Bottom line: Baidu’s Robin Li could announce a deal later this week to buy 40 percent of soccer club AC Milan, while his company’s pursuit of Paramount was likely killed by internal fighting at the Hollywood studio.
Paramount spurns Baidu, Wanda
Internet search leader Baidu (Nasdaq: BIDU) is in a couple of major entertainment headlines as the new week begins, led by word that it could finally announce a highly anticipated deal that would see it buy a major stake of European football club AC Milan. At the same time, separate new reports are saying that the company was rejected in a recent bid for a strategic stake in Hollywood giant Paramount, the studio arm of Viacom (NYSE: VIAb). Those same reports are saying Wanda Group, another Chinese entertainment aspirant, was also rejected in pursuit of a similar deal. Read Full Post…
This week’s Street View takes us to the offices of one Shanghai’s hottest Internet companies, though take-out delivery superstar Ele.me probably would have preferred to avoid the spotlight on this year’s global Consumer Rights Day that fell on March 15. But anyone who missed that story, which saw Ele.me blasted for using unlicensed restaurants, needn’t worry about accidentally missing this particular day designed to draw attention to a specific cause.
That’s because I’ve recently become aware of Shanghai’s fondness for commemorating many of the growing number of global days designed to draw attention to just about any cause imaginable. While there’s certainly no harm in using such events to raising awareness of things like environmental protection, it does seem like Shanghai’s growing obsession with these promotional days is getting slightly out of hand and may need to become a little more selective. Read Full Post…
Bottom line: Results from Chinese New Year promotions show that WeChat will continue to dominate over Alipay in gift-giving and other friend-to-friend transactions over the mobile Internet due to its original design as a SNS service.
WeChat trounces Alipay in online hongbao promotions
Most of China has been on holiday these last few days, but leading Internet companies Tencent (HKEx: 700) and Alibaba (NYSE: BABA) have been working overtime trying to put the best possible face on dizzying numbers from their red envelope gift-giving promotions over the holiday.
Tencent is focusing on the headline figure of 8 billion money-filled virtual red envelopes, known in Chinese as hongbao, that changed hands on its wildly popular WeChat messaging service through the second day of the Lunar New Year. Alibaba, meanwhile, is focusing on its own headline figure that shows its Alipay electronic payments service received a whopping 21 billion hits per minute at the height of a New Year’s promotion it held with leading TV broadcaster CCTV. Read Full Post…
There are at least three ways Netflix (Nasdaq: NFLX) can win in China. And they are realistic options that have worked for others.
But first, a few points about the situation in Chinese online streaming.
Point 1: The China entertainment market is rocketing upwards, and it will soon be the largest in the world. This huge opportunity is fueling a major fight between China’s cash-rich Internet and media giants. This hyper-competition is also creating a window of opportunity for Netflix because it has valuable things to offer to these competitors as they slug it out.
Point 2: Online media in China is very political and likely no foreign company will have control of a license or broadcast rights. So Netflix needs to be realistic about what is possible.
Point 3: The other big issue is the strong local competition. If Netflix wants to win in online streaming in China, they need to be prepared to fight for a long time.
Bottom line: The new alliance between Tencent and Zhejiang TV reflects the growing strength of China’s big Internet companies in online video, and will benefit but also challenge both sides.
By Lin Nanwei
Tencent, Zhejiang TV in new partnership
Last week’s World Internet Conference in the scenic water town of Wuzhen attracted media attention due to attendance by most of the sector’s top leaders, even though few said anything substantial. But Tencent(HKEx: 700) Chairman and CEO Pony did a little homework before he came.
The day before the curtain came down on the big event, Ma appeared at another event in nearby Hangzhou to announce a strategic partnership between Tencent and Zhejiang Television & Radio Group, the province’s largest state-owned TV broadcaster. According to reports, the 2 sides will focus on cooperation in development of content, channels and promotional activities. (Chinese article) Read Full Post…
Bottom line: Huayi Bros could be moving towards an eventual goal of becoming China’s first major Hollywood-style studio through its massive new 30 billion yuan partnership with Ping An Bank.
HUayi goes to the movies with Ping An
It’s become quite common in China these days to see non-entertainment companies pour millions of dollars into entertainment-related ventures, most notably film-production deals. Everyone’s goal is to repeat the success of recent box office hits like “Monster Hunt”, which are earning big money by drawing on a fast-growing Chinese box office that could pass the US to become the world’s largest in the next decade.
