Warner Bros. Releasing ‘Tenet’ in Chinese Theaters Sept. 4

Sept. 4 is turning into a pivotal day for Hollywood studios. Warner Bros. announced it would debut director Christopher Nolan’s international espionage thriller, Tenet, in Chinese theaters on Sept. 4. That’s the same day Disney will release Chinese-themed live-action drama, Mulan, on premium VOD exclusively to Disney+ subscribers for $29.99.

Both Tenet and Mulan have been seen as key pillars to jumpstarting national exhibitors such as AMC Theatres, Regal Cinema and Cinemark.

Warner, which has delayed Tenet three times due to coronavirus-related issues delaying re-opening of movie theaters, is set to begin rolling out the movie on Aug. 26 in several international markets. The studio will also debut the movie on Sept. 3 in select U.S. theaters, such as in Georgia, which okayed theatrical re-openings on April 27.

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Cinedigm Partners with Chinese Theme Park Operator for Animation Streaming Service

Cinedigm Aug. 6 announced a partnership with Fantawild, a Chinese theme park operator and producer of children’s animation, to launch a new global streaming service featuring the company’s animated series. The Fantawild channel is planned for a launch in the second half of 2020 and will be available worldwide for linear and AVOD platforms on connected TVs, digital set-top boxes, media-streaming devices, as well as the Web.

In addition, Cinedigm will distribute select Fantawild programming in North America across its network of distribution partners in the streaming space, including Apple, Microsoft, Netflix, Google, Amazon and Tubi, among others.

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With 29 theme parks in operation and 10 more under development, Fantawild is one of the top drivers of China’s tourism industry and attracts more than 50 million visitors annually. The company is ranked 5th on the list of top 10 theme park groups worldwide, placing ahead of major U.S.-based park operators such as Six Flags Group, Cedar Rapids Group and Sea World Attractions, among others.

Fantawild Animation’s series are broadcast nationally on more than 200 TV stations and have garnered more than 300 billion views on streaming services to date, according to Cinedigm. Internationally, the programs have been distributed to more than 120 countries and territories including the U.S., Italy, Russia and Singapore.

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“As we have demonstrated over the last year, Cinedigm’s mission is to partner with the world’s largest media brands and launch new streaming services … and this partnership dramatically expands that scope,” Erick Opeka, president of Cinedigm Digital Networks, said in a statement. “Fantawild’s innovation and dedication to quality is on par with the world’s top animation companies, which makes its content acquired by the most renowned channels and digital platforms globally.”

With Cinedigm’s Chinese-based majority ownership, the home entertainment/OTT distributor has aggressively sought to mine that relationship in support of branded streaming video services such as Dove Channel, Docurama, CONtv and recently launched Bambu, a Chinese pop culture channel.

Fantawild’s “Boonie Bears” franchise is the country’s top animated media property, having the distinction of being the highest-rated TV series in the history of CCTV, China’s national TV network.

Daisy Shang, president of Fantawild Animation, said the Cinedigm partnership would be instrumental in achieving “our goals delivering and presenting our content to American audiences.”

Study: U.S. Retakes SVOD Sub Lead From China

Thanks to Netflix, the number of gross SVOD subscriptions grew by 28% in 2019. The net subscriber count rose by 55 million (16%) to total 403 million, according to new data from Digital TV Research. The firm said gross subscriptions are growing faster than net subscribers, which means the average SVOD subscriber paid for 1.59 subscriptions in 2019 — up from 1.44 in 2018.

The U.S. overtook China to regain its position as the gross SVOD subscription leader. With about 200 million subscribers each, China and the U.S. together accounted for 63% of the global total in 2019. The U.S. added 43 million subscriptions in 2019, with China up by 35 million.

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“The number of gross SVOD subscriptions increased by 139 million in 2019 to 642 million — having grown by a similar amount in 2018,” analyst Simon Murray said in a statement.

