Bottom line: A new music re-licensing deal between Alibaba and Tencent, combined with a meeting between the copyright regulator and major online music sellers, hint at attempts to create a more level playing field in the space.
Alibaba, Tencent in music cross-licensing deal
A couple of items from the music sector are in the headlines today, showing how tricky the situation is becoming with copyrights and online licensing in China. One of those has two major players, the music services of Internet giants Alibaba (NYSE: BABA) and Tencent(HKEx: 700), signing an agreement to cross-license music to each other when one of them owns the rights to such music. The other has China’s copyright office actually calling a meeting between those two companies and two other major players, NetEase(Nasdaq: NTES) and Baidu(Nasdaq: BIDU), to discuss issues confronting the industry.
Two issues appear to be driving these two deals that appear to be related. One is concerns from the music industry that rights to their songs will become fragmented and confined to single platforms under the current licensing system, limiting consumer choice. Similar concerns might also be what’s driving the regulator to get involved as well. An interesting footnote to this might be whether the same thing could soon happen in the video licensing arena, which shares similar issues. Read Full Post…
Bottom line: China’s Wanda Group will continue a recent trend of hunting for top global talent to build its growing entertainment empire, as it seeks to challenge the likes of Disney.
The aggressively expanding Wanda Group is filling up its ranks with foreign-trained China veterans as it tries to challenge the likes of global names like Disney (NYSE: DIS) with moves into the movie and theme park spaces. Now the company is going on a major shopping spree for top talent from some of those companies, led by new reports that it has just poached a top Disney theme park executive to head its own theme park division. At the same time, other reports are pointing out that Wanda also recently hired Google’s (Nasdaq: GOOG) former top China executive to help lead its Internet division. Read Full Post…
Bottom line: Alibaba will have to spend more heavily to rid its marketplaces of trafficking in pirated goods, while its Steven Spielberg partnership is part of a new wave of deeper film tie-ups between China and Hollywood.
Alibaba ties with Spielberg’s Amblin
Internet giant Alibaba (NYSE: BABA) is being rebuffed and embraced in the US in 2 separate headlines, reflecting conflicting feelings many Americans have towards one of China’s largest private companies and their sometimes controversial business practices. In the more upbeat headline, Alibaba’s movie-making unit has just signed a major new tie-up with director Steven Spielberg to co-produce movies from his Amblin Entertainment and distribute them in China. But in a far less friendly overture, Alibaba is also being blasted by a major US apparel group for lack of progress in its battle to stamp out trafficking in pirated goods in its online marketplaces. Read Full Post…
Bottom line: Lenovo and other Chinese firms need to abandon their approach that targets declining, older brands for global M&A, and instead focus on organic growth and more strategic assets with better growth potential.
Lenovo eyes Fujitsu’s PC business
The acquisitive Lenovo (HKEx: 992) was in M&A headlines again last week, when media reported it was in talks to buy the aging PC business of Fujitsu, an operation that is largely inconsequential outside its home Japanese market. Such a purchase would continue a trend dating back more than a decade, which has seen Lenovo purchase declining global brands for bargain prices with hopes of resuscitating those names to expand its global footprint. Read Full Post…
Bottom line: Wanda is likely to succeed in its purchase of Dick Clark Productions, but could pay a rich premium for the awards show producer as part of an effort to develop similar programs in China.
Wanda in talks to buy Dick Clark Productions
Just a week after making headlines through a strategic tie-up with Sony Pictures, China’s star-struck Wanda Group is in talks for yet another blockbuster deal to buy Dick Clark Productions, known for producing a number of popular award shows. My first reaction to the headline was a big “So what?” since the production company’s namesake, who died in 2012, is best known to me as the maker of the aging annual program celebrating New Year’s Eve in Times Square, New York. Read Full Post…
Bottom line: Wanda’s new production tie-up with Sony Pictures will provide movies for its cinema chains in China and globally, but could become a drag on its theater operations if the films are poorly received.
Wanda opens new resort in Hefei
Just days after receiving a major setback to its plans to invest in Paramount Pictures, Chinese Hollywood wannabe Wanda Group has just announced a film production tie-up with Sony Pictures. This particular deal looks decidedly like a consolation prize for Wanda, which is trying to build up a diversified entertainment empire similar to Disney (NYSE: DIS).
