In Chinese martial arts novels, bi wu zhao qin (比武招亲) was a customary way of helping a woman to find a worthy husband. A father would put out a notice that his daughter was available for marriage and suitors would then fight to win the bride.
According to the classic historical work Old Book of Tang, the mother of Tang Taizong, the most famous emperor arguably, picked her husband this way. In order to find a match for his daughter, a duke challenged the contenders to shoot a peacock’s eye on a painting a hundred steps away. Only one archer succeeded: Li Yuan, father of Taizong, who married the duke’s daughter and later founded the Tang Dynasty.
In October Mango Excellent Media, a Shenzhen-listed firm that operates the online streaming unit Mango TV, announced that its state-owned parent Mango Media was offering 5.3% of its shares to interested parties.
Cue a sudden rush of suitors for the stake, with competitors soon limbering up like the best of the bi wu zhao qin contenders of yore.
Mango TV is part of a media group that has seen its shares double in price this year thanks to the popularity of hit shows like Sisters Who Make Waves (see WiC500) and Viva La Romance (see WiC443). They have helped to bring in Rmb9.5 billion ($1.44 billion) in revenues in the first three quarters, up 15% from the same period last year, and contributed to net profit of Rmb1.6 billion – a yearly increase of nearly two-thirds. To qualify as bidders, interested parties had to meet various hurdles, including total assets of no less than Rmb100 billion, with their most recent revenues and net profits of no less than Rmb50 billion and Rmb5 billion respectively.
The underlying goal is to find a formidable ally for the battle ahead. “Online video platforms are still in fierce competition, although the less competitive sites are slowly withdrawing while the leading platforms slice up the market with their respective financial strengths and operational capabilities. As the situation stabilises, the top platforms are no longer outbidding each other on content. Instead, many are now making their own exclusive content to attract users and keep them as paid subscribers, increasing the commercial viability of the platforms,” commented National Business Daily.
Mango Media, which is controlled by Hunan’s provincial government, announced the winning candidate in the share sale last week: Alibaba’s investment arm Hangzhou Ali Venture Capital, which is paying about Rmb6.2 billion for its stake. Commentators reckon that the e-commerce giant is impressed by Mango’s track record in churning out blockbuster content, and luring younger audiences: viewers between 18 and 28 years old contribute more than half of Mango’s customer base.
“All the e-commerce companies are going through a transformation when it comes to content [i.e. they need compelling content to attract shoppers to spend more],” reckoned Sina Finance. “Mango TV has the ability to continuously produce high-quality content and has a large number of high-quality IP and content assets too. It also has connections with many celebrities and influencers. These are what Alibaba values.”
Bringing in Alibaba will also be helpful for Mango TV’s aspirations in e-commerce. Back in September, the media firm announced plans to launch an e-commerce smartphone app. The move was not surprising as some of the stars from Sisters Who Make Waves were cashing in as regular guests on other livestreaming e-commerce platforms, where they were employed to supercharge the sales of goods.
“Going into e-commerce leverages on the competitive advantages of Mango TV in content making. It’s an extension of the value chain,” explained 36Kr, a tech news portal. “By putting e-commerce and content together, it basically closes the loop of ‘planting the grass’ and then cutting it,” it added.
That said, not all the news has been quite as positive for Mango’s state-owned parent. Its main satellite TV channel Hunan TV has run into problems after its new big-budget war drama Warrior of Thunder had to be pulled last week on political grounds, a setback that has generated much bad PR for the channel (for more, see this week’s “Entertainment”).
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.