Wang Xing, CEO of Meituan-Dianping, announced in an email to staff that the company’s movie ticket business, Maoyan, will be officially spun off as an independent company. Meituan is taking the action to address the threat from BAT companies in the online ticket market.
Wang also announced the CEO of the new company as Peter Zheng. Zheng is the former vice president of Dianping and former vice president of Tencent, who managed the businesses of Tencent’s social ad network Guangdiantong (GDT).
After this decision, Maoyan will be able to operate more independently, and many are predicting this signals Meituan intends to seek outside-investment for Maoyan to expand its business.
“Leading in the movie tickets market, Maoyan is going to be one of the most influential companies in the movie business,” Wang said in the email. “And Maoyan will strengthen the upstream businesses in the movie industry ecosystem.”
Basically, Wang implied plans for taking greater steps into film production and distribution. Why? Because Maoyan’s market share is dropping while other online ticket platforms make inroads into every link of the movie industry ecosystem, from cooperation with theater chains to investment in film production.
Maoyan Movie, set up in 2012 by Meituan, is one of the company’s best-performing businesses besides their food delivery and hotel booking services. It has been No. 1 in the market, but the situation has been changing since last year as BATs increase their development pace to grab more market share from Maoyan.
According to Analysys International, a research institution in Beijing, in the last quarter of 2015, Meituan-Dianping’s combined movie ticket market share was 34.19%, followed by 23.6% for Tencent’s WePiao and Gewara merger, 15.26% for Baidu’s Nuomi app and 9.47% for Alibaba’s Taobao Dianying.
In the movie ticket selling business, online channels now account for the majority of the market share with 78.46%.
Alibaba Pictures has moved fast. It integrated Taobao Dianying last December, acquired a company that makes software for ticket booking and theater management, Yueke Software, with RMB 830 million and is the second largest shareholder of Chinese leading production company Enlight Media.
Tencent is not lagging behind either. It founded its movie arm Tencent Pictures in September, and its online ticket platform WePiao merged with Gewara last December. Additionally, it has stakes in another major film production company, Huayi Brothers.
Baidu has its own online ticket arm Nuomi, and has invested in SMI Holdings, operator of the Stellar Cinemas theater chain.
(Top photo from Flickr @La Veu del País Valencià)