Latest update December 15th, 2015 10:12 PM
Huace Winning Investment from Baidu?
BEIJING, August 4 – Huace Film & TV (Huace), a Shanghai-based film and TV drama production and distribution company, is reported to gain investment from iQiyi, a subsidiary of China’s search engine giant Baidu.
Huace, the production powerhouse of 10 % China’s TV dramas, has applied the Shenzhen Stock Exchange for share suspension as it planned to issue non-public offering of stock on July 16. It is said that Huace may have investment from one of BAT: China’s Top 3 internet company: Baidu, Alibaba, Tencent.
This leading TV drama production company released its semiannual report on July 29, revealing that its revenue in the first half of 2014 has reached ￥769 million, an increase of 72.24% ,with the main profit coming from its acquired Croton Media, a distributor and producer of films and TV dramas. After purchasing Croton’s 100% share at ￥1.65 billion in 2013, Huace has managed to integrate Croton in 2014, and became the largest local TV drama production company. This report also shows TV dramas bring much more revenue to Huace than films do. More specifically, ￥710 million out of the total ￥769 million comes from TV dramas, while ￥640,000 from films.
In fact, most films that Huace has invested in had high box office in Chinese film market: COMING HOME (ZHANG Yimou, 2014) and TINY TIMES 3.0 (GUO Jingming, 2014) respectively grossed ￥290 million and ￥487 million.
Huace has been actively expanding its film business since 2013 when it acquired 26 % stake of Guo Jingming’s company, Shanghai Zui Culture Development. This deal sealed two important issues: Zui Culture would enjoy the exclusive adaptation rights of Guo Jingming’s books; Huace would enjoy the priority to invest in Guo’s works including the films that he would direct or produce. Founded in 2010, Zui Culture has signed dozens of popular young writers to publish novels, magazines and comic books. “THE NEXT”, a literature competition Zui Culture organizes, has discovered yet another array of young creators. It thus owns and still generates lots of popular IPs. ZHAO Yifang, General Manager of Huace valued this deal: “Franchises have a higher commercial value than any single film due to the collective brand effect.”
2014 will also witness Huace’s another distribution THE CROSSING, by John Woo.
If Huace finally gets investment from iQiyi, then BAT’s entry into the film industry would become even clearer: Tencent has invested in Huayi Brothers while Alibaba has already established Alibaba Pictures after acquiring ChinaVision Media Group, a cultural group of film distribution and new media business.
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