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Alibaba in anti-piracy PR blitz
Alibaba's PR blitz to be removed from the US list of Notorious pirates is likely to succeed, helping to improve its image as it courts new investors and moves toward a mega-IPO.
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E-commerce leader Alibaba has been on a quiet PR offensive for much of the last year, seeking to convince the US that its Taobao marketplaces aren't havens for pirates whose sales of knock-off products cost legitimate brands billions of dollars in lost sales each year. That drive has reached a crescendo with the company's highly trumpeted announcement of a new deal with Hollywood to fight the sale of pirated movies online. The deal will see Taobao and the Motion Picture Association of America (MPAA) work together to identify merchants that sell pirated movies over Taobao's various e-commerce platforms and remove the pirated merchandise. (English article)
This new partnership is just the latest in a series of similar moves by Alibaba, which desperately wants to be removed from the list of "Notorious Markets" for piracy published regularly by the US Trade Representative's office. The company found itself embarrassed last December when its name was included on the latest version of the Notorious list, even as another Chinese Internet leader, top search engine Baidu (Nasdaq: BIDU), succeeded in having its name removed.
As part of its push to be removed from the list, Alibaba earlier this year hired James Mendenhall, a Washingtonian with strong government ties, to improve the company's image in intellectual property protection. A Harvard law school graduate who now works in a private law firm, Mendenhall's extensive past experience in the US Trade Representative's Office should clearly give him good access to many of the key players who compile the Notorious list.
This new agreement with the Motion Picture Association does indeed look like a key milestone in Alibaba's anti-piracy campaign, since illegal copying of movies and TV shows is often listed as one of the key grievances against Chinese firms that engage in and facilitate piracy. The timing of the announcement certainly can't be a coincidence either, as the US Trade Representative's Office will accept public comments in the next week or 2 before sitting down to update its latest edition of the Notorious list.
Alibaba informs me it intends to submit comments at that time, which will undoubtedly include a list of all the steps it has taken over the last year to justify its removal from the list. It's unclear when the new list will come out, but the last one was issued last December so it's possible the new one could come out by the end of this year.
Alibaba's removal from the list would mark a major coup for the company, not only in terms of image but also as it seeks to attract new investors in the run-up to a mega-IPO that is likely in the next few years. So, the question becomes: Will Alibaba be removed from the list? If I were handicapping this one, I would put the odds for success at around 70 per cent, due as much to the company's aggressive lobbying effort as to its actual anti-piracy actions. If and when the campaign succeeds, look for some even louder announcements trumpeting the company's success as an anti-piracy champion.
Bottom line: Alibaba's PR blitz to be removed from the US list of Notorious pirates is likely to succeed, helping to improve its image as it courts new investors and moves toward a mega-IPO.
To read more commentaries from Doug Young, click on youngchinabiz.com