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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: The latest sporting deals by LeTV, Wanda and Alibaba reflect a growing scramble to secure broadcast rights and develop sports channels in China, with more such deals likely in the year ahead.
Alibaba wins NCAA rights for China
A nascent but growing move by China’s top private companies into global sports is in 2 separate headlines, with word of significant new deals involving e-commerce giant Alibaba (NYSE: BABA) and video superstar LeTV (Shenzhen: 300104). The stories also involve the entertainment ambitions of real estate magnate Wang Jianlin, one of China’s richest men, whose Wanda Group has been at the center of 2 major global sports deals over the past year.
The first of the newest deals will see Alibaba bring US college basketball to China through a deal with the National Collegiate Athletic Association (NCAA), the main governing body for US college sports. The other deal has seen LeTV, China’s most valuable provider of Internet video services, raise 800 million yuan ($130 million) for its young sports division. One of the main backers in that new funding round was Wang Jianlin’s son, Wang Shicong. Read Full Post…
Bottom line: Baidu’s crackdown on internal corruption and big jump in a ranking of global media firms are both good publicity, but won’t change the fact that it’s facing sharply slowing growth over the next year.
Baidu probes 3 directors for corruption
Following a bruising battle with some of its leading advertisers in March, leading search engine Baidu (Nasdaq: BIDU) is in the headlines this week on a more positive note with a report it is cracking down on internal corruption. At the same time Baidu is in a separate similarly positive headline that shows it is quickly climbing the ladder on a list of global media companies, surpassing much older rivals like Yahoo (Nasdaq: YHOO) and Microsoft (Nasdaq: MSFT).
The first of these headlines casts a spotlight on the many corrupt practices that frequently occur in China’s young business culture, such as preferential treatment for customers who pay “special” fees and bribe individual employees. Such practices were almost certainly a factor behind the high-profile spat that saw one of China’s largest associations of hospital owners boycott Baidu’s advertising services in March, dealing a significant blow to Baidu. (previous post) Read Full Post…
Bottom line: 3 new $100 million fundings reflect the recent popularity for Chinese tech and media start-ups among investors, pushing valuations up to unrealistic levels for these young companies that operate in mostly niche areas.
E Daijia wins big new funding
I can remember a time not long ago when $100 million seemed like a huge figure for start-ups raising new funds, and such amounts were quite infrequent. But in today’s overheated Chinese tech world, that figure is in 3 separate headlines this week, including 2 involving the hot area of location-based services (LBS). That pair of items has ride-sharing app Dida Pinche and mobile chauffeur app E Daijia each reaching the coveted $100 million mark in their third and fourth funding rounds, respectively. Meantime, the new sports unit of fast-rising video superstar LeTV (Shenzhen: 300104) has also just won its own $100 million in new funding, reportedly from one of China’s richest men. Read Full Post…
Bottom line: LeTV’s new smartphones should generate major buzz when they go on sale this weekend and could easily sell 1 million units in their first 3-4 months, challenging domestic “cool” incumbent Xiaomi.
LeTV takes pre-orders for new smartphones
Smartphone sensation Xiaomi has emerged as one of China’s hottest tech names in the last few years with its cool and trendy image, focusing its sights largely on global leaders Samsung (Seoul: 005930) and especially Apple (Nasdaq: AAPL) as it looks for a place on the global stage. But this globally-minded company could soon have to watch its back as well, with the recent meteoric rise of LeTV (Shenzhen: 300104) as the newest hipster in town.
LeTV went largely unnoticed for the first part of its life, when it was mostly an Internet-based provider of video content similar to YouTube. But it has zipped into the spotlight over the last year, first as it posed a serious challenge to China’s traditional broadcasters and now as it rolls out its own new line of smartphones. Read Full Post…
Bottom line: The hugely successful ChiNext IPO for video player maker Baofeng could draw more Chinese tech start-ups to consider listings at home, even though doing so will make their shares subject to huge volatility.
Baofeng sets record with meteoric stock rise
A video player maker called Baofeng (Shenzhen: 300431) is creating a storm on China’s Nasdaq-style ChiNext enterprise board, with a record-breaking meteoric rise for its shares following a late March IPO. The listing marks the end of a long path to market for Baofeng, which originally envisioned an IPO in New York but later abandoned that plan for a listing at home. The company’s hugely successful reception on the ChiNext also charts a potential major new path to market for Chinese tech start-ups, providing an attractive alternative to New York listings that have been the preferred path up until now. Read Full Post…
Bottom line: TVB’s choice of a Shanghai-based traditional broadcaster as its mainland partner looks like a bad selection to ensure its future, as such traditional media rapidly get overtaken by more nimble Internet-based players.
