Baidu has acquired online video service provider PPS Net TV for USD370 million to merge with its video arm iQiyi to fend off strong rivals and strengthen its mobile business. Baidu has been playing catchup with rivals including Tencent in the online video streaming business. PPS, which has a large mobile application user base, could complement Baidu’s existing video streaming site to better challenge market leader Youku Tudou. The combined new entity may become China’s largest online video platform by number of mobile device users and overall video viewing time. Shanghai-based PPS, operator of the online streaming site PPS.tv as well as personal computer and mobile device-based video apps, will become a sub-brand of iQiyi and its team will stay after the completion of the acquisition, which is set to close in the second quarter of this year. Baidu is expected to support the merged entity strongly in funding and advertising. Xu Weifeng, President of PPS, said its mobile app on both Apple’s iOS and Google’s Android operating systems now has an average of 13 million users daily, and is adding 400,000 new users every day. Figures from iResearch forecast total online video revenue in China to reach CNY13.7 billion this year, up from CNY9.5 billion in 2012, and audience size, excluding mobile users, to grow to 483 million this year, compared with 445 million last year. China had 1.15 billion mobile subscribers at the end of March, which is the possible audience for online video services. Gong Yu, Chief Executive of iQiyi, said the merger will improve the experience of users and “deliver better marketing value and a wider range of options for advertisers”.

Hutchison Telecommunications Hong Kong plans to add more mobile spectrum and keep its existing spectrum holdings to meet rising data service requirements. Hutchison Telecom, SmarTone Telecommunications, CSL and PCCW’s HKT have formed a united front to renew their existing 3G spectrum allocations, while competing in the latest government auction of new 4G mobile spectrum. Their respective 3G spectrum licenses are due to expire in October 2016. An option that the government apparently favors is to take a third of each of the four mobile network operators’ current 3G spectrum allocation and auction these off. The Communications Authority will decide after the conclusion of its public consultation on April 11. Hong Kong’s Communications Authority completed its eighth radio spectrum auction since 2001. A total of HKD1.54 billion in spectrum utilization fees were submitted for 50 megahertz of new 4G mobile spectrum in the 2.5 gigahertz and 2.6GHz bands. SmarTone was the most aggressive auction participant, with a HKD640 million bid for the two chunks of spectrum that it won. Hutchison Telecom reported a 20% rise in net profit last year to HKD1.23 billion, largely driven by robust demand for smart devices and data services. Revenue rose 16% to HKD15.54 billion. Huawei Technologies and Nokia Siemens Networks have joined local mobile operators in raising the specter of acute services disruption in Hong Kong if the government seizes and auctions off chunks of 3G spectrum currently in use. Deputy Director General of the Office of the Communications Authority, Ha Yung-kuen, reiterated the government’s estimate that average 3G data download speeds would drop 18% in the transition period after parts of the existing spectrum were redistributed, but Nokia’s Nigel Chan said there would be “at least a 30% loss”. The city’s 3G network operators claimed that the regulator “severely underestimated” the potential disruption, saying the loss in 3G download speeds would be 40% to 50% with less amount of spectrum in use. China Mobile has expressed its support of the plan and its intention to bid for the reassigned spectrum. It now utilizes local 3G network capacity from HKT and CSL.

Hutchison Whampoa, which saw its net profit more than halve last year, said it would not rule out a legal challenge to the Hong Kong government’s decision to seize part of its 3G mobile spectrum for sale to new competitors. Canning Fok, Hutchison Group Managing Director, slammed the government’s decision to take a third of the used spectrum from each of the existing four operators for newcomers such as China Mobile (Hong Kong). The government plans to auction off the spectrum.

