Digital Domain Archives ~ Business China : news for investors in China

China News Digest: October 8-10, 2016

By newsdoug on October 10, 2016

The following press releases and news reports about China companies were carried on October 8-10. To view a full article or story, click on the link next to the headline.
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Lenovo (HKEx: 992) in Talks to Take Over Fujitsu’s PC Business: Source (English article)
NetEase (Nasdaq: NTES) Media Arm Submits Draft Registration to SEC for US IPO (PRNewswire)
Wal-Mart (NYSE: WMT) Doubles Stake in JD.com (Nasdaq: JD) Moving Further Into China (English article)
It’s Official: LeEco (Shenzhen: 300104) Will Break US Boundaries on October 19 (English article)
Hollywood’s Digital Domain Takes Citic and SoftBank China as Strategic Investors (Businesswire)

ENTERTAINMMENT: ‘Star Wars’ Rattles China Box Office, Draws SMG

By newsdoug on January 12, 2016

CMC teams up with special effects house Base FX

The newest “Star Wars” movie is in two headlines this week, led by a strong debut for the seventh installment in the franchise that has just opened in China several weeks after its global premier. The movie is also in headlines related to a new initiative by the hyperactive China Media Capital (CMC), which has just formed a joint venture with a company that made some of the special effects for “Star Wars: The Force Awakens”. In this case CMC’s new partner is Base FX, a Beijing-based start-up with strong ties to Hollywood.

Much has been written about prospects for the new “Star Wars” movie in China, where the franchise isn’t very well known because none of the first 6 films in the series were screened in the country unit recently. To address that problem, the movie’s producer Disney (NYSE: DIS) has been working overtime to promote the film in China, with relatively strong results. Read Full Post…

Warner, Wanda In New China Film Finance Acts

By newsdoug on October 20, 2014

Wanda Cinemas files for domestic IPO

I’ve stopped using the term “love affair” to describe the romance between Hollywood and China over the last 2 years, as it no longer seems sufficient to describe the flood of tie-ups that have emerged since China became the world’s second largest box office. The Long March of new deals has now gained 2 more members, with word that US film giant Warner Bros (NYSE: TWX) is in a major new movie financing deal with Shanghai Media Group (SMG), China’s leading regional maker of filmed entertainment. In a separate headline, other reports are saying that real estate giant Wanda Group is also deepening its own involvement in movie industry finance, by filing to make a domestic IPO for its movie theater business. Read Full Post…

China Box Office Soars, SMG Swallows Galloping Horse

By newsdoug on July 11, 2014

SMG buys Galloping Horse

Two headlines are casting a spotlight on a love affair between China and Hollywood being fueled by a soaring Chinese box office that could one day surpass the US as the world’s largest. One of the news bits shows just how big the Chinese box office is becoming, with word that domestic ticket sales soared 25 percent in the first half of the year. The other headline highlights the growing number of partnerships that are springing up, with industry giant Shanghai Media Group (SMG) reportedly in a deal to buy Galloping Horse, a Beijing production house whose assets include the Hollywood Digital Domain special effects house. Read Full Post…

Huayi Bros Jumps On Hollywood Bandwagon

By newsdoug on March 7, 2014

The list of major Chinese entertainment firms jumping on the Hollywood bandwagon has just gained an important new member with word that Huayi Bros (Shenzhen: 300027) is on the cusp of investing in a major new production house. I’ve been following the China media scene for more than a decade now, and can say that Huayi was one of the nation’s earliest major players to emerge in a space that was extremely difficult for years due to tough restrictions and extreme fragmentation. But Huayi has shown not only an ability to survive, but also to thrive in a market where the movie theater business is suddenly booming and online video has quickly become an important new revenue source. Read Full Post…

East-West Lines Blur At China Box Office

By newsdoug on November 7, 2013

Domestic films zoom at China’s box office

Two interesting new reports about China’s box office paint very different pictures about the country’s movie industry. Everyone agrees the sector is growing at a rapid clip, and will probably eclipse the US over the next decade to become the world’s largest box office. But who exactly is fueling that growth is a subject of debate, with one report saying domestic productions are suddenly surging as another says Chinese film companies are boosting their appetite for foreign productions. The underlying factor behind this apparent paradox is a growing confluence between East and West, with foreign studios increasingly working with Chinese partners and customizing their films for Chinese audiences. Read Full Post…

Digital Domain’s New HK Owner, Wanda’s Imax Affair

By newsdoug on July 30, 2013

Digital Domain gets new owner, Wanda expands Imax ties

A couple of news bits are highlighting China’s rapidly blossoming love affair with Hollywood, and also hinting at the turbulence we’re likely to see in the next couple of years as Chinese firms invest too much as they become smitten with show business. One of those deals has US digital effects house Digital Domain being taken over by a new Chinese owner less than a year after it was purchased out of bankruptcy by a Beijing-based film producer. The other has leading theater chain owner Wanda Group significantly boosting its ties with Canada’s Imax (Toronto: IMX), as it invests heavily in Imax’s big-screen technology. Read Full Post…

