Over the next several years, the competition between traditional entertainment sources, such as cable TV or movie theaters, and Over the Top (OTT) sources is expected to accelerate. OTT specifically refers to film and television content provided via a high-speed Internet connection rather than a cable or satellite provider. OTT does not mean free content, as the term includes paid streaming services such as Netflix, Amazon Prime, Hulu and HBO Now, to name a few. Continued improvement in broadband speed and the increasing number of cord cutters among younger audiences has resulted in the rapid growth of demand for OTT services. The streaming industry itself is very diverse, not only in terms of content but also geographically. While the companies mentioned above dominate the western market, in China, Baidu's iQiyi, Tencent Video and Alibaba's Youku Tudou together control more than 70% market share of the country's online video industry. And according to a research by PwC, China's OTT video market achieved significant growth with revenues of USD 5.8 Billion in 2018, making OTT the newest and fastest growing platform for major advertisers. Furthermore, the market is projected to maintain a CAGR of 20% in the next five years, with revenues doubling by 2021 and reaching USD 14.7 Billion by 2023. AB International Group Corp. (OTCQB: ABQQ), Baidu, Inc. (NASDAQ: BIDU), Alibaba Group Holding Limited (NYSE: BABA), Tencent Holdings Limited (OTC: TCEHY), AT&T Inc. (NYSE: T)
As for traditional cinema, the global box office revenue is projected to exceed USD 50 Billion during the forecast period ending in 2023, according to data provided by PwC. This is due to both rising admissions in all major regions and renewed interest and investment in cinema outside the major regions. The U.S. in particular has been the majority market share holder of the industry, and while Hollywood continues to put emphasis on mega-budget films, China is expected to overtake the U.S.A. in 2020 in terms of total cinema revenue. China's cinema segment recorded box office revenue in 2018 grew by 9.1% and number of screens increased by 9,303 to 60,079. PwC highlights that in 2018, 33 movies earned more than RMB 500 Million each, accounting for 72% of total box office, while revenues of the industry are projected to reach USD 15.5 Billion by 2023 in China alone.
AB International Group Corp. (OTCQB: ABQQ) announced earlier last month, "its unaudited financial results for the three months ended November 30, 2019. The financial results have been filed in a 10-Q with the U.S. Securities and Exchange Commission (the "SEC")
Key Financial Highlights:
-- Revenues for the three months ended November 30, 2019, increased 111% to $156,405, as compared to $74,240 for the three months ended November 30, 2018.
-- Gross Profit for the three months ended November 30, 2019 increased 239% to $104,358, as compared with gross profit of $30,792 for the same period ended November 30, 2018.
-- Net loss for the three months ended November 30, 2019 decreasing 72% to $63,354, as compared with a net loss of $228,554 for the same period ended November 30, 2018.
-- As of November 30, 2019, ABQQ had $4,474,427 in total assets, has total current liabilities as of November 30, 2019 were $264,033. Total shareholders' equity is $4,210,394.
In November 2019, the company acquired two movie copyrights at a price of $256,000 for "Lushang" and $115,200 for "Qi Qing Kuai Che." The estimated earliest release date of these two movies will be in the third quarter of FY2021.
Chiyuan Deng, AB International Group CEO, stated, 'I am excited to execute investments in China film market, creating this business line will increase revenues in upcoming years. It's also a beneficent result of the synergies with the WeChat official account performing matching platform.'
China's total box office increased by 5.4% to reach a record high of RMB64.266 billion (US$9.2 billion) in 2019, domestic movies took 64.1% of the market. With the box office in North America declining by 4.8% last year, according to data from Box Office Mojo, China further narrowed the gap in box office revenues with the North American market.
2019 China film market highlights:
-- The total box office in China reached a record high of RMB64.266 billion (US$9.2 billion) in 2019, up 5.4% over 2018.
-- Of the total box office in 2019, 64.1% was generated by domestic movies and 35.9% came from imported movies.
-- The total number of movie tickets sold last year reached 1.727 billion in China, a slight increase of 0.5% over the previous year.
-- Six movies grossed more than RMB2 billion in box office in 2019, accounting for 36.9% of total revenue.
