Video-streaming site Bilibili announced on Monday a $66 million strategic investment in media production company Huanxi Media.
Why it matters: Bilibili has been broadening its content beyond the anime, comic, and game (ACG) content for which it became known to more mainstream entertainment offerings. A tie-up with content production powerhouses will strengthen its appeal to audiences beyond the ACG community.
Details: Bilibili is subscribing for 347 million shares of Hong Kong-listed Huanxi Media at HK$1.48 per share for HK$513 million or $66 million, a 2.63% discount to the closing price on Friday, according to the filing. The entertainment platform said it will hold a 9.9% stake in Huanxi after the deal.
- Under a five-year cooperation agreement, Bilibili will hold exclusive broadcasting rights to Huanxi’s film and television content in addition to its in-house platform.
- All revenue generated from licensed content broadcasted through the Bilibili platforms will be shared between the two companies after deducting related costs, according to the filing.
- Bilibili will set up a designated channel on its site for streaming licensed content from Huanxi.
- Meanwhile, Bilibili will be given priority to invest in film and TV projects that are majority-owned by Huanxi. The two companies will actively develop merchandise related to film and television content.
Context: Popular Chinese filmmakers Ning Hao and Xu Zheng control the production studio. Huanxi has built its reputation around curated offerings rather than mass market content which would put it in direct competition with Iqiyi, Tencent Video, and Alibaba’s Youku.
- As coronavirus shuts China’s movie chains nationwide in January, Huanxi sold its anticipated blockbuster “Lost In Russia” to Bytedance, owner of short video apps Douyin and Tiktok, as well as virally popular news aggregator Toutiao, in a RMB 630 million deal for a direct-to-streaming release.
- The move drew backlash from movie chains against the decision.