China Film: Paramount Wins, Bona Bombs

By newsdoug on April 5, 2013

Paramount, Bona discover ups and downs of China film

New headlines from top Hollywood studio Paramount (NYSE: VIAb) and publicly listed China filmmaker Bona Film (Nasdaq: BONA) are showing both the huge potential of the China box office, and also the fickle nature of the broader film industry. In the more typical Hollywood style, Paramount has splashed across the headlines with word that it will join with 2 Chinese partners to co-produce the next installment of its blockbuster “Transformers” franchise. Meantime, Bona was decidedly lower key in announcing its latest quarterly results, highlighted by a slide into the red due to lack of hit movies. Read Full Post…

China Suffers Cold in Hollywood 中国投资好莱坞需谨慎

By newsdoug on November 12, 2012

China is finding out quickly that Hollywood may be all glitter and sparkle on the outside, but it’s quite a different world to insiders where cutthroat competition is more the norm and laggards are quickly cast aside to the B-list or worse. That’s the message coming across from a new report saying Hollywood movies are taking a growing piece of the Chinese movie market since Beijing started allowing more US films into the market earlier this year. It’s also the message that Chinese firms are likely to learn the hard way as they try to buy into the Hollywood scene, as one Beijing company will probably learn after last week signing a deal to invest in a big-budget US film.

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China Gallops Off With US Digital Effects Star 小马奔腾收购数字领域

By newsdoug on September 25, 2012

China film house buys Digital Domain assets The growing China-Hollywood love affair has taken an interesting and new twist with the purchase of a major bankrupt US digital effects studio by a partnership between a Chinese production house and one of India’s leading communications groups. Adding further intrigue to the picture are the bankrupt US venture’s links to blockbuster director James Cameron, who seems to have taken his own a sudden interest in the China market. If all of this sounds like something from a Hollywood movie, then perhaps it’s because so many US entertainment executives are getting overly excited about the huge potential of the Chinese movie and TV markets, which appear to finally be opening after years of being largely closed to foreign investment. My main advice to all the excited parties, both in China and the US, would be to temper their big expectations with some realism, as it’s quite possible that either Beijing or Washington could quickly become worried about this rapidly evolving love affair and take steps to cool things off.

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China-Hollywood Lovefest Continues With Latest Deal 小马奔腾携手数字王国中国与好莱坞恋情继续

By newsdoug on April 26, 2012

Digital Domain joins China-Hollywood lovefest The new love affair between China and Hollywood seems to be growing day by day, even as signs of some minor alarm bells emerge in Washington at the rapid development of this budding romance. The latest twist in the China-Hollywood saga has Digital Domain (NYSE: DDMG), a leading visual effects company, teaming with Chinese partner Galloping Horse Film in a joint venture production house that will initially use Digital Domain’s technology to convert traditional films into 3D. (company announcement) But even as news of this latest Hollywood tie-up emerges, other media are reporting that the US securities regulator has informed several of the major studios, including Disney (NYSE: DIS) and DreamWorks, that they are being investigated for matters related to China. (English article) Perhaps not coincidentally, both Disney and DreamWorks Animation (NYSE: DWA) have both announced new animation joint ventures in China this year, marking major milestones as Beijing finally opens up the country’s long-closed media sector to foreign investment. (previous post) Let’s look first at the Digital Domain venture, which the partners are saying is designed to meet growing Chinese demand for big-budget films with all the latest visual effects, which are often quite costly to produce. The venture will initially be quite small, with Galloping Horse providing $50 million to build a facility and Digital Domain providing technology and training expertise. But obviously it can be quickly expanded if and when demand for its services grows, something that looks likely as China is already the world’s second largest movie market. This tie-up follows the Disney and DreamWorks ventures announced over the last 3 months, as well as another pending joint venture between US home shopping channel operator QVC and China’s leading radio broadcaster, China National Radio. (previous post) Perhaps in reaction to this sudden and fast-evolving love affair, the US Securities and Exchange Commission has reportedly sent letters to 4 studios informing them they’re under investigation, according to foreign media, citing unnamed sources. No reason for the investigations is given, but speculation is high that the studios may be suspected of bribing Chinese officials to get more of their films shown in China under the nation’s strict quota system that allows only 20 foreign films into the market each year. This investigation could ultimately result in 1 or 2 resignations, but is unlikely to have any major effect on the studios. Instead, it may be the US government’s more subtle way of telling the studios that they’re welcome to join hands with Chinese partners, but they also need to behave according to international norms and avoid becoming too hypnotized by the illusory myth of 1.3 billion potential movie viewers and TV watchers.

Bottom line: Digital Domain’s new joint venture is the latest advance in the growing love affair between China and Hollywood, which may be raising concerns in Washington.