading web portal and one of its oldest Internet firms.
There would be many similarities between such a deal and the Alibaba offer for leading online video site Youku Tudou deal announced late last week. Investors appear to also believe such a deal could possible, based on stock reactions to the blockbuster deal that would see Alibaba pay $4.6 billion for the more than 80 percent of Youku Tudou it doesn’t already own. Weibo shares leaped 13.4 percent after the deal was announced, second only to Youku Tudou’s own 22 percent jump. Read Full Post…
Bottom line: LeTV’s fledgling e-commerce business could rise quickly but may also experience growing pains that bring negative publicity, as media start to tire of the company’s constant hype and its fortunes start to stagnate.
LeTV jumps into e-commerce
Online video sensation LeTV(Shenzhen: 300104) has never been one to do anything quietly, and that’s true once more with its sudden jump into the hotly contested e-commerce space. In its usual high-profile fashion, LeTV has sent out emails to reporters detailing its huge success with a recent e-commerce promotion, and also its launch of a US e-commerce site.
But the media weren’t giving to much ink to LeTV’s hype, and instead focused on negative reports of logistical problems connected to its recent promotion on September 19. Such problems don’t come as a huge surprise for an e-commerce newcomer like LeTV, which is far better known for its online video service than Inernet shopping. Read Full Post…
Bottom line: China should expand its plans for a new enterprise board in Shanghai to include a place for the Chinese units of big multinationals like Yum and Uber, allowing domestic investors to buy into these big foreign names.
Calls grow for KFC parent to spin off China unit
Global fast food giant Yum Brands (NYSE: YUM) became the latest major multinational to contemplate a spin-off for its China business last week, following in the tracks of Uber and IMAX (NYSE: IMAX), two leaders in their respective areas of hired car services and big-screen theater technology. The trend acknowledges that China will soon become the world’s largest consumer market, and its unique qualities and complexities often justify creation of separate companies for these big global names to effectively develop the market.
China should seize on this trend and modify its current plans for a new Nasdaq-style enterprise board based in Shanghai to also include a place for these larger, newly created companies with foreign roots. Reports earlier this year indicated the regulator was aiming to roll out the new strategic industries board as soon as next year, though its plans could be delayed due to the recent turmoil on China’s stock markets. Read Full Post…
Bottom line: Giant Interactive is likely to achieve a backdoor listing in China over the next 12 months, while Qihoo could receive a new, lowered privatization offer by the end of this year.
Giant eyes China backdoor listing
Early signs of stabilizing on China’s stock markets are breathing new life into the nascent migration by Chinese tech firms that are abandoning overseas listings to re-list back at home. The latest signals of new movement are coming from formerly New York-listed Giant Interactive, which is eyeing a backdoor listing in Shenzhen, and from Qihoo 360 (NYSE: QIHU), which is indicating its faltering plan to de-list from New York is still alive.
Both of these deals have a bit of history, and are part of a broader wave that saw 3 dozen US-listed Chinese firms announce plans to privatize in the first half of this year. Most of those plans came when China’s domestic stock markets were rallying sharply. Backers of the bids were betting that companies whose shares had languished in New York could get much higher valuations from investors in their home China market. Read Full Post…
Bottom line: The offshore market for Chinese IPOs will see a brief resurgence in the next month as China’s stock markets stabilize, but the window will be short-lived as China’s economy shows new signs slowing sharply.
Imax China jumps in HK debut
After an extended period with few new listings, a new wave of IPOs by Chinese firms in offshore markets could be coming, led by stodgy insurer China RE. Sources are saying the re-insurer has taken a major step forward in its creaky IPO process by setting a price range for its stock after receiving strong feedback from investors.
This particular deal has been in the works for the last month, but it’s still relatively encouraging to see that it’s moving closer to the end. But the fact that it comes in the conservative and unexciting insurance sector means we’ll probably have to wait for a more controversial offering to see if the fall IPO season will really take off. Such a riskier deal could come in the next week or so if we see renewed activity for the other major offering in the pipeline, a $1 billion IPO by faded investment banking superstar CICC. Read Full Post…
Bottom line: Apple’s new drive to sell legal music, books and video in China stands a reasonably good chance of success, banking on consumers’ growing willingness to pay for such products if they are convenient and affordably priced.
iTunes comes to China
Following the record-breaking debut for its iPhone 6s models, tech giant Apple (Nasdaq: AAPL) is taking a big new risk by attempting something no one has done yet successfully: making profits from selling legal music and movies in China. The move was part of a newly announced major expansion of Apple’s online store in its second largest global market. But while Chinese consumers have shown a big willingness to pay huge premiums for iPhones, it’s far from clear they’ll do the same for movies and music that they can usually download for free.
