Tencent Establishes Two New Film Units to Tap into Largest Movie Market in China
Competition in the movie sector in China has intensified as Internet giant Tencent Holdings Ltd. has now entered the multi billion dollar industry by placing two new film units. Tencent recently established a new film company called Tencent Pictures that highlights its ambition to tap into the second largest movie market and the move is close to the heels of creating a movie venture. The company’s goal is not only to make movies, but to build a pan entertainment ecosystem that includes games, TV dramas, books and animation.
According to Cheng Wu the chief executive officer that the company taps it large collection of intellectual property rights to adopt a popular online books and animation into movies. Digital content is one of the planned focus of Tencent’s business since they don’t pursue quick cash from making movies, but they are eyeing to be an important presence that have a long term commitment. Cheng is in charge of Tencent’s business in intellectual property rights and games for several years and Chneg is known for his contribution in acquiring Shengda Literature the most popular online literature site in China.
Tencent also founded Penguin Pictures, a film unit and headed by Sun Zhonghuai the person responsible for the video streaming businesses at Tencent. Sun stated that Penguin Pictures focuses on producing original web shows, develop artists agency business and movie investments. Box office receipts soared to 30 billion yuan as of September 5 compared to 29 billion yuan for the whole last year. China is now the world’s second largest cinema market just after the United States.
Alibaba Group Holdings LTd., Baidu Inc., and other online video sites such as Youku Tudou and iQiyi.com are intensifying their efforts to cash in the industry through partnerships or acquisitions. Analysts said that Tencent decision in creating two film units shows that the movie sector to the company’s future development.