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Fan takes over Damai as Alibaba integrates ent businesses

China’s Alibaba Group has appointed Fan Luyuan, the president of its Alibaba Pictures film division, as president of the Damai event ticketing platform, as it seeks to better integrate its various music and entertainment properties.

The reshuffle – which also sees Yang Weidong, president of video platform Youku, become president of music streaming service Ali Music – forms part of a “push for a unified entertainment strategy and stronger synergies” between the three platforms, says the company.

Alibaba, the world’s largest retailer, turned over nearly US$40bn in the 2017–18 financial year. It acquired Damai, China’s largest seller of music, sports and theatre tickets, last March, and also has plans for an artist management company and booking agency, both largely tailored towards funnelling content to Youku (‘China’s YouTube’).

Alibaba kicks live plans into gear with Damai buy

Last September, Alibaba’s $7.2bn Digital Media & Entertainment Group announced the launch of a dedicated live entertainment division, to encompass ticketing, content creation and the live experience.

In a letter to employees, Alibaba Group CEO Daniel Zhang says: “In the year and a half since Alibaba Digital Media & Entertainment Group was established, all of the business units have strengthened and made advancements in their respective fields. The digital media and entertainment matrix is on its way to fighting with stronger coordination.”

Zhang Yu, the former president of Alibaba Music and Damai, will move to a new, unspecified position within Alibaba Group.

Elsewhere in the ticketing space, Alibaba owns movie ticketing platform Tao Piao Piao, which has more than 290m users, or a roughly 44% marketshare. The company says it hopes to capitalise on the synergies between it and Damai to provide a one-stop shop for the consumption of entertainment.

 


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Major players bid to awaken China’s “sleeping giant”

The past week has seen a flurry of activity in the fast-growing – but still largely untapped – Chinese live music business, with two global players launching of new ventures with the potential to shake up a market already predicted to grow by ~7% annually through 2021.

Ecommerce giant Alibaba Group, which turned over ¥158.3 billion (US$23.9bn) in the 2017 financial year, and claims to be the world’s biggest retailer, on 19 September announced the launch of a dedicated live entertainment division, to encompass ticketing, content creation and the live experience.

According to Yu Yongfu, president of Alibaba’s Digital Media and Entertainment Group, the new company, described only as the live entertainment business group (阿里文娱现场娱乐事业群), is a “key part” of Alibaba’s strategy to grow its presence in the entertainment market, where it already has interests in film distribution and production, artist booking and management, and streaming music and video.

Ticketing for the new venture will be handled by Damai.cn – China’s largest entertainment ticketing platform, acquired by Alibaba in March – with its subsidiaries MaiLive and Maizuo, hitherto largely involved in online movie ticketing, leveraging Alibaba’s data to produce live shows, reports TechNode.

Alibaba’s long-awaited move into live events – predicted by IQ as far back as May 2016 – comes as Australia’s TEG announces what it calls a “game-changing” partnership with major Chinese ticketer YongLe to launch a cloud-based ticketing platform in China. The platform, expected to be launched in 2018, will be branded YunTek, which translates as “cloud technology”.

“This is a game changer. We believe YunTek will disrupt the entire Chinese live entertainment market”

TEG, which owns leading Australian ticketer Ticketek, as well as promoters TEG Live, TEG Dainty (formed last July following the acquisition of Paul Dainty’s Dainty Group) and Life Like Touring, last month launched a new division, TEG Asia, focused on expanding its activities in the continent. TEG says YunTek, a self-service platform, will be “one of the most sophisticated end-to-end ticketing and live event management platforms that have ever been developed”.

“This is a game changer, as we believe YunTek will disrupt the entire Chinese live entertainment market,” says TEG CEO Geoff Jones. “Not only are we delivering a new and innovative ticketing solution to the Chinese market, we are upending the traditional live events value chain.”

Ren Wang, CEO of YongLe, adds that the JV represents a “combination of the largest ticketing and entertainment businesses in the region”. “We are pleased to be joining forces with TEG, one of the largest and most respected ticketing companies globally,” adds Wang. “We believe TEG’s experience in both ticketing and live entertainment will ensure the success of the YunTek platform.”

The movement in the live market follows huge growth for the Chinese recorded music industry; 20.3% in 2016, according to IFPI, driven by an increase of 30.6% in streaming. In terms of revenue, China has yet to break the global top ten, with piracy still a problem – although analysts believe rising incomes and a government crackdown on piracy is slowly changing that, with many pointing to China as a ‘sleeping giant’ music economy ready to explode.

According to PwC’s Global entertainment and media outlook 2017-2021, the Chinese live music industry was worth US$217 million in 2016, and is set to grow at a compound annual growth rate (CAGR) of 6.721%, reaching $301m in 2021.

“Australia currently has a greater music market on account of its superior live industry. Not for long: China’s music market is sprinting”

“For a nation with some 1.38bn residents (and further population growth on the horizon due to the relaxing of the one-child policy), the legitimate market has until now been tagged as a sleeping giant,” reads the report. “Australia, with a population of just 24m, currently has a greater music market in terms of total revenue on account of its superior live industry. Not for long: China’s music market is sprinting.”

Writing for MBW in July, Modern Sky founder LiHui Shen estimated there are around 365m people in China who “will happily buy into culture and entertainment – young people that have newly disposable income to spend on leisure. It may not be the entire 1.2bn population, but it’s still the equivalent of the entire USA buying into music. Imagine that.”

As for the live business, it is “flourishing,” said Shen, “with plenty of big festivals, venues and opportunities for touring. Modern Sky has seen success on that front as China’s largest promoter, presenting over 15 Strawberry Music Festivals every year in China – but many companies still aren’t equipped to make the most of the live world.”

He suggested the key to success in China is – just as TEG has done with YongLe – “working with partners who understand the territory and can make things happen”.

 


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Alibaba kicks live plans into gear with Damai buy

Chinese ecommerce giant Alibaba appears to be setting into motion its long-awaited expansion into live entertainment, today announcing the acquisition of China’s leading music, sports and theatrical ticket agency, Damai.cn.

On its page on Chinese social network Weibo, Alibaba says the buy-out, for an undisclosed sum, “continues an earnest three-year romance” with Damai.cn, in which it has had a minority interest since 2014.

Alibaba – whose Alibaba Pictures business last May announced a strategic partnership with Damai.cn, launching new ticketing operation Tao Piao Piao – adds in a statement the new acquisition “forms a strategic part of the value chain in our media and entertainment business”.

“Damai.cn will be a powerful platform to distribute our media content, as well as expand our user reach and engagement”

“Damai.cn will be a powerful platform to distribute our media content, as well as expand our user reach and engagement,” reads the announcement. “There will be extensive collaboration opportunities with our other entertainment assets, including Alibaba Music, Alibaba Pictures and [online video platform] Youku.”

Damai, which has sold tickets for more than 1.8 million events since its launch in 2007, has a marketshare of roughly 70% in China. It is not yet clear whether Alibaba will merge Damai.cn with Tao Piao Piao.

Jack Ma-led Alibaba, worth an estimated US$14bn, earlier this month announced the launch of an artist-management company as a joint venture between Alibaba Pictures and Youku.

 


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