Apple sold a record 13 million iPhone 6s models worldwide in their first weekend on sale, easily beating the previous record of 10 million for the iPhone 6 models. China was an important factor in achieving the new record, since the iPhone 6 wasn’t available here during the first weekend of its global launch due to technical reasons. Apple hasn’t given any individual country figures yet, but it’s probably safe to assume it sold at least 3 million of the new iPhones in China during their opening weekend. Read Full Post…
Bottom line: Disney’s Uniqlo tie-up highlights its new focus on China retailing as the opening of its Shanghai Disneyland draws near, and could be followed by a major film-production tie-up in the next 1-2 years.
Disney in new China retailing tie-up
Entertainment and retailing juggernaut Disney (NYSE: DIS) is turning up the volume of its advance into China, with Shanghai emerging at the epicenter of its campaign. In the latest move on that front, the company has just announced it will launch a new concept store in China’s commercial capital in partnership with Japanese fast-fashion retailing juggernaut Uniqlo. That particular move comes just 4 months after Disney opened its first China Disney store in the heart of Shanghai’s financial district. That store was also Disney’s largest in the world.
This sudden retailing push comes as Disney prepares for the main event in the first half of next year, which will see it open its first mainland Chinese Disneyland, also in Shanghai. That opening will cap years of lobbying and planning, and will be the first new Disneyland since the last one opened in Hong Kong a decade ago. Read Full Post…
Bottom line: Rupert Murdoch could soon announce a new China film tie-up after meeting with President Xi Jinping, while Warner Bros’ new China production venture could see mixed results due to the market’s challenging nature.
Warner, Murdoch salivate at China film market
Media heavyweights Rupert Murdoch and Warner Bros are both in the headlines, each snooping around the fringes of China’s film market in search of ways to exploit the nation’s booming box office. In the latest sign that Murdoch may be set to re-enter the market after an earlier withdrawal, the aging head of Twenty-First Century Fox (Nasdaq: FOX) was in Beijing late last week where he got a rare private meeting with Chinese President Xi Jinping. That meeting was chronicled in an upbeat report by the People’s Daily, the official newspaper of the Communist Party.
Meantime, Warner Bros was doing its own dance with China’s state establishment, announcing a film-making joint venture with a private equity fund owned by the nation’s second largest traditional media company. That deal saw Warner and China Media Capital (CMC) announce the formation of Flagship Entertainment Group, which will produce films in China for both the domestic box office and also overseas markets. Read Full Post…
Bottom line: Baidu’s reported plan to sell its online music unit looks like a smart way to rid itself of a controversial piracy-plagued business that holds little value for its main strategic focuses going forward.
Baidu set to dump music unit?
In what could be a move that’s long overdue, leading search engine Baidu (Nasdaq: BIDU) is reportedly eyeing a sale of a music division that was once one of its major attractions but in recent years has become more a liability due to frequent accusations of copyright violations. Baidu wasn’t commenting on the reports, but such a move would be consistent with its recent diversification into a range of new areas, none of which include music as part of their core business.
Such a deal, if it’s really in the works, probably wouldn’t be worth too much, perhaps in the $100-$500 million range at the very most. More significantly would be the disposal of a unit that in the past has come under fire for allowing rampant piracy through illegal peer-to-peer (P2P) trading of copyrighted music. Read Full Post…
Bottom line: Qihoo’s settlement of its dispute with Coolpad could ultimately see the former buy out their joint venture, leaving the latter open to a takeover by LeTV.
Qihoo, Coolpad settle JV dispute
Security software specialist Qihoo 360 (NYSE: QIHU) and smartphone maker Coolpad (HKEx: 2369) have announced a settlement in the spat over their troubled joint venture, though this hardly looks like the end of an entertaining story that has captivated China’s high-tech world for the last few months. This kind of settlement seemed likely, after Qihoo tried to forcibly sell its stake in the joint venture to Coolpad over claims that the latter had violated an anti-compete clause in their agreement.
Qihoo and Coolpad formed their joint venture last year, and Qihoo made its complaint after Coolpad later formed another smartphone manufacturing partnership with online video company LeTV (Shenzhen: 300104) in June. Now Qihoo says it has settled its dispute by agreeing to boost its stake in the Coolpad joint venture to 75 percent, giving it clear control of the enterprise. Read Full Post…
