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

VIDEO: LeEco Switches Off Vizio Deal, Cuts US Staff

Bottom line: LeEco’s scrapping of its Vizio purchase may be due to currency controls, but should be welcome by the company as a cash conserving move, and could presage a withdrawal of its investment in electric car maker Faraday Future.

LeEco scraps Vizio purchase

The first major pullback for cash-challenged LeEco (Shenzhen: 300104) is coming in the US, where the company is confirming the abandonment of its $2 billion agreement to buy no-name TV maker Vizio. At the same time, unconfirmed reports citing knowledgeable insiders are saying the company is cutting one-third of its headcount in the US. It’s not really clear if this pair of items are related, though both are certainly cost-cutting moves in a market where costs are quite high.

The next big move perhaps will see LeEco abandon its backing for Faraday Future, the electric car-making venture that’s building a $1 billion plant near Las Vegas. That deal is a bit more futuristic than the Vizio TV deal that’s now being abandoned, and is probably a bigger pet project of LeEco founder Jia Yueting. But the reality is that the company needs to conserve cash, and also that China’s foreign exchange regulator is making life difficult for anyone who wants to move money out of the country. Read Full Post…

VIDEO: LeEco Gets Lifelines from Creditor, Currency Controls

Bottom line: LeEco’s debt-for-equity deal with Compal and the looming collapse of its Vizio purchase are welcome developments that show it could quietly jettison some of its newer businesses and eventually emerge from its current cash crunch.

Picture dims on LeEco’s Vizio purchase

The unwinding of former online video superstar LeEco (Shenzhen: 300104) continues to unfold, with two major developments that could help to slow the company’s rapid decline. The first of those has one of LeEco’s largest creditors, Taiwan contract manufacturer Compal (Taipei: 2324), agreeing to swap out the huge amount of money it’s owed for LeEco shares. The second has a major deal last year that had LeEco agreeing to pay $2 billion for US television brand Vizio apparently unraveling due to China’s recent clampdown on money leaving the country for offshore M&A. Read Full Post…

IPOs: Literature Firm Makes New Listing Attempt with Shanda, Tencent Backing

Bottom line: Tencent’s online literature unit is likely to make a Hong Kong IPO later this year, and should get a relatively strong reception due to strong backing and its market leading position for a product with stable long-term demand.

Tencent literature unit eyes HK IPO

If you don’t succeed the first, second and third times, then try again. That could well be the mantra for the digital literature unit of former online entertainment giant Shanda, which has gone through quite a few attempts at an IPO, only to stumble each time. This particular story has quite a few twists, which I’ll review shortly. But the end result appears to be that the unit, previously called Cloudary, may finally succeed in its latest attempt to go to market, this time under its current parentage as the online literature unit of Internet giant Tencent (HKEx: 700). Read Full Post…

ENTERTAINMENT: DreamWorks, Paramount China Tie-Ups Unraveling

Bottom line: Foundering prospects of cross-border tie-ups involving DreamWorks and Paramount shows the love affair between Hollywood and China may be entering a new phase of lowered, more realistic expectations.

DreamWorks Animation eyes sale of China JV stake

The old saying says that what goes up must come down, and that certainly appears to be the case with new reports of the unraveling of two more China-Hollywood tie-ups. The latest reports say that US giant DreamWorks Animation is looking to sell out its stake in Oriental DreamWorks, its landmark China animation joint venture that was launched with fanfare 5 years ago. At the same time, another report is saying a $1 billion film production tie-up between two Chinese partners and Paramount is reportedly running into trouble due to turmoil at the Hollywood studio.

The unraveling of these two major deals comes just weeks after another deal involving Wanda Group’s planned purchase of Dick Clark Productions also appears to be coming unglued. In that case the culprit is China’s recent currency controls, which were preventing Wanda from getting the necessary funds outside the country to complete the $1 billion purchase. But Wanda was apparently also worried it was overpaying for the asset. Read Full Post…

E-COMMERCE: Ant Trumped in US, Alibaba Reorganizes Video

Bottom line: Ant Financial will counter bid for MoneyGram, following a surprise rival bid for the company, while Alibaba Pictures’ absorption of the former Youku Tudou looks like a logical consolidation of Alibaba’s filmed entertainment assets.

Ant’s MoneyGram offer attracts rival bidder

Two of Alibaba (NYSE: BABA) founder Jack Ma’s biggest endeavors outside his core e-commerce business are in the headlines, led by a counter bid for a US financial services company his Ant Financial is trying to acquire. That particular deal has a US company called Euronet Worldwide announcing a bid for MoneyGram that’s 15 percent higher than Ant’s own $880 million bid made back in January. The other news is slightly more mundane but still significant, and has Ma’s Alibaba moving its Youku Tudou online video service into its separately listed Alibaba Pictures (HKEx: 1060) filmed entertainment unit. Read Full Post…

INTERNET: Yidao Talks IPO, in Break with LeEco

Bottom line: Yidao’s announcement of plans for an IPO hint at a looming sale of the company by controlling stakeholder LeEco, which could be mulling sales of other recently purchased assets in a bid to ease its cash-crunch.

