Chinese Studio Huanxi Media Gets $50M Investment From Ticketing Giant Maoyan
The two companies also announced a strategic partnership, giving Maoyan priority investment opportunities in Huanxi's content in exchange for online marketing and distribution support.
Maoyan Entertainment, China's largest movie ticketing app, unveiled a $50 million strategic investment Wednesday in fast-growing Chinese studio Huanxi Entertainment Group.
The internet services company, which is backed by Tencent, raised approximately $250 million in an initial public offering on the Hong Kong Stock Exchange in February. Maoyan is now plowing 20 percent of those proceeds into an 8.11 percent stake in Huanxi, which is also listed on the Hong Kong stock exchange. The partners said Maoyan will pay HK$1.65 per share.
Along with the investment, the two companies also announced a strategic partnership that will give Maoyan priority investment opportunities and exclusive promotional and distribution rights to Huanxi Media's forthcoming films and television/internet series. In return, Maoyan will provide marketing support for Huanxi Media's content over its entertainment services platforms, which account for approximately 60 percent of all movie tickets sold in China.
A rising powerhouse in the Chinese industry, Huanxi Media was founded in 2015 by Crouching Tiger, Hidden Dragon co-producer Dong Ping, star director and actor Xu Zheng and veteran filmmaker Ning Hao. Veteran attorney Steven Xiang joined the company soon after as CEO.
Huanxi has pursued a strategy of signing exclusive partnerships with China's most influential filmmakers in exchange for equity in the company. Wong Kar Wai, Zhang Yimou and Peter Chan all have exclusive deals and stakes in the company, while other prominent directors — such as Jia Zhangke (Ash Is the Purest White), Manfred Wong (The Storm Riders), Wang Xiaoshuai (Beijing Bicycle) and Li Yang (Blind Shaft) — are under contract.
The pedigrees of these filmmaker partners have helped Huanxi hit the ground running: Its releases so far include Jia’s Cannes competition entry Ash is Purest White; Xu's social dramedy blockbuster Dying to Survive ($451 million), and this year’s Chinese New Year hit, Crazy Alien ($328 million), directed by Ning.
"Partnerships with leading media and entertainment content providers like Huanxi Media help Maoyan build long-term mutually beneficial relationships with top artists and content creators in China," said Maoyan CEO Zheng Zhihao in a statement.
Huanxi also operates a subscription streaming platform, which the company envisions as an HBO-like destination for premium film and series content.
At the recent European Film Market in Berlin, Huanxi picked up the Chinese streaming rights to a trio of prestige European dramas, including Julian Schnabel's Vincent Van Gogh biopic At Eternity's Gate, German filmmaker Florian Henckel von Donnersmarck's Oscar nominee Never Look Away and the upcoming period soccer film The Keeper. The many Chinese directors the studio has under contract are also producing content exclusively for the platform.
Huanxi also recently hit its first difficult patch in Berlin, however. The studio's second major festival contender, Zhang Yimou's hotly anticipated period drama One Second, was abruptly pulled from the Berlin International Film Festival's competition lineup because of suspected censorship issues at home in Beijing. The status of the film and the repercussion of the incident remain unclear.