Alibaba Pictures’ investment in online movie ticketing delivers huge rise in revenue
But ticket subsidies still push firm into 465.7 million yuan half-year loss
The company posted revenue of 257.3 million yuan, compared with 22.9 million yuan in the same period last year, which it attributed to the acquisition in June last year of Yueke Software Engineering, a Chinese cinema-ticketing firm.
“[Alibaba Pictures’] internet-based promotion and distribution business is well positioned to benefit from the overall box-office growth and the increasing adoption of online film ticketing in China,” the company said in its results announcement, estimating more than 70 per cent of all domestic film tickets were now sold on dedicated online platforms.
Despite the huge boost in revenue, Alibaba Pictures still recorded a net loss of 465.7 million yuan, three times higher than in the corresponding period last year, which it blamed on increased marketing expenses used in ticket subsidies for users of Tao Piao Piao, the company’s film ticket, in an attempt to gain market share.
“Using this strategy, Tao Piao Piao’s market share has grown sharply and is now one of China’s leading online film ticketing platforms,” Alibaba Pictures said, claiming Tao Piao Piao covered 95 per cent of the country’s box office.
Tao Piao Piao received 1.7 billion yuan in funding in May, led by investors including CDH Investments, Ant Financial Services Group and Sina.com, in exchange for a 12.4 per cent stake.