TVB places bets on Shanghai Gang
Hong Kong has been buzzing this past week over the latest mainland encroachment on its media sector, which is seeing leading broadcaster TVB (HKEx: 511) sell a stake in itself to a Chinese investor. But few have gone past the headlines to see what’s really behind this deal, and whether it can help to ensure the longer term survival of a company that has long dominated Hong Kong’s broadcasting scene. In a nutshell, TVB is placing its bets on a group of Chinese media high-flyers that I like to call the “Shanghai Gang”, because they are rooted in China’s largest media market and have strong ties to the city’s monopoly broadcaster, Shanghai Media Group (SMG). Read Full Post…
Bottom line: More Chinese online video companies could soon follow LeTV onto the global stage as their home market soars, providing competition in smaller markets to locally entrenched players like Hong Kong’s PCCW and TVB.
LeTV marches into HK
China is generally considered a technology follower rather than a leader, but new data are showing an exciting trend that could see it finally emerge as a global innovator in Internet-connected video services. The factors behind this movement are uniquely Chinese, and stem from a huge pent-up demand in China for quality video services. Such services are finally starting to come from a growing range of private companies led by names like LeTV (Shenzhen: 300104), Xiaomi and Youku Tudou (Nasdaq: YOKU), which are far more innovative and nimble than the stodgy state-run firms that dominate the traditional broadcasting sector.
Those newer companies are showing early signs of trying to go global, using Hong Kong and other Southeast Asian markets as their stepping stones onto the world stage. Such markets are relatively small and rely heavily on western content, making them particularly fertile ground for some of these Chinese firms that can create and distribute content more suitable for Asian audiences. Read Full Post…
Bottom line: LeTV’s smartphone gamble, based on relatively cheap phones tied to its video services, could succeed despite tough competition if its newly launched models get positive reviews.
LeTV launches smartphones
Online video sensation LeTV (Shenzhen: 300104) is all over the tech headlines this morning, with the formal launch of the first 3 models for its previously announced foray into smartphones. The company is taking a page from its successful business model with smart TVs, once again selling what it’s billing as a relatively high-end product for low prices in a bid to attract customers to its core paid video services.
LeTV’s biggest problem will be finding an audience for these models, as it’s quite late to the smartphone game. That fact is being underscored by new industry data that shows China’s cellphone market contracted 5 percent in March, amid growing signs of saturation due to stiff competition. Read Full Post…
Bottom line: Alibaba’s shares will continue to sag through the rest of the year on any news about the company, whether good or bad, as investors exit the stock to lock in big gains.
Alibaba shares continue downward trend
My earlier theory that shares of e-commerce giant Alibaba (NYSE: BABA) will continue to slump on any news, good or bad, is playing out as the shares re-approach a post-IPO low on a mixed series of headlines about the company. At this point the stock is simply on a downward track, as investors of all ilk who made big profits from the company’s meteoric rise sell their shares to lock in some gains. The pressure looks set to continue for the rest of the year, following the end of a post-IPO lock-up period last month that will allow Alibaba’s earliest investors to join the selling frenzy. (previous post) Read Full Post…
Bottom line: Shanda Games is likely to close its privatization by next month, as group founder Chen Tianqiao finishes dismantling his entertainment empire to try a possible new career in private equity.
De-listing looms for Shanda Games
The long and tortured privatization Shanda Games (Nasdaq: GAME) could finally be near, with word that a group bidding for the faded online gaming giant has finalized its funding for a $1.9 billion buyout. If and when this buyout finally closes, it will mark the end of a privatization bid that began more than a year ago. That would easily make it the most drawn out such buyout among about a dozen major Chinese companies that have left New York over the last 2 years due to lack of interest from investors. Read Full Post…
Bottom line: New moves against e-commerce and online video firms are extensions of a broader crackdown on rogue Internet practices, which will slow short-term growth at some companies but ultimately create a healthier business environment.
E-Commerce in China
Crackdowns widen on video, e-commerce
It seems like I write about the latest Internet crackdown far too often these days, as Beijing focuses on a wide range of industries where it wants to clean up what it sees as unhealthy business practices. Another 2 such crackdowns are in the headlines as we head into spring, one in the scandal-wracked e-commerce space and the other in online video. Both crackdowns actually began earlier, and these latest moves just show the regulators don’t feel that their job is finished yet.
Of course it’s a slight oversimplification to say this broader series of crackdowns is coming from a single source, since the commerce regulator has been the main driver behind the e-commerce crackdown and the broadcasting and publishing regulator is behind the video clean-up. But those 2 concurrent campaigns, along with other similar ones, probably underscore a recent resolve by central leaders in Beijing to clean up a Chinese business landscape that’s often riddled with corrupt and illegal practices. Read Full Post…
