Wanda to Buy Chinese Movie Website Mtime for $350M (Exclusive)
The acquisition adds powerful digital services to Wanda's expanding global film empire, while fueling Mtime's growth as China's top brand for movie news, reviews and merchandise.
Chinese conglomerate Dalian Wanda Group, led by Asia's richest man, Wang Jianlin, has agreed to acquire Beijing-based film marketing and media company Mtime for $350 million.
The deal, to be announced in Beijing late Wednesday, will add an array of digital services to Wanda's expanding global film empire. China's leading online destination for movie news and reviews, Mtime's business areas also comprise film marketing and a fast-growing e-commerce platform targeting the country's burgeoning movie merchandising sector.
The company is to be acquired by Wanda's publicly listed unit Wanda Cinema Line, which controls China's largest movie theater circuit. Wanda took a 20 percent stake in Mtime in 2015; the Chinese conglomerate will now buy out other early investors, including Fidelity Growth Partners Asia and Tiger Global Fund.
Wanda's chairman Wang has embarked on a record spending spree this year, as he pushes to transform his real estate conglomerate into an entertainment and lifestyle company that can rival The Walt Disney Co. Other big-ticket film business purchases include Thomas Tull's Legendary Entertainment for $3.5 billion in January and European movie chain Odeon & UCI Cinemas Group for $1.2 billion last month, as announced by Wanda-owned exhibition giant AMC Theatres. In the first six months of 2016, Wanda Group and its subsidiaries racked up nearly $16 billion in acquisitions, according to Bloomberg.
Following the sale, Mtime's brand will continue to be run independently, and the company's media, technical, marketing and merchandising teams will take over Wanda Cinema Line's operations in those areas, the two companies said. Mtime's founder Kelvin Hou, a former Microsoft executive, will remain CEO, as well as taking on additional leadership responsibilities at Wanda.
Hou launched Mtime in 2005 as a humble listings site for movie showtimes, but the company has steadily added services, becoming something like China's answer to Fandango, IMDb, Rotten Tomatoes, Entertainment Tonight and Mattel all wrapped into one streamlined web presence. It is a film reviews aggregator, one of China's leading mobile ticketing platforms, an entertainment news portal and a database of information on every film screened in China since 1930.
In a statement Wednesday, Wanda Cinema Line CEO Zeng Maojun described Mtime as having China's "most sought after" user base related to movies.
Mtime also has been a discrete marketing partner to the U.S. studios, leveraging its platforms to promote Hollywood films in China's fast-growing but restricted film market.
Wanda may have been most attracted to Mtime's most recent endeavor, however — merchandising. Over the past three years, Mtime has laid the groundwork for a bold bet that China's underdeveloped market for licensed movie goods is poised to follow the same explosive growth trajectory as the country's theatrical box office has in recent years. The company hired a team of over 40 international designers to develop product lines in-house from its partners' intellectual property, as well as establishing factories and logistical operations to manufacture and deliver the goods to cinemas and retailers across China.
In April, Mtime signed a deal with Legendary to be the exclusive Chinese merchandiser for Duncan Jones' Warcraft. Mtime says it sold more than $10 million in Warcraft-themed goods before the film had even opened (the company declined to share an updated sales figure).
In an interview in Beijing in June, Hou told The Hollywood Reporter that Mtime's revenue growth had averaged about 80 percent over the past several years. But he said growth exploded to 500 percent after the rollout of Mtime's merchandising operations at an event in December, attended by Jeffrey Katzenberg and Disney's Andy Bird along with several hundred Chinese cinema managers.
Mtime said it expects Wanda's backing will help to expand its services even faster. The company's website attracts about 160 million unique monthly users and its mobile ticketing platform has about 10 percent market share. Wanda Cinema Line, meanwhile, controls an estimated 16 percent-19 percent of all Chinese movie screens, with a ticketing loyalty program with 60 million users.
"The key business components of both companies provide an unprecedented opportunity to scale our services," said Hou. "I am very excited about what this new integration brings to both sides of the movie market."