In wake of Mission: Impossible deal with Paramount, China’s Alibaba Pictures to focus on more big-ticket international projects
Alibaba Pictures, the entertainment subsidiary of e-commerce giant Alibaba Group, plans to sharpen its focus on high-profile, international projects after rebounding from losses in 2014 with a 466-million yuan (US$71.8 million) net profit last year.
In a filing with the Hong Kong stock exchange late on Monday, Ali Pictures chairman Shao Xiaofeng said “partnering with global talents on industry-leading projects is a cornerstone of our development strategy”.
The company’s initial investment in a Hollywood blockbuster, Tom Cruise-starrer Mission: Impossible - Rogue Nation from Paramount Pictures, proved a huge success for its new international business unit, which was set up in Los Angeles in the second quarter of last year.
“We expect cross-border collaboration opportunities to accelerate in the coming years,” Shao said.
“As seen in the strong box-office growth in recent years, public demand for entertainment content [in mainland China] is on a rising trend. Meeting this demand will require increasingly higher content quality and variety.”
Data from the State Administration of Press, Publication, Radio, Film and Television showed that mainland China’s box office reached a record haul of US$6.78 billion last year, up 48.7 per cent from 2014.
The country is widely expected to surpass North America as the world’s largest movie market by the end of 2017. The combined box office take in the United States and Canada hit a record US$11 billion last year.
Ali Pictures’ second international venture is South Korean movie Real, which features popular actor Kim Soo-hyun. The company agreed in October to invest in the movie, while obtaining exclusive distribution rights in mainland China.
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Shao said Ali Pictures was also looking at investment opportunities in television programmes and various intellectual property.
The company reported a net profit of 466 million yuan for last year, putting it in the black after a net loss of 417 million yuan in 2014.
Shao attributed that big year-on-year increase to net finance income of 882.8 million yuan, comprising foreign exchange gains and interest income.
That marked the first profit for Ali Picture since Hangzhou, Zhejiang-based Alibaba took over the Hong Kong-listed business and reorganised it into the group’s entertainment arm.
Alibaba had invested US$804 million in March 2014 to obtain a 60 per cent controlling interest in ChinaVision Media Group, which changed its name to Alibaba Pictures in August that same year.
Total revenue for Ali Pictures last year jumped 108 per cent to 263.72 million, up from 126.63 million yuan in 2014, on the back of its Yueke operation.
The company had completed its acquisition of cinema ticketing system supplier Yueke in June.
Yueke supplies to more than 1,800 cinemas nationwide, as well as provide connecting software for more than 30 mainstream online movie-ticketing portals.
“As our national box-office ticket sales continue to rise, we believe Yueke is in an attractive
position to capture the market’s potential economics,” Shao said.
In December, Ali Pictures also acquired parent Alibaba’s online ticketing business and Yulebao crowdfunding platform for entertainment-related projects.
The international operations of Ali Pictures saw its stake in Mission: Impossible -- Rogue Nation,
which had US$682 million in worldwide box office, contribute 68.7 million yuan to the company’s overall revenue.
In January, the company ousted Patrick Liu Chunning from its board of directors, more than six months he was detained by Chinese authorities for alleged corruption while still employed by Tencent Holdings.
That dismissal followed Ali Pictures’ deal in December to invest US$86 million as a partner in a group that plans to buy and take private Bona Film Group, a Nasdaq-listed Chinese movie studio and distributor. The proposed buyout valued Bona at US$1 billion.
Ali Pictures’ share price advanced 1.73 per cent to close at HK$1.76 on Wednesday.
In December, Alibaba agreed to buy the South China Morning Post and all other media assets from the SCMP Group.