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Press Release

Wecast Network to Transform and Enhance its Legacy Hollywood Studio Paid Content Business Model with Yanhua Operating Partnership
NEW YORK, Dec. 7,    2016 /PRNewswire/ -- Wecast Network, Inc. (NASDAQ: WCST) ("Wecast" or the    "Company" or "WCST"), announced today a partnership with Zhejiang Yanhua Culture    Media Co., Ltd. ("Yanhua Partnership"), where Yanhua will act as the exclusive    distribution operator (within the territory of the People's    Republic of China) of Wecast's licensed library of major studio films.     Wecast will still operate its Hollywood movie    mobile/smartphone app independent of this partnership.
   

Yanhua is headed by Mr. Cao Qiang, who is known in    the industry as the "John Malone of China." Before    starting Yanhua, Mr. Qiang was the CEO of WASU Media Group ("WASU"), China's leading cable TV network, based in Hangzhou, Zhejiang Province.  Amongst many accomplishments    under his tenure at WASU, he successfully secured Alibaba as a 20% shareholder and    strategic partner, in WASU. 

   

The Yanhua Partnership will modify and improve Wecast's legacy major studio    paid content business model by moving from a framework that included high and fixed    cost upfront minimum guarantee payments, rising content costs from major Hollywood studios and low margins to a structure that will now    include relatively nominal costs to Wecast, upfront minimum guarantee payments to    Wecast and the opportunity to reach an even wider audience.  With this    partnership, Yanhua will assume all sales and marketing costs and will pay    Wecast a minimum guarantee in exchange for a percentage of the total revenue    share.  This will completely transform the legacy business by mitigating or    removing the possibility of continuing to operate at a loss yet still providing    Wecast with the opportunity to benefit from revenue upside based on the Yanhua    Partnership's success.

   

It is important to note and distinguish between the legacy Hollywood studio paid content business (that Yanhua will now be    operating) and Wecast's new Paid Content Group vertical that is vertical #1 of    the four-part vertical plan articulated by Mr. Wu and Wecast on several    occasions.  The legacy Hollywood studio paid    content business is a strictly China-distributed,    high-cost, content resell business. With the new Paid Content Group vertical, Wecast    is building a direct-to-consumer (and therefore lower cost) cloud-based    platform that will have over 100,000 titles from independent producers and be    able to reach a global and much wider audience and customer base.  Most    importantly, the new Paid Content Group is being established with an operational and    cost framework of controlled and stronger profitability margins, underpinning it.

   

As Chairman Bruno Wu discussed on the WCST Q3    Earnings Conference Call, the legacy major studio paid content and video on demand    business in China can be considered both complex and    challenging for several reasons.  The market is crowded by well-capitalized and    diversified competitors who use their deep coffers to promote and sell their services    and do so using a loss leader strategy.  While pay content and video on demand    offerings are not profitable (specifically with expensive Hollywood content), many continue to pursue this strategy    because the practice attracts an enormous amount of eyeballs and can be used to    capture new customers who can then be introduced and sold on, other service verticals    that operate with much higher profit margins.

   

With the immense draw that exists and will always exist for content, the legacy    paid content business is still a crucial component in Wecast's total business.     But Wecast Network's strategy shift and future will be that of a global-reaching    ecosystem centered on content consumer media and creating a value chain of Branding,    Content, Commerce and Licensing all intertwined and run in an aggregated, synergetic    and interwoven manner on one platform.  By passing along the high cost burden    that major studio-based paid content has presented the Company with up until this    point, Wecast will be able to more deeply focus on its new strategy and verticals,    and at the same time leverage this new Yanhua Partnership to reach a larger swath of    the population with whom Wecast can target with its other service verticals.

   

About Wecast Network, Inc. (http://corporate.yod.com)

   

Wecast Network, Inc. (NASDAQ: WCST) is leveraging and optimizing its current    operations as a premium content Video On Demand service provider in China to evolve into a global, vertical, ubiquitous and    transactional B2B2C, mobile-driven, consumer management platform for both enterprises    and consumers.  By aiming to establish the world's premier multimedia, social    networking and smart e-commerce-enabled network with the largest global effective    connected user base, Wecast, through this expanded, cloud-based, ecosystem of    connected screens combined with strong partnerships with leading global providers,    will be capable of delivering a vast array of WCST/YOD–branded products and    services to enterprise customers and end-use consumers - anytime and    anywhere, across multiple platforms and devices. 

   

Wecast has content distribution agreements in place with many    of Hollywood's top studios including Disney Media Distribution, Paramount    Pictures, NBC Universal and Twentieth Century Fox Television Distribution, Miramax,    as well as a broad selection of the best content from Chinese filmmakers.  In    addition, the Company has governmental partnerships and licenses as well as numerous    JV partnerships and strategic cooperation agreements with an array of distribution    and content partners in the global new media space. Wecast is headquartered in both    New York, NY and Beijing,    China.

   

Safe Harbor Statement

   

This press release contains certain statements that may include "forward    looking statements." All statements other than statements of historical fact included    herein are "forward-looking statements." These forward looking statements are often    identified by the use of forward-looking terminology such as "believes," "expects" or    similar expressions, involve known and unknown risks and uncertainties. Although the    Company believes that the expectations reflected in such forward-looking statements    are reasonable, they do involve assumptions, risks and uncertainties, and these    expectations may prove to be incorrect. You should not place undue reliance on these    forward-looking statements, which speak only as of the date of this press release.    The Company's actual results could differ materially from those anticipated in these    forward-looking statements as a result of a variety of factors, including those    discussed in the Company's periodic reports that are filed with the Securities and    Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to    the Company or persons acting on its behalf are expressly qualified in their entirety    by these factors. Other than as required under the securities laws, the Company does    not assume a duty to update these forward-looking statements.

   

CONTACT: 
Jason    Finkelstein      
    Director Strategy &    IR                          
    Wecast Network,    Inc.                                     
    212-206-1216                                              

   

 

   

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/wecast-network-to-transform-and-enhance-its-legacy-hollywood-studio-paid-content-business-model-with-yanhua-operating-partnership-300374417.html

   

SOURCE Wecast Network, Inc.

 

 
    Source: PR Newswire (December 7, 2016 - 9:09 AM EST)
   
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