The Chinese government fined Alibaba Inc. 18.2 billion under the Anti-Monopoly Law, highlighting the Chinese Communist government’s comprehensive censorship of mainland online majors. But Tencent, another mainland Chinese monopoly internet company that definitely does not lose out to Alibaba, only rained a little bit after a very big thunderclap, with a fine of 2 million RMB. For Tencent, this amount, equivalent to a penny for the average person, fell to the ground without bothering to bend down to pick it up.
Let’s take a look. For the Chinese Communist Party, Alibaba’s biggest problem is that it has moved the cake of banking and finance. But Tencent’s moves, in fact, are not at all smaller than Ali’s.
Ali’s Ant Financial Services has sub-business segments such as Alipay, ZhaocaiBao, BalanceBao, AntJubao, Online Banking, AntChange and Sesame Credit, and is also moving into the insurance business. Ant focuses on payment and wealth management development, with a focus on public transportation and other industries in the vertical payment category (e.g. Metro Metropolis, Tongkat Liancheng, etc.); and in the full wealth management industry chain, with a focus on businesses including investment advisors (Pioneer Pilot), smart investment advisors (Alfa Financial), and social investment (Snowball).
What about Tencent? Its payment platform mainly includes the following products: CaiPay, WeChat Pay, Mobile QQ Wallet, and WeChat Hong Kong Wallet. Among the wealth management segment, the main product is Tencent Wealth Management. Based on WeChat’s huge user base, the number of Wealth Management users is increasing and has become a key development object of Tencent’s financial technology.
The 2019 financial report shows that the fund retention of Wealth Management Pass has exceeded 900 billion, and Wealth Management Pass users have exceeded 200 million. In addition, the livelihood services segment mainly includes cell phone recharge, credit card repayment, Tencent Weiga credit card, Tencent Blockchain, Tencent Tax Refund Pass, We Remit cross-border remittance and other services.
Tencent has invested in hundreds of companies through 2019. In the fintech sector alone, it has invested in companies such as WeZhong Bank, Zhongan Insurance, Futu Securities, Waterdrop Insurance Mall, and WeBao.
In the banking field, Tencent’s financial investment in WeZhong Bank is actually far ahead of Ant Financial’s NetShares Bank, and the annual report of the two for 2019 shows that WeZhong Bank’s revenue is two times that of NetShares Bank and its net profit is three times higher. In addition to banking, Tencent also has a deep layout in the insurance field, with a joint venture in Zhongan Insurance, and heavy investment in Weibao and Waterdrop Insurance Mall. In the securities sector, it invested in Futu Securities, and the financial report showed that Futu Holdings’ revenue in 2019 was HK$1.06 billion, up 30.9% year-on-year.
As you can see, Tencent’s moves in the financial and banking business are not at all inferior to Jack Ma’s Ali.
Compared to Alibaba, Tencent is a more “mysterious” Internet company.
On the 23rd of last month, led by Tencent Film and Aiki Yi, 524 stars on the mainland jointly signed an initiative to boycott short film and video clips. The so-called film and video clips are clips of original products that are broadcast on their own platforms or channels in the name of introduction or promotion.
On April 26, a mainland media outlet published an article that deeply undermined Ma Huateng’s Tencent entertainment empire and said that this joint initiative led by Tencent is ostensibly about the protection of film and TV copyrights, while what is actually being protected are interests and blockades.
We look at the water of Tencent’s monopoly today, and just how deep it is.
Let’s look at the list of this joint signature initiative. This list has a strong line-up, including Xiao Zhan, Wang Yibo, Zhao Liying, Gong Jun and other flow artists; as well as Yang Mi, Diligaba, Yang Zi, Chen He, Dong Zijian, Yao Chen, Li Bingbing and other film and television actors.
Among them, most of Tencent’s studio artists, as well as several spokespersons signed by Tencent films at the beginning of the year, are present in its list.