But even I was surprised to see the size of the latest mega tie-up, which will see Ping An Bank pair with the highly successful independent movie producer Huayi Bros (Shenzhen: 300027) in a massive partnership with 30 billion yuan ($4.7 billion) in investment. That’s quite a large sum of money for the entertainment space, and is roughly comparable to how much e-commerce leader Alibaba (NYSE: BABA) said it would pay last week for 20 percent of retailing giant Suning (Shenzhen: 002024). Read Full Post…
Bottom line: SMG’s Whaley Tech division has become the focus of its drive into the new media realm, following Li Ruigang’s departure from his post as group chairman to focus on the unit’s development.
SMG chief tries hand at smart TV
I don’t generally hold out much hope for traditional Chinese broadcasters for making the transition to new media, since most are bureaucratic, state-run outfits staffed by an older generation that doesn’t really understand the emerging industry landscape. But 2 companies that have the potential make the transition are Shanghai Media Group (SMG) and Hunan Satellite TV, which are both making big drives into digital products delivered in on-demand formats over the Internet.
Of the pair, my favorite is Hunan Satellite, since the company has a strong track record of innovation that has helped it to build a national audience despite its location in the relatively backward interior Hunan province. But SMG’s longtime chief Li Ruigang is also trying to show he can take his company into the new media era, with word that he’s formally quit as chairman of his group to focus on development of its new media businesses. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 7. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════
China ADRs Plunge Most Since 2011 as Support Fails to Stem Rout (English article)
Apple (Nasdaq: AAPL) Steals 60 Yuan Monthly Data Usage From iPhone Users – CCTV (Chinese article)
VNO Subscribers Reach 7.5 Mln, New Users Account for 41 Pct – MIIT (Chinese article)
Huayi Bros (Shenzhen: 300027) Plans to Spin Off, List Internet Entertainment Unit (Chinese article)
Meizu, Huawei, Coolpad (HKEx: 2369) Make Big Price Cuts to Take On Xiaomi (Chinese article)
Bottom line: CCTV’s new attacks on LeTV and JD.com reflect its growing assertiveness to counter the rise of new media, and could become more frequent in the months and years ahead.
CCTV takes aim at LeTV, JD.com
The rapid rise of new media is posing a serious challenge to China’s traditional media, which is perhaps partly behind a couple of headlines that have state-run broadcasting giant CCTV leveling separate attacks against online video high-flyer LeTV and e-commerce giant JD.com (Nasdaq: JD). The first case has seen CCTV sue LeTV for copyright infringement related to its popular Lunar New Year’s eve TV program. The second has CCTV airing an investigative report accusing JD.com of offering refurbished iPhones over its site that used unauthorized components, causing some to break down. Read Full Post…
Bottom line: The exclusion of foreign tech giants from criticism in a prominent annual consumer rights show is unrelated to the broader bias they are facing from Beijing, and they will continue to come under fire for the next 1-2 years.
Foreign techs not targeted on annual consumer rights show
Top China officials at global tech giants like Apple (Nasdaq: AAPL) and Amazon (Nasdaq: AMZN) are probably breathing a sigh of relief today, after their companies weren’t targeted for attacks in an annual consumer rights show that has become a famous for creating public relations nightmares for its victims. Instead, this year’s edition of the investigative Consumer Rights Day program on China Central Television (CCTV), broadcast on March 15 each year, singled out China’s 3 major telcos for criticism in the tech sector.
Multinationals weren’t completely spared from attack, with a number of car makers including Vokswagen (Frankfurt: VOWG), Nissan (Tokyo: 7201) and Daimler (Frankfurt: DAIGn) coming under fire for things like abusive after-sales practices. (English article) But for now at least, China’s central media seem to be backing away from new attacks on foreign tech companies, following recent criticism that Beijing has unfairly targeted such firms for everything from monopolistic practices to posing national security risks over the last year. Read Full Post…
Bottom line: The latest negative headlines on Unicom and its confusing earnings reflect its broader dysfunction and a lack of investor interest in its stock, though a major new share buyback could provide a good short-term buying opportunity.
Unicom in big share repurchase
I’ve always wondered which investors were fans of China Unicom (HKEx: 762; NYSE: CHU), which based on media and its own earnings reports is easily the most disorganized and dysfunctional of the nation’s big 3 telcos. Now I’m finally learning the answer to that question, with Unicom’s announcement of a major plan to buy back up to 10 percent of its Hong Kong-listed shares. That would equate to a massive $3.6 billion worth of stock, based on the company’s current market value, in what would easily be one of the biggest share buybacks I’ve ever seen. Read Full Post…
