When Bilibili hosted its New Year’s Eve show, the video streaming platform chose not to hire superstar actors. Instead, it featured virtual idol Luo Tianyi playing a musical instrument (an ancient Chinese zither), dancers wearing costumes from the online game World of Warcraft and pop icon Kris Wu doing a freestyle rap about noodles.
Still, the show drew 82 million viewers at its peak, easily surpassing the 33.1 million people who watched state-run Zhejiang Satellite TV’s gala, which sent out a roster of A-listers like actor Li Chen and boy band star Fan Chengcheng.
“This company [Bilibili] has a very young user base and unique ways to manage content production,” Shawn Yang, managing director of research firm Blue Lotus Capital Advisors told Forbes. “Among China’s internet firms, it is one of the few that can still maintain rapid growth.”
Sony seems to think so too, announcing last week that it has secured a 4.98% stake in Bilibili for $400 million in cash. The deal makes the Japanese giant the sixth largest shareholder of the video streaming platform.
“The strategic investment and business cooperation further aligns our goals to bring best-in-class content offerings and services to our users, as we increase our domestic stronghold in animation and mobile games,” Rui Chen, chief executive of Bilibili, said in an accompanying statement.
Bilibili is currently valued at about $8.8 billion and has become a rising star in China’s video streaming market. The 10 year-old platform started as an animation site but it has expanded into other categories including eSports, user-generated music videos, documentaries and games.
The platform, which has amassed over 130 million monthly active users, has attracted several big investors, including tech giants Tencent and Alibaba, the second and fourth largest shareholders respectively.
In 2016, Bilibili became the exclusive partner in China of Sony subsidiary Aniplex’s hugely popular mobile game Fate/Grand Order (FGO), which contributed over 80% of Bilibili’s sales in 2017, according to Lanjing Caijing.
Their collaboration deepened more recently, when the two announced another partnership in which Sony provides music and video from its music label, which includes artists like Beyoncé, Mariah Carey and Taiwanese singers A-Lin and Jolin Tsai.
Sony’s direct investment in Bilibili is being interpreted in the local media as a signal that the Japanese firm is going to be more active in the Chinese market. For instance, National Business Daily describes it as a “springboard” for Sony to find more of a place in China’s digital entertainment sector. Bilibili mainly targets China’s Gen-Z audiences and the vast majority of its users — about 80% — were born between 1990 and 2009. This is the kind of audience that Sony is targeting for its PS4 gaming console and a closer relationship with Bilibili could also streamline the process for localising more of Sony’s other mobile games for Chinese players.
Rival Nintendo already has a leg-up by partnering with Tencent to bring its Nintendo Switch game console to China.
“Sony not only saw Nintendo’s competition, it also senses what could come from the cooperation between Nintendo and Tencent. After all, Switch is the bestselling game console out of the big three [including Microsoft’s Xbox and Sony’s PlayStation]. It is even more worrying that its partner in China is Tencent,” says 36Kr, a tech portal.
Sony can also licence its vast library of anime content – another part of Bilibili’s plan to expand beyond mobile games into anime, comics and e-commerce.
“Whether it is music, animation or games, Sony has one of the world’s largest ‘content libraries’. Working with a giant like Sony, Bilibili has essentially doubled the amount of content on the platform. At the same time, given Sony’s global reach, Bilibili’s path of expanding overseas will certainly be a lot smoother,” reckons 36kr.
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