Yidao prepares for IPO

What do you do when you’re running low on cash? The answer is obvious for private car services firm Yidao: make an IPO. That would normally seem like a relatively smart and logical choice for most up-and-coming companies, but Yidao isn’t quite one of those. For starters, the company operates in an extremely competitive space now dominated by the likes of Didi Chuxing, UCar and Shouqi, just to name a few.

The other big factor weighing on the company is its majority ownership by cash-challenged online video company LeEco (Shenzhen: 300104). To be precise, LeEco paid $700 million for 70 percent of Yidao in 2015, back when both companies were far healthier than they are today. Thus this latest pronouncement that Yidao is even considering an IPO seems to hint that LeEco may be considering a sale of some of the many assets it acquired during a breakneck expansion that got it into its current mess. Read Full Post…

SMARTPHONES: Oppo Shows India Resolve with Cricket Deal

Bottom line: Oppo’s major new cricket sponsorship deal shows its commitment to India, but may have to be renegotiated if and when the company’s fortunes decline in the next 1-2 years following its meteoric rise.

Oppo in India cricket deal

Smartphone high-flyer Oppo is trying to show the world it’s serious about India, with word it will pay 1.1 billion yuan ($160 million) for rights to sponsor the nation’s national cricket team. News of the deal comes just three months after China’s top smartphone brand announced plans to build a production facility in the hotly contested India market, which has become a magnet for Chinese brands over the last year.

All that raises the question of whether Oppo is for real, or just another passing fad in China’s constantly changing smartphone landscape. That landscape has seen players like Lenovo (HKEx: 992), Xiaomi and Huawei become dominant players in the world’s largest smartphone market one day, only to rapidly fade the next. It’s obviously still too early to say if Oppo will follow in that trajectory, though my educated guess would be the answer to that question is quite possibly “yes”. Read Full Post…

GAMES: NetEase Eyes Real Journey to the West

Bottom line: NetEase’s new global expansion could stand a good chance of success due to its strong record with self-developed titles, which could help it pass Baidu in market value over the next 1-2 years.

NetEase holds developer forum in San Francisco

The company that made its name from a series of games based on the famous Chinese novel Journey to the West is trying to turn that story into reality, as NetEase (Nasdaq: NTES) eyes expansion outside its home market. The West contained in NetEase’s latest announcement is quite different from the West in the classic novel, the former referring to North America and Europe while the latter refers to India.

But other similarities between the novel and this new global expansion do abound in NetEase’s new announcement that it has just held its first-ever developer’s forum in the West. In both cases, the main character is traveling into unfamiliar terrain in pursuit of major rewards. And in both cases, each faces big challenges before attaining those goals. Read Full Post…

MEDIA – LeEco Default Strains China Sports Bubble

Bottom line: LeSport’s reported default on payments for Asian Football Confederation soccer games marks the start of the popping of a bubble for sports broadcasting rights dating back to last year.

LeSports soccer drive on the skids

In what could be the first domino to fall in China’s overinflated market for sports broadcasting rights, the sports unit of cash challenged LeEco (Shenzhen: 300104) has reportedly defaulted on payment for one of several high-priced packages it purchased last year. In this case, it appears that fans of Asian Football Confederation soccer games won’t be able to watch their favorite pastime on LeSports, which reports are saying has been stripped of its broadcasting rights after missing a payment. Read Full Post…

INTERNET: Baidu’s iQiyi Raises $1.5 Bln, as Investors Hedge Bets

Bottom line: iQiyi’s issue of convertible notes to raise its latest $1.5 billion shows it continues to post big losses, and investors are increasingly skeptical that it can become profitable in the next 2 years.

iQiyi lures investors with convertible notes

It seems no one is quite ready to believe that China’s cash-burning online video sites are ready for the profit column just yet. That seems to be the message coming from Baidu-backed (Nasdaq: BIDU) iQiyi, one of the leading players, which has just raised a fresh $1.5 billion via a convertible note issue. That would indicate that investors are hoping they can convert their notes into iQiyi stock when they come due, but can also simply collect back their money with interest instead. Read Full Post…

ECOMMERCE: Wanda’s E-commerce Foray Running on Empty?

Bottom line: Wanda will continue to operate its ffan e-commerce site for another year, following the departure of its CEO, but could quietly end the initiative afterwards due to lack of synergies with its brick-and-mortar shopping malls.

Success evades Wanda in e-commerce

The headlines have been buzzing this week about the departure of the chief executive of the e-commerce unit Wanda Group, the real estate-turned-entertainment giant with a voracious appetite for global acquisitions. The big theme from the chatter is that the departure of Li Jinling, the unit’s third CEO in 3 years, marks a setback and possibly even presages a death knell for the Wanda initiative into the online shopping realm.

Wanda is speaking out on the subject, saying it never intended to launch a website that would compete directly with the likes of sector leaders Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD). Perhaps that’s true, though that didn’t stop Wanda and its ultra-confident chief Wang Jianlin from boasting of lofty ambitions when it signed up Internet titans Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700) as partners to its ffan e-commerce site in 2014. Read Full Post…