As early as April 9, when Ai YouTeng first joined 73 film and media units to jointly issue the Joint Statement on the Protection of Film and TV Copyrights, it called on short film platforms to respect originality and protect copyrights, and not to implement infringing acts such as editing, cutting strips, carrying and spreading of relevant film and TV works without authorization. Soon after, someone broke the news on Douban and Weibo that Tencent was suspected to be the lead organizer of the joint statement.
The two rights actions came with great momentum, and the traditional long film platforms formed a coalition to issue an initiative letter, with the tip of the knife pointing directly at “Jitterbug” – Jitterbug, Racer, and B station (bilibili, known as the Bili Bili pop-up network).
The editing, cutting and carrying of film and television works is an important category for these platforms, and for platform Up owners, the fragmented editing of film and television variety is the main content of a large number of short film self-publishing agencies and MCN (Multi-Channel Network) companies.
On Zhihu, some people point the discussion of copyright issues to monopoly. “(Penguin) replicates QQ Music, relying on its financial advantage to form a legal exclusivity of copyright, circling the traffic associated with the IP with legal barriers, and finally suffocating its competitors.”
There are also producers who say that the alliance in early April was essentially to “mess with Jitterbug”. “Jitterbug’s annual advertising revenue of 180 billion is more than the combined total of the five platforms in the statement, so shouldn’t it pay?”
On April 26, the mainland introductory website “Sina.com” and “Interface” and other media reprinted the WeChat public number “slightly large reference” article “Behind the 500 stars’ joint initiative, the copyright giant’s The Invisible Blockade Line”. According to the article, short film platforms have been using traffic to seize user time and fragmented content to seize users in the past few years. According to the data released by China Internet Network Information Center (CNNIC), the scale of Chinese short film users has reached 873 million in 2020, with an average daily active user (DAU) of 600 million, which also makes long film platforms feel the crisis, and the long-term uneven distribution of interests and the inability to achieve a win-win situation for both long and short film platforms lead to the outbreak of rights protection conflicts.
Tencent is the largest market share holder in both stock copyright and new copyright areas, as well as IP adaptations.
At present, there are 8,826 copyrighted dramas on the Internet in mainland China, with Tencent covering 53%; there are 399 historical domestic movies with over 100 million Internet copyrights, with Tencent covering 82%. In the field of new drama series copyright, Tencent has also started to increase the code in the past two years. 41% of Tencent’s exclusive hot drama series copyright will be available in 2020, and in the next two years, there will be 80 head dramas, 37 of which will be online in Tencent, accounting for nearly half of the market share. IP adaptation field, as of 2020, head dramas through the exclusive cooperation of ReadWrite, Tencent has got 50% of the IP reserve.
How did Tencent become the leading film and TV drama boss step by step? Investment in upstream production companies and locking head production capacity has long been tried and tested for Tencent. Used in the field of music rights in the first two years, Tencent successfully broke out; used in the field of games, also strangled as usual.
The China Film Investment and Financing Report 2020 shows that Tencent ranked top 1 in the number of equity investments in the film industry, with 17 film and TV companies including Bona Film, Huayi Brothers, Cat’s Eye Entertainment, Weifilm Times, and Lemonmount Pictures.
At present, there are mainly 12 domestic head film and television production companies, of which 42% are invested by Tencent, and the main investments and holdings are in Yawk Media, Xinli Media, Lemon Pictures and Cifeng Media, which are all included in the list of joint statements issued. These production companies have a production capacity of about 15 TV dramas a year.
In addition to decapitating upstream production companies, Tencent, Youku and Akiyoshi have also invested in the artist brokerage industry. 2017, Youku set up a managerial company, Kuye Entertainment; Tencent not only invested in One Heart Entertainment, but also participated in Long Dannii’s Wakkai; in 2018, Aidou Century was incorporated, with Akiyoshi taking 55% of the shares.
In addition, the platform through the self-made idol star-making variety show and buy out the works of film and television companies, etc., access to star resources, with traffic and cash depth bound to a large number of star studios, such as Jiaxing Media, the company led by Yang Mi stars, including Diligaba, Huang Mengying, Zhu Xudan, Diez, Zhang Yunlong, Zhang Binbin, Gao Weiguang, Liu Rylin, Wang Snap, etc., all signed to support the rights of the long film platform.
