Alibaba Pictures Group, the Hong Kong-listed entertainment and film unit of China e-commerce leader Alibaba Group, expects to lose between 1.6 billion yuan, or $254 million, and 1.7 billion yuan for the 15 months ending March 31, the company said in a statement on Friday. That compares with losses of 950.3 million yuan for the 12 months ended December 31, 2017 and 958.6 million yuan for the year ended December 31, 2016.
Profit was once again hurt by marketing expenses tied to Tao Piao Piao, the company’s online ticketing platform. “The Chinese New Year holiday period is usually a peak season for box office” in China, Alibaba Pictures said. “February 2018 saw the highest box office number ever recorded for the CNY period, which the Group viewed as a strategic time window to exert its promotional effort to strengthen Tao Piao Piao’s market-leading position. Significant resources were spent in the CNY Period of 2018 to provide pricing incentives to consumers to further promote Tao Piao Piao’s brand,” Alibaba Pictures said in a statement.
Alibaba Group, led by billionaire Jack Ma, made a big push into the entertainment industry in 2014 just ahead of its world-record IPO at the New York Stock Exchange. Alibaba Group purchased a 60% stake in ChinaVision Media Group, a Hong Kong-listed media and program content producer, for $805 million at a price of HK$0.50 a share in June 2014. The stock tripled in connection with the announcement, and ChinaVision changed its name to Alibaba Pictures. Shares peaked at HK$4.4 in April 2015; they closed at HK$0.97 on Friday and have lost more than a quarter of their value in the past year.
Alibaba Group received a boost in 2016 when Steven Spielberg’s Amblin Partners said it would form a broad strategic partnership with Alibaba Pictures Group to co-produce and finance films for global and Chinese audiences, as well as collaborate on the marketing, distribution and merchandising of Amblin Partners films in China. Amblin has already scored a big hit in China this year with the virtual reality epic “Ready Player One.”
Wanda Group, led by billionaire Wang Jianlin, purchased Hollywood studio Legendary last year and controls one of the world’s largest’s movie theatre chains, New York-listed AMC.
Source: Forbes
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