BUSINESS

Lionsgate, Saban team with Asia's Celestial to tap region's entertainment market

12/21/2011 11:13 EST | Updated 02/20/2012 05:12 EST
HONG KONG - Hollywood independent studio Lionsgate and media mogul Haim Saban's investment firm said Thursday they're teaming up with a Malaysian-owned company in a pay TV joint venture to tap the expanding Asian entertainment market.

Saban Capital Group Inc. said it will provide "significant capital investment" for Celestial Tiger Entertainment, which it is forming with Lionsgate Entertainment Corp. and Celestial Pictures Ltd., a Hong Kong-based film and TV company owned by Malaysian pay-television operator Astro Holdings.

Celestial Tiger, based in Hong Kong, will offer three pay TV channels from Tiger Gate Entertainment, an existing Asian partnership set up by Lionsgate-Saban in 2010. Celestial Pictures will contribute three Chinese-language pay TV channels.

Celestial Tiger plans to expand by adding new channels or buying other operators with the money from Saban, which did not disclose the amount.

The company also plans to produce its own TV shows as well as remakes of movies from the Shaw Brothers Film Library, the world's biggest collection of Chinese-language movies. The collection, owned by Celestial Pictures, includes more than 760 films produced over half a century.

The joint venture is the latest in a string of partnerships with Asian entertainment companies formed recently by Hollywood studios looking for growth in Asia, where a burgeoning middle class is driving demand.

"We really see Asia as a very strategically important region for our investment activity," Saban Capital President Adam Chesnoff said. "When you look at the growth in the media sector, particularly in the pay TV and free TV markets throughout the region, we think the fundamentals are very ripe and strong for investment opportunities."

The Asia-Pacific region is already the world's biggest pay TV market, with 57 per cent of global subscriptions, which were forecast to exceed 745 million in 2011, according to an ABI Research report earlier this year.

Celestial Tiger's main markets are Southeast Asia and China and it will also be the sole sales agent for Lionsgate movies and TV shows for those regions.

Lionsgate follows two other Hollywood studios, Relativity Media and Legendary Entertainment, that announced Chinese partnerships this year.

Recent Lionsgate releases include the films "The Expendables" and "Margin Call" and the hit TV series "Mad Men."

Saban Capital is best known for licensing the Power Rangers from Japan in the 1990s.

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