Time Warner Inc. and China Media Capital (CMC) announced a strategic investment partnership that will seek to capitalize on China's rapidly expanding media sector and the demand for content on multiple platforms.
The companies announced the agreement at the 2013 Fortune Global Forum in the Chinese city of Chengdu.
The partnership is another example of how U.S. media companies are working to expand their presence in international markets and is part of Time Warner's push to expand its international revenues.
In announcing the agreement, the companies noted that the Chinese media and entertainment market is among the largest and fastest growing in the world. Box-office revenue grew at 45% annual clip between 2009 and 2013 and is projected to reach $4.4 billion in 2013. Meanwhile, animation revenues have also skyrocketed by 27% a year over that period to $7.1 billion and online video revenues have jumped by 64% to $2 billion in 2013.
The Chinese market has, however, proven difficult for U.S. TV players in the past. After making a big push into China during the 1990s, restrictions on exporting channels and content into China forced major U.S. companies like Time Warner, Viacom and News Corp. to scale back some of their efforts in the 2000s.
"This partnership with CMC and [CMC chairman] Ruigang Li will give us a unique window into one of the world's largest and fastest growing media and entertainment markets," said Time Warner chairman and CEO Jeff Bewkes in a statement. "Increasing our global presence is one of Time Warner's strategic priorities and China is one of the most attractive territories in which we operate, but it is complex. This alliance will give all our businesses a savvy and accomplished partner as we strive to bring our leading brands and storytelling to people everywhere, across a wide range of devices."
"China's media and entertainment industry is undergoing a profound change on various fronts including technology, creativity and commercialization," added Li. "We are privileged to be at the forefront of these unprecedented opportunities as well as challenges. We are pleased to forge this partnership with Time Warner, a global power of television, film and digital content, to jointly explore innovative ways of creating premium content for the new generation of consumers at the age of Internet and mobile, which will further contribute to the dynamic industry development in China."
Li set up CMC as China's first media and entertainment-focused investment fund in 2010.
Since then it has worked on a number of deals, including DreamWorks Animation's Chinese joint venture and CMC's acquisition of Star China from News Corp.