TPV Technology, the world’s largest contract producer of computer monitors, is aiming to produce 18 million liquid crystal display (LCD) televisions this year as demand for smart TVs and large-sized high-definition TVs improves. The company reported a year-on-year drop of 7% in net profit last year to USD111.9 million due to weak demand for monitors, while revenue rose by 8.5% to USD12 billion during the period mainly because of the consolidation of TP Vision into the company last April. Shipments of LCD televisions rose to 15.1 million units in 2012, up 12.7% from the previous year. TP Vision, a joint venture TPV formed with Royal Philips Electronics in April last year, contributed 5.8 million units. Market research firm DisplaySearch found that global LCD television shipments declined for the first time in 2012, down 1% to 203 million. TPV’s Chairman and Chief Executive Jason Hsuan said he expected smart TVs to become the focal point of the market this year. In 2012 the average selling price of the company’s televisions was USD353.20, up from USD292.60 the previous year. Shane Tyau, TPV’s Chief Financial Officer, said TPV would be put under pressure by inventory adjustments in the first quarter but improvements to margins from the second quarter could be expected, as the company launches new products. Monitor shipments fell 6.3% last year to 56.2 million units, due to the “weakening momentum of the monitor market”, the company said. The popularity of mobile computing devices was cannibalizing personal computer demand, and affecting the sales of monitors, it said.

Bona Film Group has reported annual net revenues of USD142.3 million for 2012, a 12.8% year-on-year increase, driven by its film investment, production and movie theater businesses. Net revenues from its theater business rose to USD41.7 million from USD26 million in 2011, a 60.4% rise year-on-year, which the company attributed to an expansion of its theater activities across the country. Bona opened nine theaters in 2012, increasing its portfolio of owned and operated theaters to 20, and its number of screens to 163 by the end of December. The new theaters now provide 5,800 seats and 40 screens, and by 2014, the company plans to own 35 to 40 cinemas nationwide, it said. In May News Corp acquired a 19.9% stake in Bona and in October, Bona signed a letter of intent for film co-production with Fox International Productions, a division of 20th Century Fox Film Corp. It has also signed a co-production agreement with Universal Studios and Working Title Films. But Yu Dong, Founder, Chairman and CEO, acknowledged that the company’s financial results were affected by a weak fourth quarter, which was largely attributable to the delayed release of “The Grandmasters”, lower than expected box office receipts for “The Last Tycoon” and increased start-up costs associated with new theater openings. Bona distributed 15 films during the year, including two imported films it also helped to market. China’s box office revenues reached CNY16.8 billion last year, a surge of nearly 30% year-on-year, with domestic films contributing less than half of the figure for the first time in four years, the China Daily reports.

Dalian Wanda Group Corp, one of China’s leading property developers and the owner of the country’s largest movie theater chain by box office revenue, is in talks to buy a European theater chain, several months after its USD2.6 billion acquisition of the United States’ second-largest theater chain, AMC Entertainment Holdings. Dalian Wanda has shown interest in at least two of Europe’s largest chains – Odeon & UCI Cinemas Holdings and Vue Entertainment – which are both based in the United Kingdom and run thousands of screens in a number of countries. After the AMC acquisition, the Chinese company became the world’s largest theater operator, operating a total of 495 theaters with about 6,000 screens, taking up 10% of the global market share. In China, the company owned 115 theaters with about 1,000 screens at the end of last year, and it plans to expand to 200 theaters with 2,000 screens by 2015. If it succeeds in buying a major European theater chain, it would be easier for the company to access superior resources in Hollywood to develop co-productions with foreign counterparts, said Shao Gang, Consulting Director at EntGroup Consulting, a Beijing-based entertainment research and consultancy firm. Odeon & UCI Cinemas is the largest operator of theaters on the European continent, with 2,179 screens in 236 cinemas in seven countries, including the UK, Spain and Germany. It is owned by Terra Firma Capital Partners, a British private equity firm. A person close to the talks said that Wanda has also approached Vue Entertainment, but that the UK company is not interested in a deal. Vue Entertainment operates 1,150 screens in 120 cinemas in five European countries and in Taiwan, the China Daily reports.