Disney Entering China Streaming: Star Wars Goes China Literature (Part II – VPN Pilot Zones)

Disney Has Made a Deal with Tencent to Create Original e-Novels in Chinese, for the First Time Ever, to be Released on e-Publishing Platform China Literature.

By Ryan Carroll

October, 2019.

Analysis

For Part I of VPN Pilot Zones

Disney China unveiled in Shanghai their latest partnership for Star Wars with Tencent. To create an original story in Chinese to be published as an e-book on China Literature, and its Mainland China affiliates Qidian.com and QQ Reading.

The e-novel will be published in 40 chapters, in serialized form, by China Literature’s popular Xianxia martial arts author who goes by the pen name “His Majesty The King”. Whose ACGN light novel Spirit Blade Mountain: Feast of the Stardust was adapted into an anime series by Tencent in 2016.

This incredible news comes less than two months after the reports that Chinese Regulators will test what they are referring to as VPN Pilot Zones. Legislation that will allow foreign entities to invest into Chinese Streaming Services. Allowing them to participate up-to 50% revenue share in these “VPN Pilot Zones”.

Something that we looked at through the lens of speculative analysis, pondering the implications on an extended agreement between Marvel Entertainment and their current partner NetEase earlier this year.

An agreement that would allow NetEase to produce TV Series of Marvel properties – that being streaming – in the Middle Kingdom and Beyond. Most likely being that of one of the two Chinese superhero characters co-created by Marvel Comics and NetEase Comics; Sword Master or Aero.

The analysis of the VPN Pilot Zones, and the upcoming Shang-Chi and the Legend of the Ten Rings being released on the first day of the Spring Festival holiday in China, had us looking at the potential of any streaming TV Series coming out of this extended agreement. Produced implications that they may be distributed on Disney+ outside of China.

Disney China in Shanghai forming a deal with Tencent’s China Literature is yet another “streaming service” agreement for the House of the Mouse in the Middle Kingdom, and potentially falls under the “VPN Pilot Zones” legislation that was just announced.

China Literature is underappreciated aspect of Tencent Holdings from the Western perspective. As it is an integral part of Tencent’s overarching Branded IP development strategy, connecting new and developed IP both upstream and downstream.

With 454M users 7.8M authors and 11M stories China Literature has considerable reach as a valued partner for a brand like Star Wars. Allowing the author to develop and add Chinese characteristics organically to a brand such as Star Wars, reaching newer younger audiences in ways that the films have so-far failed to do.

China Literature, being apart of the larger Tencent machine will allow this new e-book story to potentially be adapted into new formats across other Tencent brands and mediums such as, anime, games, comics from the light novel itself – (ACGN).

Since China Literature’s 2017 Hong Kong IPO of $1.1BnUSD, content creation by the platform’s 7.8M authors has been the driving factor of the online publishing business, rather than a revenue driver for Tencent.

Tencent Holding investing then fully acquiring Qidian.com, the origin of China Literature itself, was to build Tencent’s IP and Content Library; to make it the “Disney-of-China”.

Incorporating a brand such as Star Wars onto a streaming e-Publishing platform such as China Literature, will allow for Bob Iger’s strategic vision for Star Wars in China. A vision that is not just to dominate the China Box-Office but one that will be a long-term investment.

An investment into future generations in China that will incorporate their cultivation of The Force to purchase, not just box-office tickets of future Star Wars films, but an investment into merchandising, licensed products, and Star Wars lands at Disney Shanghai.

This investment of 40 chapters being written by “His Majesty The King” and released on China Literature could lead to other ancillary products. Such as animation, comics, to live-action series, all seen on Tencent’s other streaming platforms – Tencent Video and Tencent Comics.

Achieved through an extended agreement similar to what has been seen between Disney’s Marvel Entertainment and NetEase.

If these agreements on multiple streaming platforms prove fruitful we could be seeing Disney invest more heavily into their Star Wars and Marvel partnerships with Tencent and NetEase, to participate in revenue sharing through the newly enacted VPN Pilot Zones legislation.

For Part I of VPN Pilot Zones

NOTE.

Tencent has previous been Disney’s official partner for Star Wars streaming all the previous films on Tencent Video.

For China Law Blogs Breakdown on VPN Pilot Zones

Stay Tuned China Watchers!

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About the Author

Born and raised in the Missouri-Ozarks Ryan studied Film Production, and East Asian Culture, at the University of Kansas where he was a UGRA recipient that led him on a seven-year long, Journey From the West, to China. Where he worked with Warner Brothers, the China Film Group Corp. and the National Bureau of Statistics of China. Before returning to the States, where he specializes in Chinese Anime & Comics, China’s Box-Office, and Chinese entertainment-tech industries. He has a dog in China, Abigail, and a dog in the Arkansas-Ozarks, King Blue, who help ease his anxiety of suffering from the “Two-Dimensional Complex” that is trying to understand the Culture Industry landscapes of the Middle Kingdom.

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