China’s movie-ticketing platform Maoyan Entertainment has deepened a tie-up with tech giant Tencent as part of its strategy to become a “comprehensive culture and entertainment platform,” the company announced at a Tuesday press conference in Beijing.
Why it’s important: The partnership highlights Maoyan’s determination to expand beyond its core movie ticketing business. This decision is of strategic importance for the Hong-Kong listed company, especially at a time when China’s box office revenue is experiencing a downturn.
- Box office revenue slumped 2.7% year on year in the first half of 2019, while the number of movie-goers fell 10% year on year, showed data from Maoyan.
- Tencent is already a major shareholder in Maoyan, which bought Tencent-backed ticketing competitor Weying in 2017.
- The current partnership expands the tie-up beyond capital to business operations. Other Maoyan backers include restaurant review platform Meituan Dianping and Shenzhen-listed film producer Beijing Enlight Media.
- Maoyan was originally part of Tencent-backed Meituan but was spun off as a separate company in 2016.
“Investing in Maoyan was only the first step for Tencent. With Maoyan’s growth and upgraded strategy, Tencent will cooperate with Maoyan across the entire entertainment industry to better meet consumers’ entertainment demand.”
— Zhan Weibiao, managing director of Tencent Holdings
Details: By entering a new strategic partnership with Tencent, Maoyan gains access to resources from Tencent’s entertainment units such as Tencent Pictures, Tencent Video, Tencent Holdings, and Tencent Music Entertainment Group.
- Maoyan rolled out at the Tuesday event a refocused strategy to beef up key business areas, including operational efficiency, big data, marketing, and funding.
Context: In addition to Tencent, Alibaba Group is also poised to expand further into China’s entertainment industry with its line-up of entertainment-related platforms such as video-streaming site Youku, music app Xiami, and film production unit Alibaba Pictures.
- China is the second-largest entertainment market in the world, according to data from iResearch, which earned RMB 1.7 trillion (around $247 billion) in revenue in 2018. It is forecasted to grow to RMB 2.2 trillion in 2020 and RMB 3.2 trillion in 2022.
– This article originally appeared on TechNode.