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

INTERNET: Google Feels China Backlash From Own Employees

Bottom line: An internal petition calling on Google to be more transparent about its plans to return to China represents the first major backlash to the move, but is unlikely to dissuade the company from going ahead.

Google employees question China return

When the news first broke a couple of weeks ago that Google (Nasdaq: GOOG) was planning a return to China’s search market, many predicted that western sources would be quick to criticize the plan, even though few voices have actually spoken out so far. Fast forward a couple of weeks, when we are hearing the first sounds of what’s likely to become a sea of protests if and when the company actually makes its China search homecoming.

Perhaps not too surprisingly, the first salvo in the storm of protest that could soon emerge is coming from within Google itself, with word that employees are circulating a petition raising questions about the reported move. (English article) This kind of internal debate could be especially troubling, since the last thing that Google wants is an uprising within its own ranks at such a delicate time. Read Full Post…

INTERNET: Tencent Slumps Under Government Wrist-Slap

Bottom line: Tencent’s sudden pulling of a popular game just days after its release shows no one is exempt from Beijing’s recent online entertainment clampdown, which could weigh on stocks of related company for the next few months.

Tencent gets wrist slapped by regulator

A new statement from leading online game operator Tencent (HKEx: 700) is dripping with contrition, following the sudden yanking of a new hit game from its platform that apparently didn’t pass muster with the regulator. This latest Tencent news, combined with some downbeat earnings from live broadcasting specialist Huya (Nasdaq: HUYA) and its parent YY (Nasdaq: YY), have cast a chill over Chinese gaming and video stocks, which took a beating in Tuesday trade.

Tencent has been leading the crowd, shedding 3.4 percent on Tuesday and down another 3.2 percent in early trade on Wednesday. Those two declines have collectively wiped out more than $4 billion in market value from one of the world’s most valuable Internet companies. The bloodbath was felt among the broader realm of Chinese companies that provide any form of video content over the Internet, be it games, live broadcasting or even traditional moves and TV shows. Read Full Post…

VIDEO: iQiyi Goes Down LeEco Road With Sports JV

Bottom line: iQiyi’s establishment of a new sports joint venture and the venture’s subsequent 500 million yuan in funding point to a measured expansion for its premium content business, which will be key to its future success. 

iQiyi in sports joint venture

I’m being just a bit coy with today’s headline by suggesting that a new sports programming joint venture by online video site iQiyi (Nasdaq: IQ) resembles a similar expansion by disgraced former rival LeEco (Shenzhen: 300104). But the fact of the matter is that these two particular moves do look somewhat similar, even though I have far more respect for iQiyi than LeEco, for reasons that I’ll detail shortly.

Let’s begin by jumping right in with the news, which has iQiyi, whose main backer is online search leader Baidu (Nasdaq: BIDU), announcing the formation of a sports programming joint venture called Beijing Xin’ai Sport Media. (company announcement) iQiyi is partnering with Super Sports Media, a sports marketing company set up in 2010. As part of the deal, Super Sports Media will change its name to iQiyi Sports, implying this company is basically throwing its lot in with the larger iQiyi. Read Full Post…

INTERNET: Facebook, Google in New China Steps

Bottom line: Facebook and Google’s latest micro-moves into China reflect their longer term efforts to get permission to launch major services in the market, though it’s unclear if they will get such a green-light anytime soon.

Facebook, Google take new baby steps in China

You have to give China-challenged Internet giants Facebook (Nasdaq: FB) and Google (Nasdaq: GOOG) an “e” for effort. Both companies have popped into the China headlines over the last two weeks for micro-moves into the world’s largest Internet market, including the latest news that Facebook plans to set up a company in Hangzhou that will become an “innovation hub”.

