China’s entertainment and technology titans continue to invest heavily in content production.
Bona’s Yu Dong (left) and Wanda Cinema Line’s Zeng Maojun.
Wanda Cinema Line, the world’s biggest cinema chain operator, is buying a 1.875 percent stake in private-owned Bona Film Group for RMB 300 million (US$43.51 million), the companies announced Monday. The two sides will build up a partnership for cinemas, advertising, and film investments, According to Shanghai-listed Wanda Cinemas’ announcement.
The Wanda Cinema investment brings Bona, a Beijing-based producer, distributor, and exhibitor, to an implied valuation of RMB 16 billion yuan ($2.3 billion), triple the valuation Bona got when delisting from NASDAQ in 2016. Bona currently owns 41 theaters in China. By the end of 2016, Wanda operated 348 cinemas in China and 53 cinemas overseas. Wanda Cinema Line’s parent company Dalian Wanda Group aims at owning one-fifth of the global movie screens.
While the tie-up of two giants raises concerns over anti-competitive behavior that will push other small and medium-sized exhibitors out of business, some analysts regard this collaboration as the choice that Chinese film companies have to make to face challenges from Hollywood.
Tencent notches solid growth in mobile gaming
Tencent, China’s largest company by market capitalization, on Wednesday reported its first-quarter revenue of RMB 49.6 billion ($7.2 billion), up 55 percent year-on-year, mainly driven by online gaming, which was up 34 percent to RMB 22.8 billion yuan ($3.3 billion).
With Tencent’s big hits “Honor of Kings” and “Dragon Nest Mobile,” online gaming revenue increasingly contributes more to Tencent’s total revenues. Per Tencent Q1 financials, online gaming accounts for 46 percent of its total revenue. That number was 42 percent last year.
As the world’s biggest online game publisher by revenue, Tencent has also been expanding its overseas footprint. Last year, together with other investors, Tencent bought Finnish game developer Supercell Oy, creator of “Clash of Clans,” for $8.6 billion.
Solid growth in mobile gaming gives Tencent more time and room to boost its presence in films, music streaming and create possibilities for it to waddle into Hollywood. The tech giant is investing into “Wonder Woman,” which is slated to release on June 2 in China, shortly after it backed Kong: Skull Island.
This Tuesday, Tencent announced a partnership with Universal Music Group that enables the distribution of Universal’s music on Tencent’s QQ Music, KuGou, and Kuwo platforms, the three biggest music-streaming apps in China.
Storm Player compensates Tencent for copyright damages
Beijing-based video player developer Storm Player was deemed liable by a Beijing court and fined RMB 6 million ($871,000) on Wednesday following litigation filed by Tencent.
Tencent complained that Storm Player illegally played six episodes of the third season of a variety show called The Voice of China, for which Tencent owns exclusive digital rights.
Founded in 2016, Storm Player is notorious for copyright infringements. Almost all of China’s major video providers have filed copyright suits against Storm Player, including Tencent, Youku, iQIYI, Sohu Video, LeTV. During the first half year of 2015 alone, Storm Player illegally obtained 59 online shows from LeTV. In 2014, after illegally rebroadcasting matches of the FIFA World Cup, Storm Player paid a fine of RMB 4 million yuan ($581,000) to China Central Television, China’s predominant state-owned television broadcaster.
Toutiao eyes on short videos
Toutiao, China’s biggest AI-driven news aggregator, announced it will pour 1 billion yuan ($145 million) into Huoshan Short Video, a creator of short videos, over the next 12 months. Toutiao is planning to embed Huoshan into the Toutiao app by the end of May.
The news app secured a latest series D round of funding of about $1 billion, led by Sequoia Capital at the end of 2016, bringing its valuation to $11 billion. By the end of 2016, the personalized news provider Toutiao garnered a total of 175 million monthly active users.
Toutiao isn’t the first tech company to bet heavily on the potential of China’s online short video business. Three weeks ago, iQiyi, the video platform owned by China search engine giant Baidu, invested $1.5 million into a video producer Shanghai Baiyue Culture. Two months ago, tudou.com, Alibaba’s video arm, put $290 million into a project to boost short video production and acquisition.
