YG inks deals with Chinese online giants

YG Entertainment has jump-started its expansion into China, forming financial partnerships with online giants there and collaborating with them on variety shows.

The entertainment agency that houses K-pop superstars Big Bang and Psy, among others, announced its partnership with China’s leading online and mobile ticketing company Beijing Weiying Technology Co. and the online video platform of Tencent, China’s most-used Internet service portal, at a ceremony at Grand Hyatt Seoul on Tuesday.

The first joint project by YG and Tencent Video will be a singing competition show titled “The Collaboration.” It is set to feature Kang Seung-yoon and Song Min-ho from K-pop boy group Winner and Chinese pop stars Xue Zhiqian, also known as Jacky Xue, and Hu Xia, among others.

Chinese national Zhang Yuan, who appears on Korean talk show “Non-Summit,” and China’s star host and actress Wu Xin, also known as Orfila, have been cast as show moderators.

Teams composed of a mix of Korean and Chinese musicians will compete in “The Collaboration,” which will begin filming in June and broadcast simultaneously at the end of June in Korea via SBS Medianet and through Tencent Video in China. 

The two companies will also collaborate on an “exclusive live streaming platform for YG singers’ concerts,” said Tina Ma of Tencent Video.

Collaboration on live streaming services is not new for the two companies. A record 69 million people viewed Psy’s Seoul concert streamed on Tencent Video last year, while Big Bang’s Seoul concert last year was also watched by some 16,000 paying users, according to Ma.

“These are numbers that are unimaginable offline,” she said.

There are also plans for a variety show on Korean beauty and fashion, tentatively dubbed “Stars’ Tastes.”

Offline concerts

Online ticketing company Weiying will be collaborating with YG to “bring outstanding Korean concerts to Chinese concertgoers,” said Lin Ning, the company’s founder and CEO.

The two companies will form a joint venture company in the second half of this year, he said.

“Before that, we plan to host concerts by (YG artists) Lee Hi and iKON in China to warm up our joint concert business.

“Weiying has a client base of over 100 million entertainment consumers,” Lin said, predicting that the company’s resources and experience in the performance industry will create synergy with YG’s “excellent content.”

Tuesday’s announcements followed YG’s statement last Friday that it had secured 100 billion won ($85 million) in investments from the two Chinese companies.

Tencent and Weiying have invested $30 million and $55 million, respectively.

Under the deal, Tencent will hold a stake of 4.5 percent in YG and Weiying an 8.2 percent stake, making Weiying the third-largest shareholder and Tencent the fourth.

L Capital, the private equity fund arm of luxury conglomerate LVMH Moet Hennessy Louis Vuitton, holds a 10 percent stake in YG, making it the second-largest shareholder in the Korean entertainment agency, according to reports.

“The mobile services that our two partner companies provide are being used by over half of China’s 1.3 billion people,” said YG’s CEO Yang Min-suk, brother of the company’s famed chief producer Yang Hyun-suk. “That means we have gained the ability to communicate with some 600 million Chinese users.

“Through the big data and platforms of these companies, we hope to gain better knowledge of each Chinese consumer,” Yang said.

China money flowing to K-pop

K-pop agencies are increasingly partnering with Chinese companies to gain greater access to the country’s market. In dollar terms, YG’s $85 million investment deal may mark the biggest Chinese investment in a Korean entertainment agency so far, according to the company.

In February, China’s leading e-commerce company Alibaba -- one of the country’s biggest Internet companies, alongside Tencent and search engine Baidu -- bought a 35.5 billion won stake in S.M. Entertainment, gaining a 4 percent share in the agency that is home to K-pop stars Girls’ Generation and Super Junior.

JYP Entertainment also locked a five-year deal in February with China Music Corporation, giving China’s top online music streaming services company exclusive rights to distribute JYP’s music in China. The two companies also established a joint venture in China. China Music is backed by Tencent Holdings Ltd.

Last November, Suning Universal, the entertainment arm of Chinese real estate giant Suning Group, acquired a 22 percent stake in FNC Entertainment for 33.7 billion won. In March, the two companies launched a joint venture in Shanghai.

According to reports, the partnerships will provide diversified profit sources for K-pop entertainment agencies, most of whom rely heavily on a few star artists to generate profits.

By Rumy Doo (doo@heraldcorp.com)