China Leads The Way in New Media Platforms for Film Distribution
The 4.6% stake, acquired for US$69.3 million, is the second largest investment by Tencent this year and follows Youku and Tudou Inc, two of China’s top three online video platforms, making similar agreements with Warner Bros and Disney Media respectively.
LeTV Pictures, another large Chinese online video platform, has also collaborated with Huayi Brothers purchasing $57 million yuan worth of online copyrights this year.
The latest alliance brings together two of China’s largest media entities. Huayi’s movie ticket revenues of 1.6billion yuan in 2010 accounted for a 30% share of the Chinese Market. Tencent currently caters to around 647 million users of its instant messaging, social networking and gaming services.
A recent ‘Virtual Network Index’ report from networking firm CISCO, revealed that China now has the world’s highest number of internet video consumers, with 284 million Chinese, around a quarter of its population, watching video online.
From the same report, as of 2010 online revenue in China 3.14 billion yuan, a 44% increase from 1.76 billion yuan the previous year.
Distributing films on new media platforms allows consumers to access content online through any internet enabled device and
provides film production companies with the means to reach considerably larger audience than theatrical distribution. Online broadcasting also helps to counter piracy and the illegal reproduction of hard copy formats such as DVD.
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