-- The average age for movie attendees reached 29 in 2019, and the population with age 25 to 34 accounted for more than half of all moviegoers in China. According to data from Maoyan's 2019 China Film Market Report.
About AB International Group Corp: AB International Group Corp. is an intellectual property (IP) and movie investment and licensing firm, focused on acquisitions and development of various intellectual property. We currently have a Patent License Agreement pursuant to which Guangzhou Shengshituhua Film and Television Company Limited, a company incorporated in China, granted the AB International Group a worldwide license to a video synthesis and release system for mobile communications equipment, in which the technology is the subject of a utility model patent in the People's Republic of China. We recently launched new business applications through smartphones and official social media accounts based on Tencent's WeChat platform, utilizing Artificial Intelligence, it is a matching platform for performers, advertiser merchants, and owners for more efficient services. It generates revenues through an agency service fee from each matched performance. Currently, there are hundreds of active members, which is increasing daily as new companies and performers are registering for membership. In 2019, we are also actively exploring investments in Chinese movies copyright and release rights."
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Baidu, Inc. (NASDAQ: BIDU) a Chinese-language Internet search provider, announced earlier in November its unaudited financial results for the third quarter ended September 30th, 2019. According to the report - iQIYI subscribers reached 105.8 million, up 31% year over year, in September 2019, further strengthening iQIYI's foundation to produce entertainment-based blockbuster originals. iQIYI is an online video platform based in Beijing, China and a subsidiary of Baidu. Revenue from iQIYI reached RMB 7.4 Billion (USD 1.04 Billion), up 7% year over year. iQIYI membership revenue grew 30% year over year, offset by online advertising revenue declining 14% year over year. Content costs were RMB 7.0 Billion (USD 985 Million), increasing 4% year over year. iQIYI's content costs increased 3% year over year, which rose slower than iQIYI's revenue growth.
Alibaba Group Holding Limited (NYSE: BABA) announced earlier last year its financial results for the quarter ended September 30th, 2019. Alibaba indicated that the synergies between their commerce and entertainment businesses continue to deliver a superior user experience that has helped to bring more paying subscribers onto the Youku online video platform. For the quarter, Youku's average daily subscribers increased 47% year-over-year. The Company continued to enrich the platform's portfolio with original content that resonates with Chinese audiences. Alibaba is investing in original content production capability while ensuring cost efficiencies and return on investment, resulting in narrowing EBITA losses during the quarter. For the overall Digital media and entertainment segment, adjusted EBITA margin improved to negative 30% in the quarter ended September 30th, 2019 from negative 64% in the quarter ended September 30th, 2018, primarily due to the measured content spending by Youku.
Tencent Holdings Limited (OTC: TCEHY) in its most recent earnings report announced that Fee-based Value-added Service (vas) subscriptions increased 11% year-on-year to 170.6 million, mainly attributable to video and music subscriptions. Tencent Video subscriptions grew 22% year-on-year to 100.2 million. Music subscriptions increased 42% year-on-year to 35.4 million as our paid content library expanded. Daily views of short and mini videos distributed via our Penguin Media Content Platform grew rapidly, benefitting from more sophisticated content curation and more targeted distribution to our high DAU platforms including Tencent Video, QQ KanDian and QQ Mobile Browser.
AT&T Inc. (NYSE: T) announced back in October that its subsidiary, WarnerMedia, unveiled new details about its HBO Max direct-to-consumer strategy on the company's iconic Warner Bros. lot, revealing a comprehensive offering of programming options for every audience, product features and functionality, and its go-to-market plans. "With this entire company coming together, we will have one of the most robust collections of premium streaming content that will appeal to all demographics in the household, and be able to achieve incredible scale and reach right out of the gate," said Robert Greenblatt, Chairman of WarnerMedia Entertainment and Direct-to-Consumer. "We couldn't achieve this without AT&T's unprecedented and enthusiastic support. When you live in a world with 'dragons' -- it feels very good to have one of your own in the game!" Launching in May of 2020, WarnerMedia will be making HBO Max available to customers in the U.S. for USD 14.99 per month. The company is targeting 50 million domestic subscribers and 75 - 90 million premium subscribers by year-end in 2025 across the U.S., Latin America and Europe.
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