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Ten countries had more than 10 million SVOD subscriptions by the end of 2019 — collectively accounting for 84% of the global total.

Nielsen: Asia Offers Post COVID-19 Media Snapshot

In the timeline of the coronavirus pandemic, China, Hong Kong, Taiwan, Japan and South Korea were among the first to feel the effects of social distancing and quarantining.

The regions are now the first to see a possible light at the end of the tunnel. Nielsen, which released new data showing that, similarly to the United States, in-home media consumption increased about 60% during the crisis, and from an advertising perspective, brands and agencies will need to both adjust which products are being marketed, as well as the tone in which they’re delivering their messages to consumers.

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During the first three weeks of the pandemic, Taiwan’s TV audience grew by 1 million viewers, for a total viewing population of approximately 21 million. News channels and programs were the primary beneficiaries of the increased penetration, followed by children’s programming.

In Hong Kong, as more consumers stayed home, Nielsen found that TV ratings for all day and all time periods increased by 43% in February compared with the same time period in 2019, while primetime ratings during the same period increased by 44%.

“The impact of COVID-19 is absolutely substantial,” said David Yeung, VP of marketing communications, consumer group, at HKT Limited, said in a statement. “Almost all industries have been badly hit, with lots of closure for retail outlets, restaurants, etc. The key to survival is to adapt to the changing business environment very quickly and to ensure threats are turned into opportunities by tapping into technology and data.”

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While China’s traditional communist-driven social safety nets have been challenged by a rising middle class and increased dependence on commerce with the West, As Zod Fang, head of GroupM Knowledge, GroupM China, said the government is increasing new policies to stimulate the economy and consumer consumption as the region emerges from the pandemic.

“This will lead to greater demand,” Fang said. “Therefore, brands need to get prepared. Work with agencies to have an overall plan including sourcing, logistics, marketing and sales to fully seize the opportunity.”

China did try to jumpstart the domestic theatrical market on March 24 in Shanghai — a move it quickly reversed, shuttering 600 theaters with no explanation given.

The China Film Group, the state-backed distributor that controls all movie release dates in the country, had reportedly planned to re-release box office hits Wolf Warrior 2 and The Wandering Earth, in addition Disney/Marvel The Avengers franchise movies.

All that’s back on hold for now.

CEO: AMC Theatres Hoping for Mid-June Re-Opening

AMC Theatres, the world’s largest exhibitor with 1,000 theaters and 11,000 screens, hopes to re-open domestic screens by mid-June, CEO Adam Aron told CNBC.

Speaking March 31, Aron said the industry remained on “uncharted times in our lifetimes,” while admitting to wishful thinking as the chain has seen revenue plummet to zero as local and state governments banned group gatherings of 10 or more people.

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“The summer has always been one of the biggest movie seasons of the year … and Christmas,” Aron said. “I would love to think that America will be enjoying summer movie season again. But nobody knows.”

Aron said America needs to get on the “other side of this virus” as a country. “So many businesses have been temporarily shuttered. People want to get out of the house and get back to normal. But that’s not going to happen in the next few days or the next few weeks.”

China had initiated limited theatrical openings only to reverse the decision the next day when new cases of coronavirus popped up. Beijing’s Film Bureau ordered the 600 re-opened Shanghai theaters shuttered on March 27.

Aron said China’s reopening just 60 days after the virus broke out seemed “a little too tight,” when compared with AMC’s decision to shutter all screens on March 17 for six to 12 weeks.

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The CEO said he saluted Congress for passing the $2.2 trillion relief bill, which he said would provide relief for AMC employees and “our communities.”

Aron believes the entertainment industry will bounce back quickly because “people want to be entertained.”

“The country is going to come back,” he said. “America will be normal again. We’re just going through an interruption. How quickly nobody knows. We’re all going to learn together.”

