STX Entertainment eyes more film, TV and virtual reality projects in China
Backed by Tencent, PCCW and Hony Capital, STX is looking to create a new ecosystem in which Chinese partners get closely involved in the creative process
STX Entertainment, an independent American film and television studio backed by Tencent Holdings and PCCW, aims to double down on projects with its Chinese partners as speculation grows about its public listing in Hong Kong.
“We’re approaching [collaboration with Chinese entities] different than what’s been done in the past,” said Robert Simonds, the chairman and chief executive of STX, at a recent conference hosted by Swiss financial services provider UBS.
Simonds said this involved creating “a new infrastructure and ecosystem that enables people who actually know how to connect with their audience”, which means having Chinese partners participate in the creative process and not just simply write a cheque to finance a project.
The company’s ambitious effort would augur well for the mainland’s aggressive internet giants – Baidu, Alibaba Group Holding and Tencent – as each have made substantial investments in film projects and operate the country’s largest online video platforms.
The mainland is widely expected to surpass the United States next year as the world’s largest film market in terms of box office revenue.
“We believe the key for China’s box-office growth remains the quality of movies,” said Citi Research analyst Alicia Yap in a recent report. “The traction and success of imported firms played a critical role in supporting overall box office sales thus far.”
STX has managed to carve its niche in Hollywood with medium-budget films in the US$20 million to US$60 million range. Its latest international co-production is The Foreigner, with veteran Hong Kong superstar Jackie Chan.
The company looks poised to strengthen its standing in the entertainment industry amid reports in March that Chinese film producer Huayi Brothers Media Corp wanted to renew and expand their 2015 deal to jointly produce, finance and distribute 18 movies, which will conclude next year.
STX, in which Legend Holdings-owned private equity firm Hony Capital was an early investor, could also raise fresh funding of about US$500 million and attain a US$3.5 billion valuation from its anticipated initial public offering in Hong Kong next year, according to sources cited in a Wall Street Journal report last week.
Simonds said STX was currently working with Alibaba Pictures, the entertainment arm of e-commerce powerhouse Alibaba Group, to co-develop scripts for projects involving a new TV series on United States-based video-on-demand service Hulu, a short-format film and virtual reality.
Unlike the existing Hollywood studios and their outdated ways of doing business, Simonds touted that STX has formed an integrated platform spanning intellectual property creation, creative development, production, distribution and marketing.
STXsurreal, a unit of STX, last month formed an alliance with Google to establish a pay-per-view, high-quality mobile virtual reality platform.
“Things are changing so quickly in our business,” said US filmmaker Peter Berg at a panel discussion in a UBS conference last week. “It’s very refreshing to find a company like STX that can support [various creative projects], whether it’s a TV series, video game or virtual reality platform.”
Actor-producer Mark Wahlberg added that he hoped “to do plenty of things” with STX amid the continued growth of the Chinese entertainment industry.
Both Wahlberg and Berg are currently in pre-production for the STX action film Mile 22. Wahlberg had completed work in the STX-backed crime movie All the Money in the World, which will be released in December.
New York-listed Alibaba owns the South China Morning Post.