The Facebook news comes just about a week after Google confirmed that it has launched a new artificial intelligence (AI) game in China on a platform operated by local Internet giant Tencent (HKEx: 700). Both of these moves are miniscule in the big scheme of things, especially for companies of Google’s and Facebook’s size.  But they do reflect the kind of baby steps, some might also say groveling, that such corporate giants will need to take to get a hold in the world’s largest Internet market where they are now mostly denied permission to operate. Read Full Post…

GAMES: Tencent Takes Gaming Act Abroad

Bottom line: Tencent’s WeGame could stand a 50-50 chance of success in moving abroad, since the company already has a proven track record in games and will face relatively low privacy protection concerns due to the less-sensitive nature of gaming.

Tencent takes its gaming global

Despite their huge success at home, none of China’s big Internet companies has ever scored a major victory outside its home market, despite a number of low-profile attempts. Social networking giant Tencent (HKEx: 700) is about to become the latest to take a stab at the market, with word that the company will soon launch an international edition of its gaming platform called WeGame.

There are a number of reasons why Chinese Internet companies have yet to really crack any major foreign markets, underscoring the uphill battle Tencent will face. The largest is probably well-established competition in most places, both from local players as well as global giants like Amazon (Nasdaq: AMZN) and Google (Nasdaq: GOOG). The second biggest element is probably trust, since many foreigners are a bit suspicious of these Chinese companies and their ability to protect customer privacy. Read Full Post…

IPOs: Inke Pops in Trading Debut, Xiaomi Bounces Back

Bottom line: Live broadcasting specialists Inke and Huya should do well over the next year but could face difficulty after that as popularity of such services fades, while Xiaomi’s stock gains over the last two days look like a dead-cat bounce.

Inke goes live with strong trading debut

Following the unimpressive debut of smartphone maker Xiaomi (HKEx: 1810) earlier this week, live streaming site Inke (HKEx: 3700) is the latest high-tech listing in the headlines with a more impressive debut in Hong Kong. This latest deal follows the US listing for Huya (NYSE: HUYA), China’s first live streaming site to make an IPO, which has tripled since its New York IPO in May.

There are some mixed messages in here, perhaps indicating mixed investor sentiment towards many of these new-economy companies as investors try to separate the wheat from the chaff. If that’s the case, investors certainly seem to think that Huya and perhaps Yinke represent the wheat in the hot online streaming category. Meanwhile, they seem less certain about Xiaomi, which fizzled in its trading debut on Monday but has come bouncing back somewhat since then. Read Full Post…

IPOs: iQiyi, Bilibili Juice Up Fund-Raising Targets

Bottom line: iQiyi and Bilibili should price near the top of their higher IPO price ranges, as each benefits from strong investor sentiment fueled by their unique offerings and a potential new plan to concurrently list their shares in China. 

iQiyi, Bilibili capitlize on strong positions in video

Anyone who was worried that a regulatory crackdown on fintechs late last year might dampen broader enthusiasm for Chinese stocks can relax. That’s my key takeaway from the latest headlines, which show that two non-fintech Internet firms are experiencing stronger-than-expected demand for their upcoming listings in New York.

Leading that charge is Baidu-backed (Nasdaq: BIDU) online video site iQiyi, which has sharply jacked up the fund-raising target for its proposed New York listing by a massive 80 percent, in what could well be the biggest such listing by a Chinese firm this year. At the same time, the smaller but similarly high-profile Bilibili has jacked up its own fund-raising target by a hefty 50 percent. Read Full Post…

MEDIA: DreamWorks Crashes Out of China Animation JV

Bottom line: DreamWorks Animation’s withdrawal from its China joint venture marks the end of an explosive phase in China-Hollywood tie-ups, with one-off co-production deals the most likely form of cooperation going forward. 

Take-two for DreamWorks Animation China JV

In what could herald a wave of the future, a highly-touted joint venture between DreamWorks Animation and Shanghai’s China Media Capital (CMC) has come unglued, with the official departure of DreamWorks from the tie-up. This particular exit appears quite symbolic, as Oriental DreamWorks was the first of what ended up becoming a huge wave of similar tie-ups between China and Hollywood. Thus the big question becomes if this abandonment of the venture could signal more unraveling of similar tie-ups ahead.

