Tencent to invest $295mn on backing movie projects

Bloomberg

Tencent Holdings Ltd.’s main movie arm plans to spend at least 2 billion yuan ($295 million) investing in Hollywood and Chinese films in the two years through 2017 to expand its presence in global entertainment production, according to people familiar with the matter.
Tencent Pictures, which helped finance domestic smash “Warcraft” and the upcoming “Kong: Skull Island,” is investing 1 billion yuan this year and more than that in 2017 on a plethora of local and foreign movie projects, the people said, requesting not to be named because the matter is private. That figure covers only movie financing and doesn’t include the company’s budget for intellectual property and content acquisition, the people said.
China’s largest social media company, which owns dominant messaging services WeChat and QQ, is laying the groundwork for a global entertainment empire. Founded just last year, its film-making arm is beginning to produce movies based on its trove of popular in-house content, adopting a franchise model akin to Walt Disney Co. and Marvel. The company announced in September it will bankroll 21 projects based on content including the “Tibet Code,” a fantasy series involving a hunt for ancient treasure. It’s beefing up its stable of mobile games by buying Clash of Clans developer Supercell Oy.
Canny Lo, a spokeswoman for Tencent, declined to comment on its film financing plans.
Tencent teamed with Legendary Entertainment on “Warcraft” and has announced that it’s working with David S. Goyer, a writer on movies including “Batman Begins” and “The Dark Knight.” Legendary and Warner Bros. are producing “Kong: Skull Island.”
Tencent’s competing with Alibaba Group Holding Ltd. to win a share of what could soon become the world’s largest box office. Tencent’s internet industry rival last month bought a stake in Steven Spielberg’s Amblin Partners, the latest in a spree of deals over the past two years intended to help U.S. studios tap a growing cinema audience.
China has become a focus for Hollywood studios in recent years as the U.S. film market has stagnated. Ticket sales in the Asian country are set to grow 22 percent to $10.4 billion next year, according to average projections by IHS Markit Ltd. and PricewaterhouseCoopers LLP.
The country is also rapidly becoming a well of financing. American studios have been looking to Chinese partners for funding and ways to maximize their revenue from a country that limits the number of foreign firms exhibited annually. Apart from Tencent and Alibaba —which backed the latest Mission Impossible installment among other projects — billionaire Wang Jianlin’s Dalian Wanda Group Co. has also been making its presence felt in the global entertainment industry. This month, Wanda agreed to pay $1 billion for Golden Globe Awards producer Dick Clark Productions Inc., adding a U.S. television industry asset to the tycoon’s expanding media empire.