China’s ties to Hollywood studios just got a little stronger. LA-based studio STX Entertainment announced it has received investments from two Chinese companies: internet giant Tencent and Hong Kong-based telecommunications company PCCW.

 

STX, which produced the summer comedy Bad Moms, expects to use the capital to create more content and distribute it globally, particularly in Asia. In return, audiences in Hong Kong and China with an appetite for Western-produced films will also have more access to the Hollywood studio’s entertainment.

 

“The new alliance represents an important milestone in expanding PCCW’s strategic investments into compelling content creation, not simply for audiences in Hong Kong but also for international audiences,” said PCCW Managing Director Janice Lee in a news release. “Furthermore, STX’s wide release of films and scripted television series can also be distributed across PCCW’s pay TV and OTT platforms, thus bringing the best content to viewers in Hong Kong, Southeast Asia and India.”

 

While none of the companies involved have divulged how much Tencent and PCCW invested, sources told the LA Times that STX now has access to about $700 million in new capital and the company is now valued at $1.5 billion.

 

China is the second-largest film market in the world and is expected to overtake the U.S. to become number one next year. FT Confidential Research anticipates box office receipts in the country to grow 30 percent this year to $8.3 billion.

 

Western studios are looking to cash in on the boom and gain access to a market that Chinese authorities have traditionally kept tight controls over. Just 34 foreign films are allowed in the country each year and the summer months are typically a blackout period to give a boost to domestically-produced films, though that rule has eased this year. Part of the strategy to be let in includes getting investments from Chinese firms.

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