 

Report: Asia Pacific SVOD Subs to Reach 417 Million by 2025

Despite the negative impact from the coronavirus and the Chinese economic downturn, Asia Pacific will have 417 million streaming video-on-demand subscriptions by 2025, up from 269 million in 2019, according to new data from Digital TV Research.

The London-based company said China would have 269 million SVOD subs in 2025 — or 65% of the region’s total. India will supply a further 45 million — more than double its 2019 total.

Three Chinese companies will top the DTR’s Asia Pacific SVOD subscriber rankings in 2025 — with two recording 100 million subscribers. Netflix and Amazon Prime Video, which do not operate independently in China, will take fourth and fifth places respectively.

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“The top five platforms [Tencent Video, Iqiyi, Netflix, Disney+ and Youku Tudou] will account for two-thirds of the region’s SVOD revenue by 2025,” analyst Simon Murray said in a statement.

Netflix’s revenue will more than double between 2019 and 2025 to $3.19 billion. Disney+ will generate $1 billion in 2025. Asia Pacific SVOD total revenue will reach $18.25 billion in 2025; up by $8 billion on 2019.

“These forecasts are lower than our previous edition,” Murray said.

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Analyst: TikTok to Surpass 50 Million Users in U.S. by 2021

After nearly doubling its U.S. user base last year, growth for TikTok, a Chinese video-sharing social networking service, will slow in the coming years as competition heats up and concerns grow among marketers, according to new data from eMarketer.

TikTok’s domestic U.S. user base will grow 21.9% in 2020 to 45.4 million people. By 2021, it will surpass 50 million (52.2 million). This follows 97.5% growth in 2019, as the short-form video platform drew in a huge number of users, especially children and teens. Growth will slow to single digits in 2022 as the app becomes heavily saturated among core younger users.

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“TikTok had a breakout year in 2019, and it is incredibly popular among teens at this point,” analyst Debra Aho Williamson said in a statement. “Some are spending multiple hours per day on the app, which is a testament to the incredible stickiness of its scrolling video format. But it has yet to develop a strong following among older generations.”

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This year, 21.6% of U.S. social network users, or more than one in five, will use TikTok at least once a month. Despite having lower penetration than more established competitors, it’s one of the few social apps whose penetration is growing.

 

Futuresource: Coronavirus to Cut Global CE Revenue 5% This Year

With ongoing global concern about the potential coronavirus (COVID-19) pandemic, new data from Futuresource Consulting suggests the consumer electronics market could see a 2% to 5% full-year drop in retail value worldwide.

Most consumer electronics products are manufactured in China, the epicenter for the coronavirus, which has seen manufacturing and consumer demand scuttled. The Chinese CE market accounted for 22% of the $1 trillion industry in 2019, according to Futuresource.

At the same time, Johns Hopkins University said more than 100,000 coronavirus cases have been reported globally with the vast majority of infections and deaths (3,015) occurring in China.

“Having already faced disruption in 2019 due to the Sino-American trade war, COVID-19 has further highlighted the risks associated with over-reliance on Chinese manufacturing,” London-based Futuresource said in a statement.

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The research firm said while the full effects of coronavirus remain to be seen,  short and long-term effects on consumer electronics and media entertainment industries will be significant.

Specifically, supply chain disruption to hardware vendors reliant on Chinese manufacturing will struggle, with delays in the supply chain leading to product delivery difficulties and poor Q1 fiscal performance that could extend into Q2.

Futuresource expects the second half of the year to offset the difficulties with pent-up consumer demand translating into seasonality as opposed to an overall yearly decline.

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Meanwhile, digital media platforms such as SVOD, AVOD and transactional are benefiting from the crisis, with digital video, music, and gaming all seeing spikes in engagement, according to Futuresource.

Retail trends toward e-commerce are also accelerating, while collaboration technology and software is also a beneficiary of the crisis. Besides being a short-term effect, this could have implications in the long run, as consumers are likely to continue engaging with these platforms after the virus is contained.

