"Who are the best in their fields that the heart must come before ability, honor and money... "
"The attitude should be wholehearted and truthful."
-Bae Yong Joon-

Thursday, April 24, 2014

[News] Tencent's Deal for SK Entertainment Firm Has Star Potential, Investor Says

"WOW!! Now the door to enter the China market is wide open in front of you...  Congratulationssss BYJnim & KE!!! May this collaboration will provide the great benefit for both parties. More and moreee success & blessing for you and KE in the future... hip... hip.. hooray!!" \^__^/
source: CaixinOnline
By staff reporter Liu Ran
Internet giant's planned investment in KeyEast said to open door to producing original content and overseas expansion

(Beijing) – Tencent Holding's planned investment in a South Korean entertainment company can help it secure popular video content, enhance user loyalty and open the door to producing original media content and overseas expansion, Sun Yi, an investor in the media and culture-related industry, said.
The Internet company is planning to buy about 20 percent of South Korean celebrity management agency KeyEast Entertainment Co. Ltd., a source with knowledge of the deal said. The details on valuations are unavailable, but the source said the deal would make Tencent the second-largest shareholder of KeyEast, replacing Japan's Softbank Corp.

The largest shareholder of KeyEast is Bae Yong-joon, who became a household name after starring in the TV drama Winter Sonata in 2004. Bae bought 37.5 percent stake in the company in 2006 for 9 billion won.
KeyEast's financial report shows it lost the equivalent of about 39.7 million yuan in 2013 even though its revenue rose by 13.7 percent from the year before. Its performance has fluctuated in the past three years, starting with a loss, returning to profit and then back to loss.

What Tencent sees in the investment is access to highly popular content for its online video channels, Sun said.
KeyEast is a Seoul-based entertainment and media company with business in celebrity management, media content production and online games. It represents actor Kim Soo-hyun, a star in China for playing the lead role in hit TV show My Love from the Star.

The company's stock has been rising since the show started airing in China. By April 23, the company has a valuation of about 1.25 billion yuan.

Having a stake in the celebrity management company could give Tencent access to celebrities and copyrights and potentially enable it to produce its own television and video content, Sun said. Controlling production is the beginning of Tencent's strategy in the video market, he said.

"Video is a product where users spend the most time, but it also has the greatest barrier to entry among Internet services due to the high costs of operation and copyrighted materials," he said.

The investment might also help Tencent increase its user base and improve user loyalty, Sun said. Unlike rival Internet giant Alibaba Group, whose forte is e-commerce, Tencent is known for its popular social media services, such as instant messaging software QQ and the messaging app WeChat.

Sun said collaborating with KeyEast can add to the "social" element of Tencent's products. It might also help Tencent with expanding products overseas in the long run, he said.

South Korea's system for producing pop stars is much more mature in terms of talent hunt, training and management than that in China, a source familiar with the country's entertainment industry said.

"The trainees are like standardized products made just to meet market demands, and since the Chinese audience has very similar tastes to Koreans, the training process could be used to produce Chinese celebrities too."

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