Magazine article Variety

Entertainment Giants Seek New Value Chain

Magazine article Variety

Entertainment Giants Seek New Value Chain

Article excerpt

The recent merger of China's online ticketing systems and their ventures into other parts of the showbiz's value chain will contribute to the growth of what many call "pan entertainment," or an all-encompassing entertainment experience, leading to the domination of few big players and potentially fewer consumer choices.

China's online movie ticketing accounted for nearly 85% of the total movie ticketing sales in the second quarter of 2017 - a staggering growth compared to 30% in 2013, according to the Beijing-based Big Data Research. Leading the race is Alibaba's Tao Piao Piao (22.9%), followed by Tencent's Maoyan (22.5%) and Weying (18.8%).

But the online ticketing business in China isn't just about selling tickets. September's announcement of the merger of Maoyan and Weying means that the online ticketing market is dominated by e-commerce giant Alibaba and Tencent, which also operates WeChat, China's biggest social media platform.

Tencent president Martin Lau told the media that the merger of Maoyan and Weying will further the development of pan-entertainment, boosting the entire value chain of film and entertainment business and offering on and offline support for film production companies and cinemas. He said Maoyan Weying will become an important strategic partner for Tencent's pan-entertainment development.

The concept of pan-entertainment has been hailed in China, Cecilia Yau of PwC Hong Kong Entertainment & Media told Variety. "A lot of companies are investing in the IP development stage ... to cultivate the production of dramas, games, movies - and then cinemas," Yau says. "Companies will have more control over distribution and release windows. They look into acquiring businesses that complement their existing ones."

Tencent was not alone. Despite a loss of 976 million yuan ($147 million) in 2016 caused by the heavy subsidy for Tao Piao Piao's operation, Alibaba Pictures increased its stake in the online ticketing platform in July from 87. …

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