“In a very short time period, COVID-19 has had a disruptive impact on individuals, countries and major companies alike,” Futuresource wrote. “[We] will continue to monitor the progression of the outbreak and provide further updates as the situation develops.”

 

Best Buy CFO: Coronavirus ‘Very Fluid Situation’ Impacting First Half-Year Results

Best Buy Feb. 27 said it expects interruptions from the global coronavirus outbreak to impact first half-year store results.

Like many retailers, Best Buy generates much of its product inventory from China, which, as the epicenter of the COVID-19 virus, has seen many manufacturing facilities shuttered over worker safety concerns.

“This is a very fluid situation, which makes it difficult to determine exact financial impacts from disruptions in supply chain,” CFO Matt Bilunas said in a statement.

The CFO said the retailer views the situation as a relatively short-term disruption that would not impact Best Buy’s long-term strategy and initiatives.

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“Our guidance ranges for both Q1 and the full-year 2021 [upwards of 2%] reflect our best estimates of the impacts at this time,” Bilunas said.

Separately, the nation’s largest CE retailer disclosed that fourth-quarter (ended Feb. 1) same-store entertainment sales in the United States fell nearly 22% to $1.1 billion compared to a 2.7% increase to $1.3 billion in the previous-year period.

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The entertainment segment includes DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software.

The nation’s largest consumer electronics retailer said entertainment represented 8% of $13.8 billion domestic revenue, down from 10% of $13.5 billion in Q4 of 2019.

Internationally, same-store entertainment sales dropped nearly 17% to $94 million from a 2.7% drop to $117 million during the previous-year period. Entertainment represented 7% of international revenue compared to 9% in 2019.

Overall, domestic revenue increased 2.6% versus last year. The increase was driven by comparable sales growth of 3.4%, partially offset by the loss of revenue from store closures in the past year.

The largest comparable sales growth drivers were headphones, computing, appliances, mobile phones and tablets. These drivers were partially offset by declines in the gaming category.

Domestic online revenue of $3.52 billion increased 18.7% on a comparable basis due to higher average order values, increased traffic and higher conversion rates. As a percentage of total domestic revenue, online revenue increased to 25.4% versus 21.9% last year.

Apple Cites Coronavirus for Revised Fiscal Outlook

Apple has become one of the first tech/media companies to attribute revised fiscal projections due to the ongoing health crisis in China.

Cupertino, Calif.-based Apple Feb. 17 issued a regulatory filing citing the Coronavirus (COVID-19) for slowdown in production of iPhones, Mac computers, iPad and Apple Watch, among other products.

In a statement, Apple said its quarterly guidance issued on Jan. 28 reflected the “best information” available at the time as well as its best estimates about the pace of return to work following the end of the extended Chinese New Year holiday on Feb. 10 — the latter due to government concern about the spread of the respiratory virus that has killed more than 1,000 people.

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“Work is starting to resume around the country, but we are experiencing a slower return to normal conditions than we had anticipated,” the company wrote. “As a result, we do not expect to meet the revenue guidance we provided for the March quarter.”

Specifically, Apple said its worldwide iPhone supply would be temporarily constrained due to the shutdown of manufacturing partner sites located outside the Hubei province.

“While all of these facilities have reopened — they are ramping up more slowly than we had anticipated,” the company wrote. “The health and well-being of every person who helps make these products possible is our paramount priority, and we are working in close consultation with our suppliers and public health experts as this ramp continues.”

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In addition, Apple said demand for its products in China has been negatively affected as consumers there worry more about the spread and containment of the virus than buying the latest consumer electronics device.

“All of our stores in China and many of our partner stores have been closed,” Apple said. “Additionally, stores that are open have been operating at reduced hours and with very low customer traffic.”

The company said retail operations are “gradually reopening” and would continue to do so as “steadily and safely as we can.”

Apple said its corporate offices and contact centers in China are open, and that online stores have remained open throughout the health epidemic.