Tencent share price down, to partner up with Time Warner’s HBO

Tencent Holdings Ltd, the Chinese internet gaming and social media group, is teaming up with Time Warners HBO network to distribute its TV series to online viewers in China.

However, HBOs TV shows, including Game of Thrones, Boardwalk Empire and True Blood, are known for their provocative content and may attract the attention of China’s broadcast regulator.

Under the deal, Tencent will become Chinas sole online provider of HBOs TV shows as it tries to obtain new higher income viewers and catch up to rivals. According to Analysys Enfodesk, Tencent takes the fourth place in Chinas online ratings, lagging behind rivals Youku, Iqiyi and Sohu. In the second quarter Tencent had 3 billion site visits and 39 million users.

“This partnership enables us to distribute some of the most ground-breaking programming in the world through our robust technology platform, to the benefit of Chinese Internet users” said Martin Lau, president of Tencent.

Chinese Online TV companies has spent more than $1 billion acquiring foreign video series in the past two years, but government regulators have increased their presence in the online world. The State Administration for Radio, Film and Television has imposed a limit to foreign content uploaded on Chinese video websites and even has taken down and banned TV shows, including The Big Bang Theory, NCIS, The Practice and The Good Wife.

Tencent said that upcoming airing of the newly acquired TV shows and movies still need to get approved by Chinas authorities and might need to be censored.

In April, a channel owned by the Chinas state broadcaster CCTV released a severely-censored version of Game of Thrones, which critics didnt quite like.

Song Ziwen, a Beijing TV critic, said the show has been “cleansed of all nudity and violence. Its plot is now barely coherent.”
“I hope Tencent will have more flexibility. Maybe they will be able to do some artistic things with blurring and pixels” he added.

In September, SARFT limited the maximum number of foreign content on local websites to 30%, partly to defend domestic TV and movie industry as it develops. However, Chinese series are viewed by a bigger user base than foreign show, but overseas content attract higher income viewers.

Tencent Holdings Ltd fell 0.48% on Tuesday and closed at HKD 124.70, marking a one-year increase of 42.42%. The company is valued at HKD 1.18 trillion.