China’s Letv inks deals with TCL Multimedia and Digital Domain in Hong Kong to shore up hardware and content portfolios
Chinese online video-streaming giant Letv has set out on an ambitious plan to build up its hardware capabilities and content portfolio in separate deals with Hong Kong-listed companies TCL Multimedia Technology and Digital Domain Holdings.
Letv has agreed to acquire 20 per cent of TCL Multimedia for HK$2.27 billion (US$293 million), making it the second-largest shareholder of one of the world’s largest television manufacturers.
Beijing-based Letv also signed a term sheet to explore a proposed joint venture with Digital Domain, operator of the world’s largest independent visual-effects companies, to develop and distribute immersive, 360-degree live sports events and virtual reality media content.
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Those two initiatives show how Letv continues to make a splash in Hong Kong since announcing in September that it had won the exclusive local broadcast rights for English Premier League football matches for three years, starting next season. That deal reportedly cost it more than US$400 million.
Mok Chui-tin, Letv’s chief executive for Asia-Pacific operations, said in October that the company plans to invest between HK$3 billion and HK$6 billion in the Hong Kong market over the next three years. The firm’s regional headquarters were established in the city in August last year.
Letv, through newly formed Hong Kong subsidiary Letv Zhixin, will subscribe to about 349 million new shares of TCL Multimedia at HK$6.50 per share.
Once the deal closes, Letv will nominate two directors in TCL Multimedia.
“The partnership with Letv is an important step in TCL Multimedia’s transition to the internet,” Li Dongsheng, the chairman at TCL Multimedia, said on Friday.
Li said the two partners’ common goal was to combine Letv’s strength in internet-connected smart TV applications and services with TCL Multimedia’s leadership position in the TV industry, while jointly pursuing overseas expansion for advanced smart TVs.
TCL Multimedia, part of Guangdong province-based electronics conglomerate TCL Corp, currently ranks third in terms of volume in the global TV market, with annual shipments of 17 million units.
According to their agreement, Letv will provide TCL Multimedia with access to its content, cloud computing platform, e-commerce and so-called big data r resources.
Letv, in turn, will gain access to TCL Multimedia’s international supply chain, industrial manufacturing and design facilities, as well as its extensive research and development assets.
In a regulatory filing, Digital Domain chief executive Daniel Seah Ang said the proposed joint venture with Letv involved a capital commitment of US$5 million each from both companies.
The two companies’ subsidiaries, Digital Domain Investments and Letv Sports Culture Develop (Beijing), are looking to form a 50-50 joint venture that will primarily develop, produce, broadcast, publish and distribute 360-degree live sports events and virtual reality content for the Chinese mainland.
The venture marks a huge step forward from Digital Domain’s initial project with Letv Sports in July, when the Hong Kong firm’s virtual 360-degree-view video capture and live-stream technology was used to cover this year’s International Champions Cup football matches in Guangzhou and Shanghai.
That patented technology, which was developed by Canadian digital imaging company Immersive Media, simulates the experience of being in the stadium and in the middle of the action for people who cannot attend the matches in person.
Immersive Media created the world’s first 360-degree view digital camera system and viewer technology, which was used by Google for its Street View maps application.