Some articles analyze that under the huge empire envelope, for many of the stars appearing in the joint statement, to some extent, are also standing in line for survival.
What Tencent is doing in the film and TV industry is simply a “COPY AND PASTE” of what Tencent is doing in the music industry.
Tencent Music Entertainment Group (TME) includes the top three players in the online music market, QQ Music, Kugou Music and Cool Me Music, and is a dominant player in terms of copyright.
Currently, Tencent controls QQ Music and directly or indirectly controls music companies, including Universal, Warner, Sony, Javelin, Emperor, Shaocheng Times, Fumao, Huayi, YG Entertainment, Sky Entertainment, Hummingbird, Aviator Records, Lehua Entertainment, LOEN, CUBE, Feng Hua Qiushi, Hai Die, Peacock Gallery, Seed Music, Taihe Mai Tian, Extreme Rhythm Culture, Tianhao Shengshi, CJ Korea, Tongli Records EQ Records, Yashin Music, Luhan Studio, Li Chunyu Studio, etc.
Such a scale of licensing means 68.7% of the global recording industry market share, which is an absolute advantage in the copyright competition of domestic music platforms.
Of course, Tencent is the most powerful, or the game. The hottest computer and mobile games within the mainland are basically monopolized by Tencent, and even the hottest games in the international game market, Tencent has become a big world-class player. We won’t talk much about this today.
Its expansion model is to first smash money, monopolize the upstream and downstream of the industry, then harvest and squeeze squeeze – this Chinese BAT model is actually also a replica of the American model of Silicon Valley plus Wall Street. Only, these big network enterprises in China do up, more vicious than the United States high-tech plus capital enterprises.
But among the BAT, Tencent has the most amazing expansion and the most serious monopoly situation, far more than Alibaba and Baidu.
Zang Qichao, a Chinese consulting equity investment and financing expert, exposed a speech film revealing how Tencent has monopolized and grown. Zang Qichao said in the video that Jack Ma can’t do what Ma Huateng can do, why? Ma Huateng if this disorderly expansion, is very scary.
“Do you know who invested in Poundland? Ma Huateng; you know who invested in Jingdong? Ma Huateng; you say who invested in Meituan? Ma Huateng; you say who invested in BYD? Ma Huateng; you said who invested in Tesla? Ma Huateng; you say who invested in Xiaohongshu? Ma Huateng. You can probably think of the platform, are Ma Huateng investment, and basically are the majority shareholder, is small again is also a second shareholder. Tencent is actually not an Internet company at all, it’s a typical investment company, and the things it grabs in its hands are what you want.”
Zang Qichao mentioned: “(Tencent) it does anything in three steps: the first step is always free, its QQ is free, its WeChat is free; the second step it is always pirated, you engage in what, it pirated what …… you say you want to play something, Tencent one day said I want to invest in you, you do not agree to it the next day It will destroy you. Why? Because every thing it does is ultimately for a purpose: to circle 1.4 billion losers on its platform ……”
What Mr. Zang said is certainly a characteristic of Tencent’s ferocious expansion model. But a company that can be so ferocious, directly copied and not punished in any way, certainly has his reasons and background behind it. Ma Huateng is a Shenzhen native, and his father is considered an important figure in Shenzhen and has presided over large projects.
But most importantly, Tencent joined forces with the Chinese Communist Party’s Ministry of State Security in the earliest stages of its development. QQ, the social media in mainland China at the time, had two functions: instant messaging and social media, and was an important communication tool for the mainland population. QQ, at the same time, became the first attempt by the CCP’s Ministry of Public Security and Ministry of State Security to monitor the population on a large scale, comprehensively and without dead ends through the Internet plus cell phones. Tencent’s active cooperation contributed to the subsequent “modernization of governance” by the CCP.
In other words, the difference between Tencent and Alibaba is that until recently, Alibaba did not fully share its corporate data with the authorities, while Tencent has shared all its data with the authorities from the beginning.
This is the only reason why the authorities have gently let Ma Huateng off the hook.
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