Tencent’s China Literature to Buy TV & Film Studio New Classics Media

China Literature, the publically listed e-books unit of Tencent, is purchasing the production company New Classics Media (NCM) for 15.5 billion yuan ($2.25 billion).

The China-based NCM produces across film, TV and the web, with a track record that includes series such as The First Half of My Life and Yu Zui, as well as films such as Wukong and Some Like It Hot. The transaction combines China Literature’s content library and NCM’s expertise in script development and production.

The current management of NCM will continue to oversee the TV series, web series and film production business and will make original content selections, including those from outside of China Literature’s platform.

Wenhui Wu, co-CEO of China Literature, said, “Users are increasingly demanding high-quality video entertainment content which in turn drives the demand for literary works for various content adaptations. We are the pioneer and leader in online literature market and thus in providing source material for China’s most-watched TV series, web series and films. Further enhancing our content adaptation expertise is a natural next step for China Literature to unleash the commercial potential of our content library, drive integrated development of blockbuster titles, and enhance engagement of our writers and users.”

Xiaodong Liang, co-CEO of China Literature, commented, “Mr Huayi Cao and the NCM team have built up an outstanding track record of consistently producing popular, high-quality TV series, web series and films. NCM represents a scarce opportunity for China Literature to extend its content capabilities downstream, enabling it to participate further along the IP value chain and enhance the services it can bring to its writers as well as its users. We believe that this combination will create significant long-term strategic value for China Literature’s shareholders.”

Huayi Cao, founder of NCM, said, “Today represents a new milestone on the NCM journey. From the beginning, we have focused on ensuring that NCM is the benchmark for Chinese TV series and film production in terms of quality. This process starts with the high-quality source material, and China Literature is the original content powerhouse for many of our best productions. China Literature will provide us with access to the richest literature content library in China and enhance our credibility as a leading production house for TV series, web series and film. I can think of no better home for NCM as we work in partnership towards creating better content for our audience.”