Movie goers swoon over Alibaba Pictures’ epic love story, driving content unit to its first profit

Company as a whole recorded a net loss of 950 million yuan due to high marketing expenses in promoting Tao Piao Piao online ticketing platform

PUBLISHED : Wednesday, 28 February, 2018, 12:55pm
UPDATED : Wednesday, 28 February, 2018, 3:39pm

Thanks to a movie where popular Chinese actress Liu Yifei plays a goddess embroiled in a complicated love story spanning hundreds of years, Alibaba Pictures has for the first time posted a profit for its content production segment after consecutive years of heavy losses.

Once Upon a Time, based on bestselling fantasy novel Three Lifetimes, Ten Miles of Peach Blossoms, made 534 million yuan (US$84.5 million) at the Chinese box office, helping Alibaba Pictures’ content production segment earn a profit of 4.1 million yuan in 2017, up from losses of 243.5 million yuan the previous year.

However, the company as a whole recorded a net loss of 950 million yuan, primarily due to high marketing expenses incurred in promoting its Tao Piao Piao online ticketing platform, the company said in its earnings statement.

Alibaba Pictures also co-invested in films such as Paradox, starring Hong Kong actor Louis Koo, and is currently developing a TV series and film called Swords of Legends 2, based on a popular role-playing game in China.

Chinese technology companies like Alibaba Group, Baidu and Tencent have been investing heavily in digital content and entertainment, producing their own TV series and films as well as operating subscription-based video platforms, and even online ticketing platforms, as they race to carve out market share in China’s rapidly growing consumer digital entertainment market.

“Full-cycle content production involves significant upfront capital and time investment. For the content production business in the future, [Alibaba Pictures] will also place emphasis on developing creative, positive, family oriented content,” the company said in a statement.

Ticket sales and promotions on Tao Piao Piao were strong drivers for revenue, which jumped 162 per cent from the same period last year.

Film producers behind hits like Bollywood movie Dangal, whose plot revolved around a father who trained his daughters to become professional wrestlers against all odds, as well as the Christopher Nolan-directed Dunkirk engaged Tao Piao Piao for online promotion efforts last year. Internet-based promotion and distribution generated 1.97 billion yuan in revenue, making up 83 per cent of the group’s revenue of 2.47 billion yuan.

Alibaba Pictures said it has plans to “accelerate cross-development” between content, merchandise and games, as well as collaborate with Alibaba Group and Ant Financial, an affiliate of Alibaba Group, to tap both companies’ large user bases. Currently, Alibaba Pictures has already licensed merchandising rights from certain films to selected merchants on Alibaba’s e-commerce platform Taobao.

Alibaba owns the South China Morning Post.