India Entertainment

Reliance Entertainment, the largest player in the Indian film industry, is making an ambitious play in the US entertainment market by quietly buying up cinemas across the U.S. and is poised to launch in April as a coast-to-coast chain. Recently, George Soros paid $100 million for a 5% stake in Reliance, which has 250 screens in 28 North American locations, including Washington DC, New York, New Jersey, Atlanta, Detroit, Chicago, San Jose, Los Angeles, Washington state. The company plans to rename the US sites "Big Cinemas" as their renovations are completed, and says most of the sites are close to centers of ex-pat Indian and Asian populations. The company's objective is not to force the pace of crossover by Bollywood movies but to play popular movies from a wider range of sources, including popular Chinese or Korean cinema. The company's expansion into the US entertainment market, which is likely to be followed by moves into other countries, is one of several efforts to diversify into the entertainment industry. With major positions in telecommunications, broadband Internet, video, radio, movie production and post-production, Reliance has also unveiled plans to offer up to 20 TV channels and is weeks away from launching India's fourth satellite TV platform. Overall, the move underlines Indian companies' growing appetite for international properties and influence. (VarietyAsiaOnline, 3/26/08)

The Indian entertainment sector is expected to grow by 18% per year for the next four years, and could be worth $28.6 billion by 2011, according to a report by PricewaterhouseCoopers (PwC). PwC points to record inward foreign investment of $211 million and increased digitalization, and estimates that Internet advertising will hit $104 million in 2008, and touch $272 million in 2012. Film is expected to expand from $2.37 billion to $4.35 billion by 2012 as movie players discover revenue streams beyond the traditional box office such as television, mobile, Internet, home video, merchandise, music, re-make rights, and several branded entertainment opportunities. TV, where most of the foreign investment has gone, is forecast to grow from $5.59 billion to $14.8 billion by 2012. (VarietyAsiaOnline.com, 3/25/06)

August 2007

China
NetEase.com, the Chinese provider of online games and other Internet services, reported that 2007 2Q net profit decreased slightly ($41.1 million vs. $41.3 million) compared to the same quarter in 2006 due to increased competition in the Chinese Internet industry. The company said it planned to expand its game portfolio, develop its Internet portal business, and generate more revenue from its email business. (Wall Street Journal, 8/6/07)

McDonalds is joining forces with the International Olympic Committee and China Central Television to produce a reality show-style competition that will award 300 children the chance to attend the 2008 Beijing Olympics. Children across China will take exams and participate in an art and essay competition in which they try to impress judges by explaining what the Beijing Olympics theme, "One World, One Dream," means to them. Chinese students along with children from the rest of the world will then compete is a series of televised contests, from quiz shows to athletic competitions, to determine the winners. McDonalds, who has fewer outlets in China than its main rival, Yum Brands' KFC, plans to increase outlets in China from 810 to over 1000 by the time the Beijing Olympics begin in 8/08. (Wall Street Journal, 8/9/07)

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Japan
The top two banks in Japan, Mitsubishi UFJ Financial Group and Mizuho Financial Group, reported sharp declines in their earnings for the 2006 April-June quarter, indicating that they are struggling to expand their businesses despite rising interest rates in the country. Both banks said that exposure to securities related to US subprime debt did not have a discernible impact on earnings. (Wall Street Journal, 8/1/07)

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Other Business
Hollywood producers Bob and Harvey Weinstein have launched a $285 million fund that will invest in Asian-themed projects, including an action film about Chinese folk heroine Hua Mulan, a remake of the 1954 Akira Kurosawa classic "The Seven Samurai," and "The Forbidden Kingdom," featuring Jackie Chan and Jet Li, which is currently filming in China. The company said its hopes to take advantage of lower costs by shooting in Asia, while adding a "Western sensibility" to produce movies that appeal to Asian and Western markets. (Wall Street
Journal, 8/9/07)