NEW YORK, Dec. 7, 2016 /PRNewswire/ -- Wecast Network,
Inc. (NASDAQ: WCST) ("Wecast" or the "Company" or "WCST"),
announced today a partnership with Zhejiang Yanhua Culture Media
Co., Ltd. ("Yanhua Partnership"), where Yanhua will act as the
exclusive distribution operator (within the territory of
the People's Republic of China) of
Wecast's licensed library of major studio films. Wecast will
still operate its Hollywood movie
mobile/smartphone app independent of this partnership.
Yanhua is headed by Mr. Cao
Qiang, who is known in the industry as the "John Malone of
China." Before starting Yanhua,
Mr. Qiang was the CEO of WASU Media Group ("WASU"), China's leading cable TV network, based in
Hangzhou, Zhejiang Province.
Amongst many accomplishments under his tenure at WASU, he
successfully secured Alibaba as a 20% shareholder and strategic
partner, in WASU.
The Yanhua Partnership will modify and improve Wecast's
legacy major studio paid content business model by moving
from a framework that included high and fixed cost upfront minimum
guarantee payments, rising content costs from major Hollywood studios and low margins to a
structure that will now include relatively nominal costs to Wecast,
upfront minimum guarantee payments to Wecast and the opportunity to
reach an even wider audience. With this partnership, Yanhua
will assume all sales and marketing costs and will pay
Wecast a minimum guarantee in exchange for a percentage of
the total revenue share. This will completely transform the
legacy business by mitigating or removing the possibility of
continuing to operate at a loss yet still providing Wecast with the
opportunity to benefit from revenue upside based on the Yanhua
Partnership's success.
It is important to note and distinguish between the legacy
Hollywood studio paid content
business (that Yanhua will now be operating) and Wecast's
new Paid Content Group vertical that is vertical #1 of the
four-part vertical plan articulated by Mr. Wu and Wecast on several
occasions. The legacy Hollywood studio paid content business is a
strictly China-distributed,
high-cost, content resell business. With the new Paid Content Group
vertical, Wecast is building a direct-to-consumer (and therefore
lower cost) cloud-based platform that will have over 100,000
titles from independent producers and be able to reach a global and
much wider audience and customer base. Most importantly, the
new Paid Content Group is being established with an operational and
cost framework of controlled and stronger profitability margins,
underpinning it.
As Chairman Bruno Wu discussed on
the WCST Q3 Earnings Conference Call, the legacy major studio paid
content and video on demand business in China can be considered both complex and
challenging for several reasons. The market is crowded by
well-capitalized and diversified competitors who use their deep
coffers to promote and sell their services and do so using a loss
leader strategy. While pay content and video on demand
offerings are not profitable (specifically with expensive
Hollywood content), many continue
to pursue this strategy because the practice attracts an enormous
amount of eyeballs and can be used to capture new customers who can
then be introduced and sold on, other service verticals that
operate with much higher profit margins.
With the immense draw that exists and will always exist for
content, the legacy paid content business is still a crucial
component in Wecast's total business. But Wecast Network's
strategy shift and future will be that of a global-reaching
ecosystem centered on content consumer media and creating a value
chain of Branding, Content, Commerce and Licensing all intertwined
and run in an aggregated, synergetic and interwoven manner on one
platform. By passing along the high cost burden that major
studio-based paid content has presented the Company with up until
this point, Wecast will be able to more deeply focus on its new
strategy and verticals, and at the same time leverage this new
Yanhua Partnership to reach a larger swath of the population with
whom Wecast can target with its other service verticals.
About Wecast Network, Inc. (http://corporate.yod.com)
Wecast Network, Inc. (NASDAQ: WCST) is leveraging and
optimizing its current operations as a premium content Video On
Demand service provider in China
to evolve into a global, vertical, ubiquitous and transactional
B2B2C, mobile-driven, consumer management platform for both
enterprises and consumers. By aiming to establish the world's
premier multimedia, social networking and smart e-commerce-enabled
network with the largest global effective connected user base,
Wecast, through this expanded, cloud-based, ecosystem of connected
screens combined with strong partnerships with leading global
providers, will be capable of delivering a vast array of
WCST/YOD–branded products and services to enterprise customers and
end-use consumers - anytime and anywhere, across
multiple platforms and devices.
Wecast has content distribution agreements in place with many
of Hollywood's top studios including Disney Media
Distribution, Paramount Pictures, NBC Universal and Twentieth
Century Fox Television Distribution, Miramax, as well as a broad
selection of the best content from Chinese filmmakers. In
addition, the Company has governmental partnerships and licenses as
well as numerous JV partnerships and strategic cooperation
agreements with an array of distribution and content partners in
the global new media space. Wecast is headquartered in both
New York, NY and Beijing, China.
Safe Harbor Statement
This press release contains certain statements that may
include "forward looking statements." All statements other than
statements of historical fact included herein are "forward-looking
statements." These forward looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, involve known and unknown risks
and uncertainties. Although the Company believes that the
expectations reflected in such forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's periodic
reports that are filed with the Securities and Exchange Commission
and available on its website (http://www.sec.gov). All
forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by
these factors. Other than as required under the securities laws,
the Company does not assume a duty to update these forward-looking
statements.
CONTACT:
Jason
Finkelstein
Director Strategy &
IR
Wecast Network,
Inc.
212-206-1216
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SOURCE Wecast Network, Inc.