Mergers & Acquisitions

Private equity firm AID Partners acquires controlling interest in YouTube partner network any.TV

AID Partners will subscribe to US$60 million worth of shares from any.TV, gaining a 50.01 per cent interest and control over YouTube partner networks Freedom!

PUBLISHED : Thursday, 13 October, 2016, 9:21pm
UPDATED : Thursday, 13 October, 2016, 10:34pm

Private equity firm AID Partners Technology Holdings will acquire a 50.01 per cent controlling interest in any.TV , which owns and operates one of the largest YouTube partner networks, Freedom! Network.

AID Partners will pay US$60 million (HK$468 million) to become the majority shareholder, the company announced at a press conference on Thursday.

Back in 2013, AID Partners bought regional operations for HMV, now Hong Kong’s largest music and DVD retailer. But earlier this year, the company sold over 80 per cent of the stake to film investment holding company HMV Digital China Group, formerly known as China 3D Digital Entertainment.

With the any.TV acquisition, AID Partners hopes to tap into what they describe as the “paradigm shift” toward video platforms, including in the Asia-Pacific region.

“It’s a big bargain for us,” AID Partners chairman and chief investment officer Kelvin Wu King-shiu said to the Post.

Gilbert Ho Chi-hang, executive director and chief executive officer of AID Partners, said he hopes to provide larger resources to the Freedom! Network to facilitate its growth.

Freedom! is a multi-content network that acts as an agent for content creators on YouTube, and currently has over 177,000 channel partners, 211 million subscribers, and 45 billion aggregate views worldwide, according to a company press release on Thursday.

“Obviously I’m excited about this acquisition,” Ho said. “There will be a lot of synergies that we can bring to them, and going forward, [their] growth will be even more significant because it hasn’t been really focused on the so-called Chinese-speaking community.”

“One bottleneck of [Freedom!] is the growth in Asian markets,” Wu added. “That’s why they need us as well.”

While Ho said there won’t necessarily be a focus on Chinese content for the network, he does see “a big gap” that can be built on in Asia. The majority of Freedom! viewership is in the US at 16 per cent of views, creating 47 per cent of partner revenue. Only 2.2 per cent is in Chinese, with viewership from Taiwan.

“A lot of the viewership is still in the English-speaking countries, especially North America,” Ho said. “Sooner or later, the Chinese-speaking community will be in that shift as well, and now especially in China, it’s already seeing that.”

Freedom!’s move to China could take the form of partnerships with Tudou, Youku, and other platforms, he added.

While Freedom! content is predominately gaming-related right now, the network plans to use AID Partners funding to diversify its genre mix to include music, beauty, and youth-oriented content. The network saw its viewership grow 50.2 per cent in the 12 months to June and estimated a partner revenue gain of 43.6 per cent so far this year, Wu said at a press conference.

“The support from AID Partners Technology Group for its rich resources and experiences I media and technology will fuel our growth and bring to the Freedom! family more unprecedented edges,” George Vanous, founder and CEO of Freedom!, said in a press release.

Wu said he has a “very good outlook” on the video industry, describing videos as “the new form of literature for the next generations”. The trend is moving to focus on creators, and for China, he believes there will be a shift away from live streaming to professionally scripted video content.

AID Partner shares were halted on the Hong Kong stock exchange on Thursday pending its announcement, but will resume Friday.

For AID Partners’ other assets, the company said it has invested HK$916 million in various internet and tech companies that have a current market value of HK$1.692 billion.

HMV, which AID Partners still has a 20.5 per cent stake in, is working money to create “cooler, more event-driven venues” and will conduct renovation work for its stores in the next few months, according to Wu.

The retailer is also reopening their location in Central after closing its iconic flagship store there in April out of rental cost concerns. While the new store, one block away from the original location, was slated to open in September, Wu said it will now open in December before Christmas.

Ho said HMV’s Central store will have new features, but would not comment on specifics.