I suspect the answer to that question is yes, but perhaps not for the reasons you might expect. It appears that DreamWorks Animation’s decision to quit the joint venture owed to disappointing results, and I suspect the company’s acquisition by Comcast two years ago was also a factor. The fact of the matter is that China’s movie market still has huge potential. But Beijing has shown less appetite for these China-Hollywood tie-ups these days, less for political reasons and more because it is trying to stem the outflow of money for foreign acquisitions. Read Full Post…

INTERNET: Toutiao Sues Baidu Over Search Abuse

Bottom line: Baidu’s anti-competitive behavior alleged in a lawsuit by Jinri Toutiao won’t have a long-term effect on its stock, but will draw the attention of an increasingly assertive anti-trust regulator.

Toutiao sues Baidu for manipulating search results

A humorous war of words has broken out between search leader Baidu (Nasdaq: BIDU) and news aggregating app Jinri Toutiao, also sometimes called Today’s Headlines, over unfair competition in the form of search manipulation. I’ll detail the allegations shortly. But on a more serious note, this particular lawsuit does raise the question of whether a search engine like Baidu is obliged to be objective in its results. Moreover, it could also open the company to allegations of abusing its market-leading position with anti-competitive actions.

This kind of monopoly-like position has become a growing issue on China’s Internet, which has recently shed the notion of being too small for antitrust treatment. The original BAT of Baidu, Alibaba (NYSE: BABA) and Tencent (HKEx: 700) all now hold positions in search, e-commerce and games, respectively, that are quite lucrative and might be considered monopolies in many other markets. I personally would consider all three monopolies in China in terms of their ability to dominate their respective markets, and I suspect the regulator may someday attempt to challenge them the way that Google (Nasdaq: GOOG) and Facebook (Nasdaq: FB) are now getting challenged in the rest of the world.  Read Full Post…

SMARTPHONES: LeEco Sells Down Coolpad Stake

Bottom line: LeEco’s sell-down of its Coolpad stake is a prelude to disposal of the remainder, and could presage a sale of Coolpad to another smartphone maker later this year.

LeEco sells down Coolpad stake

The unraveling of former online video superstar LeEco (Shenzhen: 300104) continues as we head into the new week, with word the company has sold off a significant chunk of its stake in struggling smartphone maker Coolpad (HKEx: 2369) for a fraction of what it paid. This particular news is significant for a number of reasons, only one of which involves the latest attempt to salvage LeEco. It also has large implications for the future survival of Coolpad, and China’s broader smartphone industry. Some have predicted 2018 will be the year this overcrowded industry finally sees a weed-out that is long overdue.

I and many others have predicted this particular sale for a while, so the actual news doesn’t come as a huge surprise. LeEco purchased about 30 percent of Coolpad in two tranches for a combined $500 million in 2015 and 2016, when it was at the height of its meteoric rise. Coolpad had a relatively sound name at that time, though it was already feeling the effects of intense competition in China’s smartphone space. Fast forward to the present, when the future of both companies is in serious doubt, as each loses big money and struggles under major debt piles. Read Full Post…

INTERNET: Twitter Tweets Indecisively Around China

Bottom line: Twitter’s conservative approach to China reflects a broader indecision at the company that is limiting its growth potential.

Twitter shackled by indecision in China

While social networking giant Facebook (Nasdaq: FB) actively flirts with China in a bid to enter the world’s largest Internet market, the smaller, struggling Twitter (NYSE: TWTR) seems unable to make up its mind. That seems to be the key takeaway from a new interview on the prickly subject of China between Maya Hari, Twitter’s Asia Pacific chief, and Caixin, a well-respected Chinese financial media that also happens to be my current employer.

This particular message seems to be a recurrent theme with Twitter, which, like Facebook, doesn’t like China’s strict self-censorship policies but also finds it hard to ignore such a big market. In Facebook’s case, the company has made it quite clear it’s willing to tolerate China’s self-censorship policies for a chance to build a presence in the market, most likely through a future joint venture with a local partner. Read Full Post…