The company was bidding for a stake in Paramount, one of the top 6 Hollywood studios, after the studio said earlier this year it wanted to sell a strategic stake in itself. But Paramount ultimately reversed that decision following an internal battle for control of the company’s parent Viacom, leaving Wanda out in the cold. (previous post) This new Sony tie-up doesn’t involve any equity swap, and instead looks mostly like a relatively routine co-production deal that is becoming quite common between Hollywood and Chinese partners. Read Full Post…
The following press releases and news reports about China companies were carried on September 22. To view a full article or story, click on the link next to the headline.
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Alibaba Takes Lead in China Digital Ad Market, Baidu Drops to Second (press release)
Postal Savings Bank of China IPO Raises $7.4 Bln After Pricing at Low End (English article)
China Telecom (HKEx: 728) to Close Accounts Without Real Name Registration (Chinese article)
Sony (Tokyo: 6758) Close to Motion Picture Alliance With China’s Wanda (English article)
Filing Shows Smartisan Value Drops By 500 Mln Yuan in Half Year (Chinese article)
China’s growing love affair with Hollywood is reaching new peaks, with word that major studio Paramount Pictures may be preparing to sell a stake of itself to a Chinese buyer. Such a deal would be the highest profile investment yet in an ever-growing string of Chinese tie-ups with Tinseltown over the last 2 years. In some ways the movement looks strangely similar to Japan’s invasion of Hollywood more than 25 years ago, which saw Universal and Columbia Pictures sold to Japanese buyers.
That parallel may lead some to wonder if this latest Chinese drive into Hollywood could end with similarly disappointing results that saw both studios sputter under Japanese ownership. Prickly US-China relations could also add an element of discomfort to this new budding love affair, since Beijing enjoys a far less friendly relationship with Washington than Tokyo. Read Full Post…
Bottom line: Beijing should note the latest trouble signal from ZTE in the smartphone sector, and take steps to prevent future similar boom-bust cycles by encouraging more responsible investing incentives by local governments.
ZTE cautious on China smartphone market
The latest trouble signal from China’s overheated smartphone sector came last week from telecoms stalwart ZTE (HKEx: 763; Shenzhen: 000063), which said it would remain cautious in the world’s largest market even as it announced ambitious new sales targets for the rest of the world this year. The company’s relative caution in its own home market comes amid a looming shakeout that is just the latest in a series of boom-bust cycles that have become all too common in China’s business landscape in the last 3 decades.
While market forces play a large role in these bubbles, regional governments looking to spur economic growth may also share some responsibility by offering incentives that encourage local firms to enter unfamiliar areas where the chance of failure is high. Such failures often result in big financial losses and mass layoffs, negating any economic benefit they were supposed to create. Read Full Post…
Bottom line: The iPhone’s appearance at the top of a Chinese investigative list of “data hogs” reflects the company’s obsession with control, but is unlikely to have a long-term negative effect on its local image.
iPhones gobble up data
Chinese media are once again feasting on leading smartphone maker Apple (Nasdaq: AAPL), which has has come out squarely on top of a “list of shame” that details how some of the best selling brands quietly steal data minutes from their unaware users. I’m not an iPhone user so I can’t attest to how the iPhones steal their data and how easy it is for users to stop the process. But my Google (Nasdaq: GOOG) Nexus phone is guilty of similar data hogging, and I had to pay a couple of large phone bills after I first bought it before I finally learned how to stop such automatic data consumption. Read Full Post…
Bottom line: A new e-commerce joint venture by Japan’s Itochu and Thailand’s CP Group marks the latest major advance for China’s fledgling free trade zone program, whose policies should eventually expanded to the entire country.
Itochu forms new venture in Shanghai FTZ
China’s fledgling Free Trade Zone (FTZ) program got a new boost last week when a group of corporate giants from Japan, Thailand and China announced a major new retailing joint venture in the original zone in Shanghai. That news came just a week after a major expansion of the Shanghai zone, and the announcement of a plan for 3 additional FTZs in other parts of China.
This sudden expansion of the FTZ program is a welcome development for the many private companies whose growth plans have been stymied for years by China’s huge bureaucracy. That group includes not only big multinationals like Amazon (Nasdaq: AMZN) and HSBC (HKEx: 5; London: HSBA), but also a growing number of homegrown private giants like JD.com (Nasdaq: JD) and Alibaba (NYSE: BABA), which also harbor global aspirations. Read Full Post…
